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Travel Money - UK - March 2016

OVERVIEW
What you need to know
Definitions and report scope
EXECUTIVE SUMMARY
The market
Overseas expenditure is rising year-on-year
Figure 1: Annual expenditure on overseas trips by UK residents, at current prices, 2009-15
Overseas expenditure is forecast to grow 16% by 2020
Figure 2: Forecast for annual expenditure on overseas trips by UK residents, 2010-20
Companies and brands
The Post Office is still the most common source of travel money
Figure 3: Methods of arranging travel money for holidays in the last 12 months, November 2015
TV advertising is growing its share of advertising spend
Figure 4: Percentage share of adspend on travel money services (including pre-paid cards), by media type, 2012-15
The Post Office’s brand strength helps give it an edge
Brand map
Figure 5: Attitudes towards and usage of selected finance brands, November 2015
The consumer
Prepaid cards still lag behind standard credit and debit cards
Figure 6: Methods used to spend money abroad, November 2015
Two thirds of consumers collect their travel money in person
Figure 7: How travel money was collected for holidays abroad in the last 12 months, November 2015
Over half of consumers see rates as the most important factor
Figure 8: Attitudes towards arranging travel money, November 2015
What it means
ISSUES AND INSIGHTS
Travel money providers are expanding money management
The facts
The implications
Rates and fees are top of mind for consumers:
The facts
The implications
Pre-holiday travel money purchase under threat
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
UK spending abroad increased by £6.5 billion from 2011-15
Overseas expenditure is forecast to grow 16% by 2020
Exchange rates may disappoint travellers
MARKET SIZE AND FORECAST
Overseas expenditure rising year-on-year
Figure 9: Total annual expenditure on overseas trips by UK residents, at current prices, 2009-15
Uncertainty in the global economy could slow the growth in overseas expenditure
Figure 10: Annual expenditure on overseas trips by UK residents, by purpose of visit 2009-15
Europe takes a 60% share of overseas expenditure
Figure 11: Annual expenditure on overseas trips by UK residents, by region of visit, 2009-15
Plastic cards are taking a growing share of the market
There is no realistic prospect of a sharp fall in demand for travel money in the near future.
Overseas expenditure is forecast to grow 16% by 2020.
Figure 12: Forecast for annual expenditure on overseas trips by UK residents, 2010-20
Figure 13: Forecast for annual expenditure on overseas trips by UK residents, 2010-20
Forecast methodology
MARKET DRIVERS
Visits overseas grew over 12% last year
Figure 14: Number of overseas visits by UK residents, by purpose, 2009-15
North America had an 11% growth in visits in the last year
Figure 15: Number of overseas visits by UK residents, by region visited, 2009-15
Consumer finances are improving over time
Figure 16: How respondents would describe their financial situation, February 2009-January 2016
Holiday bookings are becoming more spread out over the year
Figure 17: Booking holidays in the last 3 months and intentions to book a holiday in the next 3 months
Rising demand for short breaks will shift travel money demand
Travellers will be getting less for their money thanks to exchange rates
Figure 18: Spot exchange rates, US dollar-Sterling and Euro-Sterling, January 2009-January 2016
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Nearly a third of consumers arrange their travel money when abroad
New entrants expand into money management
TV advertising is the main media type for travel money
MARKET SHARE
Nearly a third of consumers arrange their travel money when abroad
Figure 19: Methods of arranging travel money for holidays in the last 12 months, November 2015
COMPETITIVE STRATEGIES
Reduced fee prepaid cards launched
Multi-currency cards introduced by key market players
Smartphone apps launched in the travel money sector
Business expense solutions
ADVERTISING AND MARKETING ACTIVITY
£5.5 million was spent on advertising travel money in 2015
Figure 20: Total above-the line, online display and direct mail advertising expenditure on travel money services (including pre-paid cards), 2012-15
The Post Office remains the top travel money advertiser
Figure 21: Top 10 advertisers of travel money services (including pre-paid cards), 2012-15
TV advertising is growing its share of advertising spend
Figure 22: Percentage share of adspend on travel money services (including pre-paid cards), by media type, 2012-15
Nielsen Media Research coverage
BRAND RESEARCH
What you need to know
Brand map
Figure 23: Attitudes towards and usage of selected finance brands, November 2015
Key brand metrics
Figure 24: Key metrics for selected finance brands, November 2015
Brand attitudes: Post Office most noted for offering something different
Figure 25: Attitudes, by finance brand, November 2015
Brand personality: HSBC and NatWest most likely to be seen as negative
Figure 26: Brand personality – macro image, November 2015
Most brands located around genuine, competent and responsive
Figure 27: Brand personality – micro image, November 2015
Brand analysis
The Post Office stands out as a differentiated and well-liked brand
Asda is seen as a welcoming brand that offers good value
Banks are most associated with unfavourable characteristics
Travelex scores well with younger age groups
Supermarket brands have an advantage of being seen to reward loyalty
THE CONSUMER – WHAT YOU NEED TO KNOW
A third of consumers use credit or debit cards abroad
Prepaid card awareness is high but usage remains low
People are still cost-conscious
METHODS OF SPENDING ABROAD
Nearly three quarters use foreign currency on holiday
Figure 28: Methods used to spend money abroad, November 2015
Prepaid cards are the most popular with those aged 35-44
Figure 29: Methods used to spend money abroad, by age group, November 2015
Credit cards are most frequently used for holidays in North America
Figure 30: Methods used to spend money abroad, by holiday destination, November 2015
Half of consumers use two or more methods to spend abroad
Figure 31: Number of methods used to arrange travel money, November 2015
WAYS OF ARRANGING AND COLLECTING FOREIGN CURRENCY
The Post Office is the most popular for pre-holiday travel money
Figure 32: Method of arranging travel money for holidays abroad in the last 12 months, November 2015
Two thirds of consumers collect their travel money in person
Figure 33: How travel money was collected for holidays abroad in the last 12 months, November 2015
Figure 34: How travel money for holidays in the last 12 months was collected, by holiday destination, November 2015
Users of bureaux de change and supermarkets are the most likely to collect online
Figure 35: How travel money was collected vs how it was arranged for holidays abroad in the last 12 months, November 2015
TIMESCALES FOR ARRANGING TRAVEL MONEY
Nearly half of consumers purchase travel money just before they travel
Figure 36: When travel money purchases were made, November 2015
Younger consumers purchase their travel money latest
Figure 37: When travel money purchases were made, by age group, November 2015
ATTITUDES TOWARDS TRAVEL MONEY
Over half of consumers see rates as the most important factor
Figure 38: Attitudes towards arranging travel money, November 2015
Awareness of prepaid cards is high but usage remains low
Figure 39: Awareness of prepaid cards by those who haven’t used prepaid cards in the last 12 months
Brand reputation is important for prepaid card providers
Figure 40: Attitudes towards prepaid cards
APPROACHES TO ARRANGING TRAVEL MONEY
A quarter of consumers go out of their way to get the best deal
Figure 41: Approaches towards arranging travel money, November 2015
High value customers put more effort into tracking down the best rates
Figure 42: Approaches to arranging travel money by number of methods used, November 2015
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Report scope and definitions
Data sources
Abbreviations
APPENDIX – MARKET SIZE AND FORECAST
Best and worst case forecast
Figure 43: Best and worst forecast for annual expenditure on overseas trips by UK residents, 2015-20
Forecast methodology

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