Table of Contents
Executive Summary
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- The market
- Overseas expenditure is rising year-on-year
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- Figure 1: Annual expenditure on overseas trips by UK residents, at current prices, 2009-15
- Overseas expenditure is forecast to grow 16% by 2020
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- 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
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- 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
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- 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
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- Figure 5: Attitudes towards and usage of selected finance brands, November 2015
- The consumer
- Prepaid cards still lag behind standard credit and debit cards
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- Figure 6: Methods used to spend money abroad, November 2015
- Two thirds of consumers collect their travel money in person
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- 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
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- Figure 8: Attitudes towards arranging travel money, November 2015
- What it means
Issues and Insights
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- 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
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- 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
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- Overseas expenditure rising year-on-year
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- 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
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- Figure 10: Annual expenditure on overseas trips by UK residents, by purpose of visit 2009-15
- Europe takes a 60% share of overseas expenditure
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- 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.
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- 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
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- Visits overseas grew over 12% last year
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- 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
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- Figure 15: Number of overseas visits by UK residents, by region visited, 2009-15
- Consumer finances are improving over time
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- Figure 16: How respondents would describe their financial situation, February 2009-January 2016
- Holiday bookings are becoming more spread out over the year
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- 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
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- Figure 18: Spot exchange rates, US dollar-Sterling and Euro-Sterling, January 2009-January 2016
Companies and Brands – What You Need to Know
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- 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
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- Nearly a third of consumers arrange their travel money when abroad
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- Figure 19: Methods of arranging travel money for holidays in the last 12 months, November 2015
Competitive Strategies
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- 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
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- £5.5 million was spent on advertising travel money in 2015
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- 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
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- Figure 21: Top 10 advertisers of travel money services (including pre-paid cards), 2012-15
- TV advertising is growing its share of advertising spend
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- 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
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- What you need to know
- Brand map
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- Figure 23: Attitudes towards and usage of selected finance brands, November 2015
- Key brand metrics
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- Figure 24: Key metrics for selected finance brands, November 2015
- Brand attitudes: Post Office most noted for offering something different
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- Figure 25: Attitudes, by finance brand, November 2015
- Brand personality: HSBC and NatWest most likely to be seen as negative
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- Figure 26: Brand personality – macro image, November 2015
- Most brands located around genuine, competent and responsive
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- 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
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- 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
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- Nearly three quarters use foreign currency on holiday
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- Figure 28: Methods used to spend money abroad, November 2015
- Prepaid cards are the most popular with those aged 35-44
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- Figure 29: Methods used to spend money abroad, by age group, November 2015
- Credit cards are most frequently used for holidays in North America
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- Figure 30: Methods used to spend money abroad, by holiday destination, November 2015
- Half of consumers use two or more methods to spend abroad
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- Figure 31: Number of methods used to arrange travel money, November 2015
Ways of Arranging and Collecting Foreign Currency
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- The Post Office is the most popular for pre-holiday travel money
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- 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
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- Figure 33: How travel money was collected for holidays abroad in the last 12 months, November 2015
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- 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
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- 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
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- Nearly half of consumers purchase travel money just before they travel
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- Figure 36: When travel money purchases were made, November 2015
- Younger consumers purchase their travel money latest
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- Figure 37: When travel money purchases were made, by age group, November 2015
Attitudes towards Travel Money
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- Over half of consumers see rates as the most important factor
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- Figure 38: Attitudes towards arranging travel money, November 2015
- Awareness of prepaid cards is high but usage remains low
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- 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
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- Figure 40: Attitudes towards prepaid cards
Approaches to Arranging Travel Money
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- A quarter of consumers go out of their way to get the best deal
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- Figure 41: Approaches towards arranging travel money, November 2015
- High value customers put more effort into tracking down the best rates
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- Figure 42: Approaches to arranging travel money by number of methods used, November 2015
Appendix – Data Sources, Abbreviations and Supporting Information
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- Report scope and definitions
- Data sources
- Abbreviations
Appendix – Market Size and Forecast
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- Best and worst case forecast
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- Figure 43: Best and worst forecast for annual expenditure on overseas trips by UK residents, 2015-20
- Forecast methodology
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