Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Overseas expenditure decelerates
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- Figure 1: Annual expenditure on overseas trips by UK residents, by purpose of visit, 2010-18*
- Growth expected to slow down
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- Figure 2: Forecast for annual expenditure on overseas trips by UK residents, 2013-23
- More people are ordering their travel money online
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- Figure 3: Collection of travel money, 2017-18
- Number of trips abroad contracts in 2018
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- Figure 4: Number of overseas trips by UK residents, by purpose of visit, 2010-18*
- Volatility and unfavourable rates continue, but consumers carry on
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- Figure 5: Spot exchange rates, monthly average, US Dollar-Sterling and euro-Sterling, January 2010-January 2019
- Companies and brands
- Adspend on travel money services declines
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- Figure 6: Total above-the-line, online display, and direct mail advertising expenditure on travel money services, 2014-18
- FinTech drives innovation and disruption
- Flexible payment options for booking holidays
- The consumer
- Debit card use set to overtake foreign currency among under-35s
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- Figure 7: Methods used to spend money whilst on holiday abroad, November 2018
- Older holidaymakers are more likely to book ahead
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- Figure 8: Timing of travel money arrangements, November 2018
- Force of habit and preconceptions are main barrier to overseas card usage
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- Figure 9: Barriers to overseas card usage, November 2018
- Most holidaymakers expect to take action against a weaker Pound
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- Figure 10: Actions likely to be taken in response to the weak Pound, November 2018
- Majority of consumers unaware of and uninterested in alternatives
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- Figure 11: Awareness of and interest in alternative overseas spending methods, November 2018
- What we think
Issues and Insights
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- Reacting to Brexit and a weaker Pound
- The facts
- The implications
- The role of PCWs in helping people find the best travel money options
- The facts
- The implications
- The long-term threat from cross-border transfer technology
- The facts
- The implications
The Market – What You Need to Know
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- Overseas expenditure decelerates
- Growth expected to slow down
- More people are ordering their travel money online
- Number of trips abroad contracts in 2018
- Volatility and unfavourable rates continue, but consumers carry on
Market Size and Forecast
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- Growth in overseas expenditure decelerates
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- Figure 12: Total annual expenditure on overseas trips by UK residents, 2010-18*
- Holidays, especially all-inclusive ones, see increase in spend
- But expenditure in other categories falls
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- Figure 13: Annual expenditure on overseas trips by UK residents, by purpose of visit, 2010-18*
- Europe accounts for 65% of overseas expenditure
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- Figure 14: Annual expenditure on overseas trips by UK residents, by region of visit, 2010-18*
- Growth expected to slow down
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- Figure 15: Forecast for annual expenditure on overseas trips by UK residents, 2013-23
- Figure 16: Forecast for annual expenditure on overseas trips by UK residents, at current and constant prices, 2013-23
- Forecast methodology
Channels to Market
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- Large majority arrange their foreign currency before travelling
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- Figure 17: Travel money arrangements, November 2018
- 76% of holidaymakers use only one method to arrange travel money
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- Figure 18: Repertoire of methods of arranging travel money, November 2018
- More people are ordering their travel money online
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- Figure 19: Collection of travel money, 2017-18
Market Drivers
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- Number of visits expected to have contracted in 2018
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- Figure 20: Number of overseas trips by UK residents, by purpose of visit, 2010-18*
- North America sees increase in number of visits…
- …but visits to Europe and other countries fall in volume
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- Figure 21: Number of overseas trips by UK residents, by region of visit, 2010-18*
- Unfavourable and volatile rates continue to impact spending power
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- Figure 22: Spot exchange rates, monthly average, US Dollar-Sterling and euro-Sterling, January 2010-January 2019
- Keep calm and book a holiday
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- Figure 23: Booked holidays in the last three months and intentions to book a holiday in the next three months, January 2014-January 2019
Companies and Brands – What You Need to Know
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- Adspend on travel money services declines
- FinTech drives innovation and disruption
- Flexible payment options for booking holidays
Competitive Strategies
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- TransferWise launches borderless account and debit card
- FinTech leads the way in cheap and simple international transfers
- Travel Money players in the FCA’s regulatory sandbox
- Thomas Cook offers flexibility…
- …and so does Airbnb
- Latest developments in travel-friendly retail banking products
- Monzo upgrades from prepaid card to current account
- Starling Bank expands its overseas proposition
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- Figure 24: Starling Bank’s ad in easyJet’s boarding pass, January 2019
- Revolut investigates suspected money laundering on its systems
- NatWest waives overseas debit card purchase charges for the summer
- Cards
- Accounts that help make the most out of travel rewards
- Monese launches current account linked with Avios in ‘world’s first’
- Case Study: Fourex, a practical solution to leftover currency
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- Figure 25: Fourex kiosk at Blackfriars London underground station, February 2019
Advertising and Marketing Activity
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- Adspend in travel money declines for second year in a row
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- Figure 26: Total above-the-line, online display, and direct mail advertising expenditure on travel money services, 2014-18
- Thomas Cook is the top travel money advertiser
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- Figure 27: Top 10 spenders on advertising for travel money and prepaid cards, 2017-18
- There is no dominant advertising channel
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- Figure 28: Total above-the-line, online display, and direct mail advertising expenditure on travel money, prepaid cards, and international money transfers, by media type, 2018
- Nielsen Ad Intel coverage
Brand Research
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- What you need to know
- Post Office scores highly in both differentiation and trust
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- Figure 29: Attitudes towards and usage of selected brands operating in the travel money sector, May 2019
- Key brand metrics – Nationwide leads the way on recommendation
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- Figure 30: Key metrics for selected brands operating in the travel money sector, May 2019
- Brand attitudes: Sainsbury’s Bank is associated with rewarding loyalty
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- Figure 31: Attitudes, by brand operating in the travel money sector, May 2019
- Brand personality: TUI’s association with holidays ensures it stands out as a fun brand
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- Figure 32: Brand personality – macro image, May 2019
- Supermarket brands are perceived as affordable
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- Figure 33: Brand personality – micro image, May 2019
- Brand analysis
- Post Office stands out in most positive attributes
- Holiday specialist TUI benefits from ‘vacation-association’
- High-street banking brands benefit from overall reputation…
- … but Metro Bank struggles in comparison amid negative headlines
The Consumer – What You Need to Know
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- Debit card use set to overtake foreign currency among under-35s
- Older holidaymakers are more likely to book ahead
- Force of habit and preconceptions are main barrier to overseas card usage
- Most holidaymakers expect to take action against a weaker Pound
- Majority of consumers unaware of and uninterested in alternatives
Methods of Spending Abroad
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- 78% use travel money
- Usage of payment cards continues to grow…
- …catching up with evolving domestic trends
- Prepaid cards retain their appeal
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- Figure 34: Methods used to spend money whilst on holiday abroad, November 2018
- Access is key when it comes to method chosen…
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- Figure 35: Methods used to spend money whilst on holiday abroad, by age group, November 2018
- …and more affluent consumers are more likely to diversify
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- Figure 36: Repertoire of methods used to spend money whilst on holiday abroad, November 2018
Timing of Travel Money Arrangements
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- Half of holidaymakers purchase travel money in advance
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- Figure 37: Timing of travel money arrangements, November 2018
- Older holidaymakers more likely to book ahead
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- Figure 38: Timing of travel money arrangements, by age group, November 2018
- But consumers can learn to recognise the advantages of early planning
Barriers to Overseas Card Usage
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- Force of habit and preconceptions keep cash relevant
- But more can be done to reassure consumers
- Acceptance and infrastructure less of a concern
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- Figure 39: Barriers to overseas card usage, November 2018
Impact of Brexit and the Devaluation of the Pound
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- 82% of holidaymakers are likely to take action
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- Figure 40: Actions likely to be taken in response to the weak Pound, November 2018
- Women more likely to adapt their behaviours…
- …and men to amend their travel money arrangements
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- Figure 41: Actions likely to be taken in response to the weak Pound, by gender, November 2018
- Expect people to be proactive and resourceful
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- Figure 42: Repertoire of actions likely to be taken in response to the weak Pound, November 2018
Awareness of and Interest in Alternative Overseas Spending Methods
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- Majority of consumers unaware of alternatives to foreign currency…
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- Figure 43: Awareness of alternative overseas spending methods, November 2018
- …and likely to stick to what sounds familiar…
- …even if it sounds too good to be true
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- Figure 44: Interest in alternative overseas spending methods, November 2018
- There is potential in reaching out to the unaware
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- Figure 45: Awareness of and interest in alternative overseas spending methods, November 2018
Appendix – Data Sources, Abbreviations, and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
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- Figure 46: Additional best- and worst-case forecast for annual expenditure on overseas trips by UK residents, 2018-23
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