2023
9
UK Travel Money Market Report 2023
2023-03-08T03:05:31+00:00
OX1154831
2195
161179
[{"name":"Finance","url":"https:\/\/store.mintel.com\/industries\/finance"},{"name":"Holidays and Travel","url":"https:\/\/store.mintel.com\/industries\/holidays-travel"}]
Report
en_GB
“Spending abroad by UK residents is expected to surpass pre-pandemic levels in 2023. This will primarily be due to rising costs and inflation with the number of holidays remaining below…

UK Travel Money Market Report 2023

£ 2,195 (Excl.Tax)

Description

Discover the latest trends in the UK travel money market. Our UK travel money market report is packed with valuable insights on consumer behaviour, UK travel money market size, and industry trends. With this report, you’ll have the knowledge to stay ahead of the competition and prepare for future challenges.

UK Travel Money Market – Overview

Inflation and the rising cost-of-living are having an impact on the holiday market. The number of trips is not expected to return to pre-pandemic levels in 2023 as consumers find their funds limited. However, the amount of money spent abroad by UK residents will surpass 2019 levels due to high inflation levels and the rising cost of holidays.

The post-pandemic surge in international holidays boosted the UK travel money market size 2022. But, a difficult economic environment meant many holidaymakers retained a conservative approach to spending. If the financial strain does not ease in 2023, many consumers will have to cancel holiday plans, or opt for shorter, cheaper trips, which will limit the amount of money they spend abroad.

Travel Money Market – Current Trends

The rising cost-of-living is leaving many households with limited funds for travel and over a quarter of consumers expect to spend more on their next holiday. Consumers who are keen to travel but are concerned about the costs are likely to be more willing to consider a wider variety of locations than cancel holiday plans altogether. In fact, over half of British holidaymakers already look for destinations where their money will go further. 

Once on holiday, cash continues to be the most commonly used type of travel money, used by 67% of Brits on their most recent trip abroad. However, there is evidence of a slow shift away from cash as a source of travel money. In the last year, debit-card usage has grown. This is largely due to increased accessibility, with digital banks tending to offer fee-free spending or automatic interbank exchange rates.

  • Travel money industry trends: 64% of consumers say they regularly monitor exchange rates before holidays.
  • Travel money consumer behaviour: 71% of people who had taken a holiday in the previous three years had used cash.
  • Travel money market outlook: When booking a holiday, 55% of holidaymakers look for destinations where their spending money can go further.

Future Trends in Travel Money

As Brits continue to struggle with the cost-of-living crisis, shifting consumer behaviour and attitudes present opportunities for the UK travel money market. With many consumers tightening their budgets, travellers are likely to be more willing to consider a wider variety of locations. Travel companies can help those on a budget by recommending locations where spending money can go further. Budgeting tools in banking apps can help consumers manage their finances abroad. There is strong interest in these tools among younger consumers, who are keen to travel but concerned about costs.

Consumer preference is slowly shifting away from cash to card payments, but banks can do more to encourage increased debit or credit card use. Many consumers are concerned about fees incurred when using their card abroad. Almost half of travellers worry about whether their card will be accepted on holidays. Banks and travel money brands can do more to reassure consumers and drive card use abroad. Better communication over fees, or providing guidance on where their card is likely to be accepted will encourage consumers to use their cards more.

Read on to discover more about the UK Travel Money Market Report 2023, or take a look at our other financial services or holidays and travel market research.

Quickly Understand

  • Market size and forecast for overseas spending by UK residents.
  • Brand analysis of the leading players in the travel money sector.
  • Travellers’ holiday activity and plans for the next year.
  • Sources of travel money and the use of cards abroad.
  • Important factors consumers consider when choosing travel money.
  • The impact of the rising cost of living on spending abroad.
  • Consumer attitudes towards travel money.

Products and Brands Covered in this Report

Products: This Report examines how people access currency and spend money while abroad. The main sources of travel money are foreign currency, credit and debit cards, prepaid cards and travellers’ cheques.

Brands: Travelex, Post Office, Monzo, Revolut, FairFX, Asda Money, M&S Bank, Starling Bank, Chase Bank, HSBC.

Expert Analysis from a Specialist in the Field

This report, written by Adrian Reynolds, a leading analyst in the finance sector, delivers in-depth commentary and analysis to highlight current trends in the UK travel money market and add expert context to the numbers.

Spending abroad by UK residents is expected to surpass pre-pandemic levels in 2023. This will primarily be due to rising costs and inflation with the number of holidays remaining below 2019 and the business travel segment having adapted to virtual meetings. Travellers will be looking for locations where their money can go further. Banks and travel money brands must offer guidance on inflation levels abroad, alongside clearly communicating fees for card use and in-app holiday budgeting tools.

Adrian ReynoldsAdrian Reynolds
Principal Analyst – Financial Services

 

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Products covered in this Report
    • Key definitions are as follows:
  2. Executive Summary

    • The market
    • The five-year outlook for travel money
      • Figure 1: Category outlook, 2023-27
    • Rising cost of travel will ensure spending abroad exceeds pre-pandemic levels
      • Figure 2: Market forecast for total spending overseas, 2017-27
    • Holiday booked picked up in 2022 due to savings and credit notes
      • Figure 3: Holiday booking activity, 2022-23
    • Companies and brands
    • Travelex launches new click and collect ATMs
    • Travelex launches new product to lock in exchange rates
    • Further competition comes to the market with ABTA launch
    • Post Office leads the way for reputation and trust
      • Figure 4: Attitudes, by brand, 2022
    • The consumer
    • Popularity of domestic holidays limited need for travel money in 2022
      • Figure 5: Recent holidays, 2022
    • Strong opportunities for travel money in the post-pandemic holiday market
      • Figure 6: Overseas holiday intentions, by age, 2022
    • Cash remains the top purchase method abroad but debit-card use is growing
      • Figure 7: Types of travel money used, 2022
    • Banks lead the way for cards but there are opportunities for retailers
      • Figure 8: Source of cards for spending abroad, 2022
    • Demand for security will boost card payments abroad
      • Figure 9: Important factors when choosing travel money, 2022
    • High proportion of travellers expecting to spend more abroad
      • Figure 10: Holiday spending intentions, 2022
    • Acceptability is a bigger issue than security when it comes to cards
      • Figure 11: Attitudes towards travel money, 2022
  3. Issues and Insights

    • Help consumers find destinations where travel money goes further
    • Communication over fees can help drive debit-card use abroad
  4. Market Size and Performance

    • Post-pandemic surge in international holidays boosted travel money in 2022
      • Figure 12: Total spending overseas by UK residents, by purpose of visit, 2015-22
  5. Market Forecast

    • The five-year outlook for travel money
      • Figure 13: Category outlook, 2023-27
    • Rising cost of travel will ensure spending abroad exceeds pre-pandemic levels
      • Figure 14: Market forecast for total spending overseas, 2017-27
      • Figure 15: Market forecast for total spending overseas, 2017-27
    • Learnings from the last income squeeze
      • Figure 16: Market size for total spending overseas by UK residents, 2007-12
    • Forecast methodology
  6. Market Segmentation

    • Holiday spend rebounds but remains below 2019 levels
    • Business segment grows but will be limited by the shift to digital communication
      • Figure 17: Overseas expenditure by UK residents, by purpose of visit, 2018-22
    • Average spend remains far higher than 2019 as costs rise
      • Figure 18: Average amount spent by UK residents per trip (holidays only), 2015-22
  7. Market Drivers

    • High inflation could make it difficult for households to prioritise travel
      • Figure 19: CPI and CPIH, 2019-22
    • Financial confidence is declining but a large holiday market remains
      • Figure 20: Financial confidence for the year ahead, 2022-23
    • The focus is on everyday cutbacks rather than cancelling holidays… so far
      • Figure 21: Spending habits and the rising cost of living, 2022-23
    • Holiday bookings picked up in 2022 due to savings and credit notes
      • Figure 22: Holiday booking activity, 2022-23
    • Disruption due to strikes could hit travel plans
    • Desire for sustainability could see people spending more on holidays
    • New working culture has created opportunities to work abroad
  8. Competitive Strategies and Launch Activity

    • Travelex fortunes improve following restructure
    • Travelex launches new click and collect ATMs…
    • …and a new product to lock in exchange rates
    • Further competition comes to the market with ABTA launch
    • Supermarket banks can boost demand with loyalty points
    • Digital bank travel money options grow with the success of Chase
    • HSBC brings Global Money Account to the UK
  9. Brand Research

    • Brand map
      • Figure 23: Attitudes towards and usage of selected brands, 2022
    • Key brand metrics
      • Figure 24: Key metrics for selected brands, 2022
    • Brand attitudes: Post Office leads the way for reputation and trust
      • Figure 25: Attitudes, by brand, 2022
    • Brand personality: Travelex and Revolut have a more upbeat brand image
      • Figure 26: Brand personality – Macro image, 2022
    • Reassuring image of Post Office will be vital during cost-of-living crisis
      • Figure 27: Brand personality – Micro image, 2022
    • Brand analysis
    • Post Office well-placed as a trusted brand during a challenging economic environment
    • Asda Money attracts a younger customer base with its affordable brand identity
    • FairFX user base skews younger but awareness remains low
    • M&S Bank is deemed reliable but struggles for differentiation
    • Travelex is deemed more upbeat but trust has been hit by need for restructuring
    • Digital bank potential reflected by Revolut scoring highest for experience
  10. Holiday Activity

    • Popularity of domestic holidays limited need for travel money in 2022
      • Figure 28: Recent holidays, 2022
    • Younger demographics’ return to foreign travel brings opportunity for digital banks
      • Figure 29: Recent holidays, by age, 2022
    • Strong opportunities for travel money in the post-pandemic holiday market
      • Figure 30: Overseas holiday intentions, by age, 2022
  11. Sources of Travel Money

    • Cash remains the top purchase method abroad but debit-card use is growing
    • Cash is going nowhere in the foreseeable future
      • Figure 31: Types of travel money used, 2022
    • Older consumers are sticking with cash when travelling
      • Figure 32: Types of travel money used, by age, 2022
    • Most holidaymakers use multiple sources of travel money
      • Figure 33: Repertoire of types of travel money used, 2022
  12. Arranging Travel Money

    • Banks lead the way for cards but there are opportunities for retailers
      • Figure 34: Source of cards for spending abroad, 2022
    • Strong opportunities for click and collect cash machines
      • Figure 35: Arranging cash for holidays, 2022
  13. Important Factors when Choosing Travel Money

    • Demand for security will boost card payments abroad
    • Exchange rates could influence destination choice
      • Figure 36: Important factors when choosing travel money, 2022
    • Familiarity is keeping older demographics tied to cash
    • Offer flexibility in exchanging unused currency
      • Figure 37: Important factors when choosing travel money, by age, 2022
  14. Travel Money Behaviours

    • High proportion of travellers expecting to spend more abroad
      • Figure 38: Holiday spending intentions, 2022
    • Acceptability is a bigger issue than security when it comes to cards
      • Figure 39: Attitudes towards travel money, 2022
    • Help travellers find options where their money goes further
    • Offer digital budgeting tools in banking and travel money apps
      • Figure 40: Attitudes towards travel money, by age, 2022
  15. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  16. Appendix – Market Size and Forecast

      • Figure 41: Market size and forecast for total spending overseas, 2022-27
    • Forecast methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.

Consumer

Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

Brand/Company

Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

Data

Market reports provide appendices of data to support the research and insight produced. Our databooks* are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

*databooks not available with UK B2B Industry reports.

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