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UK Travel Money market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Travel Money market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Key points included

  • Reacting to Brexit and a weaker Pound
  • The long-term threat from cross-border transfer technology
  • The role of PCWs in helping people find the best travel money options

Covered in this report

This report looks at the travel money market in the UK. This includes:

  • Foreign currency, exchanged either in the UK or abroad
  • Prepaid travel or currency cards
  • Travellers’ cheques
  • Use of domestic debit cards abroad for travel money purposes
  • Use of domestic credit cards abroad for travel money purposes

Market data for this report covers travel money spend by UK residents for any purpose of overseas travel, including holidays, business travel, and visits to friends and relatives abroad. The consumer research conducted for this report focuses primarily on consumer use, attitudes, and behaviours towards travel money for holidays abroad.

Expert analysis from a specialist in the field

Written by Irene Salazar, a leading analyst in the Financial Services sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

As the travel money market adjusts to the new realities of a weaker Pound, consumers are actively adapting their behaviours and attitudes towards paying and spending abroad. Despite the challenges, there are opportunities for providers willing to help people make the most of their pounds. Irene Salazar
Financial Services Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Overseas expenditure decelerates
              • Figure 1: Annual expenditure on overseas trips by UK residents, by purpose of visit, 2010-18*
            • Growth expected to slow down
              • Figure 2: Forecast for annual expenditure on overseas trips by UK residents, 2013-23
            • More people are ordering their travel money online
              • Figure 3: Collection of travel money, 2017-18
            • Number of trips abroad contracts in 2018
              • Figure 4: Number of overseas trips by UK residents, by purpose of visit, 2010-18*
            • Volatility and unfavourable rates continue, but consumers carry on
              • 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
                • Figure 6: Total above-the-line, online display, and direct mail advertising expenditure on travel money services, 2014-18
              • Convenience and familiarity valued by consumers
                • Figure 7: Attitudes towards and usage of selected brands operating in the travel money sector, November 2018
              • FinTech drives innovation and disruption
                • Flexible payment options for booking holidays
                  • The consumer
                    • Debit card use set to overtake foreign currency among under-35s
                      • Figure 8: Methods used to spend money whilst on holiday abroad, November 2018
                    • Older holidaymakers are more likely to book ahead
                      • Figure 9: Timing of travel money arrangements, November 2018
                    • Force of habit and preconceptions are main barrier to overseas card usage
                      • Figure 10: Barriers to overseas card usage, November 2018
                    • Most holidaymakers expect to take action against a weaker Pound
                      • Figure 11: Actions likely to be taken in response to the weak Pound, November 2018
                    • Majority of consumers unaware of and uninterested in alternatives
                      • Figure 12: Awareness of and interest in alternative overseas spending methods, November 2018
                    • What we think
                    • Issues and Insights

                      • 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

                                        • 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

                                                  • Growth in overseas expenditure decelerates
                                                    • Figure 13: 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
                                                      • Figure 14: Annual expenditure on overseas trips by UK residents, by purpose of visit, 2010-18*
                                                    • Europe accounts for 65% of overseas expenditure
                                                      • Figure 15: Annual expenditure on overseas trips by UK residents, by region of visit, 2010-18*
                                                    • Growth expected to slow down
                                                      • Figure 16: Forecast for annual expenditure on overseas trips by UK residents, 2013-23
                                                      • Figure 17: Forecast for annual expenditure on overseas trips by UK residents, at current and constant prices, 2013-23
                                                    • Forecast methodology
                                                    • Channels to Market

                                                      • Large majority arrange their foreign currency before travelling
                                                          • Figure 18: Travel money arrangements, November 2018
                                                        • 76% of holidaymakers use only one method to arrange travel money
                                                          • Figure 19: Repertoire of methods of arranging travel money, November 2018
                                                        • More people are ordering their travel money online
                                                          • Figure 20: Collection of travel money, 2017-18
                                                      • Market Drivers

                                                        • Number of visits expected to have contracted in 2018
                                                          • Figure 21: 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
                                                            • Figure 22: Number of overseas trips by UK residents, by region of visit, 2010-18*
                                                          • Unfavourable and volatile rates continue to impact spending power
                                                            • Figure 23: Spot exchange rates, monthly average, US Dollar-Sterling and euro-Sterling, January 2010-January 2019
                                                          • Keep calm and book a holiday
                                                            • Figure 24: 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

                                                          • Adspend on travel money services declines
                                                            • Convenience and familiarity valued by consumers
                                                              • FinTech drives innovation and disruption
                                                                • Flexible payment options for booking holidays
                                                                • Competitive Strategies

                                                                  • 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
                                                                                  • Figure 25: 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
                                                                                            • Figure 26: Fourex kiosk at Blackfriars London underground station, February 2019
                                                                                        • Advertising and Marketing Activity

                                                                                          • Adspend in travel money declines for second year in a row
                                                                                            • Figure 27: 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
                                                                                              • Figure 28: Top 10 spenders on advertising for travel money and prepaid cards, 2017-18
                                                                                            • There is no dominant advertising channel
                                                                                              • Figure 29: 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

                                                                                                • What you need to know
                                                                                                  • Post Office scores highly in both differentiation and trust
                                                                                                    • Figure 30: Attitudes towards and usage of selected brands operating in the travel money sector, November 2018
                                                                                                  • Key brand metrics
                                                                                                    • Figure 31: Key metrics for selected brands, November 2018
                                                                                                  • Brand attitudes: Sainsbury’s Bank benefits from awareness of Nectar Card
                                                                                                    • Figure 32: Attitudes, by brand, November 2018
                                                                                                  • Brand personality: TUI seen as fun
                                                                                                    • Figure 33: Brand personality – Macro image, November 2018
                                                                                                  • Supermarket brands are perceived as affordable
                                                                                                    • Figure 34: Brand personality – Micro image, November 2018
                                                                                                  • Brand analysis
                                                                                                    • Holiday specialist TUI benefits from ‘vacation-association’
                                                                                                      • High-street banking brands benefit from overall reputation…
                                                                                                        • …but Metro Bank struggles to capitalise on strong card proposition
                                                                                                        • The Consumer – What You Need to Know

                                                                                                          • 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

                                                                                                                    • 78% use travel money
                                                                                                                      • Usage of payment cards continues to grow…
                                                                                                                        • …catching up with evolving domestic trends
                                                                                                                          • Prepaid cards retain their appeal
                                                                                                                            • Figure 35: Methods used to spend money whilst on holiday abroad, November 2018
                                                                                                                          • Access is key when it comes to method chosen…
                                                                                                                            • Figure 36: Methods used to spend money whilst on holiday abroad, by age group, November 2018
                                                                                                                          • …and more affluent consumers are more likely to diversify
                                                                                                                            • Figure 37: Repertoire of methods used to spend money whilst on holiday abroad, November 2018
                                                                                                                        • Timing of Travel Money Arrangements

                                                                                                                          • Half of holidaymakers purchase travel money in advance
                                                                                                                            • Figure 38: Timing of travel money arrangements, November 2018
                                                                                                                          • Older holidaymakers more likely to book ahead
                                                                                                                            • Figure 39: 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

                                                                                                                            • Force of habit and preconceptions keep cash relevant
                                                                                                                              • But more can be done to reassure consumers
                                                                                                                                • Acceptance and infrastructure less of a concern
                                                                                                                                  • Figure 40: Barriers to overseas card usage, November 2018
                                                                                                                              • Impact of Brexit and the Devaluation of the Pound

                                                                                                                                • 82% of holidaymakers are likely to take action
                                                                                                                                  • Figure 41: 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
                                                                                                                                    • Figure 42: Actions likely to be taken in response to the weak Pound, by gender, November 2018
                                                                                                                                  • Expect people to be proactive and resourceful
                                                                                                                                    • Figure 43: Repertoire of actions likely to be taken in response to the weak Pound, November 2018
                                                                                                                                • Awareness of and Interest in Alternative Overseas Spending Methods

                                                                                                                                  • Majority of consumers unaware of alternatives to foreign currency…
                                                                                                                                    • Figure 44: 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
                                                                                                                                      • Figure 45: Interest in alternative overseas spending methods, November 2018
                                                                                                                                    • There is potential in reaching out to the unaware
                                                                                                                                      • Figure 46: Awareness of and interest in alternative overseas spending methods, November 2018
                                                                                                                                  • Appendix – Data Sources, Abbreviations, and Supporting Information

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

                                                                                                                                          • Forecast methodology
                                                                                                                                              • Figure 47: Additional best- and worst-case forecast for annual expenditure on overseas trips by UK residents, 2018-23