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Travel Money - UK - March 2017

Published By :

Mintel

Published Date : Mar 2017

Category :

Banking

No. of Pages : N/A

The travel money market has benefited from rising numbers of people going abroad. However, the decline in the value of the Pound following the Brexit vote will change the way people shop for travel money. Exchange rates are already one of the most important factors when choosing travel money; however, holidaymakers now expect to spend more time shopping around for a good deal and ensuring they budget accurately.

Table of Content

OVERVIEW
What you need to know
Products covered in this Report

EXECUTIVE SUMMARY
The market
Total expenditure abroad grows by 11% in 2016
Figure 1: Forecast for annual expenditure on overseas trips by UK residents, 2011-21
Majority arrange some form of travel money in the UK
Figure 2: Method of arranging travel money in the last 12 months, November 2016
Visits increased by 7.2% in 2016
Figure 3: Number of overseas visits by UK residents, by purpose, 2010-16
Reduced rates will limit spending power abroad
Figure 4: Spot exchange rates, monthly average, US Dollar-Sterling and euro-Sterling, January 2010-January 2017
Companies and brands
Adspend reaches £5.7 million in 2016
Figure 5: Total above-the-line, online display and direct mail advertising expenditure on travel money (including prepaid cards), 2012-16
FinTech drives prepaid cards innovation
Post Office stands out from other travel money providers
Figure 6: Attitudes towards and usage of selected brands in the travel money sector, December 2016
The consumer
Foreign currency remains the most popular payment method abroad
Figure 7: Method of spending money on holiday abroad, November 2015 and November 2016
Travel money gives people reassurance when spending abroad
Figure 8: Attitudes towards travel money, November 2016
Budgeting tools can help people understand how much travel money they need
Figure 9: Attitudes towards budgeting travel money, November 2016
Two out of five use their card for larger costs
Figure 10: Credit and debit card usage abroad, November 2016
Rates and no fees are most important
Figure 11: Factors of importance when arranging travel money, November 2016
Shopping habits set to change following fall in the value of the Pound
Figure 12: Impact of the recent decline in the value of the Pound on arranging travel money, November 2016
What we think

ISSUES AND INSIGHTS
Falling Pound will affect consumers’ travel money shopping habits
The facts
The implications
Foreign currency continues to be preferred due to convenience and familiarity
The facts
The implications
Prepaid cards and apps could be the key to holiday budgeting
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
Total expenditure abroad grows by 11% in 2016
Growth to slow going forward
Majority arrange some form of travel money in the UK
Overseas visits increased by 7.2% in 2016
Europe continues to attract the majority of travellers

MARKET SIZE AND FORECAST
Total expenditure abroad grows by 11%
Figure 13: Total annual expenditure on overseas trips by UK residents, 2010-16
Visiting friends or relatives sees biggest increase in spend
Figure 14: Annual expenditure on overseas trips by UK residents, by purpose of visit, 2010-16
Majority of overseas spend in Europe
Figure 15: Annual expenditure on overseas trips by UK residents, by region of visit, 2010-16
International card payments continue to grow
Figure 16: Value of overseas spend on debit and credit cards, 2015
Growth to slow going forward
Figure 17: Forecast for annual expenditure on overseas trips by UK residents, 2011-21
Forecast methodology

CHANNELS TO MARKET
Majority arrange some form of travel money in the UK
Figure 18: Method of arranging travel money in the last 12 months, November 2016
Preference for in-store purchase
Figure 19: Method of ordering/ collecting travel money in the last 12 months, November 2016

MARKET DRIVERS
Visits increased by 7.2% in 2016
Figure 20: Number of overseas visits by UK residents, by purpose, 2010-16
Biggest increase in visits to Europe
Figure 21: Number of overseas visits by UK residents, by region visited, 2010-16
Outlook looks positive for holiday bookings despite Brexit
Figure 22: Booked holidays in the last three months and intentions to book a holiday in the next three months, June 2012-January 2017
Reduced rates will limit spending power abroad
Figure 23: Spot exchange rates, monthly average, US Dollar-Sterling and euro-Sterling, January 2010-January 2017
Home or abroad?

COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Adspend reaches £5.7 million in 2016
FinTech drives prepaid cards innovation
Brand building through added-value services
Post Office is a brand leader

COMPETITIVE STRATEGIES
Travel money providers remain committed to high street presence
eurochange
No1 Currency
Thomas Cook
FinTech drives prepaid cards innovation
Revolut continues to make waves
Soldo travel card targeted at families
Monzo gains traction among students
Payment Cloud Technologies and FEXCO launch No1 Currency card
Brand building through added-value services
Post Office launches travel money game
Travelex launches holiday planning tool
FairFX
Travel money ‘sales’

ADVERTISING AND MARKETING ACTIVITY
Adspend reaches £5.7 million in 2016
Figure 24: Total above-the-line, online display and direct mail advertising expenditure on travel money (including prepaid cards), 2012-16
Post Office accounts for 46% of all spend
Figure 25: Top 10 advertisers on above-the-line, online display and direct mail advertising expenditure on travel money (including prepaid cards), 2012-16
Digital trumps TV spend
Figure 26: Total above-the-line, online display and direct mail advertising expenditure on travel money (including prepaid cards), by media type, 2012-16
Nielsen Ad Intel coverage

BRAND RESEARCH
What you need to know
Brand map
Figure 27: Attitudes towards and usage of selected brands, December 2016
Key brand metrics
Figure 28: Key metrics for selected brands, December 2016
Brand attitudes: Currency specialists are considered to be worth paying more for
Figure 29: Attitudes, by brand, December 2016
Brand personality: Bank brands are more likely to be viewed as boring
Figure 30: Brand personality – Macro image, December 2016
Most brands viewed as competent and helpful
Figure 31: Brand personality – Micro image, December 2016
Brand analysis
Post Office stands out from other travel money providers
Travel money specialists viewed as exactly that
Supermarket and retail banks fail to engage
Consumers confused over Virgin Money
Holiday specialist Thomas Cook benefits from brand reputation

THE CONSUMER – WHAT YOU NEED TO KNOW
Foreign currency remains the most popular payment method abroad
Travel money gives people reassurance when spending abroad
Frequent credit card use for back-ups/emergencies
Rates and no fees are most important
Fall in the value of the Pound means more will shop around

METHODS OF SPENDING ABROAD
Four in five use travel money abroad
Figure 32: Method of spending money on holiday abroad, 2015 and 2016
Over-55s are more reliant on foreign currency
Figure 33: Method of spending money on holiday abroad, by age, November 2016
Nearly half use only one method of spending
Figure 34: Number of different ways of spending money on holiday abroad, November 2016

ATTITUDES TOWARDS TRAVEL MONEY
Comfort in taking travel money
Figure 35: Attitudes towards travel money, November 2016
Frequent credit card use for back-ups/emergencies
Figure 36: Method of spending abroad, by agreement with the statement ‘I only use my credit card on holiday abroad as a back-up or for emergencies’, November 2016
Half of holidaymakers use PCWs for their travel money
Specialist foreign exchange providers benefit from comparison websites
Figure 37: Method of arranging travel money in the last 12 months, by agreement with the statement ‘I use a price comparison website to find the best deal on travel money’, November 2016
Changing money at the destination

HOLIDAY BUDGETING BEHAVIOUR
Four in five save for their holiday money
Figure 38: Attitudes towards budgeting travel money, November 2016
Budgeting tools can help people understand how much they need to take away
Element of fun in getting the best deal

CREDIT AND DEBIT CARD USAGE ABROAD
Two out of five use their card for larger costs
Figure 39: Credit and debit card usage abroad, November 2016
Credit cards offer protection for larger purchases
Figure 40: Credit and debit card usage abroad, by method of spending abroad, November 2016
Higher-income households more likely to have dedicated overseas cards
Figure 41: Credit and debit card usage abroad, by household income, November 2016

IMPORTANT FACTORS WHEN ARRANGING TRAVEL MONEY
Rates and no fees are most important
Figure 42: Factors of importance when arranging travel money, November 2016
Convenience is key
Figure 43: Factors of importance when arranging travel money, by age, October 2016
Over-45s much more focused on rates
Pre-ordering can mean better rates
People using currency specialists prioritise costs
Figure 44: Factors of importance when arranging travel money, by method of arranging travel money in the last 12 months, November 2016

IMPACT OF BREXIT ON ARRANGING TRAVEL MONEY
Majority plan to arrange travel money
Figure 45: Intentions to arrange travel money in the next 12 months, November 2016
Four in five will compare providers
Figure 46: Impact of the recent decline in the value of the Pound on arranging travel money, November 2016
Two in five concerned about future rate drops
Card users find it difficult to understand impact of falling value of the Pound
Figure 47: Impact of the recent decline in the value of the Pound on arranging travel money, by method of spending abroad, November 2016
Online shoppers more engaged
Figure 48: Impact of the recent decline in the value of the Pound on arranging travel money, by method of arranging/ collecting travel money, November 2016

APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology

APPENDIX – MARKET SIZE AND FORECAST
Forecast Methodology
Figure 49: Additional best- and worst-case forecast for annual expenditure on overseas trips by UK residents, 2016-21

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