Despite pressures exerted by the cost of living crisis at home, this year’s Post Office Travel Money Holiday Spending Report reveals that growing numbers of Britons are prioritising holidays and plan to travel abroad this year. Over half – 57 per cent – of adults surveyed for the report intend to travel abroad, up from 53 per cent last year and 43 per cent in 2021, while even more families – 66 per cent – are planning an overseas getaway.
Holidaymakers still harbour concerns about holiday finances but worries about the cost of accommodation (84 per cent) and flights (82 per cent) outweigh fears about the UK cost of living (78 per cent). Almost as many, 77 per cent, are concerned about the cost of meals, drinks and other tourist items abroad. Post Office says they have a good reason. In recent years the gap between budgets set and cash spent has continued to widen, with two-thirds of holidaymakers (71 per cent of families) complaining that unexpected ‘rip off’ charges had led to their overspending.
On their most recent trip abroad, over four in five (81 per cent) of holidaymakers set a budget averaging £338.35 per person but only three in ten of them stuck to it. The remainder (70 per cent) paid an average of £135.22 – over 39 per cent – more than they planned. Overspending is also commonplace among families – and on the rise. Over three-quarters (77 per cent) of families set a budget averaging £637.65 but only 23 per cent of them stuck to it. 77 per cent splashed out an average of around £243 – 38 per cent more than the budget they set. Compared with four years ago, family overspending levels are now 53 per cent higher than in 2019 when this averaged £159.
Although prices charged for excursions, attractions, meals and drinks, restaurant service charges and transport are regarded as the biggest holiday ‘rip offs’, growing numbers of Britons – particularly families – complained about charges made for credit or debit card transactions and for using ATMs. One-in-five families objected to credit card transaction charges, while 18 per cent said that debit card charges were also unfair. 20 per cent were annoyed about being charged multiple times for ATM cash withdrawals and 12 per cent felt ripped off when they agreed to make a credit card payment in sterling rather than local currency, only to find that this incurred an extra charge.
Laura Plunkett, Head of Travel Money at Post Office, which accounts for one-in-four UK foreign exchange transactions, said: “Despite good intentions, our research shows that the majority of British holidaymakers are struggling to get their budget right and end up paying a financial penalty for this when they need to change more money while abroad.
“When planning a trip abroad, it is worth bearing in mind that there are improved rates for higher value exchange transactions in Post Office branches and online. This means holidaymakers who set realistic budgets based on past experience will get more for their money and can avoid the risk of poor exchange rates and transaction charges incurred at ATMs abroad or when paying with credit or debit cards. Another practical solution is to carry a combination of foreign notes and funds held on a pre-paid Travel Money Card that will not incur transaction charges.”
This year’s Holiday Spending Report research revealed that growing numbers of holidaymakers – one-in-seven of those surveyed – are loading cash onto a pre-paid card, like the contactless Post Office Travel Money Card, which is a safe way to carry money as it is separate from a bank account. Only three-in-ten (29 per cent) changed all their money before leaving the UK and avoided the need to get more cash while abroad.
Although city breaks remain the top choice for two-in-five of British holidaymakers, the Post Office research reveals that significant numbers try to cut spending by choosing all-inclusive holidays. Over a third (36 per cent) of those planning trips this year intend to follow this route and half of these holidaymakers view all-inclusive packages as good value because they need not worry about taking holiday spending money. However, extra spending in their hotel and in local resorts led most all-inclusive holidaymakers to splash out an average of nearly £700 extra on their last trip.
Families spent even more – an average of around £750. 16 per cent of them said that extras not included in their all-inclusive package cost more than they expected and one in seven were surprised that not everything was included.
Quantifying this, the Post Office research shows that the amount spent on extras ranging from food and drink to excursions, water sports, internet access and spa treatments has risen by over 20 per cent since last year. The most significant rises were in luxury items like spa treatments (up 21 per cent to £65.84) and water sports (up 39 per cent to £65.67. At the same time, well over three-quarters of all-inclusive holidaymakers are continuing to spend significant amounts of money away from their resort in local restaurants, bars and shops. Spending levels on food and drinks items rose 18 per cent from £248 last year to £293.
The Post Office is the UK’s leading foreign currency provider, offering over 60 currencies for pre-order at 7,000 Post Office branches or online at www.postoffice.co.uk/travel for next-day branch or home delivery. 3,600 larger Post Office branches stock the leading currencies and more than 7,000 offer euros over the counter without pre-order. These can also be ordered online for same-day ‘click and collect’ at selected branches, next-day collection at any branch or home delivery.
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