Sun, sea and spend! Seven-in-ten holidaymakers blow budgets in hotspots abroad

• Over half of those surveyed in the latest Post Office poll say they will travel abroad this year – citing the high cost of UK breaks as a key factor (www.postoffice.co.uk/holidayspending)
• Careful budgeting crucial to avoid busting budget as 7-in-10 overspent by 38% on last holiday
• Nearly two-thirds (63%) also said they had been ripped off on their last trip abroad
• All Inclusive trips will be popular but cost hundreds of pounds more than the paid-for package

Despite goodintentions, Britons travelling to holiday hotspots overseas are continuing to bust their budgets by hundreds of pounds, according to the annual Holiday Spending Report from Post Office Travel Money, the UK’s leading provider of foreign currency. Research for the report shows that 53 per cent of over 2,000 Britons polled intend to travel abroad and, for almost two-thirds (64 per cent) of them, the high cost of UK-based breaks was an important factor in their decision-making. However, the research also revealed that three-quarters of holidaymakers set a budget for their last trip abroad, but resort spending cost seven-in-ten of them an average of 38 per cent extra.

Although over half (54 per cent) of those planning holidays abroad this year intend to allocate more spending cash because they expect costs to increase, past levels of overspending indicate that individuals will need to allow at least £477 and families around £890 if they are to avoid busting their budget again. On their last overseas trip the research found that individual holidaymakers set a budget averaging £344.38 but only three-in-ten stuck to it and the rest spent an average of £132.46 more. 76 per cent of families also set a budget but over three-quarters (76 per cent) of them lost control of their purse strings and paid out £243.14 on top of the budget they had set of £644.43.

Concerns expressed about the cost of accommodation, travel and resort meals and drinks by Britons planning trips abroad may mean that many cash-strapped holidaymakers will turn to budget destinations. This is especially the case for the signficant minority – 24 per cent of those surveyed – who say they will have to cut their costs as they have less money available to spend.

All Inclusive holidays are regarded as another way to rein in costs and look set to be more popular than self-catering. Twice as many families – 48 per cent compared with 23 per cent – told Post Office Travel Money they would be go All Inclusive rather than choose to self-cater. 35 per cent of individual holidaymakers will go this route as well.

However, while 46 per cent of holidaymakers who have gone All Inclusive in the past five years or plan to do so this year view this type of holiday as good value ‘because everything is included and they do not need to worry about taking holiday money’, significant numbers splash out on extras. The latest Post Office research reveals that the proportion of people paying for extras has again risen across the board – both in All Inclusive hotels and in local resorts.

The numbers paying extra for food and drinks in their All Inclusive resort has trebled over the past eight years to 48 per cent - although this may be because fewer items are now included in the paid-for package. For example, the percentage paying for local brands of alcohol and soft drinks – once a cornerstone of the free drinks promise made by All Inclusive resorts – has mushroomed to around eight times the 2014 level when just six per cent of people paid for them. Furthermore, 73 per cent of individuals and 81 per cent of families head out to local resorts for meals and drinks.

Nonetheless, there is some evidence that holidaymakers have been tightening their belts. Overall, 46 per cent spent an average of £343.53 on nine food and drink items, down 12 per cent on 2021 levels. Away from their All Inclusive hotel, the amount spent on food and drinks has dropped 16 per cent to just under £248. The conclusion drawn by the report is that more Britons on All Inclusive packages are prepared to pay for extras but are watching their wallets and curbing their spending.

Nick Boden, Head of Post Office Travel Money, which accounts for one-in-four UK foreign exchange transactions, said: “Over the past five years, research for the Holiday Spending Report has consistently revealed that most Britons start with good intentions by setting a budget but find that it is inadequate once they get to their resort. We urge them to think back to their last holiday and set a budget based on past experience. That way they can avoid extra fees for paying with a debit or credit card or having to withdraw cash from an ATM. A good solution is to carry a combination of cash and money held on a pre-paid Travel Money Card that will not incur extra transaction charges.”

A range of factors help to account for the high levels of overspending, but almost two-thirds (63 per cent) of holidaymakers put it down to ‘rip offs’. They named airline prices for meals and drinks onboard, excursion costs, attraction entry and compulsory restaurant service charges as the biggest culprits. However, significant numbers were annoyed about the extra charges levied on credit or debit card transactions.

One-in-six complained about debit card transaction charges, while 14 per cent said that credit card charges were unfair. 16 per cent were irritated by the charges made at ATMs or in hotels for withdrawing cash using a credit card and 14 per cent at being charged multiple times to withdraw cash at an ATM. Despite this, only a third (33 per cent) had changed enough money in the UK to avoid these charges and 21 per cent said they had only changed a small amount of cash in the UK because they planned to use ATMs abroad.

The Post Office is the UK’s leading foreign currency provider, offering around 60 currencies for pre-order at around 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 around 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.

Ends

Notes to Editors:

¹ Consumer research by Yonder for Post Office Travel Money among 2,080 UK adults (30 April-1 May 2022), of whom 1,345 have been on a holiday abroad in the past five years and 1,095 (53 per cent) are planning to do so this year (561 of the survey sample were parents and 369 of these had been on a family holiday in the past five years, with 333 planning to do so this year).