Brits cut back half a billion pounds in holiday spend

But Spain and USA still top destinations

Namibia, Lebanon and Kenya emerge as destinations to watch

20th May 2010

Spending by British holidaymakers abroad fell by more than half a billion pounds in 2009 according to analysis by Visa Europe* of UK Visa cardholders’ transactions.

The research which forms part of the second annual Visa Europe Travel Report is based on analysis of the spending trends and patterns of 86 million UK Visa cardholders. It found that total spending abroad fell by 4% (£564 million) on 2008, as did the number of transactions (falling from 134 million to 128 million).

The trend in spending less abroad was reflected in travellers’ purchases. The amount spent in department stores abroad, for example, fell from £189m to £151m, a decline of 20 per cent while spending on car rental fell by 25 per cent from £65m to £49m. For accommodation, spending dropped from £1.68bn to £1.44bn, a 14 per cent decline. However, spending in supermarkets increased by 18 per cent from £52m to £62m suggesting holidaymakers are choosing to eat in more.

Countries such as Namibia, Lebanon and Kenya bucked the trend as travellers flocked to these destinations. Each country saw a 53 per cent, 40 per cent and 28 per cent upturn in spending respectively. These destinations are likely to have benefited from the relative weakness of the pound, as travellers sought to travel further afield. More than two-fifths (42 per cent) of those questioned by Visa Europe said the strength of the pound had an impact on their travel destination**.

Table 1 - Countries with the biggest % increase in spend

Visa Europe expects to see an upturn in foreign spending and is expecting a slight increase in spending over 2010. Visa Europe’s research amongst travellers indicates that 28 per cent of holidaymakers are planning to spend more than they did last year while just 21 per cent said they would spend less.

British holidaymakers reduced their spending on Visa cards in the USA by £178 million last year, making the States the biggest victim of British cardholders’ cutbacks. In 2008 Britons spent £1.63bn in the USA but last year this fell to £1.45bn. The next biggest losers were France and Spain which both experienced similar declines. Spending in France fell from £1.52bn to £1.40bn a reduction of £117m, while Spain saw spend fall from £1.80bn to £1.71bn a fall of £83m. Despite this, Spain, the USA and France still topped the list of destinations by spend. With the research showing that almost half the people surveyed (46%) don’t like carrying cash abroad, these figures indicate that Brits have continued to use their Visa cards abroad over cash.

Table 2 - Biggest total spending reductions

Table 3 – Top five destinations by total spend

Tony Gibbons, Head of Debit, Visa Europe said: “We have seen a constant growth in consumers using their Visa cards abroad over the last five years, showing cards are more convenient and safer than using cash. However due to the economic climate, in the last twelve months we have seen a slight slow down in card spend abroad. The global downturn hasn’t put us off travelling instead we’ve scaled back our spending and are looking to extract as much value from our trips as possible. For example people are shifting spend from eating out to eating in. As people start to travel abroad again, we expect to see spend pick up over the next few years.”

Notes to editors

* Based on analysis of Visa Europe’s own spending data

** Lightspeed research amongst +1000 UK adults  

About Visa in the UK

In the UK, Visa is the leading debit card with over 58 million debit cards issued. In the 12 months ending June 2009, these cards were used to make 3.7 billion purchases. In the same period, there were 618 million purchase transactions on Visa UK credit cards. Visa has unsurpassed acceptance and purchase protection at approximately 29 million retail locations worldwide

Visa Europe is a membership association that is the leading European payments system, developing innovative products and technologies to benefit its 4000 plus member banks and their customers (cardholders and retailers). In October 2007, Visa Europe became independent of the new global Visa Inc., with an exclusive, irrevocable and perpetual licence in Europe.

For more information, visit www.visaeurope.com