Travel remains high priority for consumers but transparency is more important than ever
Consumers are forecast to spend 28% more on travel over the next 12 months
The latest edition of ‘consumer travel spend priorities’ research from Outpayce has revealed that consumer demand for travel is expected to remain robust over the coming 12 months - despite continuing economic uncertainty.
‘International travel’ was once again ranked by consumers as the highest discretionary spend priority from a basket of six categories.
All spend categories edged up compared to last year’s study, pointing to a tentative jump in overall consumer confidence.
However, the number of people ranking travel as a ‘high priority’ for the coming year increased by the largest margin, rising to 47%, up 12% year-on-year.
Travellers expect to spend significantly more on international travel during the coming year with average expected spend of £2,690, an increase of £590 per consumer, or 28%, compared to last year.
“This year’s research shows that consumer demand for travel remains strong,” says Jean-Christophe Lacour, SVP global head of products management and delivery at Outpayce.
“People are clearly prepared to spend savings that may have been amassed during the pandemic, and to make sacrifices in other areas, to dedicate more funds to international travel.
“But there’s no room for complacency, travel companies that clearly price their products in the traveller’s native currency, offer flexible ways to pay and focus on delivering a smooth retail experience stand the best chance of converting shoppers into paying customers.”
Last year a huge 75% of consumers also said they were ‘more likely’ to use Buy Now Pay Later (BNPL) services to fund travel.
This number dropped to a still significant 33% of travellers being ‘more likely’ to choose BNPL to fund travel over the coming twelve months, suggesting continued demand for BNPL, albeit at a reduced growth rate.
This trend is evident across all forms of short-term credit with significantly fewer consumers saying they are ‘more likely’ to use credit cards or payday loans to fund travel this year.
Instead, 40% of consumers said they plan to pay for travel by dipping into their savings and a third confirmed they will reallocate spend from areas like clothing and home improvement to fund travel plans.
Another theme that emerged was travellers continuing to place value on fintech services that offer transparency and help them avoid foreign exchange (FX) fees when travelling.
Notably, 66% of travellers said they would be more likely to select a travel company that allowed them to pay in their own currency so they could better understand the cost of travel, which reflects a notable jump of 18% compared to last year. 68% of respondents said they will pay close attention to FX fees incurred when travelling.