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Posted July 16, 2018

UK travel

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Uncertainty around the Brexit referendum led to many predictions of its impact on UK travelers. Since that historic 2016 vote, outbound travel has increased, and Travolution recently reported long-haul travel increased 50% from the UK. They note “passenger numbers to all destinations are up 6%, buoyed by increases to long-haul destinations, including the Americas, up 56%, and Asia up 50%.”

Other findings Travolution shared include:

  • 7 of 10 countries that have seen an increase in UK travelers are in Asia, including Singapore with a 232% increase
  • Helped by a 178% growth in visits to Los Angeles, the US moved from 9th to 5th “most popular destination for British travelers”

The increase in travel from the UK seems to be a combination of factors, including the exchange rate, the increase in low-cost long-haul carriers and the continued importance UK residents place on travel.

Exchange Rate = More Attractive Destinations

Earlier this year, the Sunday Express quoted Andrew Brown of Post Office Travel Money in a piece about the Post Office’s 10th annual Worldwide Holiday Costs Barometer, “Every long-haul currency in our top 40, except for the Malaysian ringgit, has fallen against sterling since last February and, with savvy travelers watching exchange rates carefully, there is good reason to believe that more of them will consider holidaying further afield this year.”

Where does the exchange rate help UK travelers? Many countries’ currency has fallen against the pound this past year, including:

  • Mexico’s peso (dropped by 16.7%)
  • Costa Rica’s colon (16.6%)
  • Lucia’s (Eastern Caribbean) dollar (12%)
  • New Zealand’s dollar (10%)

Emma Coulthurst from the price comparison site TravelSupermarket told The Guardian earlier this year, “The reality is long-haul destinations can offer incredible value this summer.”

More Low-Cost Long-Haul Options

In ABTA’s Travel Trends report, the UK’s largest travel association predicts low-cost long-haul travel will “go mainstream in 2018” and that carriers such as Norwegian Airlines, WOW Air and Eurowings will increase the number of “flights on offer in 2018, allowing people to go further afield in fuel-efficient aircraft without the extra cost and make the most of more competitive currencies.”

According to the Centre for Aviation, as of March, there were 21 low-cost long-haul airlines operating widebody aircraft and 19 of those were launched in just the past six years.

BBC’s Chris Gibson reported on the impact of low-cost carriers earlier this year. He stated, “A new breed of low-cost carriers such as Norwegian, WOW, and Primera are taking on the old guard such as British Airways and Air France-KLM in the skies above the Atlantic. In fact, Norwegian has just beaten British Airways’ record for the fastest transatlantic flight in a subsonic aircraft after one of its planes made the journey from JFK in New York to London Gatwick in just five hours and 13 minutes”.

Gibson notes the importance of the UK to Norwegian. “It flew 5.8 million passengers from the UK and Ireland and launched more than 15 routes in 2017.” He adds, “Norwegian recently secured an additional 28 weekly slots at Gatwick. It hopes to build on its existing routes to nine US cities, Singapore and now Buenos Aires.”

Traveling Is A Priority

The December 2017 ABTA report states that “despite wider economic issues, holidays are still a spending priority for UK consumers,” noting that many are cutting back on eating out and entertainment to save for travel. The report also cites industry research that found a 5% increase in summer bookings over the same time the previous year, and a 6% increase (to 31%) in those who expect to spend more on travel in 2018.

The Travolution article echoes some of the ABTA findings; in particular, that 25% of UK travelers “have done at least one thing to save money in relation to holidays or breaks since the EU referendum.”  The influence of younger first-time travelers is also having an impact on long-haul travel since “13% [of] people aged 16-24 are making plans to visit Asia for the first time, whilst 15% plan an inaugural trip to the US.”

Travel Republic’s survey of 2,000 British adults was done more than a year ago, but it was post-Brexit, so the results are likely still relevant. They asked people about their New Year’s resolutions and found that the resolution for one-third of respondents was to travel more. “Almost as many people said they wanted to travel more as save more money – usually something that everyone puts at the top of their list,” and 45% said they want to “visit a place they’d never been before.”

These UK long-haul travel trends illustrate the payment processing challenges faced by today’s travel companies–paying a growing roster of suppliers around the globe. Our virtual payments solution allows travel companies to pay suppliers in over 150 currencies worldwide, avoiding exchange rate markups and cross-currency fees. In up to 21 of those currencies travel companies can be billed in the same currency as the supplier is paid, which avoids exposure to exchange rate fluctuation risk.

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Clare Murphy

Clare Murphy

Clare joined WEX in 2017 bringing a wealth of experience in travel with leading companies including British Airways Holidays, Air New Zealand, Travelport and Capita Travel & Events. With a background in travel technology and a particular focus on travel payments and procurement, Clare is focused on growing our business and helping our customers in the travel industry to optimise supplier payments achieving tangible business benefits.


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