Notably, it highlights travellers expect to spend significantly more on international travel during the coming year with average expected spend of USD3,422, an increase of USD753 per consumer, or 28%, compared to last year.
“But there’s no room for complacency” for businesses, warns Jean-Christophe Lacour, SVP Global Head of Products Management and Delivery, Outpayce. 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,” he says.
The research is based on the responses from 4,500 travellers from the US, UK, France, Germany and Singapore who were surveyed during the second quarter of 2023 using an online methodology by international market research firm Opinium.
Moderation in demand for short-term credit
Last year in the previous edition of the report, a huge 75% of consumers 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.
Travellers value fintech that provides transparency and limits fees
Travelers continue to value fintech services that offer transparency and help them avoid foreign exchange (FX) fees when travelling. Notably, two-thirds (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. More than two-thirds (68%) of respondents said they will pay close attention to FX fees incurred when traveling.
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 twelve months increased by the largest margin, rising to 47%, up 12% year-over-year.