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The number of Britons choosing to travel abroad has risen for the fifth consecutive year, despite growing concerns over US tariffs and the strength of sterling making holidays more expensive.
More than two-thirds of Britons intend to take a holiday overseas this year, but of the 54 per cent who have already booked a trip, the majority are worried about affording the overall cost, including meals, drinks and other tourist items, according to the Post Office’s annual holiday spending report.
Nearly 80 per cent said exchange rates, as well as the impact of US trade tariffs on prices, were a notable concern, prompting changes to financial behaviour, including putting money aside earlier and increasing budgets to prevent overspending.
This had prompted some to avoid destinations where tariffs could affect prices, while nearly 40 per cent planned to avoid travelling to the US, despite having previously considered doing so.
Instead, Britons rated Spain, Turkey and Thailand as destinations with the best value for money, while Kenya and Scandinavia were rated as offering the poorest value.
More than 80 per cent said they had set a holiday budget averaging £377, but the majority admitted overspending by £140, while families spent £323 more than their average budget of £766 on their last holiday abroad.
“This year’s holiday research again demonstrates that holidaymakers don’t always set a realistic budget and overspend by large amounts as a result,” said Laura Plunkett, head of travel money at the Post Office.
“It’s great to hear that holidaymakers are already planning to budget more for their holidays this year, to avoid coming unstuck when they arrive at their destination.”
Despite being a popular destination, the Post Office Exchange Rate Monitor found that the rise in Thailand’s currency against sterling meant British visitors would get nearly £30 fewer Thai baht on a £500 transaction.
Nearly half of UK holidaymakers added that their choice of destination would depend on the strength of sterling, with Vietnam and Bali offering more value for money.
Although the US has fallen out of favour with many, holidaymakers will feel the benefit of a weak dollar in countries where the greenback is widely used, such as in the Caribbean and Middle East.
The Post Office report also uncovered instances of using debit and credit cards abroad becoming a “costly practice” due to bank transaction charges on ATMs.
“Far too many holidaymakers told us they paid significantly more than they anticipated because of the transaction charges made for using credit and debit cards at an overseas ATM,” Plunkett added.