Press Releases | Visa
UK households set to spend £63.4 billion on international travel by 2025
London, June 22nd, 2016 – A new study commissioned by Visa forecasts significant growth in international travel by UK households in the next decade. UK spend on global travel is predicted to reach £63.4 billion in 2025, up 58% on 2015. On average, each UK household is set to spend £9,300 annually by 2025, up from £6,500 in 2015.
The study, conducted with Oxford Economics, looked at current travel patterns of Visa-branded cardholders across the globe combined with industry estimates and forecasts for travel. According to the study, the UK will rank as the 2nd highest spenders on foreign travel in Europe by 2025, just slightly behind Germany, and the 4th globally.
Spend by older travellers is forecast to drive overall growth in the UK over the next decade. The number of outbound trips taken by over 65 year olds is set to grow at 6.5% annually between 2015 and 2025, compared with 3.8% for 35 – 64 year olds, and 1.3% for under 34 year olds.
Globally, estimated cross-border travel around the globe will rise dramatically to £979.9 billion in 2025. Roughly 282 million households will plan at least one international trip per year by 2025, up nearly 35% from 2015. By 2025, China is predicted to have the highest level of household spending in 2025, reaching £167.1 billion.
Travel spend amongst households with annual earning over £13,000 ranked by projected 2025 spend.
|Rank||Country||2025||Increase over 2015|
|2||United States of America||£87.7 billion||33%|
|4||United Kingdom||£63.4 billion||58%|
|5||Russian Federation||£32.2 billion||118%|
|6||Hong Kong, China||£31.0 billion||78%|
|10||South Korea||£22.5 billion||63%|
The study identified key drivers expected to impact global travel over the next decade, including a growing middle class globally, greater Internet connectivity and improved transportation infrastructure across many countries, and an aging global population with more time for leisure travel.
Kevin Jenkins, Managing Director UK & Ireland, Visa Europe, commented:
“Britons’ love of travelling shows no signs of abating. In the next decade we’ll see an expanding travelling class that will spend a growing portion of their household income on international travel.
“More foreign trips mean more decisions to make on spending money overseas. Using a card at home is a familiar daily ritual and more people begin to realise, through experience, that card payments and ATM withdrawals abroad are not only convenient, but easily available and safe. Wherever the foreign destination, paying can remain just as familiar.”
Highlights of the global report include:
- The Rise of a New Global Traveling Class: Growing income levels around the world are creating a new “travelling class”. The study uncovered that worldwide, households that make at least £13,000 per year account for more than 90% of spending on international travel today. By 2025 it is estimated that nearly half of all global households (945 million) will be within this income range, spurring greater international travel and spending, particularly by households from emerging markets such as China, Russia, and Brazil.
- Global Aging: By 2025, travelers aged 65+ will more than double their international travel to an estimated 180 million trips, accounting for one-in-eight international trips globally. The study estimates that older travellers will be able to afford longer trips that provide greater comfort at higher prices. Trends such as “medical tourism,” whereby aging populations undertake international travel for medical purposes, will also take hold in the future.
- Increasing Connectivity: The combined forces of globalisation and technology are expanding access. Construction of more than 340 new airports is expected over the next decade, creating new routes and destinations that will make international travel easier and more convenient. At the same time, awareness of travel options is spreading with the rapid uptake in Internet access and the number of mobile devices around the world. Digital connectivity is not only fostering greater spontaneity in travel, but also spurring a broader array of personalised travel and tourism options as well.
An executive summary along with country and region-specific data can be found on www.visa.com/travelinsights.
Note to editors:
Visa estimated the number of households traveling internationally by comparing Visa-branded cardholders in a given country who have made at least one face-to-face transaction abroad versus the population of all active cardholders in the source country. The figures were adjusted to be representative of the source country’s population regardless of payment methods used by households. The propensities were then used as an input in the forecasts developed by Oxford Economics for the study.
Oxford Economics used survey data on the age and income of international travelers from a sample of 10 countries to calculate international travel frequencies and share of travel by age bracket and income class. The results were extrapolated to a broader set of countries based on their classification as developed or emerging markets and key variables such as GDP per capita and total international arrivals per capita. The estimated travel shares were then compared with each country’s household income distribution and age distribution to develop a historical relationship from which to project international travel shares and volumes by income class and age bracket from 2005 to 2025.