Mallorca has become increasingly expensive over the past few years and according to a new survey British Holidaymakers “in the know” rate Greece top value as new research shows holiday overspending is at record levels. Greece has narrowly beaten Spain and Portugal to rate as best value among 28 destinations surveyed in a poll of past visitors for the 2024 Post Office Travel Money Holiday Spending Report.
The report also reveals that over three-in-five Britons – and 68 per cent of families – plan to travel abroad this year as overseas trips are named the top priority after paying for food, energy and household essentials. However, holidaymakers overspent at record levels on their last trip abroad.
Over the past decade the gap between budgets set and cash spent has widened to its highest ever level. On their most recent trip abroad, almost four-in-five (78 per cent) of holidaymakers set a budget averaging £334.47 per person, less than on their previous holiday. Only a third of holidaymakers stuck to it and the remaining 67 per cent bust their budget by an average of £154.62 – 46 per cent more than planned and up seven per cent on their previous holiday.
Families overspent by even more. Over three-quarters (76 per cent) set a budget for their last holiday but only 27 per cent of these families stuck to it. The 73 per cent who bust their budget did so by 55 per cent, spending around £312 more than the average budget of £566.26. Family overspending levels have almost doubled since before the Covid-19 pandemic. In 2019 families allocated a spending budget of £630 – significantly more than the £566 average now - and overspent this by around £159.
When asked which items of expenditure were most responsible for their overspending, well over half (57 per cent) of holidaymakers laid the blame on restaurant meals, while 32 per cent named food and drinks that they had bought from a local shop or supermarket. Over a third (36 per cent) attributed their overspending to the cost of drinks and 44 per cent said they overspent on sightseeing and excursions. This chimes with earlier research by Post Office Travel Money for the 2024 Holiday Money Report in which 84 per cent of holidaymakers expressed concern about the cost of meals, drinks and other tourist items in overseas resorts and cities.
For this reason, perceptions of value for money may play an important role in destination choice. When holidaymakers who had previously visited destinations abroad were asked which they rated good value, Greece came top with a score of 94 per cent, ahead of Spain (93 per cent) and Portugal (92 per cent). Post Office research on holiday costs supports the positive views about Greece and Portugal because Athens and Lisbon were among the top five cities in last month’s City Costs Barometer, while the Algarve was rated best value in Europe in the annual Worldwide Holiday Cost Barometer.
Spain did not fare so well as the Costa del Sol came only 14thin the barometer.
Thailand received the highest approval rating of 89 per cent the among 14 long haul holiday destinations surveyed, followed by Mexico at 87 per cent. However, only two-thirds (67 per cent) of Britons who had visited the USA said it offered good value. Dubai was given the lowest score of 51 per cent. Switzerland and Scandinavia were rated least favourably of all by past visitors with scores of just 38 per cent apiece. However, Britons who had never been to either country gave them higher ratings of 45 per cent and 52 per cent respectively. They were two of just four destinations to score better value ratings among non-visitors than those given by past visitors.
Laura Plunkett, Head of Travel Money at Post Office, which accounts for one-in-four UK foreign exchange transactions, said: “The opinions of holidaymakers who have visited a destination are really useful and likely to be a more reliable source of information about value for money than those expressed by people who have no direct knowledge of the country. Most of the 28 destinations included in our good value poll achieved higher scores from past visitors than among those who had to rely on what they had read or heard about the country.”
All-inclusive holiday packages have, traditionally, been regarded as a good way to rein in spending and almost half (47 per cent) of families told Post Office researchers that they are planning this type of holiday in 2024. However, the Holiday Spending Report research reveals that the proportion of people paying for extras has again risen and most people spent hundreds more pounds in their hotel and in local resorts on their last all-inclusive trip.
The numbers paying extra for food and drinks in their all-inclusive resort has more than quadrupled over the past decade to 57 per cent because fewer items are now included in the paid-for package. The percentage paying for local brands of alcohol and soft drinks – once a cornerstone of the free drinks promise made by all-inclusive resorts – has grown to over eight times the 2014 level when just six per cent of people paid for them. Furthermore, 77 per cent of individuals and 81 per cent of families head out to local resorts for meals and drinks.
Despite the rise in numbers paying for extras, there is some evidence that holidaymakers have been tightening their belts. Overall, 51 per cent (53 per cent of families) spent an average of around £373 (£394) on nine food and drink items in their all-inclusive hotel, down by almost seven per cent (six per cent for families) compared with last year. Away from their All Inclusive hotel, the amount spent on food and drinks dropped by around six per cent to just under £274. Families spent over nine per cent less – £300 compared with £331 reported a year ago.
Laura Plunkett, Head of Travel Money at Post Office, said: “The evidence provided by holidaymakers who have travelled abroad in recent years makes it clear that most people set inadequate budgets and end up overspending as a result. Given the rising concerns about resort costs, we urge holidaymakers to think back to the overall cost of their last holiday and set a budget based on that experience. This will be the most practical way to avoid incurring extra fees for paying with a debit or credit card or having to withdraw cash from an ATM. A good solution is to carry a combination of cash and money held on a pre-paid Travel Money Card that will not incur extra transaction charges.”