Cost-Saving Holiday Tips

With the ongoing global recession, many holidaymakers want to stretch their pounds further and make the most of their travel budgets. Recent research by Penfold found that the search interest for the term "save for holidays" increased by over 300% between April 2022 and April 2023, indicating a growing demand for budget-friendly travel options and money-saving tips. Even with rising costs and tighter budgets, it doesn't mean that you have to sacrifice your dream vacation; it simply means getting creative with your planning. To help travellers save money in 2023, Penfold has conducted extensive research to uncover the best and most effective money-saving strategies, as well as the types of holidays, destinations, and travel days that are particularly well-suited for cost-conscious travellers.

Why are people looking to save for holidays?

Despite the rising cost of living, recent data suggests that consumers' desire to travel remains strong. A study by ABTA, a leading travel association in the UK, found that 65% of people are planning to holiday abroad in the next 12 months, highlighting the ongoing importance of travel in people's lives. The ongoing trend of prioritising experiences over material possessions, as demonstrated by the rise of the ‘experience economy’, has led to an increased emphasis on vacations, whether they are extravagant getaways or short weekend breaks.

In 2023, average holiday prices have seen an upward trajectory due to factors such as inflation and increased demand. However, this has not deterred travel enthusiasts from exploring new destinations and seeking memorable experiences. In the UK, holidaymakers are budgeting £420 per person to spend while on a one-week holiday.

Holidaymakers are using a variety of methods, such as early booking, being flexible with trip dates, and using flight comparison websites, to maximise their travel costs. Additionally, a lot of visitors favour off-the-beaten-path locations and unique, genuine experiences over conventional tourist sites.

Most Affordable European Locations

The average cost of a holiday for UK travellers is approximately £420 per person on a one-week holiday, with daily expenses potentially reaching up to £60 on average. To help you make the most of your budget, we've compiled a list of the top 10 budget-friendly European destinations, taking into account the most budget-friendly, average travel costs and daily expenses.

The Top three most affordable locations are:

1. Turkey is the most budget-friendly destination on this list, with an average daily budget of £13. Accommodation costs are quite low at £5.22 per night, and the average cost of food per day is only £4.31.
2. Poland is a great budget-friendly destination in Europe. The average daily cost for travellers can reach £18 if you decide to travel on a budget, which includes accommodations, meals, and transportation. Budget accommodations can be found for around £10 per night, and the average cost of food in a day can reach £4.88.
3. Bulgaria offers a mix of beautiful landscapes and historical sites at affordable prices. The average daily cost for travellers can range between £23 if you go with the cheap travel style, which includes accommodations, meals, and transportation. Budget accommodations can be found for around £13 per night, and the average cost of food in a day can reach £5.

*Please note that these European destinations offer affordability based on average daily budgets, accommodations, meal costs, and transportation. Actual expenses may vary depending on individual preferences and travel choices.

The Most Affordable Travel Destinations Based on Favourable Exchange Rates

The fluctuating currency exchange rates can significantly impact the affordability of holiday destinations for British travellers. We will look at the most affordable travel destinations based on favourable exchange rates from the British Pound (GBP) to the local currencies. By understanding how exchange rates affect your travel budget, you can explore exciting new destinations without breaking the bank.

The attractive GBP performance against various currencies can enhance the value of their spending money, allowing them to indulge in even more experiences during their trips.

Argentina tops the list with the most favourable exchange rate, at 276.36 ARS for £1.

Indonesia follows closely, with 18,513.71 IDR for every £1

In Asia, the exchange rates for Vietnam and India also make these destinations more enticing for UK holidaymakers. With £1 equating to 29,074 VND and 102.02 INR respectively

The strong performance of the GBP against various currencies presents a fantastic opportunity for British travellers to explore new destinations and enjoy unforgettable experiences at a more affordable cost. However, it is important to remember that exchange rates are subject to change, and the actual affordability of a destination depends on various factors such as the cost of living, flights, accommodations, and daily expenses.

The Best Days to Travel for Maximum Affordability

Planning a vacation can be an exciting yet overwhelming task, especially when it comes to finding the best deals on flights and accommodations.

To make the most of your budget, aim to book your flights on the cheapest days of the week. Research has consistently shown that Tuesday and Wednesday are the most affordable days to fly. These days generally have fewer business travellers and less demand, leading to lower airfares.

On the other hand, peak prices and busy days often coincide with the beginning and end of the workweek, as well as weekends. Fridays and Sundays are typically the most expensive days to fly due to higher demand from both leisure and business travellers. Additionally, holiday periods, such as Christmas, New Year's, and school breaks, often see inflated prices and increased demand for flights and accommodations. According to Which?, package holidays and flights can be more than 30% more expensive than last year.

Strategically planning your vacation around the most affordable days to fly and being aware of peak travel periods can significantly impact your travel budget.

Tips for Securing the Cheapest Prices

• Travel during off-peak seasons to take advantage of lower prices and less crowded attractions. May to June and September to October are the best times to travel as airfares, accommodations, and even attraction fees tend to be lower than during peak seasons, as demand is reduced. According to a study by CheapAir.com, travelling during off-peak seasons can save travellers up to 20% on airfare and accommodations.
• Be flexible with your travel dates and destination, allowing you to capitalise on last-minute deals and promotions. Research by Skyscanner found that travellers who are flexible with their travel dates and destinations can save up to 25% on flights. 
• Set up fare alerts on websites like Skyscanner or Google Flights to monitor price fluctuations and grab the best deals. A study by Going.com found that users who set up fare alerts on their platform saved an average of $550 per ticket. 
• Book flights and accommodations well in advance or take advantage of last-minute discounts. Data from Kayak's 2022 Travel Hacker Guide suggests that travellers who book flights and accommodations more than 21 days in advance save an average of 10% on their trips. On the other hand, last-minute discounts can save travellers up to 30% on unsold hotel rooms and last-minute flight seats.
• Use loyalty programs and credit card rewards to save on flights and accommodations. A 2021 guide by Forbes Advisor explains how travellers can save money on flights, accommodations, and other travel-related expenses by taking advantage of travel rewards credit cards and loyalty programs. By accumulating points through these programs, travellers can redeem them for flights, hotel stays, and more.

By being proactive in your financial planning, you can allocate resources wisely and prioritise the aspects of your trip that matter most to you. This approach allows you to focus on creating lasting memories and immersing yourself in new cultures, cuisines, and environments without the stress of overspending.

Moreover, practising smart money management while travelling also enables you to optimize your travel experiences by taking advantage of deals and discounts offered by various travel providers. Being financially savvy ensures you can strike a balance between indulgence and frugality, making it possible to experience the best of both worlds.

Pete Hykin, CEO and Co-Founder at Penfold, a workplace pension provider, comments

“The best way to save money on holidays is through careful research, planning, and flexibility. Stay informed on exchange rates, consider travelling during off-peak seasons, and compare prices for flights, accommodations, and activities. Embrace the art of budgeting and take advantage of discounts or deals offered by travel providers. Remember, a memorable holiday experience doesn't always have to come with a hefty price tag; with a strategic approach, you can create unforgettable memories without putting a strain on your finances."