January is a prime time for holiday bookings, with the prospect of a getaway making the winter chill slightly more tolerable for some. According to MyVoucherCodes, over a third (39%) of shoppers are hunting for a bargain holiday during the sales this month.

Moreover, international trips are being eagerly planned, with over half (59%) of people having started discussing dates and locations, as per a recent survey commissioned by American Express. Particularly, younger adults could be spending big this year.

ABTA’s Travel Trends for 2025 report suggests that more than one in five (22%) Gen Z adults plan to spend more on their holidays this year to upgrade their accommodation, compared to 14% of Millennials, 11% of Baby Boomers and 8% of Gen X. With some holidaymakers set to splurge in 2025, it’s crucial to avoid any expensive pitfalls that could ruin your plans.

One such pitfall is not taking out cover as soon as you book. There are various reasons why holidaymakers may need to cancel or shorten their trip – and travel insurance can provide cover for an “unforeseen” event such as illness, bereavement, jury duty, redundancy, significant home damage, or a burglary.

There are also optional add-ons to choose from, like travel disruption cover, which can offer extra protection against events such as natural disasters.

Insurance giant Aviva is encouraging holidaymakers to secure travel insurance as soon as they book their trips, highlighting the potential financial implications of cancelling a holiday due to unexpected events. The insurer’s data reveals that travel insurance can help recover non-refundable costs related to holiday bookings, such as unused flights, accommodation, excursions and car hire.

According to Aviva’s claims data, the average cost of cancelling a European holiday is £725. This includes unused flights, accommodation, car hire, excursions and other associated booking costs.

Based on its 2024 travel insurance claims data, holidays to Greece had the highest average cancellation costs at £1,298. Spain, a favourite destination among UK holidaymakers, saw the most cancellations.

However, it’s not just foreign trips that are affected. Staycations also frequently face cancellations, with the UK ranking second in Aviva’s cancellation figures.

The insurer also warns against failing to declare any pre-existing medical conditions or ongoing medical investigations when taking out a policy, as this could result in a claim being rejected. Resources like the British Insurance Brokers’ Association’s Find Insurance Service can assist individuals with medical conditions and older travellers in finding suitable cover.

Scammers are aware that the holiday booking season is a particularly busy time and may create fake websites or offer deals via social media. They might also copy photos from legitimate websites, so it’s worth conducting an image search to see if the photo has been lifted from another site.

The Take Five to Stop Fraud campaign, spearheaded by UK Finance, advises double-checking website links, cross-referencing accommodation on other websites, and researching the advertised holiday destination to ensure its existence.

In addition to having contacts for your destination when you travel, it’s crucial to have your insurer’s details handy so you can easily reach them if needed during your trip. Your payment card provider’s number could be another useful contact to have in case your card is lost or stolen while you’re away.

Take Five also recommends only carrying the payment cards you plan to use and knowing how to freeze your card within your banking app.

Before booking, check whether the tour operator or travel company is a member of a recognised trade association such as ABTA or ATOL. ABTA is a trade association for UK travel agents, tour operators and the wider travel industry, boasting over 4,300 travel brands in membership.

The ATOL scheme, managed by the Civil Aviation Authority, provides financial protection when booking a package holiday that includes flights. The ATOL website features a tool allowing travellers to verify if their chosen companies are ATOL holders.

James Lynn, co-founder of travel debit card Currensea, warns that busy parents often leave currency exchange until they reach the airport, rather than seeking potentially cheaper alternatives. He also advises against paying in sterling when abroad, as this can result in unfavourable exchange rates.

This advice applies equally to pre-travel expenses such as hotel or flight bookings. Combining this strategy with currencies where the pound is strong can lead to significant savings.

Lynn says: “Our previous research showed that 60% of people are still unaware that choosing to pay in sterling when overseas can result in a much worse rate. But it works just as well when paying for flights and accommodation before you travel, as you can slash costs when paying for a hotel or Airbnb in Paris, or flights to Spain in euros rather than pounds.”

Lastly, Lynn cautions travellers about high fees charged by some overseas ATMs, which can quickly deplete your holiday budget.