Camping or caravan holidays, or UK holidays where you don't really incur extra costs for having 4 people rather than 3, absolutely go for it. In those situations, you could always take the friend home if it was a disaster, and it'd be reasonably easy! I'd recommend you choosing the friend, or a shortlist, for your child to choose from, and starting with a short break (maybe two or three nights?), to test the waters. Make sure you've had a chat with parents in advance, and try to plan the trip in such a way that they'll only need pocket money, not money for meals out, travel or tickets etc.
My only-child friend nearly always took a friend to the caravan from being about 7/8. They were close, and we all lived and were parented in a way where if we were doing something wrong, whoever was in charge of us told us off, and could dish out a suitable punishment. If your child has friends you'd be comfortable with, then absolutely go ahead for UK hols!
They didn't take other children abroad however, as it's more complicated and more expensive (incurs extra costs per person, versus driving to the caravan with an extra kid in the car).
My sister used to take a friend away to the caravan from being about 12/13, as I was older and wasn't there. The friend she usually took was lovely, and didn't get any other holidays or to really go many places, due to her home circumstances, so my parents were happy to take her, and knew she wouldn't act up, drop out on short notice, or wander off. She made the trips great for my sister, and my parents, as she was pleasant, helpful and put my sister in a far better mood than she'd have been otherwise! My dad's got really fond memories of her making everyone a cup of tea when they got back to the caravan after a walk one day, as my sister hadn't ever thought about doing that! It was often that they did free or cheap activities, and if they went out for a meal or activity, my parents would pay, but usually it was a long weekend away, with a walk around the nearby town or beach, maybe a pub drink at the end of a hike, and then back to the caravan for chill time and BBQs. When they went with a big groups of friends (about 6 families total), the friend was always invited, and the other families would also ask about her like they would me when we all got older!
My parents did then take her abroad aged 17, but that had actually been paid for by (& planned with) a different friend, who then got severely grounded and lost her permission to go abroad, and my parents said the only person they'd be happy to supervise on that short notice was 'caravan friend', but they chatted to her and her mum about how much spending money she'd need, what they'd be doing on their own versus what would be supervised by them, and what else she needed (passports, visa, toiletries etc). They said they wouldn't be happy to take anyone they hadn't had away in the UK, and wouldn't have done it when my sister was any younger!
I'd say you just need to be really clear what you'd expect from them, and ensure it's a child you'd be happy to take, have met lots and fed before, and you have talked them and parents through what to bring!