Australians are opting for shorter trips and better value for money this summer, as cost-of-living pressures force a record number of travellers to tighten their spending amid shrinking household budgets.
The next two months loom as the busiest period for summer travel since 2019 – Qantas expects 4.8 million passengers in December and January, almost 250,000 more than what they carried last year – but spending will be restrained, the nation’s leading travel agencies and booking services have revealed.
A record number of travellers are expected over the Christmas period.Credit: Bloomberg
James Kavanagh, the managing director of Flight Centre Australia, found that travelling remained a priority for Australians, who despite experiencing facing cost-of-living strains still view travel as a “key aspect of their lifestyle”.
“The summer holidays are always a busy time for travel,” Kavanagh said. “Although cost-of-living pressures have reduced discretionary spending in some areas, travel has generally shown strong performance.”
The introduction of Turkish Airlines and the growing presence of international carriers such as Qatar Airways have nurtured greater demand for international travel, as competition in the domestic market continues to flounder. Sixty per cent of Flight Centre customers chose international holidays in 2024, while Webjet has seen a nine per cent rise in overseas travel in the past 12 months.
Chief executive at Webjet, Katrina Barry, said a surge in overseas demand has come as Australians are “looking for value”, noting that – in some cases – it was cheaper to fly to Rome than it was to Kalgoorlie.
Booking.com Oceania regional manager Todd Lacey has observed a surge in tourism to Japan.
“Bali fever is alive and well, because it’s so affordable once you’re on the ground,” Barry said. “International competition is really thriving.”
Japan is the premiere winter destination for Australians in December and January, with favourable exchange rates and cultural value among the reasons for its surge.
Tokyo wrestled with Bali and Auckland as the top international destination for Australian travellers booking with Webjet, Flight Centre, Expedia, and Booking.com. Expedia observed a 130 per cent increase in bookings for the Hakuba skiing village over the past 12 months.
Todd Lacey, Booking.com’s Oceania regional manager, found that Japanese cities such as Tokyo and Osaka have been particularly popular for solo travellers. These travellers have been drawn to the ‘pod hotels’ in the region as an “affordable way to travel to an otherwise expensive destination. ”
Expedia Australia has seen a 130 per cent increase in bookings for Japan’s Hakuba skiing village.
Barry said Japan was “starting to emerge as a favourite year-on-year”, noting its emergence as a skiing destination for Australians shunning the slopes of North America and Europe.
Darren Karshagen, senior director at Expedia Australia, found that travellers were becoming “savvier” when booking a holiday, finding that accommodation with free inclusions had become increasingly popular among his clients.
“Aussies can still find cost-effective holidays in summer, provided they are flexible with destinations and travel dates,” Karshagen said.
While Bali still remains the heavyweight of Australian summer tourism, growing interest in neighbouring regions has accelerated a fragmentation of the Southeast Asian market.
“Khao Lak and Patong [both in Thailand] are really starting to grow, those that aren’t really the classics,” Barry said. “We’re seeing a diversification of beach destinations.”
Domestically, Australia’s east coast capital cities remain the most popular destinations for a summer holiday, with the Gold Coast and Perth also experiencing significant demand. Regional areas such as Townsville and Launceston are also amassing tourists seeking greater bang for their buck.
“Queensland is the only state that took out multiple spots in our top five most popular destinations,” Kavanagh said. “We are seeing some Aussies flock to the northern hemisphere for a white Christmas, while plenty are also staying closer to home to soak up the sun.”
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