Cost of living crisis continues to impact Australian travel plans but Aussies are choosing to prioritise travel according to research from Southern Cross Travel Insurance

27 February 2024 by Sue Hamilton

83% of Australians travelling this year will need to reduce travel costs as a result of the rising cost of living.

47% of Australians consider travel more important when compared to other discretionary spending items with one in five (21%) claiming it’s a top priority or much more important.

Key findings from the research include:

  • 91% of Australians plan to travel in 2024
  • 83% of Australians will need to reduce the cost of travel due to rising cost of living pressures
    • The top trade-offs consumers will make include booking cheaper or budget accommodation (41%), taking fewer trips overall (41%), taking a shorter trip (36%), going to a cheaper destination (34%)
  • 47% of Australians consider travel more important when compared to other discretionary 
    spending items with one in five (21%) claiming it’s a top priority or much more important compared to other discretionary items
  • 2.4 million Australians claim they won’t purchase travel insurance as a way to save costs due to 
    financial pressures. 

New research announced today from Southern Cross Travel Insurance reveals that the rising cost of living will continue to have a significant impact on Aussie travel plans in 2024, with more than eight in ten (83%) Australians who plan to travel in the next 12 months admitting they will need to reduce travel costs as a result of the rising cost of living.

The Future of Travel 2024 research was commissioned by Southern Cross Travel Insurance to better understand Australian attitudes towards travel and investigate the ongoing impact of the cost of living crisis on travel behaviours. The study shows Australians’ appetite for travel continues to grow, with more than nine in ten (91%) planning to travel either domestically or overseas in the next 12 months. However, over two in five (43%) Australians say they are less likely to travel interstate over the next 12 months due to the rising cost of living, and more than half (53%) saying they are less likely to travel overseas this year for the same reason - both significant increases on 2023 figures (37% and 48% respectively).

Although more Australians overall intend to travel than last year, consumers will be looking to maximise their holiday as much as possible. The research shows Australians plan to travel overseas for longer but take fewer trips compared to last year. The length of time Australian travellers intend to spend overseas has increased from 14 days per trip in 2023 to 16 days per trip in 2024. However, the average number of trips they take will be less than those who travelled last year.

According to SCTI data the most popular length of time for people to travel overseas is between 7 - 13 days, with 35% of policies selecting this timeframe. This is closely followed by 14 - 20 days (20%) and 21-27 days (17%).

Despite the cost of living crisis continuing to bite, Aussie's passion for travel doesn’t seem to have lessened, with almost one in two Australians (47%) considering travel to be more important when compared to other discretionary spending items and one in five (21%) claiming it’s a top priority or much more important that other areas of discretionary spend. 

Interestingly, Millennials appear to be the most unwilling to forgo travel, compared to other generations, and plan to seek out affordable travel options. In the research, 17% of Millennials claimed travel is their top priority when it comes to discretionary spending (compared to 5% Gen Z, 6% Gen X and 4% Baby Boomers). A staggering 90% of Millennials are more likely to say they will make trade-offs to reduce the cost of any travel over the next 12 months, with 43% planning to seek out more affordable destinations.

The research reveals some of the strategies Aussies will adopt to ensure their travel plans continue. For those who plan to travel over the next 12 months, the top trade-offs consumers will make include; booking cheaper or budget accommodation (41%), taking fewer trips overall (41%), taking a shorter trip (36%), going to a cheaper destination (34%), choosing a lower cost budget airline with no frills (30%), and booking fewer activities at their destination (27%).

However, the most concerning finding from the research is that more than 2.4 million Aussies claim they won’t purchase travel insurance as a way to save costs due to financial pressures. Alarmingly, Gen Z are more than twice as likely as Baby Boomers to say they would reduce their travel costs by not buying travel insurance (18% versus 9%).

“Australians are reclaiming their status as a nation of travellers now that travel is well and truly back to normal. Continuing last year’s trend, travel continues to grow as a priority pastime and it is how many of us want to spend our time and well-earned money, says Jo McCauley, CEO at Southern Cross Travel Insurance. “But the worsening cost of living crisis is impacting all areas of consumer behaviour and travelis no exception but in 2024 it’s not so much ‘if’ we will travel, but ‘how’.”

“As people look to save money, think more sustainably and mitigate risks, new trends are emerging. We’ll be taking longer trips less often, seeking out lower cost travel modes and destinations, carefully timing our trips and thinking twice about what we pay for upfront. Consumer focus is definitely on bang for buck.”

McCauley stresses Australians need to ensure travel insurance doesn’t get cut as part of that process: “We know how tempting it might be to skimp on travel insurance to save a few dollars, but we’d encourage everyone to ensure they take out travel insurance regardless of where they’re travelling. Overseas medical bills can be in the tens of thousands, occasionally the hundreds. It’s simply not worth the risk.”

The research took place in January 2024 and was conducted by YouGov. A nationally representative sample of 1,018 Australians aged 18 years and older took part in the online survey.

For more information, please visit www.scti.com.au