Australians are feeling the pinch from a falling Aussie dollar and rising travel costs — and it’s changing how they plan their travel over the next 12 months. New research shows that two-thirds of Australians (66%) will either cut back on trips or seek cheaper options and deals. Nearly half (47%) will lock in cheaper airfares, while 30 per cent will seek bundled holiday deals to find savings, and 20 per cent will seek last-minute deals.
The findings were derived from a new survey of a nationally representative, independent panel of 1009 Australians, commissioned by award-winning travel insurance provider Insure&Go, to find out how ever-increasing overseas travel costs will impact their travel plans.
A weak Australian currency means that travellers receive less value when making purchases – or exchanging money – overseas, increasing the cost of their travel. Currently, one Australian dollar buys around 0.56 Euro, 0.64 USD and 0.48 GBP. At these rates, a 5 Euro coffee would equal AUD$8.93.
Even domestically, Aussies are finding no relief as airfares spike significantly and accommodation prices grow. A recent report has projected a 13.7 per cent year-on-year increase in economy-class airfares within Australia – compared with just 2.3-3.7 per cent in other continents.[1] Prices for accommodation domestically also grew 5.3 per cent in the 12 months to April 2025.[2]
David Mayo, Insure&Go Commercial & Marketing Director, says: “Our survey reveals that people are adapting quickly to the rising cost of travel and currency challenges. The appetite for travel is still strong, with just 25 per cent of Australians willing to cut back on the number of trips they take. A much higher proportion will get smarter about stretching their budget further – from finding bundled flight and hotel deals, hunting for airfare sales, or booking at the last minute.”
Insure&Go asked survey respondents what they will look for when hunting for deals. Cost is the top priority. Two thirds (69%) say they will be purely motivated by price and are willing to sacrifice flexibility in their travel dates and even accommodation options to make savings. This figure is largely driven by under-30s (at 72%) than 30-50-year-olds (70%) and over-50s (61%).
But prices aren’t the only priority – flexibility and inclusions matter too. Two in five (42%) say they’ll prioritise deals with flexible cancellation and refund policies, suggesting they’ll nab a bargain early, knowing they can cancel if their plans change. A similar proportion (43%) will prioritise deals with inclusions such as meals and tours, recognising that these add-ons can significantly impact the overall cost of a trip.
Insure&Go also found that over-50s are less likely to change their travel plans due to costs, with 35 per cent indicating they won’t change their plans, compared with 28 per cent of under-50s.
David says: “Over the next 12 months, value will be priority for Australian travellers, as they grapple with a low Aussie dollar, especially in Europe, Great Britain and the Americas. They will prioritise price more than the freedom of choosing their preferred dates and accommodation.
“But while it’s easy to get caught up in the excitement of a travel deal, it’s important to always check the fine print across all bookings and your insurance. Your travel insurance should cover cancellations, delays, all prepaid components of the deal, as well as any risky activities. While budgets are tight, it’s important not to cut corners on insurance, as a cheap deal can quickly become expensive if an unexpected event changes your plans or something goes wrong overseas.”
