Overseas Travel Grows as Domestic Tourism Stalls

Australians are increasingly heading overseas to stretch their travel budgets, leaving domestic tourism to stagnate. This trend, evident in new data, highlights a shift in travel preferences that could significantly impact local tourism operators.

Recent statistics from the Bureau of Statistics show a surge in outbound travel as domestic visitor nights remain flat. In November alone, 961,370 Australians traveled abroad for short-term trips, compared to 679,280 arrivals for holidays, business events, or family visits. Outbound travel has surpassed pre-COVID levels, with numbers up from 869,120 in 2019. In contrast, inbound arrivals represent just 83% of pre-COVID figures, reflecting a slow recovery.

Australia's top inbound tourist markets remain below pre-pandemic figures, with the exception of India and South Korea. Chinese tourists, once a major source of visitors, have returned at only 54% of 2019 levels, posing a particular challenge for operators still expecting a strong recovery.

Domestic tourism is also feeling the pinch. Tourism Research Australia's data reveal no growth in domestic visitor nights in December year-on-year, despite slight upticks in day and overnight trips—up 4% and 2%, respectively. Rising costs, particularly for domestic airfares, have deterred many Australians from traveling locally. Airfares have increased by 30%–40% over the past year, making international holidays seem more cost-effective.

Meanwhile, Australia's hotel occupancy rates in December reached 69.3%, a marginal rise from 67.6% the previous year. However, tourism operators have faced challenges balancing affordability with rising operational costs, such as wages and energy. To remain competitive, many have absorbed these increases instead of passing them on to customers.

International destinations like Japan, Bali, Vietnam and Thailand are seeing record numbers of Australian visitors. In November, 72,060 Australians travelled to Japan, up 70% from 2019. Vietnam saw almost a 60% rise, while Bali experienced 15% growth. The favourable exchange rates in these regions make overseas trips more appealing compared to domestic options. However, with Australians prioritising value-driven vacations, the rising costs of domestic travel may continue to push many towards international trips.

Source: The Australian, Statista, Australian Bureau of Statistics