Cost and Global Unrest Drive Australian Travel Shifts in 2026
In an era marked by economic pressures and international tensions, how Australians plan their holidays is undergoing a significant transformation. According to the latest Future of Travel report from Southern Cross Travel Insurance (SCTI), released at the TravMedia Summit Australia 2026 in Sydney, factors like the cost of living and global unrest are profoundly influencing travel choices. The report, based on a national survey of 1,008 Australians aged 18 and over conducted in November 2025, highlights a cautious approach to international adventures.
Key Factors Influencing Destination Choices
When selecting their next getaway, cost emerged as the paramount concern for 66% of respondents. This was closely followed by the political stability of a destination, cited by 48%, and reliable weather conditions, important to 44%. On the flip side, the biggest deterrents for avoiding certain locations included politics (63%), crime (42%), high expenses (32%), health risks (32%), and negative feedback from other travellers (30%).
Jess Strange, chief customer officer at SCTI, emphasized the impact of financial constraints. "The cost of living is clearly shaping how Australians travel, not just where they travel," she noted. To manage budgets, around half of travellers are steering clear of peak seasons, while 31% are opting for lower-cost airlines or cheaper airfares. Additionally, 28% are reducing spending during their holidays, such as cutting back on dining and entertainment.
Risky Trends in Travel Insurance
Despite these cost-saving measures, Jess Strange issued a stark warning against one particular trend: travelling without insurance. "One trend we’re most concerned about is that some Australians are trying to save money by travelling without travel insurance," she stated. The report revealed that in 2025, 14% of Australians admitted to travelling overseas without coverage, with this figure rising to 19% among 18 to 29-year-olds.
"Skipping insurance might feel like an easy saving upfront, but it can become a very expensive decision if something unexpected happens, whether that’s a medical issue, cancellations, or lost luggage," she added. This caution comes as exclusions for war and conflict are standard in most insurance products, though the Insurance Council of Australia affirmed insurers' commitment to supporting customers affected by conflicts like those in the Middle East.
Destination Preferences and Avoidances
The survey indicated that more than 35% of Australians are now less likely to visit certain destinations. Topping the list of avoided regions is the United States, with 51% of those who once aspired to visit now reconsidering. Other areas generating wariness include the Middle East (36%), China (28%), and Indonesia (21%).
Conversely, Japan remains a top choice, with 31% planning to visit in the next 12 months, followed by Europe (27%) and New Zealand (22%). Cultural tourism also plays a significant role, with 58% of respondents citing interest sparked by a country’s music, 51% by television, 49% by arts, and 43% by movies.
Expert Advice for Safe Travel
Jess Strange urged travellers to stay informed and protected. "Southern Cross Travel Insurance is committed to supporting customers, and we encourage people to still lodge a claim if they have been significantly affected and are unsure of their coverage," she said. She also recommended monitoring the Smartraveller website operated by the Australian Government for updates on affected regions and travel disruptions. "It’s the best source of truth for what’s happening and vital for staying safe by following expert instructions."
As Australians navigate these uncertain times, the report underscores a shift towards more calculated and safety-conscious travel planning, balancing dreams of exploration with practical realities.
