Australians are increasingly diversifying their travel destinations, as highlighted by the latest annual report from the Australian Bureau of Statistics. In the 2024-25 period, Indonesia, New Zealand, Japan, the United States, and China emerged as the top five destinations for Australian travelers. Notably, Indonesia, with its popular island destination Bali, retained its position as the most favored spot, accounting for 14 percent or 1,741,370 of Australian trips.
Japan’s appeal has surged, securing the third spot with 910,640 visits, marking a significant rise as the number of trips has tripled since the 2014-15 data. This growth has pushed Japan ahead of the United States, which has seen a decline, dropping to fourth with 746,220 visits. This represents a 25 percent decrease from a decade ago, with 253,220 fewer trips than in 2014-15. Meanwhile, China climbed two places to become the fifth most popular destination for Australians.
Factors Behind Changing Travel Preferences
The shift in travel preferences reflects broader trends and influences. According to Sara Dolnicar, a Professor at the University of Queensland’s Business School, Japan’s rise in popularity is attributed to several factors, including a favorable exchange rate, more affordable and shorter direct flights, and cultural attractions such as cuisine, scenery, and traditions.
Skyscanner’s 2025 travel trends report supports this, indicating that weather, attractions, food, and culture are the top factors influencing destination choices for travelers. In contrast, travel to the United States has declined by 25 percent over the past decade, partly due to political uncertainties.
“I don’t know if it’s specifically the Trump administration or whether it’s the perceived volatility of decision-making, but there is absolutely no doubt that that has affected international travel into the US,” Dolnicar remarked.
She further explained that while Australians may still desire to visit iconic US destinations like New York, they might choose to delay their trips due to current uncertainties.
China’s Growing Appeal
China’s rise in the rankings is not necessarily politically motivated. Instead, a new policy introduced in November 2024 allows Australian passport holders to travel in China for 30 days without a visa, significantly boosting its attractiveness as a travel destination.
“Being able to walk in and get a stamp for 30 days — that would have had a big effect [on the figures],” Dolnicar noted.
She added that while some may have always wanted to explore China, the ease of entry has made it a more viable option now.
Broader Influences on Travel Choices
Beyond destination-specific factors, Dolnicar identifies five broader forces shaping Australian travel choices: exchange rates, political insecurities, natural disasters, the cost of living, and a post-COVID desire for international travel. Cost considerations are paramount, especially amid a cost-of-living crisis.
Margy Osmond, CEO of the Tourism and Transport Forum Australia, highlighted that while two-thirds of Australians plan to travel, there is a “noticeable drop” in those who actually take holidays, indicating economic pressures are impacting travel decisions.
“That suggests that while the desire to explore remains strong, cost-of-living pressures and economic uncertainty are influencing how and when people travel,” Osmond told SBS News.
Exchange rates also play a significant role. The Australian Dollar has increased by about 25 percent against the Japanese Yen over the last decade, making Japan a more attractive and affordable destination. Conversely, the Australian Dollar’s exchange rate with the US Dollar has fallen by almost 9 percent over the last five years, contributing to the decline in US travel.
Future Travel Trends and Challenges
Looking ahead, Osmond predicts Australians may increasingly opt for destinations closer to home, particularly in South East Asia and the Pacific. She notes that these regions offer better value and shorter travel times, which could shift some of the US market share elsewhere.
“While traditional favourites like the US and Europe will remain aspirational, emerging destinations in Asia and the Pacific could enter the top five, and the industry will need to navigate challenges such as affordability, sustainability, and seamless border experiences to meet travellers’ expectations,” Osmond said.
The Australian Travel Industry Association’s May 2025 report highlights Japan’s significant year-on-year growth with a 38.4 percent increase, followed by China and Vietnam. Dolnicar emphasizes the attractiveness of Asia due to its proximity and affordability, with Vietnam emerging as an alternative to Indonesia.
However, climate change poses a potential challenge to future travel patterns. Dolnicar warns that changing weather patterns and environmental policies could impact travel viability and costs. Measures such as carbon limits or the use of biofuels could make overseas travel less affordable, potentially prompting a shift back to more local travel options.
“If the flight to Bali is suddenly very expensive, you’re not going to go,” Dolnicar explained. “There is a real likelihood that we’ll need to move back to more local travel because the carbon emissions we generate with the way we’re currently travelling is out of control.”
As Australians continue to navigate these evolving travel landscapes, both industry players and travelers will need to adapt to changing preferences and external influences.
