Australians are increasingly altering their travel preferences, opting for destinations in Asia over traditional favorites, according to the latest annual report from the Australian Bureau of Statistics. In the 2024-25 period, the top five destination countries for Australian travelers were Indonesia, New Zealand, Japan, the United States, and China. This shift highlights a broader trend driven by economic, cultural, and political factors.
Indonesia, with Bali as its crown jewel, remains the most popular destination, capturing 14 percent of Australian trips, which translates to 1,741,370 visits. Japan has climbed to third place with 910,640 visitors, showcasing a significant increase compared to the 2014-15 data. Meanwhile, the United States has slipped to fourth place, experiencing a 25 percent drop in travel volume over the past decade, with 746,220 visits in 2024-25.
Japan’s Rise and the U.S. Decline
The growing interest in Japan is attributed to several factors, according to Sara Dolnicar, a professor at the University of Queensland’s Business School. She cites a favorable exchange rate, affordable direct flights, and cultural attractions such as cuisine and traditions as key motivators. Skyscanner’s 2025 travel trends report supports this, noting that weather, attractions, food, and culture are top factors influencing travel choices.
Travel to the United States is 25 percent lower than 10 years ago, while the number of trips to Japan has tripled compared to data from 2014-15.
Conversely, the decline in travel to the United States may be linked to political instability. Dolnicar notes, “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.”
China’s Growing Appeal
China’s ascent to the fifth most popular travel destination for Australians is not necessarily politically motivated. Instead, it is likely influenced by a new policy introduced in November 2024, allowing Australian passport holders to travel in China for 30 days without a visa. Dolnicar explains, “Being able to walk in and get a stamp for 30 days — that would have had a big effect on the figures.”
This policy shift simplifies travel logistics, making China an attractive option for Australians who have long been curious about the country. “With the US, people might say they love it, but now is not a good time. And now with China, they might have always wanted to check it out and they’ve made it easier to get in — so why not?” Dolnicar adds.
Broader Forces Shaping Travel Decisions
While specific destinations have their unique appeal, Dolnicar identifies five broader forces influencing Australian travel: exchange rates, political insecurities, natural disasters, cost of living, and the post-COVID desire for international exploration. The cost of travel is a significant consideration, especially during a cost-of-living crisis.
Margy Osmond, CEO of the Tourism and Transport Forum Australia, notes that while two-thirds of Australians plan to travel, there is a “noticeable drop” in those who actually embark on holidays. “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 are also having an effect. Dolnicar points to a roughly 25 percent increase in the value of the Australian Dollar over the Japanese Yen in the last decade.
Meanwhile, the Australian Dollar’s exchange rate with the US Dollar has fallen by almost 9 percent over the last five years, making travel to the US more expensive. “While the US remains a bucket-list destination for many Australians, higher costs, a weaker exchange rate, and the rising expense of long-haul flights have dampened demand,” Osmond added.
The Future of Australian Travel
Looking ahead, Osmond predicts a growing preference for destinations closer to home, particularly in Southeast Asia and the Pacific. “Many travelers are now gravitating towards destinations that offer better value and shorter travel times, particularly across Asia and the Pacific,” she said.
The Australian Travel Industry Association’s May 2025 travel trends report found Japan had the largest percentage increase year-on-year, with a 38.4 percent rise, followed by China with a 35 percent increase and Vietnam with a 26.2 percent rise. “The whole of Asia is very attractive. It’s close and it’s affordable,” Dolnicar said, noting that Vietnam offers an alternative to Indonesia with a more off-the-beaten-track experience.
However, climate change is poised to impact travel decisions significantly. Dolnicar warns that some destinations may become less viable due to changing weather patterns, and measures such as carbon limits could make overseas travel less affordable. “If the flight to Bali is suddenly very expensive, you’re not going to go,” she said.
As Australians navigate these evolving dynamics, the travel industry will need to adapt to meet changing expectations, balancing affordability, sustainability, and seamless travel experiences.
