Australians face higher holiday travel costs as top destinations revealed

Australians are facing higher travel prices, new data shows.

Australians are facing higher travel prices, new data shows. Photo: Getty

Australians are paying much more for their holidays this year as travel and insurance costs spike, according to new figures, which also reveal the most popular destinations on getaway lists in 2023.

Finder said on Thursday that the cost of domestic holidays has soared 19 per cent since the pandemic, while international holidays now cost a “staggering” 33 per cent more these days.

But despite those higher costs, Finder’s Gary Ross Hunter said plenty of Australians are still keen to travel, with a more recent cooling in inflation taking the sting out of travelling costs.

“The cost of both international and domestic travel is certainly putting more of a dent in Aussie wallets compared to pre-COVID,” he said.

“After a period of take off in the travel industry post pandemic – due to pent-up demand and staff shortages – our report shows travel inflation has actually started to cool.”

The 10 top destinations for Australians in 2023 were Indonesia, United States, United Kingdom, Italy, Thailand, France, New Zealand, Japan, Singapore and Vietnam (in that order).

Of those, Vietnam, Japan and Italy became more popular, while Thailand, France and New Zealand became relatively less popular among travellers, according to travel insurance quotes.

The other major cost pressure facing families travelling to these destinations and others is travel insurance, with separate figures published by Canstar on Thursday showing the squeeze is real.

The cost of travel insurance has increased $38 on average (11 per cent) to $375 per policy in 2023, according to Canstar’s report, which was based on almost 20,000 insurance quotes.

Canstar’s travel insurance expert Steve Mickenbecker said it’s the second year in a row that travel insurance costs have risen.

“The more modest 11 per cent premium hikes in 2023 reflect the increased cost of settling claims in an inflation-racked world,” he said.

“Even though there are fewer insurers than in pre-COVID times, the market is a competitive one and the increased premiums are a signal to overseas travellers that the risks are real.”

The good news is that there are still ways to save on travel insurance, with Canstar finding that a discount of 32 per cent on the average price is available for those willing to shop around.

The best value policy identified by Canstar for a single travelling overseas cost $143 compared to $199 for other products, representing a potential $56 saving.

That rises to $145 for a family or even $165 for a senior who is single and looking to travel.

Mickenbecker said that Australians who just buy a policy off the shelf without doing any research are likely paying way more than they need to be.

“Savings are possible by taking out a policy that has lower dollar limits on claims for loss of baggage or cancellation,” he said.

“Losses in these categories can be in the thousands of dollars but are not likely to cause lasting financial hurt.

“Travellers should not be skimping on insurance for overseas medical care where costs can be massive and can leave the family finances severely damaged.”

Holidaymakers are also urged to consider how their behaviour could affect their travel insurance.

For example, if you plan to drink alcohol on your holiday you could be excluded from cover, while other insurers set blood alcohol limits, Mickenbecker said.

The hospital may have taken a blood test, which will provide evidence either way. Other insurers may rely upon a bar bill, witnesses and experts to establish intoxication.

“Travelling is often in unfamiliar terrain with unknown customs, which already puts travellers at risk and alcohol will just heighten that.

“Travellers need to be aware that they could find themselves footing the bill if drinking in another country leads to a major medical event or any other form of loss.”

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