Australians spent about $63 billion a year on international travel and domestic travel before the COVID-19 pandemic and stockbroking house UBS says a large chunk of that is now being diverted elsewhere, which should help underpin a solid 2021 for most retailers.

UBS analyst Aryan Norizi and a team of economists have closely scrutinised the spending habits of people before the pandemic. They say that with international travel banned and domestic travel still restricted, about 85 per cent of the funds previously spent on travel will find its way into extra consumer purchasing power.