The best-value destinations for Australians, despite the weak dollar

If planning an overseas trip in 2025, choose your destination with care because the Aussie dollar has copped a beating in the past couple of months. In eight of the 10 countries Australians visited the most in the year ending October 2024, our dollar buys less local currency than it did a year ago. It’s dropped more than 7 per cent against the US dollar, more than 5 per cent against the British pound and more than 6 per cent against China’s yuan. New Zealand and Japan are the only two out of that top 10 where our dollar is worth more than this time last year.

Turkey is a good travel option in 2025, with the Aussie dollar 10 per cent up against the Turkish lira.Credit: iStock

As well as a weaker Aussie dollar in your pocket, hotel accommodation, transport, food and activity costs have escalated across most of the world over the past 12 months. That’s a concern that needs to be factored into your holiday plans, and might even influence your choice of destination.

Currency fluctuations are nothing new. At the beginning of the pandemic the Aussie dollar took a deep dive, falling 16 per cent against the US dollar, 17 per cent against the euro and 5 per cent against the British pound over the month preceding March 31, 2020. It was also down 6 per cent against the Indonesian rupiah and 4 per cent against the New Zealand dollar.

Where our dollar goes from here depends largely on commodity prices, what the Reserve Bank does with interest rates and the economic fallout from the Trump administration in the US, and that’s anyone’s guess. If you want to avoid any further falls in our currency, you can lock in the value of your Aussie dollars at the current exchange rate buying euros, US dollars, Indonesian rupiah or whatever other currency you might need on a travel money card, such as the Wise card or Revolut.

Another strategy is paying for your accommodation, car hire and any other major expenses in advance. If you do, make sure your payment is 100 per cent refundable until close to the booking date. If your plans change for any reason, you’re covered.

Montenegro provides better value for Australian travellers than other parts of Europe.Credit: iStock

Europe

The Aussie dollar is down 2 per cent against the euro over the past year and close to 5 per cent against the British pound. That puts a shine on traditional favourites including Greece, Italy, France and Ireland, as opposed to the UK. Accommodation and food cost less in the former Eastern bloc countries including Poland, Romania, Albania and Montenegro, despite falls in our dollar against some of those currencies, including the Polish zloty and the Romanian leu. Turkey is a hot tip since our dollar has risen by almost 10 per cent against the Turkish lira over the past year.

There are other surprises in northern Europe’s non-euro zone, where the Aussie dollar has appreciated more than 2 per cent against the Norwegian krone and about 0.5 per cent against the Swedish krona. But Scandinavia is not the place to go for a cheap holiday.

Asia

The Aussie dollar has fallen marginally against the currencies of Indonesia and Vietnam, and close to 8 per cent against the Thai baht. Despite those falls, in terms of accommodation, dining, transport, shopping and spa and beauty treatments, South-East Asia still offers outstanding value for Australian travellers.

The dollar has dropped by more than 4 per cent against India’s rupee, but that’s unlikely to dent the appetite for travel to the subcontinent given the size of the Indian diaspora in Australia. Tourism to the subcontinent from Australia is rising fast and while a five-star hotel room in New Delhi will cost over $600 in peak period, there’s plenty of choice at $50-100 per night.

In Japan, the dollar buys almost 1 per cent more yen than at the start of 2024. While Japan is not a cheap destination, since the pandemic the country has catapulted into the list of Australians’ favourite destinations, and cost is largely irrelevant.

The Americas

Our dollar has dropped 7.5 per cent in value against its US counterpart, putting what was already an expensive destination beyond many Australians. This is one place where you might look for a package holiday to help keep a lid on costs if you’re looking to holiday in Hawaii, California, the American West, New York or New England. Against the Canadian dollar the decline is far less – just 0.5 per cent – making the country a more attractive holiday destination.

There is much better news from Mexico, where our dollar buys almost 12 per cent more pesos than it did a year ago. Further south, you’ll get 18 per cent more Argentinian pesos, 16 per cent more Brazilian reals and 4 per cent more Chilean pesos per Australian dollar than this time in 2024.

The Pacific

Holidays in New Zealand are better value this year with our dollar up by 3 per cent. But against the Fijian dollar we’ve lost ground by about the same amount. New Zealand has slipped from the No.1 on the list of favourite destinations for Australian residents, replaced by Indonesia. While the number of Australian residents travelling to New Zealand rose in 2024, the number visiting Indonesia rose more quickly.