Bali bigger than ever for Aussies seeking value for money holidays as Italy slips out of top five

The cost of living crisis is not keeping Australians at home, but it is dictating where we travel.

The cost of living crisis has failed to keep Australians at home, with July travel figures showing a record number of people returned from overseas holidays in the month — and one in seven had been to Bali.

Bureau of Statistics data revealed 1.15 million Australians returned from a trip abroad in July, compared with 1.12 million five years ago, and 1.13 million in July 2018.

Value for money destinations proved the most attractive to Australians heading offshore, with Thailand pushing Italy out of the top five and Bali the undisputed favourite.

Almost 170,000 Australians travelled home from Bali in July, compared to 138,000 at the same time last year and 142,270 in July 2019.

Japan was also seeing a lot more Australian tourists now than pre-Covid-19, with numbers up 55 per cent on five years ago, and visitors to Vietnam were up 43 per cent.

In contrast, the number of Australians travelling to New Zealand, the UK and US lagged 2019 levels by as much as 30 per cent.

Australian Travel Industry Association chief executive Dean Long said people seeking the highest value for their dollar was clearly behind the embrace of some destinations over others.

“We’re still finding that value is the primary motivator for travel now and for the foreseeable future,” said Mr Long.

“There’s no doubt we’ve worked through the savings nest of what people had built up over Covid, that’s now completely spent and value is very much driving leisure decision-making in that space.”

Luxury was still in demand, but it was “luxury with value” and Mr Long said that would continue until interest rates came down.

“People will still prioritise that trip, but what we’re finding for the end of the year is it’s a softer end of the year than what we’ve had since reopening,” he said.

One destination ATIA was watching closely was New Zealand, with predictions that beefed up taxes on tourists would further slow the country’s recovery and turn off cost-sensitive Australians.

Milford Sound in New Zealand. Picture: iStock

As well as an 88 per cent increase in border processing fees for cruise passengers, New Zealand was lifting its international visitor levy from $35 to $100 from October 1.

Mr Long said that would put New Zealand into the top three highest tourist taxing countries in the world.

“From what I’m hearing if it’s not people wanting to go there to visit friends and relatives, it’s becoming harder to sell New Zealand to Australians for holidays because those taxes have now reached the point where they’re meaningful taxes, and they’re making it harder for people to go there,” he said.

The levy does not apply to Australian citizens and permanent residents, but International Air Transport Association regional vice president Xie Xingquan said the level of taxation would still make New Zealand less attractive as a tourist destination.

He said the recovery of the New Zealand aviation market already lagged behind Australia, Canada, the UK and the US, and the levy could delay that recovery even further.

“The travel and tourism sector is an important contributor to the New Zealand economy,” said Dr Xie.

“The New Zealand government should be looking at other ways to improve the country’s competitiveness as a destination compared to other markets.”

Heading into Australia, New Zealand remained our greatest source of inbound visitors ahead of China, followed by the US, Japan and the UK.

But short term overseas arrivals continued to lag pre-Covid levels by 16.6 per cent, with visitors from the major source markets yet to fully recover.

The exceptions were South Korea, with short-term arrivals up 48 per cent on five years ago, and India (up 3 per cent).