International travel remains off the boil, but domestic surges: JP Morgan

Older groups are less likely to travel even domestically, and cost-of-living pressures mean more people are holidaying at home, according to a JP Morgan survey.

Almost a quarter of survey respondents said they would be flying less than they had before the Covid-19 pandemic, even domestically.

Planning to forgo that pricey skiing holiday at Thredbo or Falls Creek this winter or a $500 a night trip to Uluru? You may not be alone.

Inflationary pressures are already biting into the domestic holiday aspirations of Australians this winter with a sharp uptick in stay at home vacation plans, according to an extensive survey conducted by analysts at investment bank JP Morgan.

The number of survey respondents reporting their next holiday would be a “stay at home one” jumped from 16 per cent in November to 21 per cent in June. Increased cost of living expenses saw 65 per cent of respondents to the survey indicate that they could spend less on travel and holidays during the next 12 months if inflation trends persist.

“This trend could gather momentum,” wrote JP Morgan analyst Jason Steed.

In response to tougher economic times, Australians typically downgrade experiences, destinations and the length of holidays. There’s even an eight per cent decrease in driving holidays between November and June according to the survey respondents.

Notwithstanding the fact that international airlines have only achieved 50 to 60 per cent of outbound capacity pre-pandemic – due in part to the lack of Chinese-owned airlines returning to Australia – the JP Morgan survey found that there has been a significantly small increase in overseas travel of just two per cent.

“The 2 per cent lift in overseas travel is surprisingly small too given Australia’s reopening to vaccinated travellers from February 2022,’’ Mr Steed wrote.

On the international travel front, 41 per cent of survey respondents said that they were very unlikely to travel offshore despite Covid-19 health fears receding and the reopening of international borders.

“As with domestic travel, those in older age groups were less likely to travel internationally, with 58 per cent of the 60 plus age group indicating they were very unlikely to travel internationally for leisure in 2022,” the survey analysts notes.

This comes despite American-owned cruise companies reporting sellouts on some Mediterranean voyages well into next year. And despite Qantas’s claims that business travel is now exceeding pre-pandemic levels, just 4.7 per cent of JP Morgan’s respondents said they were very likely to travel internationally for work this year.

“That said, we retain our view of a recovery in corporate travel throughout the second half of this year, underpinned by current booking trends, which have remained robust,” Mr Steed wrote.