New research from Zoom Travel Insurance suggests that younger Australians continue to prioritise travel, even as economic pressures mount and the Australian dollar weakens.
A survey conducted by the insurer, which gathered responses from 500 young Australians, found that 72% still consider travel an essential aspect of their lives, despite increasing costs.
Zoom Travel Insurance marketing manager Natasha Sullivan said that for Gen Z, international travel remains a key priority, even amid financial constraints.
“This generation values the personal growth and social currency that come from seeing the world, despite the rising cost of living and a weakening Aussie exchange rate,” she said.
In early January, the Australian dollar hit a five-year low, dropping to US$0.61 and losing ground against the British pound and the euro. This decline has made international travel more expensive, particularly to destinations like Europe and the US, where exchange rates further impact accommodation, transport, and everyday expenses.
Sullivan said some young travellers are adjusting their plans in response to these financial challenges.
“Due to a weak Aussie dollar, students and backpackers will have to tighten their budgets even more, particularly when visiting the US, the UK, and Europe,” she said. “As a result, many may opt for destinations such as New Zealand, where the Aussie dollar is still strong or budget holiday hotspots throughout Southeast Asia.”
Recent research from Southern Cross Travel Insurance (SCTI) highlighted how different generations are responding to financial pressures when it comes to travel.
The company’s “Future of Travel 2025” report found that 45% of Australians aged 18 to 44 are prioritising travel over homeownership. Conversely, 38% of Australians aged 45 and older reported cutting back on travel to provide financial support to their families.
In New South Wales, nearly half (48%) of older respondents said they were willing to forgo travel to help their children enter the housing market, compared to 32% in Queensland.
Focusing on travel insurance trends amid financial pressures, a recent report by financial comparison website Mozo examined 166 travel insurance policies from 51 providers and surveyed 1,425 Australians about their insurance habits. The findings suggest that while demand for international travel remains strong, many Australians may not be fully covered.
According to Mozo, 57% of respondents said they prioritise price over coverage when selecting a travel insurance policy, and only 20% reported reading their policy’s Product Disclosure Statement (PDS) in full. Additionally, 13% of Australians travel without insurance, while 14% rely on credit card coverage, which may have limitations.
However, Zoom Travel Insurance has observed an increase in policy uptake among young travellers.
“Over the past year we've noticed an increase in Gen Z customers, along with a rise in claims from young travellers,” Sullivan said. “From lost luggage to medical emergencies, Gen Z is recognising the value of being protected when things go wrong. With the rising cost of travel, even minor mishaps can significantly impact their budgets.”
She noted that while younger travellers have traditionally been less likely to purchase travel insurance, this trend appears to be shifting.
“Travel insurance is no longer just a nice-to-have; it’s a must-have,” she said. “The upfront cost of insurance is minimal compared to the thousands of dollars you could end up spending on an unforeseen incident. Young travellers have traditionally been the least likely to purchase travel insurance, but our findings suggest this trend may be shifting.”
