Australia’s shifting travel patterns: winners, losers, and emerging trends

When it comes to overseas travel, it’s no secret that Australia is a case of mutual exchange. As Australians travel overseas and more visitors come here, the evolving travel patterns reveal the tourism industry is on track to reach a market size of $200.5 billion in 2025. Federal Tourism Minister Don Farrell has forecast that international arrivals will hit a record 10 million in 2026, growing further to 11.8 million by 2029. This coincides with Tourism Australia’s new $130 million campaign, fronted by an array of localised personalities for each target market.

Beyond the “G’Days” and nods to Paul Hogan, new ABS data reveals the changing face of international travel. Key trends include:

• Holidays are the top reason to visit Australia (43%)
• New Zealand is our biggest source of visitors (17%). However, India is the standout growth story with arrivals up 102%, and stays now averaging 61 days
• Japanese visitors are quick-turnaround travellers, with a median stay of just 6 days compared to the 12-day average

The data also reveals our own passport priorities, including:

• 3 in 5 Australians travel overseas
• Indonesia continues to lead the list (14% of trips). However, Japan’s popularity has tripled over the last decade, now ranking third behind New Zealand
• The US has slipped from third to fourth place and is the only top 10 destination still below pre-2015 levels

So, what factors are driving these shifts?

India’s travel boom

India’s rapid rise as a source of visitors to Australia has been driven by multiple factors. Firstly, stronger education links mean Australia is now home to a growing Indian student population. The number of international student enrolments from India has tripled in the last 10 years, with Indian nationals now constituting nearly 1 in 5 student visas. Meanwhile, closer business ties, a thriving Indian community, and increased direct flights from major cities like Delhi and Mumbai have made Australia more accessible. Tourism Australia has also placed India high on its priority list, running a recent campaign featuring Australian Test cricket captain Pat Cummins. Together, these factors have contributed to the number of Indian arrivals doubling over the last 10 years.

Japan climbs the destination rankings

Japan’s leap to the third most popular destination for Australians is fuelled by a mix of economic, cultural, and social factors. While the depreciation of the yen has played a substantial role in its affordability as a tourist destination, Japan also exhibits a significant cultural pull, mixing tradition and history with a vibrant contemporary society. This has been fuelled by social media buzz, particularly on Instagram and TikTok, as once ‘hidden gems’ become inundated due to sudden viral videos. Additionally, strong government investment in tourism infrastructure and promotion, alongside targeted efforts to spread visitors beyond major cities, have further enhanced accessibility.

Japan’s leap to the third most popular destination for Australians is fuelled by a mix of economic, cultural, and social factors. While the depreciation of the yen has played a substantial role in its affordability as a tourist destination, Japan also exhibits a significant cultural pull, mixing tradition and history with a vibrant contemporary society. This has been fuelled by social media buzz, particularly on Instagram and TikTok, as once ‘hidden gems’ become inundated due to sudden viral videos. Additionally, strong government investment in tourism infrastructure and promotion, alongside targeted efforts to spread visitors beyond major cities, have further enhanced accessibility.

US visits remain below pre-2015 levels

While the United States remains a bucket-list destination for many Australians, its appeal has not rebounded to pre-2015 levels. In fact, it’s the only country in the top 10 outbound destinations yet to recover to earlier volumes. Cost in undeniably a factor, with the Australian dollar continuing to weaken against the US dollar over the past decade. There is also growing competition from alternative “big trip” destinations. Europe remains a perennial favourite, while closer to the US, Canada has attracted Australians seeking a North American experience with a different flavour. Political polarisation and domestic unrest under the Trump administration has also dampened the country’s appeal for some Australians, with safety perceptions and social tensions influencing travel decisions.

In summary

For Australia’s tourism industry, success will depend on adapting to these shifting dynamics, understanding not only who our visitors are and where they come from, but also how global economic conditions, cultural trends, and geopolitical factors continue to influence the choices travellers make. As we move toward record visitor numbers in the coming years, success will be dependent on having conversations grounded in the right data. To explore how Fifth Quadrant can help your organisation leverage these opportunities to the fullest, contact us today.