International travel is back, but the next 12 months won’t be all smooth sailing
Australia’s international travel story looked pretty rosy by the end of 2025. Planes were full, the numbers were heading in the right direction and every sign pointed to a sector finally achieving the recovery it deserved after years of disruption.
But as we head deeper into 2026, the reality is more nuanced. Demand is still strong – there’s no question about that – yet a new mix of geopolitical risk, higher costs and shifting sentiment means the next 12 months won’t be all smooth sailing.
The boom that set us up
Let’s start with the hard numbers because they tell an important story.
ABS Overseas Arrivals and Departures data for December 2025 show 1,036,660 short‑term visitor arrivals, up 9.7 per cent on December 2024 and just shy of the pre‑COVID December peak. Across all traveller types we saw almost 2.0 million arrivals and 2.45 million departures through our international gateways in a single month.
On the inbound side, New Zealand, the UK and the US led the pack, with China, India, Singapore, Japan, South Korea, Germany and Hong Kong rounding out the top 10. It’s a mix that says traditional markets are back while key Asian markets, particularly China and India, are slowly but surely rebuilding their presence.
Tourism Research Australia’s International Visitor Survey (IVS) reveals more about what’s going on behind those movements.For the year ending 30 September 2025, Australia welcomed about 8 million international trips, generating $53.2 billion in spend, heavily driven by holidaymakers and the ever important visiting family and friends market. Significantly, a large share of those visitors didn’t just fly into one city and fly straight out again. Multi‑destination itineraries – Sydney plus regional NSW, Melbourne plus coastal or outback touring – are increasingly more prevalent, lifting average spend per trip through extra nights, internal flights and touring.
TRA forecasts suggest this trend will continue until 2030, and potentially beyond, with international arrivals tracking towards around 11 million visitors and international visitor spend continuing to climb as longer, higher‑value, multi‑stop trips become more common. At the same time, outbound demand is surging: in December 2025 there were 869,410 Australian residents returning from short overseas trips (less than 12 months), up 5.6 per cent year‑on‑year, and more than 1.55 million Australian residents heading overseas, with Australians flocking to Indonesia, New Zealand, Japan and wider Southeast Asia.
By any measure, travel is back and the foundations for recovery are in place. And if we just looked at the ABS and IVS releases, we could be forgiven for thinking it’s all smooth sailing from here. But more recent traveller‑sentiment research tells a different story.
Skyscanner research released in January 2026 finds six in 10 Australians intend to travel overseas this year, even though 60 per cent have not yet locked in dates and 72 per cent say cost is the biggest barrier.
The Europ Assistance 2025 Holiday Barometer tells a similar story, describing Australian travel intentions as “exceptionally strong”, with around eight in 10 Australians enthusiastic about travelling this year, despite global uncertainties.
Against that backdrop of strong intent, Southern Cross Travel Insurance’s “Future of Travel” study – conducted in November 2025 and published in early 2026, before the most recent Middle East escalation – shows how people are recalibrating their choices rather than cancelling travel altogether. Among Australians who had wanted to visit the US, 51 per cent now say they’re less likely to go, and 35 per cent say there are destinations they’re actively rethinking. The US tops that list, followed by the Middle East (36 per cent), China (28 per cent) and Indonesia (20 per cent).
The main reasons are politics (63 per cent), crime (42 per cent), high costs and health risks (both 32 per cent) and negative word‑of‑mouth (30 per cent). None of that however suggests that people will stay home. Instead it points to them being more selective about where they go and what they feel comfortable with.
Cost‑of‑living pressures are forcing similar trade‑offs. Around 62 per cent of Australians planning an overseas trip say rising living costs have affected their plans; roughly half are avoiding peak seasons, 31 per cent are opting for cheaper airfares and 28 per cent are cutting back on dining and entertainment spend while away. The trip is still happening – it’s just being re‑imagined to fit the budget and the risk appetite.
Webjet’s 2026 “Go Somewhere Special” travel trends report reinforces this picture, with 86 per cent of Australians planning a domestic trip and 60 per cent planning to travel overseas this year, while value, safety and emotional connection are emerging as the key drivers of destination choice.
Conflict, costs and confidence
The worsening conflict in the Middle East is creating new uncertainty for global aviation – especially on routes between Australia and Europe – but it hasn’t shut the world down.
Airspace closures and disruptions around key hubs have led to thousands of flights being cancelled or rerouted, stranding or delaying hundreds of thousands of travellers and lengthening flight times on some Europe–Asia–Australia corridors. With many Gulf airspace corridors restricted, airlines are shifting more Australia–Europe services through Asia or via alternative routes, adding time and fuel burn and putting upward pressure on fares.
Importantly, those alternative routes do exist. Qantas and other carriers can still reach Europe via Singapore, Hong Kong, Tokyo, the US or other Asian hubs, and analysts expect them to keep adjusting capacity as demand dictates. The last few Euro summers have each been bigger than the one before, and ANZ is forecasting another strong northern‑summer season, with Australian spend in Europe expected to rise around 10 per cent on 2024 based on early booking data. The conflict is likely to make those trips longer and more expensive, not make them disappear.
Australia’s Smartraveller service is rightly warning that Middle East tensions can cause global travel disruption and urging Australians to expect changes, check their insurance and have a Plan B. Together with the sentiment trends already evident in the research, it points to travellers being more cautious, not cancelling trips altogether.
For inbound markets, these factors can cut both ways. Some long‑haul travellers will defer or shorten trips that involve multiple high‑risk regions, while others may still see Australia and New Zealand as relatively safe, desirable end‑of‑line destinations and continue to travel here – perhaps less often, but for longer, more carefully planned stays. TRA’s medium‑term forecasts still assume steady growth in international arrivals and spend; the path over the next year is likely to be a little bumpier, but the direction of travel remains positive.
And as the industry has demonstrated time and again – through bushfires, financial crises, volcanic ash clouds and a global pandemic – tourism has a knack for taking the hit, regrouping quickly and finding a way through.
New styles of travel – and where Australia fits
At the same time, people aren’t just travelling more or less – they’re travelling differently.
Booking.com’s 2026 Travel Predictions, (surveying over 29,000 travellers across 33 countries including 1,000 Australians), point to a global shift towards hyper‑personalised, story‑driven trips. Travellers are looking for holidays that reflect their quirks and interests – everything from “turbulence test” trips that challenge comfort zones to “romantasy” journeys inspired by books and films.
Australians are right in that mix. Around two‑thirds of Australian respondents said they were open to trips that deliberately test compatibility or resilience, and a similar share said they’d consider visiting destinations inspired by fantasy or “romantasy” worlds – broadly in line with, and in some cases slightly above, the global average.
Port Douglas even makes Booking.com’s list of top trending global destinations for 2026 – a good reminder that Australian regions can absolutely compete for these more immersive, “big feeling” trips without travellers having to go halfway around the world.
So where’s the opportunity?
Overall, the next 12 months are shaping up as a period of steady, if uneven, progress rather than any dramatic swings either way.
- Inbound: The fundamentals are still strong, especially from New Zealand, the UK, the US and a steadily rebuilding China and India, but higher fares and geopolitical risk will act as a significant hurdle in some markets.
- Outbound: Australians will keep travelling in large numbers, but the dial is shifting towards closer, lower‑risk and better‑value destinations in our region and away from some traditional favourites where politics, safety and cost are becoming deal‑breakers.
For destinations and operators, that’s not all doom and gloom. It’s a chance to step up. Places that can credibly promise safety, value and flexibility – and package that with the kind of personalised, story‑rich experiences travellers are hunting for – are well placed to win share even in a volatile market.
The bottom line? Tourism is back, but travellers are more selective, more price‑sensitive and more values‑driven than they were pre‑pandemic. For a sector that has repeatedly shown its resilience and ingenuity, that’s not a reason to despair – it’s a clear signal about where to focus effort and investment.
At Moses Corporate Affairs we’re working with tourism, transport and visitor‑economy clients to navigate exactly these cross‑currents – making sense of the data, pressure‑testing assumptions and turning headwinds into practical strategy. If this is a conversation you’re having inside your organisation, we’d be very happy to continue it with you.
