Cost of living crunch won’t dampen Euro summer travel plans

As the annual European summer holiday season kicks off, new data from instant payout travel insurer PassportCard has revealed Australians are planning a European interlude in record numbers, but cost-of-living crisis has most travellers adjusting their plans.

Despite almost nine in ten (87%) Australians saying that cost of living had impacted their travel plans, over a quarter (28%) of the more than 1,800 Australians surveyed in the PassportCard commissioned study, were still planning a trip to Europe in the next 12 months.

Two in five (39%) are now looking for more travel deals to afford their European ‘vacay’, with a third (37%) booking cheaper accommodation, planning a different style of trip that suits their budget (35%), cutting back on non-essentials like dining out (32%), or travelling off-peak (31%).

Young travellers in their ‘savings era’

The report found younger travellers made the most travel adjustments, delaying plans, bargain hunting, opting for cheaper hotels with a minority even running the gauntlet by not taking out travel insurance.

Almost half (46%) of 25–34-year-olds looked for flight and accommodation deals, two in five (40%) millennials (25–44-year-olds) opt for a different style of travel that suits their budget with the same percentage of 18–44-year-olds booking cheaper hotels.

Twice as many younger Australians (18-24-year-olds), were cutting back on non-essentials such as not buying new clothes, and limiting eating out, compared to over 54-year-olds (20%).

While most aren’t letting cost of living keep them grounded, a quarter of Aussies have reported they are avoiding overseas holidays altogether until they can afford their dream holiday without making sacrifices. This is particularly true for over 54-year-olds who were almost twice as likely to delay their travel until they could afford the full package (37%), compared to 18-44-year-olds (21%).

Mo-money mo-travel problems

Surprisingly, the data also revealed higher income earners were more likely to change their travel plans as a result of cost-of-living pressures. The highest income households ($200,000+), were the most likely to take cost-saving actions, including:

• - Searching for deals (52%), compared to 35% of lower-income households)

• - Booking cheaper accommodation (37%), compared to 29% of lower-income households)

• - Planning shorter trips (40%), compared to 30% of lower-income households)

• - Planning off-peak travel (40%), compared to 30% of lower-income households)

• - Planning domestic trips only (27%), compared to 22% of lower-income households)

Safety conscious Australian travellers prioritising travel insurance

While most Australians are looking for travel savings, one Europe must-have they aren’t skimping on is travel insurance, with 92% reporting they take out travel insurance for their European trips in case of unforeseen issues like flight cancellations, lost luggage, medical emergencies or stolen cash. Young travellers (18-24years old) were twice as likely to risk not having travel insurance (14%) compared to all other age groups (7%).

PassportCard CEO Peter Klemt said Australia’s love of a European summer holiday is showing no signs of slowing, but there were some risks that travellers need to consider when planning their next adventure.

“European holidays are often a trip of a lifetime for many Australians, and it’s also a significant financial investment with our own PassportCard data showing that the average cost of a trip to Europe among our customers has increased 8% in 2024 to $10,861,” Klemt said.

“With the average length of a European trip 35 days, there is a lot of time for travellers to immerse themselves in the culture, but unfortunately there’s also a lot of time for things to go wrong. While most enjoy a stress-free holiday, we see many Aussie travellers experiencing flight cancellations, lost or delayed luggage, theft or injury while in Europe. These travel hiccups not only cost you precious time while on holiday, they can also lead to unexpected costs on top of an already expensive holiday.”

“The research showed the most in-demand destinations this year were cities such as Paris, Rome, London and Barcelona, all of which are seeing high volumes of incidents, in addition to being expensive places to pay for medical assistance, buy new luggage or make alternative travel plans.”

For holiday-goers, travel hiccups can eat into precious holiday time and funds, with travelers often waiting weeks for reimbursement and claim resolution. With PassportCard, travelers can receive instant payouts for three common claims like medical emergencies, delayed luggage, and stolen cash.

With two million customers worldwide and a 24/7 support team based in Sydney, PassportCard is well placed to rescue Aussies from out-of-pocket expenses to get them back to doing what they do best – holidaying.

Additional research insights:

Methodology:

• Online survey of 1,853 Australians

  • 34% reported they haven’t been to Europe or have no plans to travel in the next 12 months and were screened out of the survey.

  • 37% of those surveyed have been to Europe before.

  • 28% of those surveyed said they had plans to travel to Europe in the next 12 months.

Travel plans:

• NSW (29%) and Victoria (23%) had the majority of travellers who have planned trips to Europe in the next 12 months, followed by QLD (18%) and WA (11%).

• Of the top 20 European destinations to visit in 2024, survey respondents reported London (36%), Paris (34%) and Rome (30%) as being the most popular destinations for their upcoming travel plans and bookings, closely followed by the Swiss Alps (27%), Amsterdam (27%) and Athens (24%).

• European Summer (June to August) (44%) has been reported as the favourite time of the year for Australians to travel to Europe, followed by European Spring (April to May) (27%).

Cost of living impacts:

• 27% of people are planning shorter trips (over a quarter of Aussies are planning shorter trips)

• Almost 40% of people are price sensitive looking at flight and accommodation deals, with 35% of people additionally booking cheaper accommodation than previously

• 35% of people are planning a different type of travel that suits their budget

• Almost 1/3 of Aussies are travelling at off peak times to avoid inflated costs at peak periods

• Over 54yos were more than twice as likely to report that cost of living hasn’t changed their travel behaviour (25%) compared to all other younger age groups (11%).

Insurance trends:

• More than three-quarters of Aussies travelling to Europe (77%) trust that their travel insurance company will cover an unexpected incident should it arise while they are overseas.

• 18-24 year olds were the most likely to buy insurance through their travel agent (40%), followed by over 54yos (59%) and 44-54yos (38%).

• 35-44yos were the most likely to search for the best travel insurance deal online (39%), followed by 44+yos (35%)

• 25-34yos were the most likely to rely on their credit card for travel insurance (23%), followed by 35-44yos (22%).

• People who buy their travel insurance through a travel agent are more likely to have made claims in the past (57%) compared to credit card insurance (47%) and online travel insurance buyers (23%).

ABOUT PASSPORTCARD

PassportCard understands they are the only company in the world to offer real-time payment via a rechargeable prepaid debit card. The US patented technology allows customers to pay expenses for approved claims so you can get back to enjoying your holiday without having to pay via their own funds and wait to be reimbursed.

Now that Australians have started travelling overseas again, PassportCard has restarted its operations in Australia. The PassportCard Group has been providing innovative travel insurance solutions since 2014 with over 2 million cardholders globally.

Find out more at www.passportcard.com.au