The Suncorp Cost of Travel Report (a national survey of more than 1,500) revealed nearly a third of Aussies fail to save ahead for their holiday and half rely on credit cards and life savings, despite collectively spending $63.6 billion* every year ($3,500 individual average) on domestic and international travel.
The findings come as the number of people travelling overseas continues to rise every year (11 million in year ending March 2019), particularly during July, August and December**, which Suncorp EGM Stores and Speciality Banking, Jason Stephens said should be a timely reminder for people planning a holiday to think about their finances.
“While I agree with the statement ‘travel is one expense which makes us richer’, thinking about how much we want to spend and setting a budget will not only make the trip more relaxing, it will reduce the risk of returning home to a mountain of bills and unplanned expenses,” Mr Stephens said.
Unsurprisingly, flights ($1,443) and accommodation ($1,206) were revealed as the biggest travel expenses, followed by food ($702) and experiences ($459), which Mr Stephens said had the biggest potential of blowing out.
“With anything, incidental costs, such as food and activities, tend to be ones which can add up quickly, often without us even realising,” Mr Stephens said.
“A good trick can be setting yourself a realistic daily limit on how much you can spend – this can help avoid a budget blowout, without making you feel restrained.
“The research also revealed half of us aren’t always aware of exchange rates and fees when making spending decisions overseas.
“Exchange rates fluctuate daily so it’s important to understand the true value of your dollar. For example, in June 2018, $AUD1000 was equivalent to approximately $US742, and today that’s worth $US692 – the equivalent to a lunch or dinner” Mr Stephens said.
The research also revealed that one in four holiday-makers don’t purchase insurance when travelling overseas and half don’t spend money on insurance when travelling in Australia, “Aussies are happy to spend hundreds on flights, food and accommodation, but many aren’t taking steps to protect themselves and their valuables while they’re away,” Mr Stephens said.
“Holidays are absolutely meant to be fun and carefree, but we need to ensure our enthusiasm doesn’t cloud our judgement when it comes to deciding what’s an essential expense.”
Of those who do buy travel insurance the most common types of claims are for injury/illness, lost or damaged property and cancellations.
The report also found that despite the nation’s growing dependence on digital, 40 per cent of travellers still use cash to pay for their expenses while travelling.
Other key findings:
- People aged between 35 to 54 years are the biggest spenders on travel ($4,597), compared to 55+ ($3,205), 18-34 years ($2,735).
- Two in five people travel in Australia for pleasure at least once a year, and travel overseas for pleasure at least once everyone – five years.
- Close to one quarter (24%) claim they always save a proportion of their salary for travel, even without having plans.
- The majority of travellers pay for their travel expenses using credit cards or debit/savings accounts. However, a notable proportion (40%) still opt to use cash for travel related expenses.
- Males are more likely to use a credit card and cash. Females and people aged 18-34-years are more likely to use debit card/savings accounts. People aged 35-54 years are more likely to use credit cards.
- When on holidays, set yourself a realistic daily limit on how much you can spend – this will help avoid a budget blowout, without making you feel restrained.
- Obviously, the longer you can save the better – even if you don’t have any specific travel plans but know you will holiday eventually, try putting a small amount away every week. Every dollar counts.
- If you’re travelling abroad, update your Bank so they can keep an eye on your account for any suspicious activity. Also, EFTPOS Card availability at shops/restaurants etc isn’t always a given like it is in Australia – it’s always great to arrive with a few dollars in a new location for a drink or taxi etc on arrival.
- Travel insurance may not be the most exciting part of your holiday planning, but it could be the most important. If anything, if provides peace of mind if you get sick, injured, lose luggage or have your flight cancelled.
Note to Editor: *Based on ABS 2016 Census of Population and Housing statistics – total population aged 18+ is 18,193,867. **Source: AFTA Travel Trends May 2019