Fewer Australians planning to take a holiday
A slowing economy, lack of wage growth, declining home value and political uncertainty is taking a toll on the experience economy, which has enjoyed a growing share of consumer spending in recent years.
New research from Roy Morgan reveals that fewer Australians intend to take a domestic or overseas holiday in the next 12 months, and the negative wealth effect is to blame.
“The travel industry, like other sectors of the economy, is now facing a number of real challenges that have the potential to negatively impact their market,” Norman Morris, Roy Morgan industry communications director, said.
According to Morris, concerns about the slowing economy, lack of wage growth, energy price escalation, declining home values, superannuation changes and political uncertainty with a potential change of government could be making consumers less predisposed to spend on discretionary items like travel.
Based on Roy Morgan’s data, nearly 14 million Australians intend to take a holiday in the next 12 months, a drop of 250,000, or 1.8 per cent, from the same time 12 months ago.
Domestic holidays face the biggest drop in intentions. They are down 270,000 or 2.5 per cent, compared to overseas holidays, which are 20,000 or 0.9 per cent, down. Both short-term and long-term holidays are down from this time last year.
It is worth noting that around one million holiday intenders haven’t yet decided their likely holiday destination for the next 12 months.
Millennials and gen-Xers are more likely than other generations to be planning a holiday. Nearly three quarters of these age groups intend to take a holiday in the next 12 months, followed by around two-thirds of baby boomers and gen Z.
This presents an opportunity for businesses in the travel industry, according to Morris.
“Holiday intentions are obviously closely related to socio-economic status but this release has highlighted the need to understand the influences of other factors of which generational differences are only one,” he said.
Morris also categorised the drop in holiday planning as more of a “modest” decline, especially given the struggling retail environment and major slowdowns in motor vehicle sales and new car intention levels.
“Travel obviously remains a high priority experience for many consumers,” he said.