Dreaming of drinking a spritz in Italy this year? You may want to first verify the exchange rate.
The Australian dollar has suffered in the middle caused by .
Flights, accommodation, meals and insurance: many things can become more expensive when your dollar does not get so far.
Could Trump’s rates interrupt your travel plans?
Since then Trump has returned his deployment of having announced a and largely imported from China, where exporters .
But on Wednesday, before these developments, the Australian dollar fell to 59.15 US cents, its weakest point in approximately five years.
Since then it has recovered slightly, buying about 62 cents of US. The Australian dollar is also weaker against the euro, buying around 55 cents of euros, below the 58 cents of the euro last month.
Despite the fall, Dr. Luke Hartigan, professor at the University of Sydney and former economist at the Bank of the Reserve, warned against assuming price increases in all areas.
“Thinking when the dollar was below 50 [US] Centers in the 2000s, did not lead to immediate and massive increases. Many companies absorbed costs or covered against them, “he said.
Companies that depend on imports abroad are often protected through currency coverage, blocking exchange rates in advance. This means that some trips related to the trip may not increase immediately, but if the dollar remains low for months, you could feel the pinch more on the gasoline pump or when booking international flights.
“Fuel and air trips: they will be reflected very soon, I imagine,” Hartigan said.
“What will probably be reflected immediately is that consumers decide to travel locally. Therefore, it can end up going to Queensland or simply Cairns instead of going abroad, with the exception of New Zealand. That is the only country that our dollar never falls.”
Do people still plan to travel? If so, where?
Sydney’s resident, Laura, said she has had to change her travel plans to Europe in July due to the bad exchange rate.
“I was planning to go to Greece and Italy this year, but I ended up changing it to Thailand. Many of my friends are having their summer in southeast Asia now,” he said.
“I have a family in London with which I was going to stay, but even then, I lose half of my money as soon as I land for how bad the Australian dollar is compared to the British pound.
“I prefer to have a vacation where I know I can get much more for my money, which takes me much longer to save due to the cost of living here in Australia.”
‘Traveling is an elastic price good’
A study published by Tourism and the Transport Forum (TTF) that surveyed the Australians about their travel plans from December 1, 2024 to February 28, 2025 showed that despite the growing cost of living that continues to tension the wallets of the Australians, a significant part of the nation still planned to prioritize the trips.
NSW and Queensland emerged as the most popular destinations for those who travel nationwide, while the Australians who headed abroad were more likely to visit New Zealand, Japan or Europe, according to the survey.
The CEO of TTF, Margy Osmond, said despite the old advice to book early, the Australians have indicated their opening for a last -minute travel plan.
“Whether it is due to the busy end of the year calendar or looking for a last minute agreement, most Australians have said they would book a vacation less than a month in advance. Almost a third would even wait until a few days outside the game to organize,” he said in December.
However, professor Sara Dolicar of the University of Queensland, who specializes in trips and tourism, said that traveling is a “very price elastic good.”
“Given the current crisis of the cost of living and now the low Australian dollar, when it comes to tourism, reacts strongly to price changes or income changes,” he said.
Dolicar said that consumer behavior has changed after pandemic, and Australians now show greater preference for international holiday destinations about nationals.
“Pandemia taught us that we can actually have good vacation near home. I expected understanding to remain, especially for sustainability purposes. But in Australia, that has not been particularly the case,” he said.
“I think that Australians still have this strong desire to travel internationally. We have destinations such as Europe and the United States that are somehow idealized in what it means to us to have a specific type of vacation.
“Then, for the Australians, it is not about giving up the dream … but to delay it when it becomes more affordable.”
The global impact of economic uncertainty
But beyond Australia, the global economic perspective is not exactly positive.
“Safe United States [is at risk of recession]”Hartigan said.
“Companies are likely to send investment plans, and consumers are adjusting their bag ropes. It amplifies that in everything: cars, coffee, chocolate, even delayed games consoles.”
He said that low -income commercial countries such as Vietnam and Bangladesh are also feeling the sting of global tariff wars and the demand for the slowest consumers, all of which eventually extends through supply chains and travel costs.
Travel tips for a weak dollar economy
If you are still anxious to travel internationally, some intelligent movements can help relieve the blow:
- Early book. Block flights and accommodation while the rates are stable
- Use covered travel cards or block early exchange rates
- Travel during seasons out of peak and look for offers on flights and stays
- Observe the currency of your destiny
- Consider packages offers, these can group costs and reduce exposure to fluctuating exchange rates
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