Domestic travel in Australia showed modest growth in the 2024–25 financial year, with expenditure reaching $139 billion, driven by an increase in day trips (up 7.8 per cent compared to the previous year to 266.1 million trips).
Cost-of-living pressures eased during the 2024–25 financial year, with the Consumer Price Index (CPI) showing notable declines. This was particularly notable through the second half of the financial year, slowing to 2.1 per cent by the June quarter of 2025, from 5.6 per cent for the previous financial year.
Interest rates, which peaked at 4.35 per cent at the end of the 2023–24 financial year, also started to fall reaching 3.6 per cent at the end of the financial year as inflationary pressures eased.
While cost-of-living pressures eased, travellers’ household savings, which were elevated during pandemic and initially supported the strong recovery in domestic travel, have since diminished resulting in reduced capacity for discretionary spending.
While households continued to struggle with economic pressures during the period, travel continued to be an essential expenditure.
However, there have been changes in travel patterns. The 2024–25 financial year saw a softening of the domestic overnight travel market, both in NSW and across the country, with domestic travellers making fewer overnight trips of shorter length, or more preferring day trips.
Also, with international travel restrictions no longer a major concern, Australians travelled overseas in record numbers. In 2024, Australian residents made a record 10.1 million short-term outbound trips.
Air connectivity remained a critical factor in shaping the visitor economy during the period. In the domestic market, lower average discount airfares from late 2024 peaks improved affordability for households, encouraging more frequent interstate and intrastate travel.
This uplift in mobility occurred despite a contraction in overall supply (flights down 5.9 per cent and seats down 4.4 per cent), as overall passenger numbers still rose to 12.1 million (up one per cent).
Higher load factors during the year indicate strong demand for domestic travel and more efficient utilisation of available services, with aircrafts operating closer to capacity.
These trends underscored the importance of price competitiveness in maintaining accessibility and driving domestic visitation to NSW.