After over 2yrs of restrictions, new research reveals that most Aussies are keen to travel & spend overseas at almost any cost. Two-thirds of the population will travel overseas, make overseas purchases, invest or make donations offshore, despite a declining Aussie dollar.
The Australian dollar has been testing new lows over recent weeks, falling to US $0.65 cents after a strong start of US $0.73 cents in January 2022. Money Transfer Comparison, a global comparison website that enables Australians to source the best money transfer rates, commissioned a survey of an independent panel of 1000 Australians to find out how Australian dollar falls and increases will influence their overseas spending. The full results are here.
What did Money Transfer Comparison find?
From the survey, Money Transfer Comparison found that Australian dollar movements had little impact on the overseas spending habits of Australians. If the dollar were to continually decline over the next 12 months, almost two-thirds (61%) of respondents said they will continue any planned overseas travel, purchases, investments and donations. Conversely, if the dollar rises, 82% of Australians would be motivated to spend overseas in these ways.
Specifically, a strong demand for international travel is unwavering against significant financial changes. The survey found that 62% of respondents would travel if the dollar continues to decline for another 12 months, while 70% would be motivated to travel if the dollar were to become stronger against other currencies. Despite their lower income & net worth, younger Aussies were still likely to go on with travel plans despite increased cost.
In fact, the likelihood to forego international travel due to cost increased with age: 42% of respondents aged 55 years or older would give up overseas holidays, compared with just 37% of 35-to-54-year-olds and 33% of 18-to-34-year-olds due to increasing dollars.
Alon Rajic, Founder and Managing Director of Money Transfer Comparison, says: “Unlike previous economic periods which have seen the travel industry suffer when the AUD weakens, Aussies seem unwavering in their commitment to travel & overseas spending in this dip.”
How are Aussies traveling with a falling dollar?
“While the data shows there will be some impact, it is pleasing to know it will not be significant enough to create a crisis in the travel industry. While the Australian economy may not be directly impacted by the drive for international spending in an AUD decline, the weakened Australian dollar will likely bring on increased tourism within Australia from international countries such as the US who have seen significant growth in their buying power,” he added.
A declining dollar puts greater pressure on steadily increasing inflation & the cost of living. However, the research found that despite the decreased dollar, there is a strong desire to continue purchasing overseas products. 63% of respondents specified that they will continue to purchase overseas products if the dollar continues to decline over the next 12 months.
South Australians were most likely to disregard price hikes, with 76% indicating they would continue to purchase overseas if there was a continued 12-month decline in the dollar – & 70% of West Aussies. Overseas investing was shown to be popular across the states over the next 12 months. 84% of South Aussies, 74% of NSW residents & 73% of West Aussies said they wouldn’t be averse to investing overseas with a continually weakening dollar.
Aussies proved themselves to be generous, as a very high proportion of all respondents 81% would continue aiding money to family and charities overseas if the dollar continued falling.
Alon says, “Australians have come out of the pandemic with increased savings and a desire to spend after more than two years of limited activity. It is positive to see that despite recent economic troubles, most Australians aren’t feeling overly money-conscious and are able to continue investing and purchasing overseas despite inflation and currency falls.”
“While the push to spend pandemic savings overseas is strong, there is a silver lining as Aussie industries can be hopeful to receive an influx of overseas tourism on the weakened dollar.”