Southern Cross Future of Travel research: Rising cost of living impacting New Zealanders’ travel plans
Future of Travel research reveals cost of living concerns
- 83 per cent of New Zealand travellers will try and reduce the cost of travel over the next 12 months
- 38 per cent will book cheaper accommodation
- 35 per cent will take fewer trips
- 33 per cent will take shorter trips
- Domestic insurance increasingly necessary
- More New Zealanders planning to work overseas
While New Zealanders are renowned for their wanderlust, and 95 per cent say they have plans to travel in Aotearoa or overseas in the next 12 months, new research from Southern Cross Travel Insurance shows we are making big trade-offs thanks to the rising cost of living.
The Southern Cross Future of Travel survey was initially launched in 2022 to understand the impacts of the pandemic on traveller behaviour and has been conducted again in 2023 to see how those perceptions have changed over time.
Jo McCauley, Southern Cross Travel Insurance CEO said it was clear cost of living concerns, rather than health issues, are now the key factor for New Zealanders planning travel in the next 12 months.
“It’s well-known New Zealanders have a huge appetite to get out there and see the world, and that remains strong,” adds McCauley. “But the rising cost of living is impacting New Zealanders in all areas of their lives and travel is no exception. We’re seeing people look for ways to cut costs while still trying to make those trips happen.
“While our 2022 survey showed a close to 50 per cent drop in the appeal of hostel-type accommodation as people were wary of Covid-19, we’re seeing the increased cost of living appearing to outweigh any health concerns travellers may previously have had.
“Our results show 83 per cent of New Zealand travellers will try and reduce the cost of any travel they do, the top trade-offs being they will book cheaper accommodation (38 per cent), take fewer trips overall (35 per cent) and take shorter trips (33 per cent).
McCauley is quick to point out that while many New Zealanders are feeling the pinch of the cost-of-living crisis, they need to be aware of the real risk they are taking if they choose to opt out of taking travel insurance to save money.
“We are pleased to see 81 per cent of travellers will likely be investing in travel insurance. We know from recent experience this has come to the rescue of thousands of customers as travel has ramped back up again with lost luggage, extreme weather-related delays or cancellations and injury and illness.
“Most New Zealanders consider travel insurance a high priority for overseas trips, with 76 per cent rating it as such. The survey also showed 44 per cent of travellers also rate domestic travel insurance as a high priority.”
The case for domestic travel insurance
With an average of $921 paid out on hundreds of domestic claims in the period 1 July 2022 through to the end of February ’23 (including many for travellers affected by flooding in Auckland), it’s easy to see how domestic travel insurance is becoming more important.
McCauley said, “New Zealand offers so much to travellers and many of the best things to do like Great Walks or guided tours are as costly as they might be overseas. For example, one customer had to cancel an extensive tour of the Southern Lakes and the Canterbury high country due to testing positive for Covid-19. Rather than being able to enjoy vivid lakes and lupins they unfortunately had to remain in isolation. We were pleased to be able to cover their claim for $9,500 so they can plan to travel again in the future.”
New international adventures beckon for travellers
The Future of Travel research also indicated nearly half (46 per cent) of New Zealand workers would consider living and working remotely overseas to extend a trip/holiday.
“There are more people departing New Zealand for work than there are arriving, with many younger people wanting to stay in a new environment for a longer period of time. They’re heading to Australia, the UK, USA, and Canada (in that order of popularity), with most intent on office-based work while overseas, followed by hospitality and then retail. But it’s generally when they take a break from their work that we see insurance kicking in.
“We do receive high-value claims from our Working Overseas policyholders for costs related to unexpected health-related incidents that have occurred during their overseas trip.
“Customers in the USA can run up treatment and / or air ambulance transfers home upwards of $100,000 and not many people can afford a medical bill that size. Trying to save a few dollars by not investing in travel insurance when working overseas can prove to be a costly mistake.”
Travel facts and trends from the Future of Travel
Nearly all (95 per cent) New Zealanders are planning to travel (in NZ and overseas) in the next 12 months, with the top reasons for doing so to see family and friends (61 per cent), to relax and unwind (59 per cent) and to experience an adventure (30 per cent)
More than half (56 per cent) of all NZ overseas travellers over the last 12 months have experienced an issue like flight delays/cancellations (32 per cent), problems with accommodation booking (14 per cent) and illness/injury (13 per cent) and 9 per cent of travellers have experienced lost luggage.
The 2023 research indicated a reduction in the intention to take a family holiday with immediate family, down to 41 per cent, from 55 per cent in 2022, while romantic getaways (29 per cent) and holidays with the extended family (26 per cent) remain popular.
The research took place in January 2023 and was conducted by YouGov. A nationally representative sample of 1,031 New Zealanders aged 18 years and older took part in the online survey.
For more information, please visit www.scti.co.nz