European summer spending is set for a rebound, one of Australia's biggest banks predicts, with travellers also looking to other destinations to escape the winter at home.
ANZ says customers travelling to Europe across June, July, and August will spend up to $280 million — a projected 10 per cent increase compared to 2024 which it says is based on early trends in hotel and airline bookings.
It says pre-travel spending data showed that between January and May, hotel and airline bookings were up 11 per cent on the same period last year.
The projected total spend won't match the record of $313 million set in 2023, ANZ said. But it will be an uptick from 2024 where, despite more than 100,000 of its customers travelling to Europe, total spend and average spend per customer were down 19 per cent and 13 per cent respectively, compared to the previous year.
Beyond saying travel to Europe among its customers had "dipped" in 2024, ANZ in its statement did not explain why it believes there might be an increase in total spending this year — although not one that would match the 2023 record.
Some measures show consumer confidence — which predicts how consumers feel about the economy and their own finances — has improved since 2024. But it's also higher than in 2023.
Interest rates, however, have fallen from the 12-year high which carried from late 2023 through 2024. That has eased mortgage repayments, though disposable incomes haven't significantly increased.
Like Australia, Europe also battled a period of high inflation. Inflation in the European Union peaked at 11.5 per cent in late 2022 and has since cooled. Falling inflation doesn't necessarily equate to lower prices, it just means prices are growing at a slower rate — unless inflation turns negative.
Additionally, a recent analysis showed that a drop in jet fuel prices had lowered airfares. Global capacity — meaning seats on planes — was also up on last year and pre-pandemic levels, contributing to falling costs, according to corporate travel advisors FCM Consulting.
"Our data shows that customers are reigniting their passion for European travel. We’re seeing strong growth in early planning activity," said Yiken Yang, ANZ's managing director of everyday banking.
"While we may not hit the $313 million peak of 2023, 2025 is shaping up as a vibrant resurgence for the travel sector."
ANZ said non-European destinations in 2024 saw a 3 per cent increase in spend for the June-August period.
Indonesia, New Zealand, Thailand and Japan were among the most popular destinations, ANZ said, which is consistent with what the Australian Bureau of Statistics says are countries favoured by holidaymakers.
It also said Hong Kong and Sri Lanka were "emerging hotspots" and recording "significant" year-on-year growth in spend.
