GEMMA ACTON: Fulfil your holiday fantasies without breaking the bank this year

After several days of incessant rain and more showers scheduled, the appeal of escaping it all for a sunny holiday is only growing.

Once you add in the workplace slowdown that often accompanies July school holidays as well as the end of the tax year, the reasons to head away keep stacking up for those who can.

Not only will all 13.6 million Australian taxpayers get a tax cut effective July 1 but soon after, around two thirds of them will also pocket a timely tax refund from this financial year.

A NAB surveys shows that the majority of respondents say they’ll save that extra cash. Using it to offset the mortgage is the second-most popular choice and paying down debt, the third.

Only a modest one in ten has plans to spend it on anything fun. However, economists have clearly seen these ascetic intentions unravel once bonus dollars hit the bank account before because several have commented with remarks akin to “I’ll believe that when I see it!”

If you are in that 10 per cent of people who are already planning to deploy that money in pursuit of treating yourself, international travel might be starting to look like a more compelling option than it has for a long time.

While the onset of the pandemic stopped international airlines coming to Australia dead in their tracks in March 2020, the recovery has been far more meandering. Yet it is finally starting to pick up pace with ever more airlines returning and more carriers offering additional routes and seats.

There were 4.169 million total available seats on international flights to/from Australia in February — a more than one-third increase on a year earlier — with 56 international passenger airlines servicing our country that month.

Since then, capacity has only grown, leading several experts to predict ticket prices are set to fall further in coming months.

And not just because low-cost carriers are taking a bigger share of the pie today, carrying just under one in five international travellers in February, up from fewer than one in 20 two years ago.

According to Expedia, more than one in three Australians has plans to travel abroad this year with value for money the No. 1 criterion for choosing a location.

In other words, being able to get away at all is trumping knocking lifelong dreams off our bucket list.

By tallying searches for accommodation on its website, Expedia lists Japan as the number one choice destination this year for Australians, followed by Indonesia and Thailand.

Exchange rates are undoubtedly playing a role in propelling Japan to the top of the list with the Aussie dollar rising more than 7 per cent against the yen so far this year and at its strongest against the Japanese currency since 2007.

The US is still the fourth-most popular destination for Australian travellers with more than 50,000 short-term trips taken there in the month of March.

Given the number of other countries whose currencies are pegged to the greenback, this currency pair is always one for travellers to keep an eye on.

While the Aussie dollar is around 3 per cent lower against the US dollar than where it started the year, the bulk of the losses came in the first six weeks of 2024.

Our dollar has been consistently trending higher since mid-April with AMP’s Shane Oliver predicting it will regain 70 US cents within the next 12 months, even if it bounces around a little on the way to that milestone.

Many people had their travel booking strategies nailed down prior to the pandemic with buying flights as soon as your plans were in place, a widely accepted technique for securing the best price.

Much to the stress of people like myself who love to lock down anything as organisationally demanding as an overseas holiday as far in advance as possible, in the new post-COVID world, that’s not necessarily best practice.

With more airlines returning to Australia as time goes on and those who are already back in service now in the habit of adding routes and seats nearer to take-off time, it could now work out to be financially advantageous to bide your time.

Our two major airlines generated a lot of poor will from passengers in the post-pandemic years with only 53 per cent of Qantas and Virgin Australia domestic flights arriving on time as recently as July 2022.

With the grace period granted by travellers for a disappointing number of cancellations, delays and lack of availability long since expiring, both are now making more concerted plays to keep loyal customers and pinch disloyal ones from the other.

In practice, that means more frequent sales, more options for spending accumulated rewards and even an offer to immediately achieve the membership tier you have with Qantas if you sign up with Virgin Australia without jumping through the usual points and credits hoops.

It’s been a chaotic five years for aspiring travellers but with trends now moving in the right direction on several fronts, it’s worth keeping an eye on what’s nearly within reach — as pretty soon it just might be.

Gemma Acton is the Seven Network’s finance editor.