TRAVEL: Japan Embraces Luxury Travel as Australia and NZ Cut Holiday Spending

New Allianz Partners research reveals contrasting travel trends across Asia-Pacific, with Japanese travellers prioritising meaningful experiences while Australians and New Zealanders make budget-conscious choices to keep their holidays on track.

Travel spending patterns across Asia-Pacific are undergoing a noticeable shift, with Japanese travellers showing a growing willingness to pay more for memorable experiences, while Australians and New Zealanders are tightening their belts to ensure holidays remain part of their plans.

The latest Global Travel Confidence Index 2026 by Allianz Partners reveals a growing divide in how travellers across the region approach their holiday budgets. While Australians and New Zealanders remain enthusiastic about travelling despite rising costs, Japanese travellers are becoming more selective about taking holidays, but are prepared to spend more on experiences they consider worthwhile.

Japanese travellers seek meaningful, premium experiences

Despite Japan recording the lowest travel intention among the five markets surveyed, those planning to travel are demonstrating a strong appetite for premium experiences.

Almost half (48%) of Japanese respondents intending to travel said they planned to spend more on luxury travel experiences – the highest proportion across all five markets.

However, rather than embracing luxury for its own sake, Japanese travellers appear increasingly interested in holidays centred on memorable activities, personal interests and special occasions.

Concerts, festivals and entertainment events emerged as the most popular choices, attracting interest from 36% of respondents. Event-led travel and special occasions followed at 35%, while spa and wellness retreats appealed to 30%. Sporting events also featured prominently, with 25% expressing interest.

These findings suggest significant opportunities for travel businesses to develop experience-led itineraries that connect travellers with the events, activities and special moments that matter most to them.

Nevertheless, financial pressures remain a major consideration. Some 76% of Japanese respondents planning to travel expressed concern about rising travel costs, while 46% intended to scale back their holiday plans.

The message is clear: Japanese travellers may be willing to spend more, but they increasingly expect premium experiences to deliver genuine value.

Australians and New Zealanders prioritise holidays over luxury

In contrast, Australian and New Zealand travellers are taking a more cautious approach to holiday spending, making sacrifices in other areas of their lives to protect their travel plans.

The research found that 65% of Australian travellers and 74% of New Zealand travellers did not intend to increase their spending on luxury travel experiences.

Instead, approximately seven in 10 travellers in both countries were cutting back on non-essential purchases to make their holidays more affordable.

This determination to keep travelling is reflected in the finding that 59% of Australians and 57% of New Zealanders planned to reduce their holiday spending or scale back their trips, rather than abandon travel altogether.

The trend highlights the resilience of travel demand in both markets, although travellers are becoming increasingly conscious of where and how they spend their money.

Domestic destinations face growing competition for holiday dollars

Another important finding is the continued appeal of domestic travel.

Around 32% of Australian respondents and 39% of New Zealand respondents expressed a preference for holidaying within their own countries.

For international destinations and tourism operators targeting these markets, this presents an additional challenge. Overseas holidays must compete not only on price, but also on the experiences, convenience and overall value they offer compared with destinations closer to home.

Value and experiences will shape the next phase of travel

The findings from Allianz Partners highlight how differently travellers are responding to economic pressures across Asia-Pacific.

For Japanese travellers, the opportunity lies in delivering distinctive, experience-driven holidays that justify a higher price tag. For Australians and New Zealanders, affordability, flexibility and value for money are likely to remain central to holiday decisions.

For the travel industry, understanding these differences will be increasingly important when developing products, marketing campaigns and destination experiences.

Ultimately, travellers are not necessarily giving up on holidays. They are becoming more deliberate about what they spend, where they go and which experiences are worth paying for.