New research from Southern Cross Travel Insurance (SCTI) suggests travellers in New Zealand and Australia are rethinking where and how they travel, with flow-on effects for working holidays, destination risk assessments, and uptake of travel insurance.
The findings come from SCTI’s fifth Future of Travel study, conducted in November 2025. The Australian arm surveyed a nationally representative sample of 1,008 adults, with parallel research undertaken in New Zealand. The results show reduced appetite for traditional long-term overseas work trips, a cooler stance toward the US and several other regions, and continued demand for family- and experience-led travel that can result in substantial claims.
One of the clearest changes in the New Zealand data is the drop in interest in the classic overseas experience (OE). Among Gen Z respondents, interest in extended work-abroad trips decreased from 75% in 2024 to 55% in 2025. Jess Strange, chief customer officer at SCTI, linked the shift to labour market conditions in established OE destinations and the realities of digital nomad arrangements. “There has been a fair bit of media coverage, let alone anecdotal chat, of it being difficult to secure jobs in a traditionally favoured market like London. Post-pandemic, some locations such as Portugal, Japan, Indonesia, and Malaysia extended special visas for digital nomads; however, economic realities, workplace shifts, and the practical challenges of living and working overseas have become clearer and may well be forcing travellers to rethink their plans,” Strange said. According to SCTI, its Working Overseas policy includes maternity, dental, and optical benefits, and cover to return home and back overseas if a close family member becomes seriously ill or dies. The product is positioned for customers undertaking long stays or employment abroad.
Across both markets, the US features prominently among destinations that respondents say they are less likely to visit. In New Zealand, SCTI’s research shows that among travellers who are actively avoiding particular destinations, 74% now put the US at the top of their “less likely to visit” list. Of those, 83% nominate politics as the main deterrent, followed by border entry rules and safety concerns. Strange said the responses highlight the need for clarity about how entry requirements intersect with travel insurance. “Travellers’ concerns are understandable, and it’s important to understand how things like border entry policies may affect travel insurance cover. If you travel without the correct visas or paperwork, or you are declined entry due to a government policy, it’s highly unlikely changes to your journey will be covered by insurance. You’ll be required to fund your own itinerary changes and those don’t come cheaply. Travel insurance is there for unexpected events – so making sure you have everything in place to secure entry is your responsibility,” she said. Among New Zealand respondents who reported there are destinations they are now less likely to visit (42% of the sample), 43% named the Middle East. Between 17% and 19% cited Mexico and Central America, Africa, China, Indonesia, and India. Reasons included border and political factors, perceived expense, negative reports from other travellers, and health considerations.
In Australia, 35% of respondents said there are destinations they are less likely to visit over the next few years, and 51% reported they are now less inclined to travel to the US. The Middle East (36%) and China (28%) were also common mentions, and Indonesia – a long-standing favourite for Australian holidaymakers – was named by about two in 10 respondents as a place they are now less likely to visit. Asked why they avoid certain destinations, 63% of Australian respondents cited politics, 42% pointed to crime, 32% mentioned high costs and the same proportion referred to health risks. Thirty percent said negative word of mouth from other travellers was a factor.
For the Australian market, SCTI’s research indicates that cost-of-living pressures are affecting both destination choices and protection decisions. Among Australians planning to travel overseas, 62% said rising living costs have altered their plans. Half of this group are shifting away from peak seasons, 31% are choosing low-cost carriers or cheaper airfares, and 28% are planning to cut back on dining and entertainment during their trips. Some travellers are also reducing or foregoing insurance. Fourteen percent of Australians reported travelling overseas without travel insurance in 2025. The proportion rises among younger adults, with 19% of 18- to 29-year-olds saying they travelled internationally without cover.
Strange warned that this approach can expose travellers to large out-of-pocket expenses. “We’re seeing Australians make smart trade-offs to manage rising living costs, while still making the most of their holidays. But skipping travel insurance shouldn’t be one of them. Medical care, travel cancellations, and disruptions can be incredibly costly, and travel insurance remains an useful safeguard for travellers no matter how big or small your trip is,” she said. When Australians do allocate additional spending, the research suggests they prioritise extensions and upgrades. Respondents reported adding extra nights or extra destinations and increasing shopping spend (31%), followed by stays in higher-end or boutique accommodation and booking higher-cost experiences (29%).
In New Zealand, the survey shows that family-focused travel remains a central motivation. A family holiday is the top priority for 54% of respondents, ahead of beach breaks (34%) and immersive cultural trips (28%). Gen X respondents are the most likely to prioritise family travel, at 62%, while Millennials and women are more likely to nominate beach and “authentic” experiences. Road-based travel also features. “Taking a road trip to discover scenic routes and be spontaneous comes in at fourth on the list at 25%. The popularity of road trips indicates a continued interest in self-driven adventures – good news for regional destinations and motoring tourism overseas. It’s also where travel insurance can support adventurers using rental vehicles – offering cover for rental vehicle excess for what can sometimes be an extraordinary incident,” Strange said. In 2025, SCTI paid more than $311,000 in claims for rental vehicle excess internationally, with an average claim of $1,487. In New Zealand, the average rental vehicle excess claim was $1,287, covering incidents ranging from minor collisions in ski regions to damage caused by wildlife.
Both New Zealand and Australian respondents continue to pursue large-scale or “bucket-list” trips, even as they report being more selective about certain destinations. New Zealanders surveyed identified African safaris, the Inca Trail, and Disney theme parks as key aspirations. While some said they are less inclined to visit the US, interest in Disney destinations remains, supported by locations in Europe, Hong Kong, and Japan. Generational differences are evident in travel type. Gen Z respondents show relatively higher interest in travelling for major events (26%), while Baby Boomers and the Silent Generation are the cohorts most likely to choose cruising, at 18% and 25%, respectively.
Strange said medical treatment on cruise ships is a recurring source of large claims. “While cruising is increasingly popular, it’s super important to note that should you fall ill while cruising on the Danube, along Alaska’s coastline, or circumnavigating the Bahamas, you will quite likely endure excessive charging for healthcare. SCTI regularly receives very expensive claims for medical care on board ships – where practitioners often charge US style prices. From $300 for a dose of paracetamol to thousands of dollars for drips, infection control and small procedures, if you don’t have travel insurance cover while cruising the seven seas, you'll likely be seriously out of pocket,” she said.
On the Australian side, high-profile events and destinations continue to influence travel intentions. The most popular experiences named in the research include Disneyland or Disneyworld (30%), African safaris (20%), the 2026 FIFA Football World Cup (17%), and the 2028 Los Angeles Summer Olympics (16%). In terms of destinations for the next 12 months, Japan ranks first with 31% of Australian respondents saying it is where they most want to go. Europe follows at 27%, then New Zealand (22%), the US (19%), and both Southeast Asia and the UK at 17%. SCTI’s claims experience reflects Japan’s appeal. “In 2025, we paid out over $316,000 in claims for people visiting Japan, with an average claim cost of $1,251,” Strange said.
The most frequent claim categories were medical treatment and evacuation, which together contributed $259,411 in claim costs. The three largest claims linked to travel in Japan were $28,822 for a traveller hospitalised with gastrointestinal issues, $18,302 for a traveller who slipped and broke a leg, and $17,867 for another traveller who also broke a leg. “Medical issues and simple trips or falls are some of the most common and costly claims we see overseas. What might be a minor incident at home can quickly turn into thousands of dollars in medical bills abroad, particularly in countries like Japan. That’s why travel insurance should always be treated as a non-negotiable part of any trip,” Strange said. SCTI’s Future of Travel 2026 study points to a traveller base that is more selective about destinations, adjusting for cost pressures, yet continuing to book higher-cost experiences and itineraries that can generate significant medical and disruption claims.
