Mind the gap: Has the Australian gap year bubble burst?

A dramatic fall in young Australians’ interest in long work-abroad trips has been highlighted in a new survey.

While 78 percent of Gen Z (born between 1997 and 2012) travellers wanted to do a multi-month working holiday trip in 2024, that number fell to 56 percent in 2025.

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The reasons were varied and nuanced, the report said, but cost of living pressures and lack of realistic opportunities for remote work were likely to be among them.

“From a policy perspective, the drop in remote work interest among Gen Z might hint at the need for companies to better communicate remote work opportunities or for governments to promote working holidays – it appears initial excitement waned, possibly due to economic or workplace changes.”

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The Southern Cross Travel Insurance Future of Travel report details the differences between different age groups’ travel habits. 

The findings also presented a divide between what younger travellers want, and what they’re able to do; Gen Z Australians had more far-flung destinations on their bucket lists than their Millennial, Gen X and Baby Boomer counterparts. Whereas Gen Z had aspirations to travel to Japan, Boomers were more likely to have their sights set on Europe and North America. 

The responses come from a survey of just over 1000 Australians aged 18 and over in November 2025.

Across the board, Aotearoa New Zealand is a wish list destination for Australians, with 22 percent hoping to visit, beaten only by Japan (31 percent) and Europe (27 percent).

Although the survey’s results pre-date the most recent global instability due to tensions between the United States and Iran, political and safety concerns were cited as barriers to travel by 42 percent of Australians, with 74 percent saying they were less likely to visit the USA as a consequence.

Similarly, whilst fuel prices were not affected at the time the data was gathered, travellers were already feeling the pinch, with half avoiding travelling in high season due to cost, and around 30 percent seeking low-cost airline tickets or compromising on cheaper entertainment or meals.

Other key findings from the report include:

• 41 percent of Australians who have travelled in the last 12 months say they have used AI for their travel plans. The most common application of AI is for comparing hotels, airlines and insurance (20 percent).
• Australians are still avid travellers; 51 percent were planning an overseas trip, 73 percent were looking to travel intrastate and 65 percent wanted an interstate trip.
• When it comes to most preferred trips, it’s a family holiday (48 percent), followed by a beach holiday (25 percent) and road trips (17 percent).
• 88 percent of Australians say travel insurance is a priority for international trips, a significant increase from 79 percent in November 2024.