R'n'R is at top of our priorities

<em>Illustration: michaelmucci.com</em>
Illustration: michaelmucci.com 

Holidays have become our biggest incentive for saving money — and our piggy banks are taking Australians further and further afield.

Who needs a new bathroom when you can travel to South America?

Or a new plasma telly when you could have a couple of weeks at the beach in Queensland?

Aussies are working hard to holiday well, putting travel ahead of any other motivation for saving, according to research from the St George-Melbourne Institute.

The institute's Household Financial Conditions Report for the month of December 2012 shows nearly 60 per cent of Australians nominated holidays and travel as a key motivation for saving money, ahead of any other reason.

Travel ranked higher than saving a deposit for a house, renovating, saving for retirement, education, repaying debts, buying a new car or an expensive item for the house.

Only saving for a rainy day came close in our priorities, with 53 per cent of people nominating saving as a precaution as a key motivation for putting money away.

The chief economist for the St George Banking Group, Hans Kunnen, says he was initially surprised to see how high holidays ranked in Australians' priorities - "even ahead of retirement".

"But when you think about how we're made up, as people, I guess it's not so surprising," Kunnen says.

"We're all working very hard and travel is something that takes us away from that for a while.

"Australians still see a holiday as something we should be doing; it's seen as an important circuit breaker.

"The Australian dream is to have a house ... and a holiday. Travel is just part of our aspiration."

Kunnen says rising demand for travel is part of a bigger picture of rising living standards.

While many Australians feel that times have been tough recently, the economy needs to be viewed with historical perspective.

"The Australian economy is in its 22nd year of growth," Kunnen says.

"There's tough times and there's tough times.

"Things feel tough because the sharemarket fell and house prices fell but with the unemployment rate below 6 per cent, that's not what you call tough times nationally.

"How tough can it be when you can still pick up your mobile phone, go on the internet and go on holiday?

"It's all relative."

Kunnen believes there has also been a shift in workplace attitudes, with many companies now requiring employees to take at least 10 days' leave at a time, to prevent burnout.

The strong Australian dollar is a further driver, with Australians having roughly twice the spending power, against the US dollar, of a decade ago.

With the Australian dollar dropping to less than US50¢ in 2000 and 2001 and now sitting comfortably at more than a dollar, Australians can afford to travel further or more frequently.

Figures from Flight Centre show airfares have also moved in favour of travellers.

The cheapest international flights are now, on average, almost 25 per cent cheaper than five years ago, the company says.

Travellers are saving hundreds of dollars on international fares and in some cases are paying just half of what they were at the end of 2007.

The managing director of Flight Centre, Graham Turner, says the significant drop in airfares is somewhat at odds with pricing trends in other sectors.

"Inflation in Australia has increased more than 10 per cent during the past five years and average wages have increased more than 20 per cent, but airfare prices have actually fallen," he says.

Turner says airline competition has increased significantly as more airlines, including low-cost carriers, have a presence in Australia.

Flight Centre compared the cheapest advertised return fares from Sydney to 10 popular destinations and found the Singapore route had recorded the biggest drop, with fares now half what they were five years ago.

The Bali and Bangkok routes recorded pricing drops of 30 per cent or more, while Hong Kong, Los Angeles and Phuket have dropped by about a quarter.

Combined with the spending power afforded by the Aussie dollar, it is hardly surprising that international departure numbers are soaring.

Figures from the Australian Bureau of Statistics show short-term departures from Australia were 5 per cent higher in November 2012 than they were in November 2011.

Departures now far outstrip arrivals, although there has been healthy recovery in arrivals over recent months.

 

Dollar value destinations

Now you've saved the money, where are you going to spend it? Japan is one of the best places to get value for money, according to the Expedia NAB Foreign Exchange Index, which measures the Aussie dollar's gain against other currencies. The dollar has gained more than 15 per cent against the Japanese yen over the past 12 months.

Making up the top five for "emerging destinations" where the Australian dollar has made the biggest gains are Brazil, South Africa, Indonesia and Argentina, so this could be the year for adventure.

 

Trend watch

They call it a "quiet zone", but what it really means is no screaming kids.

No-frills airline AirAsia X has taken a step that many travellers have dreamed of: creating a child-free zone at the front of the aircraft.

The first seven rows of seats on long-haul flights across Asia and to and from Australia are being reserved for passengers over the age of 12 and promoted as a quiet zone with soft lighting.

The airline says the zone will offer "a more pleasant and peaceful journey with minimal noise and less disturbance".

There is no charge for requesting the quiet zone, other than AirAsia X's existing charge for choosing your own seat.

However, with the zone likely to be in hot demand, it is probably only a matter of time before a fee is applied.

On domestic flights, it is common for airlines to place families travelling with children in the back half of the plane, whether it is by design or due to the fact that families are often travelling on discounted tickets.

However, on international flights, infant bassinets are usually located at the front of each economy section.

AirAsia X says it offers infant bassinets in other sections of the economy zone, allowing it to keep the first seven rows for grown-ups.

jane@janeefraser.com.au

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