Australians spend big on travel and leisure, despite rising inflation

The first third of 2022 has been difficult, seeing unprecedented weather, a geopolitical crisis leading to global inflation and the residual impacts of the pandemic. Despite the real financial impacts of these troubles, Citi Australia’s debit and credit card spending data shows that Aussie consumers are looking to return to the pre-pandemic normal.

“A holiday has been at the top of the to do list for many Australians, after a long two-years of lockdowns, and this spend trend shows us consumers now have the confidence to plan longer-term travel, like international and domestic getaways and cruises,” Citi Australia’s Head of Cards and Loans, Choong-Yu Lum said.

“It’s pleasing to see strong spend in travel and leisure categories, including airlines, cruise lines, hotels and resorts, dining and retail, with February seeing significant spend increase in the travel category, with flights up by 69% and travel more broadly up by 34% compared to the previous month.”

Looking at the distribution of overall spend, there is little change in the top half of the top ten categories - consisting mostly of supermarkets, household goods, business services, insurance, health and medical. The bottom half of the table saw an increase in retail, restaurants, and travel categories, indicating a rebound in consumer confidence and strong sentiment for the travel and tourism industries.

Impacted by inflation and globally volatility, from February petrol was a top spend category for Australians. “We expect this to continue into the coming quarter as the war in Ukraine continues, and global inflation rises,” Choong-Yu Lum said.

With the announcement of the federal budget, a coming federal election, looming interest rate changes, and global instability and inflation, there will likely be some changes in spending for the remainder of 2022.

More positively, as borders open and Aussies rediscover their wanderlust, Citi data suggests that travel and leisure spending will continue to grow. “Cardholders will be maximising travel related rewards, like discounts, insurance and the like,” concluded Choong-Yu Lum.

If you have big travel plans for 2022, now may be a good time to look into getting a rewards credit card that accumulates frequent flyer points as you spend. To compare see below for some top rewards cards options or check out the best credit cards in Australia this month for Mozo Experts Choice Award winners and editor’s picks.