How is everyone affording Europe?

The travel is real

Australian residents recorded 12.26 million returns from short-term overseas trips in 2024–25. That was more than a million above the previous record in 2018–19, with holidays accounting for 60% of trips. There is real activity behind the airport photos.

Those are trips, though, rather than separate people. Your mate who went to Bali, Japan and Greece counts three times. The figures also include destinations outside Europe and reasons other than holidays. They establish the volume of travel, but cannot establish that it has become affordable for everyone.

There is another problem with judging this through your friends. Imagine 20 people you know, five of whom take separate two-week holidays. If their trips do not overlap, that is ten weeks of someone being overseas while most of the group is at home.

Follow enough people and someone can always be away. The people taking their bins out are contributing considerably less to the coverage.

You know their job, not their expenses

It is tempting to look at someone with a similar job and assume their spending capacity should roughly match yours. But a salary has to get through quite a few other people before any of it reaches an airline.

Rent, mortgage repayments, car finance, children and existing debts all affect what is left. Two people earning the same amount can have completely different holiday budgets without either being particularly good or bad with money.

As an illustration, a $200 difference in weekly housing costs amounts to $10,400 over a year. That is before comparing anything else. Living with family, sharing expenses with a partner or owning a home outright can change the calculation substantially.

The Reserve Bank observed this unevenness in August 2024, reporting weaker consumption growth among renters and mortgagors than outright homeowners. That was about spending generally, but it shows why “everyone is struggling” is too broad to explain individual purchases. People experience the same economy with very different bills.

Then there is the time involved. Putting aside $150 a week produces $7,800 over a year. Whether that is achievable depends on your circumstances, and it is not an estimate of what Europe costs. But it explains how an expense that looks sudden to everyone else might have been accumulating for months.

You see three weeks of spending. You may have missed a year of saving for it.

Europe and a house are different purchases

Someone can afford an overseas trip and still be nowhere near buying a home. A holiday has a budget you can work towards, with some control over its duration, accommodation and itinerary. A property purchase involves a much larger commitment, followed by years of repayments.

So I do not think “you went to Europe, stop complaining about house prices” is a particularly intelligent argument. A flight does not demonstrate that a deposit and mortgage were otherwise manageable.

But the reverse argument deserves scrutiny too. “I cannot afford a house anyway” does not remove the cost of the trip. The money still leaves your account. It could have remained available for a future purchase, an emergency or something else you wanted.

You can decide the experience is worth that trade-off. You do not need to pretend there is no trade-off to justify going.

This is also why visible spending can be misleading. Travel might be someone’s main discretionary purchase for the year. They may drive an older car, spend less on weekends or delay replacing things because they would rather go overseas.

Someone else might have family help. Another person might borrow. And yes, some people simply earn enough that the trip is not a major financial event. There is no reliable way to identify which arrangement you are looking at from a photograph of pasta.

When a holiday starts to feel compulsory

The more interesting consequence is what happens to your own expectations.

If overseas travel feels exceptional, you might treat it as something to save towards occasionally. If everyone around you appears to go every year, staying home can start to feel like missing a normal part of life.

The trip has not necessarily become cheaper. It has become harder, in your own mind, to leave out.

For a travel business, that is a valuable place to occupy in someone’s budget. Once the customer is committed to going, the question becomes where, for how long and what they will cut elsewhere to fund it. An expensive purchase can survive a tight budget when the buyer gives it priority.

That does not make travelling irresponsible. I think spending deliberately on something you care about is perfectly defensible. What makes less sense is adopting someone else’s spending priorities without knowing the circumstances that make them possible.

The person in Italy, the person buying a house and the person driving a new car may be three different people. Put their purchases together and you create someone who appears to be doing everything.

Trying to keep up with that person would be expensive. Particularly given they do not exist.