Monsoons and European detours: where to holiday with your weak Australian dollar

The Australian dollar’s recent decline in value against major currencies has hiked the cost of overseas travel to many destinations for Australians. The dollar’s slump from a high of 69 US cents in September to a low of 62 cents on Friday makes a holiday in the US less affordable, while Japan is discouraging Australian tourists from flocking to its major cities.

So where can holidaymakers still travel on a budget?

Get ‘that island feel’

The Cook Islands in the middle of the Pacific, a six-hour direct flight from Sydney, offer all the perks of a Pacific island holiday at a fraction of the price, says Charissa Hanrahan, a travel designer for MTA Travel.

“It’s almost like you would imagine Fiji, 20 or 30 years ago,” she says.

The islands use New Zealand’s dollar, which like the Aussie has fallen against overseas currencies, so Australian travellers have a decent exchange rate on their side, with A$1 buying NZ$1.10 on Friday.

The Australian dollar kept its value in the Cook Islands and New Zealand over most of 2024 into 2025 but fell in Fiji as it slumped around the world.

While flights to the Cook Islands may cost as much as a flight to Fiji, travellers could find places to stay for less than A$200 a night and buy meals for half the price, Hanrahan says.

“You really get that island feel,” she says.

Hanrahan suggests hiring a scooter to ride around the islands or “just hop in a kayak and go out in the crystal clear water, go snorkelling, go for a walk in the forest, enjoy the food and relax on the beach”.

Cross the ditch

The Aussie dollar’s strength in New Zealand means travelling across the ditch has stayed affordable.

To keep costs low, Hanrahan suggests hiring a campervan – about A$120 a day for a two-berth van or A$220 for a six-berth including toilet and shower – and camping at free sites all along the North or South Island.

But the Australian dollar has had a rough few months in many other countries, says Hanrahan, so it may be easier for holidaymakers to save themselves the exchange rate hassle and take a look in their own back yard.

“Explore Australia, there’s so much to do here,” she says.

Bargain hunters looking for a beach break can find cheap domestic flights with fares from Sydney to Byron Bay as low as $60 and Brisbane to Airlie Beach for $99, according to Virgin Australia.

Off-peak bargains in south-east Asia

Those looking for a beachside holiday could swap Vanuatu for Vietnam, says travel agent Tracy King.

“You can go to Phu Quoc, which is a beautiful island. You can go down to Hoi An – there’s heaps of beautiful beaches down there.”

The Australian dollar has lost value in Vietnambut the south-east Asian country still offers accommodation and meals at more affordable prices, King says.

“You get a lot of bang for your buck over there,” she says. “If you’re staying in a five-star hotel in Ho Chi Minh [City], you probably would pay four-star price.”

The typical flight to Vietnam from Australia’s east coast may still cost more than A$1,000 return but Hanrahan says savvy shoppers could find air fares for less than A$500 from budget airlines and sales.

Australians could also benefit from affordable direct flights all around south-east Asia, according to Lynda Reid, owner of the agency Ezy Travel Guru.

Travelling to Thailand and Indonesia during off-peak periods, such as during monsoon season, could help bring costs down as long as holidaymakers stayed safe and planned ahead, Hanrahan says.

“I know that it’s going to bucket down in the afternoon, so I just do all of my things in the morning, [then enjoy] cocktail hour when it’s set to rain,” she says.

According to data from travel website Expedia, Australians are increasingly interested in visiting Malaysia’s capital, Kuala Lumpur, where accommodation can be found for less than $350 a night over the summer.

European detours

The Australian dollar has slumped against the euro and the pound, but travellers can keep costs low in Europe by travelling off the beaten track, says Reid.

Smaller Italian towns, such as those in Tuscany, could still offer accommodation for $200 a night alongside cheap food and drink and a valuable European experience, she says.

“To get that cultural experience in a place, you’ve got to get to the small country towns, to the farmers, the shopkeepers, the people that have been in their traditional coffee shop for 50 or 60 years.”

Other cities attracting attention as alternative Europe destinations include Reims, north-east of Paris, Brescia, near Milan, and Girona, 100km from Barcelona, according to analysis from Expedia published in November.

Albania and countries further east have also grown more popular as travellers seek cheaper alternatives to western Europe, Reid says.

“There are beautiful beaches and it’s half the price of other European countries, with not as many tourists,” she says.

“The eastern countries, Slovenia, Slovakia … they’re much cheaper than your France and your Germany and Italy.”