ANZ shifts towards a pricing growth: revenue climbs, traveler flows stagnate, margins are reconfigured. Inflation drives the 2024 revenue — Prices, not volumes — under constraints of air capacity and a saturated domestic market.
Online penetration levels off, OTAs slow down, while Direct gains the upper hand with airlines and hoteliers. Authorities aim for profitability, Focus on high-value visitors, imposing a tangible premium proposition on suppliers. Starting from 2025, airlines will boost recovery through alliances, high fares, and robust load factors.
The hospitality sector faces budget escape towards international options, while car rentals progress in line with arrivals. This price dependency exposes the sector to a downturn if household spending contracts. Performance will hinge on targeting premium customers, fostering direct relational ties, and aligning with winning segments. Australia and New Zealand are thus shaping a 2024-2028 ANZ market characterized by inflation, direct channels, and distribution arbitrage.
| Quick Focus | |
|---|---|
| • | 2024 Revenues: $37.8 billion, above pre-crisis levels. |
| • | Growth driven by prices, not by volumes. |
| • | Saturated domestic market; limited incoming air capacity. |
| • | Dependency on inflation = vulnerability if household spending declines. |
| • | Focus on high-value visitors; demand for premium value from suppliers. |
| • | Mature Digital: 59% in 2024, ~61% by 2028. |
| • | Rise of direct channels; relative slowdown of OTAs. |
| • | Leaders enhancing retention: Qantas, Virgin Australia, Air New Zealand, Accor. |
| • | Traditional agencies strong in complex international and corporate travel. |
| • | Airlines: expected recovery from 2025 despite the exit of Rex and Bonza. |
| • | Aerial drivers: partnerships (e.g., Qatar–Virgin), high fares, load factors increasing. |
| • | Hospitality: increased competition; occupation ~70%; local spending shifting to overseas. |
| • | Car rentals: gradual recovery, driven by the return of entrants and self-drive. |
| • | Market signal: prioritize high-value customers over volume hunting. |
| • | Priorities: direct relationship, customer loyalty, alignment with most lucrative segments. |
| • | KPIs to monitor: incoming capacity, channel mix, ADR/RevPAR, air yield, direct bookings. |
Growth Mechanics: Inflation Rather Than Influx
The ANZ sector reached $37.8 billion in 2024, driven by rising prices. Volumes stagnate, fed by a saturated domestic demand and continued constraints in international air capacities. Players optimize their pricing power, but a contraction in spending could quickly weigh on trajectory.
Prices, not attendance, drive growth.
The dependency on inflation increases volatility, while governments target high-contributing travelers. The strategy involves tangible upselling, with a perceived value impeccable and a frictionless service experience.
Demand, Capacity and Public Policies
The domestic market reaches a plateau, limiting margins for organic expansion in the short term. International air capacities are slowly rising, hindered by fleets, slots, and operational delays. Authorities prioritize spending per visitor and sustainability, requiring suppliers to deliver credible premiumization rather than mechanical filling.
External signals confirm the value orientation, such as the rise of experiential travel and AI. Local survey work, such as this regional study, illustrates the interest in finely measuring behaviors and spending.
Distribution: Digital Ceiling and Shift Towards Direct
Online penetration reaches 59% in 2024 and would peak at 61% in 2028. OTAs are progressing, albeit slower than supplier-direct, boosted by proprietary data and loyalty ecosystems. Qantas, Virgin Australia, Air New Zealand, and Accor enhance the attractiveness of direct channels through status advantages, exclusive content, and targeted pricing.
Direct bookings are gaining prominence over intermediaries.
The alternative rental segment illustrates the normalization of platforms, as highlighted by the moderation of Airbnb’s growth. Traditional and corporate agencies retain the advantage for complex travel, supported by advisory, compliance, and risk management.
Performance by Segment
Airlines
Airlines will lead growth starting in 2025, despite the bankruptcy of Rex and Bonza in 2024. Investment from Qatar Airways in Virgin Australia, higher fares, and high load factors should generate double-digit gains. Levers include ancillary services, granular yield management, and network optimization.
Hospitality
The hospitality segment faces headwinds, with an occupancy rate in the low 70%. Domestic travelers are reallocating part of their spending internationally, intensifying competition for local inventory. Subscription models and shared ownership, visible in Asia through vacation clubs, inspire more immersive loyalty approaches.
Car Rentals
Car rentals are gradually returning to pre-COVID levels thanks to the return of inbound travelers. Regional dependence on self-drive supports demand, while fleet management and electrification redefine costs. Suppliers capitalize on service packs and dynamic insurances to increase ARPU.
Accessory Economy and Ancillary Revenues
Ancillary spending creates a margin cushion, from baggage to onboard connectivity. The dynamics of the baggage market reflect the extension of the tourism value chain. The top-performing players orchestrate packaged offers, customized by data and travel context.
Indicators, Risks and Management
Projections through 2028 confirm growth driven by prices and mix, not by volumes. A weakening in consumption would put pressure on segments with low perceived elasticity. Monitoring of cost of capital, exchange rates, and fleet capex remains crucial to calibrate supply and maintain profitability.
Capturing premium value over the quest for volumes.
The repositioning towards high-contributing clients requires omnichannel orchestration, a reliable premium experience, and relevant partnerships. Phocuswright’s market analyses, with sizing and scenarios for 2025-2028, shed light on segment arbitrage and allocation priorities.
