Melbourne overtakes Sydney as Australia’s top winter break city in 2026 as seasonal domestic travel plans fall sharply. Just 54 per cent of Australians are planning a winter holiday this year, down from 74 per cent two years ago as costs bite.
Melbourne is now the nation’s most popular winter break city with 13 per cent of travellers planning to visit the Victorian capital, ahead of Sydney (11%), Gold Coast (8%) and Brisbane (7%).
The downturn cuts across every category of travel amid cost-of-living pressures as school holidays get underway around much of the country, according to new Tourism & Transport Forum (TTF) data.
Domestic travel has taken the biggest hit. Just 23 per cent of Australians are planning an intrastate winter break, down from 34 per cent two years ago, while interstate travel has dropped to 18 per cent from 26 per cent.
By state, Queensland remains the top overall destination drawcard, attracting 29 per cent of holidaymakers, followed by Victoria (23 per cent) and NSW (22 per cent).
Overseas travel proved the most resilient, easing only slightly to 12 per cent this winter from 14 per cent in winter 2024.
How cost-of-living is reshaping the winter break
More than half of Australians (54 per cent) said cost-of-living pressures had affected their winter holiday plans, but the response was to cut back rather than abandon altogether.
The survey shows 16 per cent are taking a shorter trip than originally planned, 15 per cent have chosen a close-to-home destination and another 15 per cent are cutting back on accommodation spending.
A further 13 per cent have postponed or cancelled their winter holiday altogether, echoing the widespread cancellations and shorter trips seen over Easter around cost pressures.
However, holidays continue to rank as the number-one discretionary priority for Australians, underlining that intent has not evaporated: budgets have.
TTF Australia CEO Margy Osmond said the shifting rankings showed how competitive the domestic market had become while households stayed cautious about discretionary spending.
“These results are a reminder that continued investment in destination marketing and visitor experiences matters because Australians have more choices than ever about where they spend their holiday dollars,” she said.
“Maintaining that investment will be critical to ensuring destinations remain front of mind when Australians are deciding where to travel.”
Her call for sustained investment comes as the sector reacts to a Federal Budget that cut Tourism Australia funding.
For advisors, the numbers point to clients who still want to travel but are watching the price tag: the opportunity sits in value-led shorter breaks, closer-to-home escapes and packaging that takes the guesswork out of the total spend.
KARRYON UNPACKS: Travel demand hasn’t gone, budgets have. With 54 per cent of Australians cutting back their winter plans rather than cancelling, the story is trade-down, not walk-away. Melbourne’s rise over Sydney shows loyalty to any one destination is up for grabs when every dollar is being counted.
