Why FY27 will be won on mix, margin and value per traveller, not on volume.

An analysis of the FY26 reporting season, the latest ABS and Tourism Research Australia data and Virtuoso’s 2027 Luxe Report, and what they mean for travel brands and travel insurers planning the year ahead.

By Matt Endycott, Founder and Managing Director, Hartmann Advisory

Executive summary

For three years, growth in Australian travel arrived by default. Borders reopened, demand surged back, and every plan written since 2022 has carried a recovery tailwind somewhere in its assumptions. That tailwind forgave a great deal, from blunt forecasting to average product to ancillary revenue left unconverted. This travel industry outlook 2027 starts from a simple reading of the evidence. The tailwind has gone, growth now has to be engineered, and the FY26 results show which businesses have already understood that.

The volume story has gone flat. Across May, June and July 2026, Australians made 3.09 million short-term overseas trips, only about 1,200 more than in the same three months of 2025 and around 9 per cent above the same period of 2019. The flat total hides a hard rotation underneath it. Trips to Vietnam ran around 21 per cent higher over those three months and China grew by double digits in June and July, while the United States, the United Kingdom and Italy went backwards.

Spend is concentrating rather than shrinking. Domestic overnight trips fell while overnight spend rose, and international visitor spend in Australia grew almost twice as fast as visitor numbers. Virtuoso’s 2027 Luxe Report points the same way at the top of the market. Most advisors expect spend per trip to rise again in 2027, Japan has displaced Italy as the top global destination for the first time in the report’s history, and China leads the destinations on the rise, with Vietnam and South Korea also in the top ten.

The FY26 reporting season showed where that value was captured. Earnings grew where businesses sit on supply economics, corporate contracts and loyalty programs, and compressed where they depend on winning each consumer booking afresh. It also showed how thin the buffer is. Fuel and the Middle East cost Qantas around $1 billion against expectations, and Corporate Travel Management returned to the ASX after thirteen months of suspension with its shares roughly 80 per cent below where they last traded.

Underneath all of it sits an insurance gap. The traveller cohort growing fastest is the least insured, and the trips Virtuoso’s advisors expect to grow, from milestone celebrations to multigenerational journeys and expedition cruises, carry more value and more exposure than the average holiday. FY27 planning needs three changes in response. Forecast by destination rather than by national total, measure revenue per traveller rather than transactions, and treat ancillary revenue, travel insurance above all, as core rather than incremental.

This analysis is written for boards, chief executives and commercial leaders across travel and travel insurance. Every number in it is public, and every recommendation can be acted on before the FY27 plan is locked.

In brief

• Australian outbound volume has gone flat. Trips from May to July 2026 were almost identical to the same months of 2025, and the premium over 2019 has narrowed to around 9 per cent.
• Demand has redistributed rather than softened, with Vietnam, China and Indonesia taking share from the United States and Europe.
• Value per traveller is rising in both directions, and Virtuoso’s 2027 Luxe Report shows the top of the market expects to spend more per trip in 2027, not travel less.
• FY26 earnings grew where businesses own supply, corporate contracts or loyalty, and compressed in transactional consumer retail.
• The buffer is thin. One disrupted quarter reset the year for some of the sector’s largest names, and governance has become a counterparty risk in its own right.
• The fastest-growing travellers are the least insured, which makes ancillary conversion, travel insurance above all, the largest unclaimed margin in the FY27 plan.

Volume has flattened, and demand has redistributed

The headline number looks like a plateau. Underneath it, the market is rotating faster than at any point since borders reopened.

Three months, one flat line

ABS short-term resident returns fell 4.9 per cent year on year in May 2026, rose 0.4 per cent in June and rose 3.8 per cent in July. Read month by month, that looks like noise. Read as a quarter, it is a clear signal. Across those three months Australians made 3,090,540 short-term overseas trips, only about 1,200 more than in the same three months of 2025. The trend line has gone flat.

The comparison with 2019 says the same thing. June trips sat 9.0 per cent above June 2019 and July trips 11.4 per cent above July 2019. After three years in which almost every month carried a recovery premium, the market has settled onto a line only modestly above where it stood seven years ago. The post-reopening surge has been absorbed, and what remains is a mature market in which growth has to be won from competitors rather than handed over by recovery.

The destination mix is rotating hard

The destination table tells a very different story. Vietnam grew 22.1 per cent in May, 17.8 per cent in June and 21.5 per cent in July. China grew 11.1 per cent in June and 10.2 per cent in July. Indonesia, which now leads the outbound table and accounted for 17.0 per cent of all resident returns in June, grew in each of the three months. New Zealand grew 14.0 per cent in May and 6.2 per cent in July.

On the other side of the ledger, trips to the United States fell 16.7 per cent in May and 4.1 per cent in June before stalling in July. The United Kingdom fell 12.6 per cent in June and around 9 per cent in July, and Italy fell in both months. Japan, long one of the strongest growth corridors, was broadly flat across the three months combined.

Two conclusions follow. Asia and the Pacific are absorbing share that North America and Europe used to hold, driven by proximity, exchange rate value and airline capacity. And the destinations moving fastest are not the ones most product, pricing and cover assumptions were built around.

A flat total with a rotating mix is harder to run than growth. Growth forgives forecasting error. Rotation punishes it.

The planning trap inside a flat total

This is the part most FY27 plans will get wrong. A flat national number conceals double-digit swings in both directions, which means a business can hit its volume forecast precisely and still miss its revenue, margin and claims assumptions by a wide mark. A trip to Vietnam and a trip to the United States are different commercial events, with different ticket values, commission structures, insurance premiums, medical cost exposure and service loads. When the mix rotates this hard, the national total stops being a useful planning unit.

It also means the sector is carrying assumption debt. Product architecture, pricing tables, marketing allocation and underwriting assumptions were largely built when the growth corridors ran to North America, Europe and Japan. The fastest growth now runs to Vietnam, China and Indonesia. Every year that gap stands, products drift a little further from the travellers actually buying them, and the cost lands in the margin line, usually without a named owner.

Value per traveller is rising, and the luxury market confirms it

The consumer has not stopped spending. They have concentrated it.

Fewer trips, more money per trip

Tourism Research Australia data for the year ending March 2026 shows domestic overnight trips down 2.3 per cent to 113.1 million while overnight spend rose to $107.6 billion. Day trip spend rose 27 per cent to $49.4 billion on a 9 per cent rise in day trips. International visitors made 8.4 million trips to Australia in the year ending June 2026, up 9 per cent, while their spend in Australia rose 16 per cent to $40.5 billion.

Fewer trips, more money per trip, in both directions. That is what a maturing market looks like. The customer is still committed to travel but is making fewer and higher-value decisions, which moves the commercial question from how many travellers a business can touch to how much of each traveller’s trip it captures.

What Virtuoso’s 2027 Luxe Report adds

Virtuoso’s newly released 2027 Luxe Report adds the view from the top of the market. It draws on survey responses from more than 3,100 travel advisors in more than 50 countries, more than 400 of them in Australia and New Zealand. It is a global view rather than an Australian one, but the direction it describes matches the local data closely.

On spend, 59 per cent of advisors expect spend per trip to rise modestly in 2027 and a further 13 per cent expect a significant increase, while 23 per cent expect it to hold at 2026 levels. Celebrating a milestone is the leading travel motivation for the third consecutive year, and 47 per cent of advisors say ultraluxe travel built on privacy and personalisation is on the rise, with luxury all-inclusive experiences at the top of that list.

The destination rankings echo the ABS rotation. Japan has displaced Italy as the top global destination for the first time in the report’s history, and Tokyo and Kyoto are the two leading cities. China ranks first among destinations on the rise, with Vietnam and South Korea also in the top ten. Asia is not only taking volume share at the mass end of the Australian market. It is taking the top of the global luxury market as well.

Japan is the instructive case. Australian trips to Japan were broadly flat from May to July, yet Japan now leads the global luxury rankings. The same destination can be standing still on volume and rising on value at the same time. Measured by trip count, Japan looks like a mature corridor. Measured by revenue per traveller, it may be one of the most valuable.

Cruise and the multigenerational trip

Cruise is the clearest expression of value per traveller compounding. CLIA recorded a record 37.2 million ocean cruise passengers in 2025, up 7.5 per cent, with nearly 90 per cent of cruisers intending to sail again. Around a third of cruisers are under 40 and around a third of cruise trips are multigenerational. That is a category with repeat rates most travel businesses would pay for, and a demographic profile that dismantles the industry’s own stereotype of it.

Virtuoso’s advisors point in the same direction. Multigenerational family travel is now the number one trend in the report, having climbed a place every year since 2024, and expedition cruising has risen to number three. Antarctica remains the top adventure destination and the Nile has entered the top cruise itineraries for the first time.

Where the margin went

The dividing line is not size, sector or brand strength. It is whether a business earns from a relationship or from a transaction.

Supply, contracts and loyalty compounded

Web Travel Group, reporting for the year to 31 March 2026, grew TTV 20 per cent to $5.8 billion and revenue 20 per cent to $394.1 million, with WebBeds EBITDA up 24 per cent to $172.7 million at a 43.8 per cent margin. Virgin Australia lifted underlying EBIT 13.4 per cent to $753 million and expanded its EBIT margin 60 basis points to 12.0 per cent, helped by transformation benefits and fuel hedging as well as demand. Qantas Loyalty grew underlying EBIT 12 per cent to $625 million. Inside Flight Centre, the corporate business lifted underlying EBITDA 24.4 per cent to $275 million.

Set side by side, the pattern is hard to miss. The businesses that grew earnings sit on supply economics, corporate contracts and loyalty programs, positions where revenue per unit is high, the relationship is contracted or habitual, and volume growth is optional.

The transaction middle compressed

The pressure sits in consumer transaction retail, where the customer is won one booking at a time. Flight Centre grew group TTV 4.7 per cent to a record $25.7 billion, but revenue grew only 2.5 per cent to $2.9 billion and underlying profit before tax fell 4 per cent to $278 million. Webjet Group’s underlying EBITDA fell 20 per cent to $28.1 million for the year to 31 March 2026, and its OTA bookings were running 12 per cent below the prior year by mid-May.

In a flat-volume market, that is what the middle of the value chain looks like when it monetises transactions rather than relationships. Revenue growing at around half the rate of TTV is the clearest sign that the value of each booking is being competed away.

Supply, corporate relationships and loyalty economics are compounding. Consumer transaction retail is compressing. In a flat market, the gap between them only widens.

The buffer is thin, and the new mix carries more risk

Nine months of momentum and one quarter of disruption reset the entire year, and the new traveller mix adds exposure most plans have not yet priced.

One quarter reset the year

Qantas reported FY26 underlying profit before tax of $2.06 billion, down $330 million, after absorbing a fuel bill $610 million higher than expected and a net Middle East impact of $420 million. Flight Centre’s leisure business lost about $60 million of profit in the fourth quarter as flights were reduced, having been on track for around $200 million in underlying profit before tax before conditions turned.

The lesson is not that shocks happen. It is how little cushion the sector carries when they do. Qantas absorbed around $1 billion of combined fuel and geopolitical impact and still cleared $2 billion in underlying profit before tax, because scale and diversification bought resilience. For boards, FY26 was a live stress test, and the useful question is not whether the shocks were foreseeable but what the year revealed about the buffer.

Governance became a market event

Governance now sits beside geopolitics as a live commercial risk. Corporate Travel Management was suspended from the ASX in August 2025 while billing practices in its UK business were investigated. It lodged its FY26 accounts on 2 September 2026 and resumed trading the following day, thirteen months later, with its shares trading roughly 80 per cent below their last price before the suspension. The accounts carried a customer-related liability of $260 million at 30 June 2025, forecast to fall to $234 million a year later alongside a modified audit opinion and dividends still suspended.

That deserves to be read as more than a company story. Underlying EBITDA at the business rose 36 per cent in FY26, which is precisely the point. Demand shocks take a quarter’s earnings. Governance failures take years of trust and most of the equity value. For every corporate client, supplier and platform partner, counterparty diligence now belongs in the FY27 risk register alongside fuel and geopolitics.

The insurance gap under the new mix

Now overlay the demand rotation. The growth destinations are Vietnam, China, Indonesia and the Pacific, and the fastest-growing traveller segments are younger and travelling more often. Research commissioned by the Insurance Council of Australia and Smartraveller found 14 per cent of Australians travelled overseas uninsured on their most recent trip, rising to 23 per cent among under 30s. Sixty-five per cent of the uninsured had considered cover before deciding against it, and the most common reason given was a belief that the destination was safe.

The cohort growing fastest is the cohort least covered, travelling to destinations where the gap between perceived and actual medical exposure is widest. That is a claims problem for insurers and a duty of care problem for distributors. And because two thirds of the uninsured considered cover and declined it, this is not an awareness gap. It is a conversion and framing failure at the point of sale, which puts it squarely inside distribution’s control.

The luxury data sharpens the point from the other end of the market. The trips Virtuoso’s advisors expect to grow are milestone celebrations, multigenerational journeys and expedition cruises to places like Antarctica. These trips usually involve several travellers across generations, are planned around fixed dates, and often go to remote places where medical evacuation is complex and expensive. The value at risk in a single cancelled or disrupted booking is higher than ever, and so is the cost of getting the cover conversation wrong.

The traveller mix is getting younger at one end and more valuable at the other, and the insurance conversation has not kept pace with either.

What the year ahead rewards

Read together, the reporting season, the official data and the luxury outlook describe one market from six angles.

Signal	What it tells a leadership team
Volume	Australian outbound trips were flat across May to July 2026. Growth now has to be won from competitors, not inherited from recovery.
Mix	Vietnam, China and Indonesia are growing while the United States, the United Kingdom and Italy decline. The national total is no longer a planning unit.
Value	Spend per trip is rising in the local data and most Virtuoso advisors expect it to rise again in 2027. Capture per traveller is the growth lever.
Earnings	Supply, corporate and loyalty models grew earnings in FY26 while transactional consumer retail compressed.
Resilience	One disrupted quarter reset the year for some of the largest names. The buffer, not the forecast, decided the result.
Protection	Almost one in four under 30s travels uninsured while high-value celebration, family and expedition trips grow. Ancillary is now core.

 

Three practical changes follow for the FY27 plan.

Forecast by destination, not by total

The planning unit for FY27 is the corridor, because margin, capacity cost and risk profile differ sharply between Vietnam and the United States. Demand, revenue, attach rates and claims assumptions should be built destination by destination, with marketing and capacity allocated to match. If the plan on the table forecasts one national growth number, it is already wrong in both directions.

Measure revenue per traveller, not transactions

Scorecards drive behaviour. While frontline targets count bookings, the organisation will keep optimising for the metric the market has stopped paying for. Revenue per traveller and its direction of travel belong on the executive dashboard, with a named owner.

Treat ancillary as core, not incremental

Ancillary revenue is the only margin available that does not require a new customer, and travel insurance is the largest part of it still going unconverted. Virtuoso’s advisors put luxury all-inclusive experiences at the top of the ultraluxe list, which says the top of the market wants the whole trip arranged in one decision. That makes attach rate a strategic number rather than a service metric, and it aligns the commercial interest with the duty of care that the uninsured data puts to every distributor.

In practice

Consider an Australian travel business selling through retail and online channels. Its draft FY27 plan forecast modest national growth on the assumption that the long-haul corridors would recover. Rebuilt corridor by corridor, the same plan looked very different. Growth in Southeast Asia was real but arrived at lower ticket values and was concentrated in younger travellers with the lowest insurance attach rates in the book. Long-haul volume was softer than forecast, but the long-haul travellers who remained were spending more per trip, travelling in larger family groups and booking around milestones.

The business made three changes. It set targets by corridor rather than in total. It replaced bookings per consultant with revenue per traveller on the frontline scorecard. And it rebuilt the insurance conversation by itinerary, explaining cover in terms of each destination’s real medical and disruption exposure rather than offering a generic add-on at the end of the booking. Its volume forecast barely moved. Its margin forecast moved materially, because the plan now priced what the market was actually doing.

This example is an illustrative composite drawn from patterns observed across the sector and does not describe any single business.

Implications

For travel brands and distributors

• Accept that the compression is in the transaction middle, and that the response is more value per traveller rather than more volume.
• Build corridor-fit product for the destinations that are actually growing, not the ones the range was built around.
• Design for the celebration, family and expedition trips the top of the market is buying.
• Make insurance attach rate a reported number with an owner, and treat the uninsured traveller as a duty of care question as much as a revenue one.

For travel insurers

• Recognise that the portfolio is rotating underneath you, toward younger, more frequent, more Asia-weighted and less insured travellers.
• Review product, pricing and conversion built for the old corridors before they misprice the new ones.
• Treat the uninsured cohort as a growth pool already sitting inside your distribution partners’ customer bases.
• Build cover and assistance propositions for multigenerational, celebration and expedition travel, where the value at risk in each booking is highest.

Questions for the leadership table

• Which destinations does our FY27 revenue actually depend on, and how different is that list from the one our product, pricing and cover assumptions were built around?
• If total volume stays flat all year, where specifically does our earnings growth come from?
• What is our revenue per traveller, which direction is it moving and who owns that number?
• What would three months of disruption do to our full-year result?
• What share of our travellers leave uninsured, and are we comfortable owning that answer in a duty of care conversation?

For the market overall

This is not a gloomy read. Flat markets are honest markets. They stop subsidising drift and start paying for precision. The differentiator in FY27 will not be access to the data. It will be whether the forecast, the scorecard and the operating model have been rebuilt to price it in. Those that wait will find themselves planning for a market that no longer exists.

How Hartmann Advisory helps

For travel brands and travel insurers planning FY27, Hartmann Advisory works at the intersection of commercial strategy, distribution and execution, helping leadership teams rebuild the forecast, the scorecard and the partnership model around where demand is actually moving.

Hartmann Advisory is a specialist, senior and founder-led advisory firm for travel brands and travel insurers across Australia, New Zealand and international markets. Every engagement is led by the founder from diagnosis to delivery, scoped against a measurable result and built to be delivered rather than filed.

We work across four practices.

• Commercial strategy and growth, clarifying where to play, how to win and what has to change to lift performance.
• Partnership and distribution performance, strengthening the economics, structures and governance behind partnerships.
• Market representation and expansion, leading entry and growth in new markets, including in-market representation of client brands.
• Transformation and operating model, aligning strategy, structure and accountability so that execution keeps pace with ambition.

Hartmann Advisory is led by Matt Endycott, who brings 25 years leading travel and insurance distribution as Head of Travel at Allianz Partners, Head of Distribution at nib Travel and Head of Partnerships at Europ Assistance, now Redion. Earlier roles include Virgin Australia and The Travel Corporation. His work spans airlines, retail groups, wholesalers, loyalty programs, insurers and financial institutions across Australia, New Zealand, North America, the UK and Europe.

That perspective is why this outlook is grounded rather than theoretical. Forecasting by corridor, measuring value per traveller and converting the insurance conversation are disciplines Matt has built and run from inside the sector, not ideas observed from the outside.

The volume era rewarded the businesses that could handle scale. The next one will reward the businesses that know what each traveller is actually worth.

Start a conversation

If your FY27 plan still forecasts on a national total, measures success in transactions or treats insurance as incremental, we would welcome a conversation.

Matt Endycott

Founder and Managing Director

matt@hartmannadvisory.com.au

+61 467 412 917

hartmannadvisory.com.au

Sources and notes

Australian Bureau of Statistics, Overseas Arrivals and Departures, Australia, May, June and July 2026 releases. Three-month totals and growth rates are Hartmann Advisory calculations from the published monthly figures.

Tourism Research Australia, Domestic Tourism Statistics for the year ending March 2026 and International Visitor Survey results for the year ending June 2026.

Virtuoso, 2027 Luxe Report, global release dated 30 September 2026, based on survey responses from more than 3,100 Virtuoso-affiliated travel advisors in more than 50 countries. Australian and New Zealand respondent numbers are from Virtuoso’s Sydney preview on 1 October 2026.

Results and announcements lodged with the ASX between May and September 2026 by Qantas Group, Virgin Australia, Flight Centre Travel Group, Web Travel Group, Webjet Group and Corporate Travel Management, and market reporting of Corporate Travel Management’s return to trading on 3 September 2026.

Cruise Lines International Association, 2026 State of the Cruise Industry report. Insurance Council of Australia and Smartraveller, traveller insurance research released in October 2025.

Illustrative examples in this analysis are composites drawn from patterns observed across the sector and do not describe any single business. This analysis represents the views of Hartmann Advisory and is provided for general information. It is not commercial, legal or financial advice. Figures cited reflect public sources at the time of writing in October 2026.