Is this the end of the gap year? New research shows that living & working overseas is losing its lustre for Gen Z travellers

• Gen Z interest in gap year travel drops dramatically by over 20% year-on-year
• Nearly three quarters of Australians prioritise their phone charger over travel insurance
• Over 40% of Australians are using AI in their holiday planning

Once considered a rite of passage for young Australians, the traditional “gap year” appears to be losing its appeal. New research from Southern Cross Travel Insurance (SCTI) has revealed there has been a sharp decline in Gen Z's appetite for long-term work-abroad stints, with interest in spending long periods working overseas falling dramatically by 22% from 78% in 2024 to just 56% in 2025.

The Future of Travel Report 2026 found that more than half of Gen Z still like the idea of working overseas, however the steep year-on-year decline suggests that travelling and working overseas is no longer as appealing as it once was, as the reality of cost-of-living pressures and an increasingly unstable global political climate come home to roost.

Jess Strange, Chief Customer Officer at SCTI said: “For many young people, the gap year has long been seen as a once-in-a-lifetime experience, but we're now seeing an attitude shift.”

“The rising cost of living, job uncertainty, and global political instability appear to be making Gen Z reconsider working and travelling overseas for extended periods” said Strange. “That said, in the event they do,  Aussies travelling to work and live overseas should consider comprehensive travel insurance like SCTI's 'Working Overseas' policy – which can support travellers with cover for maternity care, emergency dental, mental health, rehabilitation and optical treatment and cruise, motorbike and moped, and skiing and snowboarding*.”

Convenience over caution

The research also revealed that when it comes to travel essentials, convenience wins out over caution. Almost three quarters (70%) of Aussies rank their phone and chargers as more essential than travel insurance. 

While Australians recognise the importance of having the right insurance while travelling, they still place far more focus on staying connected over making sure they're properly covered. When surveyed about their top travel essentials, Aussies ranked their phone and charger as their most important travel essentials (at 70%) over travel insurance (only 47%) and toiletries (43%). Attitudes shift among those planning to travel within the next 12 months, with travel insurance increasing in importance from 47% to 54%, and good quality luggage rising from 30% to 35% in these cases, suggesting travellers become more risk-aware as trips move from planning to reality.

Travel insurance: A high priority, but not seen as essential

The top reasons for taking out travel insurance included extreme weather events (73%) and extreme natural events (71%), followed by a likelihood of conflict (68%) and political instability (63%). In these scenarios, peace of mind (70%) is the leading motivator, closely followed by having good medical coverage (69%). SCTI paid out more than $3.8 million in medical and evacuation claims to Australians throughout 2025.

Despite the growing awareness of global uncertainty, 14% of Aussies admitted to travelling overseas without travel insurance in 2025. This trend was more prevalent among younger travellers with 19% of 18-29 year olds travelling internationally without any insurance cover.

Strange said: “In our experience, travelling without insurance is one of the biggest financial risks you can take overseas. We regularly see claims where a simple accident, illness or flight disruption would have been financially catastrophic without cover. 

“We recently had a claim where a traveller suffered a stroke while visiting the USA.  We assisted our customer to successfully return home after a prolonged stay in hospital. The claim totalled more than $425,000. Not many people can afford to pay such a large sum unexpectedly! With the number of Australians travelling overseas almost doubling in 2025 compared to January 2023, it's important that travellers switch their priorities during the planning stage and prepare for events they might not anticipate,” said Strange.

AI becomes a travel companion

AI is also continuing to reshape how we plan and experience travel, with two in five (41%) Australians who travelled in the past 12 months claiming they used AI to assist with their trips.

The most common uses for AI in trip planning were:

• 20% used AI for hotel, airline or insurance comparisons
• 15% used AI for itinerary creation and trip planning  
• 14% used AI to get personalised recommendations
• 14% used chatbots for information or assistance

A further 45% of Australians say they understand AI but haven't yet applied it to their travel plans – an increase of 5% from 2024, which highlights growing awareness and future potential.

Among those who are planning to travel in the next 12 months, 40% say they are likely to use AI to assist with planning or travel experiences, with younger Aussies leading the charge. 88% of Gen Z and 84% of Millennials say they already use AI to support their travel decisions.

“AI has huge potential to support travellers, from helping plan itineraries to answering questions on the go, but it shouldn't replace basic due diligence. We want to remind travellers to always double-check that accommodation, attractions and experiences actually exist, confirm availability and opening hours, and book through reputable platforms. A few extra minutes of checking can prevent a holiday disaster.” said Strange.

The Future of Travel 2026 research took place in November 2025 and was conducted by Insights HQ. A nationally representative sample of 1,008 Australians aged 18 years and above took part in the online survey. For more information, please visit: www.scti.com.au

*Terms and conditions apply. Southern Cross Travel Insurance is an Australian financial services licensee authorized to provide general advice about our products. As our advice is general in nature, we strongly suggest that customers read the Financial Service Guide and Product Disclosure Statement, including Policy Wording, before purchasing our products. The latest versions of these documents are available on our web site www.scti.com.au.
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Download the full report. 

About Southern Cross ​​Travel Insurance 

Southern Cross Travel Insurance (SCTI) has over 40 years of experience supporting more than six million travellers worldwide. 

SCTI first launched in New Zealand in 1982, before beginning to partner with Australians in 2009. Since then, the insurer has been trusted by over 6 million travellers worldwide+, which includes providing peace of mind to 1.5 million Aussies.  

SCTI is proud to have won multiple awards for providing customers with great value and outstanding customer service, including: 

• International Travel & Health Insurance Journal Award 

Finalist – International Travel & Health Insurer of the Year 2024, 2023 

Winner – International Travel & Health insurer of the Year 2022 

• ProductReview.com.au Award 

Travel Insurance Award Winner – 2017-2020, 2023-2025

• Canstar Star Rating Awards 

Outstanding Value for Travel Insurance – International – 2017, 2022, 2024

Outstanding Value for Travel Insurance – Seniors 2022-2024 

Outstanding Value for Travel Insurance – Domestic 2022-2024

• Finder Travel Insurance Customer Satisfaction Awards 

Highly Commended for Value – 2025, 

Highly Commended for Loved Brand, 

Trusted Brand and Quality Service – 2024

• Finder Awards 

Best Travel Insurance Comprehensive 2023-2025 

Best Travel Insurance Seniors – 2023

Best Travel Insurance Value (Highly Commended) – 2023

• Mozo Experts Choice Awards 

Exceptional Value Medical Only Travel Insurance – 2024

Exceptional Value Annual Multi-Trip Travel Insurance – 2022 & 2024

Exceptional Value Comprehensive Travel Insurance – 2018

Exceptional Value Cruise Travel Insurance – 2018

• Australian Insurance Industry Awards 

Finalists for General Insurance Claims Team of the Year – 2022

• Sitecore Experience Award 

Honourable Mention – Digital Experience Transformation 2021 

• Mumbrella Travel Awards 

Finalists for Travel Marketing Team of the Year – 2022

+Based upon the total number of travellers we have insured across the markets where we operate for all our travel insurance products from January 1995 to June 2024. 

If you have any further queries, please contact: 

Laura Sedgwick - 0451 041 705 

laura@sedgwickcommunications.com