Indonesia has overtaken New Zealand as Australia's number one holiday destination for the first time.
About 1.37 million Australians travelled to Indonesia last year - with 86 per cent going for a holiday, the latest ABS statistics say, while 1.26 million travelled to New Zealand.
New Zealand had consistently been the most popular destination since the ABS started recording tourism data nearly 50 years ago, with Indonesia overtaking the US as the runner-up since early 2014.
Australian tourism to both countries reached its peak in 2019 before sharply declining during the COVID-19 pandemic.
Both have showed significant tourism growth since 2020 but while Indonesia has returned to its pre-pandemic peak, New Zealand's growth has slowed since 2022.
New Zealand's post-COVID growth has been hurt by major airlines shrinking their fleets during the pandemic, according to Australian Travel Industry Association chief executive Dean Long.
"(Virgin, Qantas, Air New Zealand's) supply hasn't really changed significantly over that period, so not a real surprise to see those numbers flatlining," he said.
Conversely, Australians may be discovering the cultural and geographical diversity that exists in Indonesia outside Bali, DeluxeLife CEO Simon Mustoe said.
"I think there's a gradual realisation by Australians that there is almost a microcosm of world travel on our doorstep," he said.
Indonesia has the fourth highest population in the world and is populated by over 300 ethnic groups spread across about 18,000 islands.
"You start with Java, some of the the temples there rival anything that you see places like Cambodia and Vietnam.
"Move to Sulawesi and you've got an incredible cultural diversity, you've also got an island with a higher degree of ... unique animals than Madagascar."
Tourism New Zealand has announced a campaign to encourage US tourism to the country, its second largest tourism market after Australia.
