Is the weak loonie squeezing your travel budget? How to still travel and save money

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A few years ago, Julia Wilson and her mother planned a weekend trip to New York City for her November birthday that was usually filled with dinner reservations and shopping.

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But Wilson said this year’s 28th anniversary celebrations have been dull. Like many Canadians crossing the border, he said the exchange rate means he has to make budget-friendly decisions about how to spend his money.

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“With the US dollar being so high for us Canadians today, it didn’t seem like there was any benefit for me to spend more than I needed,” said Wilson.

“If I can take advantage of selling at home with my money, I’d rather do that than spend it while I’m traveling.”

Whether you have to cut back on vacation expenses or decide to forgo a trip to the US, it’s true that many travelers are struggling this holiday season as the loonie continues to weaken.

The Canadian dollar has been hovering around 70 US cents in recent weeks, a slide that has seen its value fall to its lowest level in nearly five years.

With that in mind, Wilson said it doesn’t seem worth buying too much into his trip this time around.

“In the past, there were a few stores in New York that I prioritized in the way we planned our travel plans,” she said.

“Because I knew things were very tense, I didn’t have that effort to go and visit them this year.”

A BMO survey this fall found that 79 per cent of Canadians plan to cut back on holiday spending this year, including when it comes to vacations.

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About one-third said the cost of international travel — including airfare, lodging and gas — is now too expensive for their budget, while about 45 percent said travel is the least expensive since they control everyday expenses.

“(Costs) of things, as we all know, have increased. “When you compare it to the US dollar, it means you need 40 percent more than you thought compared to our dollars,” said Gayle Ramsay, head of everyday banking and client growth at BMO.

While research says Canadians plan to spend about $1,800 on travel this season, Ramsay said current conditions may require some to “find ways to economize” on their budgets or shorten their stays.

“You probably don’t do five-star restaurants every night,” he said.

“Perhaps you’re actually planning to have one special night out and look for less expensive restaurants, or some of the entertainment options – to limit that.”

Ramsay also encourages Canadians to use travel credit cards, especially those that waive international transaction fees or accumulate points that can be used to pay for expenses abroad.

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“What I always say is, ‘Plan it, save it, and track your expenses when you’re actually on vacation,'” she said.

“That way, you don’t get a big surprise when you come back.”

One segment of Canadian travelers that seems undisturbed by the country’s plans this season is the snowbird population _ those who make warmer climates like Florida and Arizona their home during the winter months.

The Canadian Snowbird Association said it expects most of its 115,000 members to temporarily settle in the US sunbelt this season as they do every year.

“The snowbird market tends to be more volatile than the traditional tourism market. These people usually have homes in their winter quarters, they have established relationships in these communities,” said spokesman Evan Rachkovsky.

“They’ve already invested a lot of money, in many cases, in maintaining these winter structures, so as a result, they end up leaving.”

Still, Rachkovsky said he expects many Canadian snowbirds will face tough choices about how they spend their money compared to previous years.

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“No. 1 way that snowbirds mitigate a weak dollar in these conditions is to make changes in their discretionary spending,” he said.

“So eating out, rounds of golf and other outings, those are always the first things to cut back in these situations where the dollar is affected.”

Some may also choose to reduce the number of days they will stay in the south because of the cost of medical travel insurance, which depends on the duration of the trip and “can be worse” in the US, he added.

For those still budgeting for an upcoming trip, Wilson recommended trying to find savings in areas like transportation and more.

While Ubers or taxis may get you somewhere faster, choosing budget-friendly options will ensure that money is left over for an enjoyable experience.

“Useful materials may not be the right choice because they can be very expensive,” she said.

This Canadian Press report was first published on December 13, 2024.

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