Canadians are turning home for holiday travel, with the weak loonie discouraging US travel

Article content

MONTREAL – Barry Choi has been noticing a few full seats on some of his flights for the past year.

Article content

Article content

“People travel less,” said Choi, who runs the Money We Have Personal Finance and Travel website, which puts him on a plane every four to six weeks.

The trend is one he didn’t expect two years ago, when the desire to escape was almost palpable after the COVID-19 border closures and air travel resumed.

Article content

“Because of the continuing need for this epidemic, people have taken their journey. By 2022, I feel like everyone was leaving. Everyone was saying, ‘I’ve got to get it out.’

“Some people waited until 2023, but this year everyone is down,” he said.

That pattern looks set to continue in December and January. After turning abroad for the holidays last year, many Canadians are shelving their plans to travel domestically this Christmas season due to tight budgets, low domestic fares and a significant end to the pandemic in overseas travel — and now it’s a crumbling currency.

The number of Canadian flights to the United States this December is expected to decline by 2.5 percent year-over-year, according to statistics from airline tracking company Cirium.

Meanwhile, domestic flight volume is expected to jump nearly 10 percent this month compared to December 2023.

More air capacity north of the border has helped lower prices as demand rises, with fares on Canadian flights sitting 20 per cent higher than a year earlier as of September, the latest month for which Cirium had data.

Article content

Article content

Spokesman Mike Arnot said fewer flights to the US – from all Canadian airlines except Porter Airlines, which is rapidly building its fleet and flying south – means “higher airfares in general,” as capacity falls short of demand.

Wallet concerns have intensified with spending less, with Type Zers and millennials thinking twice before shelling out big bucks on experiences, including travel.

“We cannot ignore the fact that people are in a pinch. “The interest rate is starting to come down, inflation is more, but still the cost of housing, the cost of living is at a high level,” said Ramzi Rahbani, vice president at FlightHub.

A survey from the travel industry found that just over half of Canadians plan to stop traveling for the holidays.

Thoughts about moving away from the US may be heightened after the loonie, which was already hovering around 72 US cents, fell to its lowest exchange rate in years following President-elect Donald Trump’s proposal for a 25 percent tariff on Canadian imports.

“I get a lot of people thinking, ‘Do I still want to go to the US?'” Choi said.

Article content

Canadians who often go out to Florida, Arizona and California in the winter are among those who feel the dollar’s weakness the most.

“For snowbirds, the US has become more expensive,” said Jill Wykes, a travel expert who spoke from Sarasota, Fla.

“All kinds of people were in debt for things that were canceled in 2020 and 2021, especially cruise lines.” Those vouchers and travel credit have now been redeemed.

Millennials — now outnumbering baby boomers in Canada — and gen Z together make up more than half of all passengers, according to FlightHub. They cited family visits as a major reason for flying over the holidays, which helps explain the domestic turn.

Overseas, the capitals of the Philippines and India – Manila and New Delhi – saw some of the highest numbers of bookings from Canada between Dec. 20 and Jan. 1, according to FlightHub.

“They often come back to see family and friends again,” said Rahbani. Meanwhile, the difficult leisure travel to other destinations where the sun is on the rise.

Despite the shift to domestic travel, many broad patterns remain. For those heading south, New York City, Florida and California remain top destinations for almost every age group.

Article content

“It’s stable,” said Richard Vanderlubbe, founder of travel agency Tripcentral.ca, referring to travel trends in general. But that like 2023 itself is a big change from recent years, which have seen wild fluctuations in customer volumes as COVID-19 restrictions have come and gone.

While passenger numbers at Canada’s eight major airports rose 4 per cent year-over-year in October, that’s slightly outpacing population growth, according to Statistics Canada. And the five percent increase in air travelers since 2019 has come off the back of a 10 percent increase in population over that period, meaning rates have fallen on a per capita basis.

About a quarter of FlightHub customers said they budgeted between $1,000 and $2,000 for vacation travel. Another 22 percent set aside between $500 and $1,000, while most left less than $500.

This Canadian Press report was first published on December 8, 2024.

Article content