How the Canadian Dollar Could Impact Travel in 2015
The recent drop in oil prices has had a huge impact on the Canadian economy. With gas prices falling to their lowest in years, a cut to interest rates by the Bank of Canada, and with a sharp drop in the Canadian dollar, Canadians have been left weighing the pros and cons of the events that have occurred over the past few months.
However, one area that has not received a lot of attention is the impact the lower Canadian dollar will have on Canadian travel trends in 2015 and beyond, with the Canadian dollar hovering around 80 cents on the US dollar.
As stated in a recent Global News article titled, Lower dollar with have impact on travel decisions, “A lower loonie may be good news for many Canadian businesses but, over time, consumers may see prices creep up for those popular vacations to warmer climates, and fewer reasons to shop online or in the U.S.”
This is confirmed by David McCaig, President of the Association of Canadian Travel Agencies, as he believes we could see a big change in how Canadians travel as the low dollar continues. “Instead of packing their bags and heading south or to the Mediterranean, many have opted to have a ‘staycation’ or travel within the country to stretch their dollar,” he says.
While the lower dollar has yet to have much of an impact on winter vacation plans this year, largely due to the fact that most trips were planned in advance of the drop in the dollar, we could see things start to change into the summer and next winter.
Here are a number of ways the lower Canadian dollar could impact travel:
- Fewer cross border shopping trips: Millions of Canadians flock across the border to take advantage of shopping deals. However, the lower dollar could mitigate the cost savings once you factor in the exchange rate and higher cost associated with travel such as hotel stays, gas, and meals.
- More travel within Canada: If the dollar remains at its current level, expect more Canadians to travel within the country. There is no shortage of great Canadian travel destinations, and it will also help to boost the travel industry.
- More staycations: Staycations are becoming increasingly popular, and the lower dollar is only going to make them a more attractive vacation option for Canadians.
- More US travellers visiting Canadian tourist destinations: A lower Canadian dollar makes travelling to Canada more appealing for Americans.
- Shorter trips for snowbirds: While it will cost more to travel down south, expect snowbirds to alter their length of stay rather than opt to stay in Canada during the winter.
We may also see Canadians spending more time seeking out travel deals and looking for alternatives to save money, such as travelling for fewer days, considering cheaper travel destinations, and changing the time of year when they travel.
Will the low dollar impact your decision to travel in the future? Tell us about how you plan to minimize the impact of higher travel costs?
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