We experienced it. Work commitments meant we had to cancel our annual vacation to Quebec City in September. Many people are choosing to forgo large trips. A want rather than a need to travel. While we all need time off to discharge and relax, many people are doing it for other reasons. While inflation and affordability concerns remain top-of-mind for countless Canadians, that hasn’t stopped them from wanting to scratch their summer travel itch.
Meeting with their financial planners, people are asked to consider some important questions before making their escape. We are still seeing people traveling a lot. And in some cases, they are worried about the cost. But they still want to travel, so they still pay. While the years of pandemic lockdowns have retreated well into the rearview mirror, Canadians’ thirst for travel is still alive and well.
According to a recent RBC report in the first part of 2023; the number of those returning from trips abroad via a land port plummeted 21% compared to the same period last year, while the number of returning Canadian flyers soared 42%.
Sourcing the trip
Clients often times have a particular travel destination in mind as they attend a special event. A family reunion abroad or a wedding, for example. But for those who don’t have a particular agenda, a little flexibility can go a long way. We encourage clients to not pick the trip based on the site, and just shop around.
Focusing on Canadian flyers, the RBC study found roughly 134% more Canadian residents came back from the U.S. via air travel in the first part of this year compared to the same period in 2019. While that could be due to angst over airport disruptions. I have purposely delayed returning to the air as a result. For others, a comeback in conferences, or people’s increase ability to work from anywhere, flights to the U.S. are also shorter and more affordable.
Quality versus budget conscious
For Canadian travellers, quality also appeared to be more front-of-mind than budget concerns. Based on a Google analysis, RBC found more Canadians searched for the best travel options in 2023, compared to those who googled cheap options. There are great opportunities to set a Google alert or use other tools to get notified when airline prices drop. Unless you’re picking an ultra-luxurious location, you can still find some good deals. There’s really no reason to overpay.
Ease of a credit card
Across the board, clients have a hard time setting a travel budget. While some might have traditionally put their summer getaway on a credit card, the current high levels of interest rates make it an extremely expensive proposition. More Canadians are already leaning on plastic to get by even on items outside travel. Compared to before the pandemic, spending on credit cards has increased by 21.5%. If you don’t pay that credit card bill off in the first little bit, you could end up paying double the cost of your trip just on interest.
To avoid that pain, we encourage clients to reflect on what they’re actually spending their hard-earned money on, and what it is they really need to do. Some come into a meeting wanting to visit an exotic and luxurious destination, only to later realize that they’re happy to escape somewhere that’s closer to home.
The bottomline
That’s the benefit of having a professional who can dig into these conversations with you and ask what do you really need? The beach vacation or do you need just to get away?
If possible, you’ll want to find someplace that will match or mimic the experience you want for a quarter of the price. Nobody wants to be in the position of deciding between paying for their mortgage and paying off their credit card. Still uncertain? Then it is a wise idea to chat with your financial planner who can rationalize with you and get you going in the right direction Keeping Life Current.
