As Canadians rethink U.S. travel, industry pros pivot to mitigate potential losses

The political temperature cooled a little on Monday (Feb. 3) after Prime Minster Justin Trudeau announced that U.S. President Donald Trump will pause levying tariffs on Canada for at least 30 days.

But anxieties around Canada entering a trade war with its closest ally remain. The concern, now, is whether Trudeau’s deal with Trump – which will see Canada expand its existing $1.3-billion border protection plan to fight drug trafficking – will hold.

For the travel industry, there’s a lot at stake. Amid calls to “buy Canadian,” along with requests from politicians to cancel trips to the U.S., and a weak loonie, some Canadians are rethinking where they should spend their travel budgets.

READ MORE: “I’m absolutely concerned”: Travel advisors, execs respond to trade war; some cancellations reported

It’s a movement that could hit economies hard. Earlier this week, the U.S. Travel Association, which represents all components of the U.S. travel industry, revealed that a mere 10 per cent reduction in Canadian visitation could result in two million fewer visits, including $2.1 billion in lost spending and 14,000 job losses.

It currently isn’t known just how many Canadians are, in fact, cancelling trips to the United States (all we have is anecdotal evidence), but stats like that are hard to ignore.

Canadian travel advisors, meanwhile, are pivoting.

“I believe we can limit the negative impact of the tariffs by asking our travellers to ‘travel with intention’ and choose Canadian destinations and/or Canadian travel suppliers as much as possible when travelling,” Jamie Angus-Milton, a partner at Uniglobe Carefree Travel in Saskatoon, Saskatchewan, told PAX earlier this week.

“Instead of not travelling, we believe travellers will travel differently, and it’s up to us to give them options to do so.”

Angus-Milton says many of her customers are requesting Mexico as an alternative to the U.S., as well Europe, Australia and New Zealand.

So, what’s stable?

But should the travel industry be worried amid times of economic uncertainty? The economy, after all, is what drives travel.

Jane Clementino, senior vice-president and general manager of TRAVELSAVERS Canada, says travel advisors should always be aware of geopolitical and economic factors because they can impact disposable income and consumer confidence.

“Consumers want to travel, but under these circumstances, (the unknown), they may move to less expensive options and book in shorter time frames as a strategy to stay on top of exchange rates and other possible sensitivities,” Clementino told PAX.

READ MORE: Canadian U.S. travel boycott could cost $2.1 billion, says U.S. Travel

Clementino said TRAVELSAVERS Canada is indeed seeing shifts in demand for certain destinations as customers consider their options.

“We’re noticing consumers are starting to rethink trips, considering cancellations, in particular those in the deposit space,” she said. “One of the biggest factors is exchange rates. Those who booked in advance with minimal deposits are now concerned about how much their balances have increased.” 

The consortium, however, continues to see “a very healthy number” of future sun destination bookings, Clementino said.

“These bookings are stable,” she said.   

Canadians will prioritize travel

In a statement to PAX, Shauna Vu, vice-president of operations at B.C.-based Travel Best Bets, said there’s “no doubt some people will change where they travel to.”

But the market, she said, will continue travelling nonetheless.

“We have been through so much over the years that you never want to let your guard down, but Canadians love travel and they prioritize it,” Vu said.

READ MORE: B.C. Premier tells residents to rethink U.S. travel in light of Trump tariff threat

Vu said she has seen a few trip cancellations come through – “but nothing significant to note.”

“Most were seeking out other destinations,” she said.

“We do understand the way some Canadians are feeling right now, and until the tariff situation is resolved, there will be many Canadians looking to spend their dollars in countries other than the U.S.,” she said.

A possible downturn?

McKenzie McMillan, a luxury consultant and supplier relations manager at The Travel Group, also based in B.C., is seeing similar activity.

“We are absolutely seeing immediate effects of the proposed trade war between our two countries. I’ve received calls from clients contemplating a change in plans, but also clients who are ready to cancel and move on to other destinations,” McMillan told PAX.

“As well, we are seeing requests specifically for alternative destinations. Places like Mexico and Iceland have been a topic of conversation with clients due to their relatively close proximity to Canada, and there’s no doubt both will feel benefits from Canadian travellers.”

Beyond the changes in travel plans, McMillan said there’s “definitely” a concern about how a proposed trade war will affect Canada’s spending power in other destinations, as well as what the economic consequences could do to travel businesses.

“We’ve seen in the past that in a recession or financial downturn, spending on ‘luxuries’ like travel can often be the first to take a hit, so we definitely are preparing for the possibility of a downturn in business heading into the busy summer season,” McMillan said.

Whatever is best for the customer

The push to "buy Canadian” is easy to understand when it comes to purchasing certain goods, like groceries or alcohol.

But this sentiment could have broader implications on travel. Cruise, for one, is primarily a U.S.-based segment given that the largest cruise lines, and ports, are based there.

Clementino says advisors at TRAVELSAVERS Canada are ready to support consumer-driven decisions.

“We are looking at what is best for the customer,” she said. “Many of our preferred travel suppliers are headquartered in the U.S., but equally we have a large number of Canadian preferred suppliers and various European suppliers. It’s more about whether or not consumers want to reconsider the destination and look for alternatives and options.” 

Her advice to travel advisors as the navigate the situation?

“This is a great opportunity for our advisors to shine as they share their knowledge and demonstrate the value of their role,” she said. “Advisors are equipped to provide customers with sound advice and counsel given the circumstances. Things like great trips that offer the best value, and making sure clients fully understand cancellation and refund policies and buy insurance so they’re protected.”

“Our advisors are conscious of consumer concerns and desires when it comes to vacation planning. They can help them reconsider choices and budgets as appropriate, keeping an eye on pricing, and sharing lots of options.”

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