As Temps Fall, Winter Travel Sales Rise in Canada

Freezing temperatures are heating up winter leisure business in Canada – if record airline load factors and positive reports from travel sellers are any indication.

“We’ve had an exceptionally cold winter compared to the last two, so business is good,” said Jackie Moir, who manages three Merit Travel Group offices, part of  Signature Travel Network, in eastern Ontario.

Cold weather, along with brighter economic conditions, have driven his winter business up by 10% to 15% over last year, said Robert Orgera, owner of Travel Sensations, an Ensemble agency in Toronto.

“I think the weather is the reason,” he said. “There’s also a pent-up demand over last year and the year before because of an improving economy.”

Both Air Canada and WestJet achieved record load factors in January. WestJet reported an 80.9% load factor, with an increase in revenue passenger miles of 7.7% over the same month in 2012. Air Canada registered a 79.4% load factor, with an increase in revenue passenger miles of .3% over the previous January.

Interest in new destinations
Not only are bookings up for nearly all agents who spoke with Travel Market Report, but clients are traveling further, going to new places and looking beyond the cheapest packages on the market.

“There are more choices for people,” said Michael Broadhurst, executive vice president/director of Vision 2000 Travel Group, a Virtuoso affiliate in Calgary, Alberta. “A lot more people are going a bit further or to a bit more unusual places.”

While Hawaii and the Mexican Riviera dominated client choices a few years ago, there is a growing interest in destinations such as Panama, Costa Rica, the Azores and southern Europe, he said.

“Panama’s the one that’s opened up from the West Coast,” she said. “A few years ago you never heard of people going to Panama and now it’s a destination.”

Looking beyond the Caribbean
Although the Caribbean has been a mainstay for many years, it may be losing its appeal for some Canadians, according to Ruby Silverton, owner and president of The Travel Network Corp., a Virtuoso affiliate in Toronto.

“I find that people are getting a little bored with the islands,” she said. “They want more activities, so they are trying new destinations – destinations with more activities, like South America and Central America. Some people are even going to Europe and Asia, but they’re heading more for southern Europe.”

Spending trends
While concerned with value, Canadian clients are willing to pay more for their winter holidays this year, according to some agents.

“They’re spending more,” said Merit Travel Group’s Moir. “A standard all-inclusive package to Jamaica this year can be $1,200 to $1,500 per person. People are spending the extra money to do something different. We had four sold-out Peru departures priced at $2,700 to $3,500.”

Not all agents are seeing a noticeable increase in spending among clients.

“People are spending about the same,” said Vision 2000 Travel Group’s Broadhurst. “People are cautiously optimistic and we’re coming out of a time of caution, so if there’s something that particularly appeals to them, they’ll do it. And there are still a huge number of people who are realizing the value of cruising,”

Regional differences
How much Canadians are willing to spend depends on where in the country they are located, Broadhurst added, noting that an energy boom in Western Canada has boosted that region’s economy.

“We have at least two separate countries here,” he said. “I’m in Alberta and, because of oil, we’re isolated from the real-world economy. Our economy is very resilient, very strong.”

Demand for quality
Clients have grown more discerning, Silverton added.

“I don’t think people are willing to settle for the quick, cheap getaway. You can go on a vacation and get away for $1,000, but when people do that they’re really unhappy. I think the standards of a lot of places have to come up. People are much more demanding now.”

Merit Travel Group’s Moir agreed. “A lot of consumers right now are not looking for the cheapest option. They want an option that delivers the best for their time, their money and their experience.”

With more clients looking for unusual experiences, Moir’s agency is selling more culinary travel, European river cruises and destinations such as Peru and Portugal. Also doing well are four-week packages aimed at retired baby boomers, she said.

Challenges remain
Although business may be good for Canadian travel sellers this winter, agents also said challenges remain.

“There has been a lot of pressure on the margins from our suppliers, so we have had to be creative in how we package our offerings to make a little bit more money,” said Travel Sensations’ Orgera.