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Canadians are continuing to spend more money on travel as the industry rebounds slowly from pandemic disruptions, according to RBC Economics — but many are opting for closer destinations, with travel to the U.S. on the rise.
Spending on travel has risen almost 30 per cent above pre-pandemic levels, according to an RBC Proof Point report published at the end of May.
In January 2022, Canadians were spending roughly 60 per cent less on travel than they did before the pandemic began. But that number soon shot up, and has remained high.
Between January and April 2023, more than 10 million Canadians took trips abroad, which is a seven per cent increase compared to the same period in 2019.
Last summer, hotels and tours were much more expensive than they were in 2019, with flights more than 30 per cent more expensive and rental cars priced 50 per cent higher.
The costs associated with these specific activities have dropped slightly, but Canadians have been dealing with increased food and shelter costs amid soaring interest rates this year. However, this hasn't stopped Canadians from investing in travel.
According to RBC, when travelling, more Canadians decided to fly rather than drive so far in 2023. In the first part of the year, the number of Canadians returning from a trip by plane increased 42 per cent.
A higher percentage of these flights are now to the U.S. rather than destinations farther away, however. Around 134 per cent more Canadian residents returned to the country from the U.S. by plane between January and April 2023, compared to 2019. The report theorized that price played a role in this, as shorter trips are cheaper.
However, price isn't the only motivator for Canadians seeking to travel right now. The report also looked at Google Trends and found more Canadians were searching the word "best" more often when googling travel related queries, as opposed to the word "cheap." Before the pandemic, and in 2020 and 2021, the gap was smaller between those searching "best" versus those searching "cheap," but the gap has increased in the past year.
Within Canada, travel trends are shifting east, with Atlantic Canada experiencing bigger increases in interest according to Google Trends compared to any other region in the country. At the same time, the eastern provinces have been increasing in population, potentially due to the sustained levels of remote work.
The report predicts that while there will likely be a dip in travel spending soon as Canadians tackle the increasingly expensive world, we're unlikely to see demand crash dramatically.
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