Having spent the bulk of my career on the wholesale and retail sides of the travel industry, I am still regularly asked by friends, relatives, and even former colleagues the age-old questions: "When do you think is a good time to book?" " Are there any good deals out there? "
With COVID seemingly in our rear-view mirror - now replaced for the average Canadian by fears of soaring inflation and a likely economic recession -- I'm being asked that same question again: "When do you think is a good time to book?" My answer? NOW! If you plan on having a winter vacation this year, as soon as possible.
With the USD trading high and instability in oil pricing, there will invariably be a fuel surcharge, and potentially a currency surcharge imposed at some point down the road. Booking now will lock in rates and avoid surcharges should they come along. And it's only going to get worse: early reports from wholesalers in talks for summer 2023 pricing are that they are seeing increases of 25%.
The average pre-tax income for Canadain Individuals reported in 2020 was $54,630. The average household income as reported in 2019 was et at $62,900. These numbers represent approxamitely 85% of all Canadians. Disposable income will be of great concern for this segment of the market.
Historically, there has always been a big marketing push from tour operators and airlines with a full-court press on "BOOK EARLY AND SAVE HUGE." Unfortunately, market conditions would sometimes result in last-minute pricing falling below early booking prices. This led to Canadians losing confidence in the the 'book early and save' message.
This year is different. And that's not just my opinion.
"First and foremost, it is highly unlikely that last minute pricing will exist this winter during peak travel periods, so don't wait to make your plans," says Brian Robertson, President, Canada West, Direct Travel, Inc. "Prices are high because demand is high and will stay there. For some clients, this is their first post-pandemic trip and they are not willing to postpone again."
TravelBrands CEO Frank DeMarinis runs one of Canada's largest online retailers at RedTag.ca. He sees the trends and shares Robertson's opinion.
"This past summer we have seen a strong booking trend for Europe with escalating prices for last minute bookings. This will continue for Canadians this fall and winter for last-minute bookings as global travel is at its highest in over three years. We highly recommend everyone looking to travel this fall and winter to book well in advance to avoid paying more for the same trip."
Richard Vanderlubbe, who heads up TripCentral.ca, another leading online retailer, says prices have risen with every piece of good news during the industry's recovery from COVID, from the switch to Antigen from PCR tests to the full removal of border restrictions coming October 1. Barring a "curve ball," he expects the trend to continue.
"Combined with pent-up demand and seasonal changes, this should mean rising prices. Now that restrictions are completely gone in Canada, the next bit of good news would be a WHO declaration that we have to live with COVID, the pandemic is over, and it is now endemic. Any friend who asks hears: 'The sooner you book, the better. Unpredictable curve balls aside.'"
Flemming Friisdahl, founder of travel agency network The Travel Agent Next Door, is convinced that this year the time to book a winter vacation is right now.
"This winter the prices will NOT go down, the main reason is that the USA has been booking like crazy and there simply are not enough hotel rooms. Hotels can't find enough staff, meaning some can only open up 70% of their available rooms. Lastly, the price of fuel has not gone down nor will it anytime soon. Add on to this the removal of the rules for Canadian to travel and every factor is telling consumers to book now."
On the surface, it appears the only affordable way for average Canadians to travel this winter may be to head south to Mexico or the Caribbean or get on a cruise ship in the same region. Travelling within Canada or the U.S. is an increasingly costly endeavour, with hotel, meal and car rental costs soaring. Canadian consumers' ability to pay versus their willingness to pay should never be overlooked. After all, we are a very budget conscious group of people.
A quick search for 3-4* accommodation in January (7-14) for a 7-night city/beach/ski stay in popular U.S. and Canadian tourist destinations resulted in the accommodation cost per person listed below. Note that for the most part you would need to add car rental, air, meals and lift tickets where applicable:
Miami - $1,400 p/p
Ft. Lauderdale - $1,500 p/p
Orlando - $1,300 p/p
Santa Barbara - $2,100 p/p
Pheonix - $1,470 p/p
Toronto - $1,300 p/p
Whistler - $1,700 p/p
A quick search online search for 4-star rated properties in the Caribbean and Mexico came back with these prices, per person for the same week of January 7 - 14. Fares include standard room, an all-inclusive plan for meals and drinks, round trip airfare from Toronto, transfer to and from the hotel, and all taxes and fees.
Cuba - $1,000 p/p
Cancun - $1,600 p/p
Dominican Republic - $1,500 p/p
Jamaica - $2,000 p/p
Saint Lucia - $2,900 pp
Cruising is also on the radar for a quality vacation with exceptional pricing. After exploring various cruise line sites, we came up with this list. Pricing is per person in CAD$ departing out of either Ft. Lauderdale or Miami. It is based on an ocean view cabin, which comes with meal, non-alcoholic beverages, entertainment and some taxes and fees. Air is not included. As well, there are a wide variety of incentives and specials available.
Carnival - $850 p/p
Norwegian Cruise line - $900
Royal Caribbean - $900 p/p
The appetite of Canadian consumers to spend their disposable income on travel could very well shrink if fears of a recession and the blunt instrument of inflation continue to dominate the media. If they have any plans to escape what by all accounts is set to be a brutal winter, they had a better lock-in now to guarantee value for their money, a cold Mojito, and some southern sun.
John Kirk is the Founder, Editor in Chief for TravelPulse Canada. Follow him on Twitter @JohnKirk_CA
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