Summer travel means big business with more foreign, local travellers

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Vacation time is right around the corner for many, and that could mean big business for Canadian tourism since merchants should get a boost in international revenue this summer, according to a recent survey by Moneris Solutions Corp.

A year-over-year spending analysis shows the top five days for international spending in Canada last summer had double-digit growth, with spending growing on July 8 by more than 29 per cent.

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The Prairies had the biggest growth in international transactions last summer, with Manitoba getting a 75 per cent spike and Saskatchewan experiencing a 30 per cent hike.

Big events also attracted a healthy amount of foreign spending, with all 10 days of the Calgary Stampede doubling as Alberta’s top 10 days, while spending during Le Festival d’été de Québec gave Quebec a 126 per cent boost.

Moneris said businesses should be ready and open on Aug. 3 since Saturday on the August long weekend last year had the most international spending of the year.

But it’s not just international spending that’s expected to heat up.

A Bank of Montreal report earlier this month said 20 per cent of Canadians plan to spend more on vacations this summer compared to last year, while 38 per cent plan to spend the same amount.

“Many Canadians like to make the most of the relatively short summer and look forward to spending the season travelling, celebrating milestones and making memories with friends and family,” Gayle Ramsay, head of everyday banking, segment and customer growth at BMO, said in the report. “However, too much fun under the sun without a budget can lead to overspending and you may find yourself drifting away from your financial goals.”

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BMO

Meanwhile, a May report by Deloitte Canada said Canadians intend to spend an average of $2,405 on transportation and lodging costs on their major summer trip, while 74 per cent intend to stay within the country this summer.

“The evolving landscape of summer and leisure travel presents significant growth opportunities to the travel and hospitality industry stakeholders as they prepare for the increasing demand in Canadian tourism,” Leslie Peterson, national transportation, hospitality, and services industry leader at Deloitte Canada, said in the report.

“Despite an unpredictable economic climate, Canadians still value their travel plans for the upcoming summer season and are more eager than ever to make the most of their time off. From lakeside getaways to big city escapes, Canadians plan to vacation within our own beautiful country.”

Canadians are already spending more on travel, given that the price growth in travel tours and air transportation contributed to the country’s unexpected inflation bump in May.

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Inflation ticked up to 2.9 per cent in May, marking the first time inflation has been on the rise in 2024, Statistics Canada reported on Tuesday. 

Largely to blame are price bumps in cellphone services, travel tours, rent and air transportation.

The uptick came as a surprise to economists, who largely expected the downward trend to continue.

Now, economists are rethinking what to expect at the next interest rate decision in July, though most believe economic data to come should paint a clearer picture of the Bank of Canada’s next move.

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Today’s Posthaste was written by Ben Cousins, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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