Cross-Border Travel to US Tumbles

The sagging loonie is finally shrinking the volume of travellers flying to the United States. While the air travel market segment has been showing remarkable resilience since the Canadian dollar began tumbling in lockstep with the price of oil, the latest numbers are down significantly.

According to statistics released by the US commerce department, southbound air travel from Canada was down a full 6.2% in May compared with the same month a year ago.

In comparison, May drive arrivals in the US for a stay of one night or more were down 5.5%, marking the first time in two years that the result for the air travel segment was worse than the land travel performance.

The combined result meant that almost 113,000 fewer travellers crossed the border in May, explained Washington economist Mark Brown.

The drive market was quick to react to the growing imbalance between the Canadian and America dollars, showing 18 months of declines since January 2013. In contrast, air travel volumes were down for only four months, and then only marginally before the May collapse.

The disappointing result for the month means that, on a year-to-date basis, the total southbound market is down 4.7%, reported Brown.

Conversely, the currency imbalance in favour of the greenback is having a positive effect on northbound travel. Following a solid 15 months of declines in 2013 and first-quarter 2014, the volume of air travellers heading north has been in positive territory since April last year.

The drive market took longer to react; only showing growth since last December. But it reacted with a vengeance in May, peaking at 8.3% and outstripping the air segment which grew 5.9%.

The word must be out that Canada is now a bargain destination, since total northbound travel has expanded 6.5% since January.
And that spells good news for our hospitality industry since the raw numbers show that more than 203,000 more arrivals were counted in this year’s first five months and 77,482 more in May alone.