This story originally ran in the December 19, 2019 issue of Travelweek magazine. To get Travelweek delivered to your agency for free, subscribe here.
TORONTO — Even before all the January credit card bills, 51% of Canadians said they weren’t planning a winter vacation for 2019-2020, and 66% blamed a lack of budget. So what’s a travel agent to do?
Gilbert Manza, Owner, Executive Travel Services Inc. based in Woodbridge, ON says the majority of his clients are receptive to spending enough on their vacations to make the trip worthwhile. However over the years Manza has found a few helpful strategies for dealing with budget pushback. “I mention that ‘you live once and life is short’, the new ‘toys’ in the garage can wait, this is something you do for yourself and your health,” he says.
Manza also counsels clients to “spend the extra this year and perhaps do a staycation or drive vacation next year.”
Manza’s advice varies from client to client, depending on the circumstances. “If it’s a family, I remind them that no kid ever said ‘we never took any vacations but we had really nice countertops or crown mouldings’. Family memories are made of experiences you get from travelling, not from material items in a home like a TV, cars, etc.”
The winter travel survey, better known as the Canadian Winter Vacation Confidence Index, conducted by Ipsos and released by Allianz Global Assistance Canada, shows that, not surprisingly, having the budget to take a vacation is directly related to age.
According to the results, Baby Boomers are aiming to spend $3,299 on their 2019-2020 winter vacations, quite a bit more than the $2,205 average spend by Millennials.
The oldest Millennials turn 40 in 2020 and many are knee-deep in mortgage payments and family expenses. They not only have the lowest projected spend, they are also the largest age group to cite budget constraints as their reason for not taking a vacation (75%) followed closely by GenXers (73%).
“Obviously Canadians are concerned about their pocket books,” says Dan Keon, VP, Market Management for Allianz Global Assistance Canada.
Keon notes that “while 72% of Canadians said that an annual vacation is important to them, it’s interesting that only 49% actually expect to take one. And they expect it will cost them more to do so.”
FOCUS ON THE ‘MUST-HAVES’
Overcoming concerns about vacation spend, and learning to qualify clients to find that perfect getaway that works for their budget, are all in a day’s work for agents.
Regina, SK-based travel agent Carrie Anne Gillespie, a home-based agent with Vision Travel, agrees that travel is getting pushed down the priority list for many, and that’s a challenge. “Travel is creeping farther down the list, as the cost of living just keeps getting higher.”
Gillespie says: “I like to pull out what are their ‘must haves’ in the trip. For example, is it essential to have 24-hour room service or a specific category? What if we take a look at a resort that might not have it but is more within your budget?”
Gillespie says she also looks at the full month of pricing to see if maybe clients can change their dates to get a lower price. “This is where travel advisors can show their worth by getting the client the perfect vacation within their budget.”
Canadians are known for being fairly financially conservative and while that doesn’t help when it comes to splurging on holidays, it’s a good trait for staying out of debt. No travel agent who wants repeat business would ever counsel a client to spend beyond their means, however there are work-arounds for big travel dreams on smaller budgets.
Uplift, a payment option that allows consumers to book now and pay over time, launched in Canada earlier this year with Denise Heffron at the helm as Managing Director. Uplift is exclusively B2B and doesn’t work with consumers directly during the booking process. But Heffron says that since Uplift’s launch in Canada in March 2019, consumer feedback via client surveys suggests many consumers “wouldn’t have been able to travel without the help of Uplift, and they express a lot of gratitude.”
A number of U.S. suppliers have signed on with Uplift, and in Canada clients include TravelBrands, Travel Only and TPI.
Heffron says the company is pleased with what it has accomplished so far in Canada “and I would definitely say there is an appetite for our product.”
She adds: “A big part of what we offer is a way for our travel partners to help their clients plan and budget for their travel. Breaking the payments up over time makes things more manageable. We also offer a lot of flexibilty to travellers – no penalties for early payments and no penalties for late payments. As well we charge simple interest and payments are communicated clearly from the outset.”
FINDING THE RIGHT MATCH
Other players in the market include Z.I.P., the Zero Interest Program available through The Travel Agent Next Door. Many Canadian travellers remember the immensely popular vacation payment plan with Sears Travel and TTAND says Z.I.P. is similar.
Scott Penney, a Dartmouth, NS-based travel specialist and part of The Travel Agent Next Door network, says Z.I.P. “allows our clients to finance their vacations, and unlike other financing plans and credit cards, our clients simply pay a set financing fee and no interest.”
Penney adds: “I think this will be a game changer for us this year and already I have had clients take advantage of it. One of my clients is using it to take her grandkids to Cuba this year. She says she would not have been able to without this option. Another client used it to defer her final payment for a few months due to some unexpected costs this year. I believe this will be huge for us this year.”
For budget-sensitive clients, Penney says his strategy is to find out what clients feel comfortable spending if they still want to do a vacation, and work within that budget amount. “There are lots of options for different clients depending on their budget needs and generally we can find a solution that will be within their means and something they do feel comfortable with and a vacation they are going to enjoy. There are so many options and choices available so it’s about finding that match for our clients.”
HIGH SPEND IS GOOD NEWS
The good news, according to the Allianz Global survey, is that Canadians who are planning a winter vacation say they expect to spend an average total of $2,706, and that’s the highest anticipated spend since Allianz started collecting the data four years ago.
Regionally, the average anticipated spend is highest in the Prairie provinces at $3,365, and lowest in Quebec at $1,908. Ontarians expect to spend an average of $3,012.
Based on an average spend of almost $3,000 per household, the study projects Canadians will spend over $13.5 billion on winter vacations this year – up from $12.2 billion a year ago and up significantly from $10.7 billion in 2016, a jump of 25%.