Travel and COVID-19: postponed, not cancelled

As the first phase of the COVID-19 begins to slowly wind down, many people are ramping up their plans to travel. Be it across town or around the planet, millions of Canadians are planning to resume some aspect of travel in our new-normal world.

But how? Where? And when? 

Having been physical distancing for weeks, many people are asking themselves these questions as the weather warms up and the prospect of some travel opens up. 

The point is, travel is unlikely to be the same again for years, if ever. But that doesn’t mean you can’t – or shouldn’t – plan for it.

Here are a few things to keep in mind when getting ready for that next trip.

Travel industry was side swiped

Let’s start with a harsh reality – COVID has decimated the travel industry, at least temporarily. 

Grounded by the pandemic, Air Canada cut its capacity by 90 percent in the first quarter of this year compared to the same quarter in 2019, leading to a financial loss of more than $1 billion in three months. Then, last week, the carrier announced it will lay off more than 22,000 of its employees as of June 7.

The cruise line industry – very popular among many clients – is experiencing even rougher waters. Carnival, which halted all its operations on March 13, initially planned to commence sailing again on April 10. That has now been pushed back to August 1 at the earliest, and that’s only for cruises in North America. Meanwhile, Norwegian Cruise Line, warned investors on May 5 that the company had “substantial doubt” about its ability to keep operating in light of a substantial liquidity crunch.

Travelers, who are vital to the tourism industry’s survival, may well be asking themselves several questions as the sector goes through a painful – and potentially prolonged – transformation. 

 

  • Will this mean lower or higher costs for our airline and cruise line fares?
  • With variances around the world in how countries adapt to COVID, what travel options will be open – and advisable – for the next few years? 
  • AirBnB leaves cleaning up to the respective owners. Are we comfortable with that? 

 

“It’s too early to tell” may still be the best answers here. And anyone travelling on a plane any time soon should prepare to do so with while wearing a facemask, according to the International Air Transport Association.

Postponed, not canceled 

For many Canadians – particularly those who are retired – the pandemic is probably more of a pause than a cancelation when it comes to travel. They still plan on seeing their kids and grandkids living abroad, and they enjoy the planning aspects of travel. But the trip itself – along with all the confirmation bookings – need to wait a while longer until there are clear signs that COVID is under some sort of control in the places travellers want to go.

Some glimmers of strength in the Canadian dollar make those delayed travel plans a little more palatable. On March 18, as the pandemic was really starting to bite into the economy and oil prices, our dollar hit a low of USD$0.6898. Since then it has been slowly inching its way back up. 

Domestic destinations

Travelling closer to home in our huge country may be the choice of many Canadians for the time being. There are endless domestic destinations to consider for people who want to explore their own country and/or are still a bit leery of visiting other countries.

So, we may always have Paris. But Paris can wait. 

Instead, what about Fogo Island off of Newfoundland and Labrador, Edmonton or Saskatoon? These and a wide range of other domestic options may well be more attractive than ever to Canadian travelers who tend to stamp their passports overseas and/or down south.

What’s more, travelling at home boosts Canada’s economic recovery. According to Destination Canada, tourism accounts for approximately 2% of GDP, making it larger than telecommunications and mining. As well, tourism contributes upwards of $25 billion in taxes to governments, and – at its peak – employs around 2 million Canadians. Spending Canadian travel dollars at home will give this sector a much-needed boost.

Still, it’s not open season on travel here in Canada either, as provinces and territories have imposed various travel restrictions. New Brunswick, for example, stationed provincial officers working 24/7 at each of the province’s seven inter-provincial land entry points, and at airports in Moncton and Fredericton. Dr. Jennifer Russell, the chief medical officer of health in New Brunswick, said on May 5 that these officers have the power to turn people away if they deem their travel non–essential. 

Keep in mind as well that a flight across to Europe can sometimes cost less than a flight to Calgary, for example. So, the question here is, will domestic airlines, desperate to once again fill their planes – albeit with new seating arrangements, possibly – reduce their fares to induce domestic travel? 

Students learning overseas – also on hold?

Learning experiences are deeply enriched when done in person in other cultures. So it’s no surprise that in pre-pandemic times, many clients sent their kids overseas for summer learning programs or full semesters during the fall or winter. 

This may still be possible down the line. And there’s no time like the present to start thinking at least about this sort of enriched learning experience for students.

But for now, like so many other things, overseas study plans are up in the air as governments and teaching institutions around the world sort out their plans for students and teachers. 

Likewise, plans for international students coming to Canada are also uncertain as schools here work through a range of issues. “All universities — like all Canadians — want to get back to normal as quickly as we can, but some of that is outside our control,” Universities Canada President Paul Davidson told CBC earlier this month

There’s light ahead for fellow travellers

I wrote this article with many questions because there still aren’t many answers. 

But I do know this. Canadians have been diligent in protecting themselves and others through the early part of this unprecedented pandemic. And while we’re not completely out of the dark woods, there is light ahead. 

Indeed, the road before us is slowly starting to open up. Where it will lead is part of life’s journey.

Steven Bright, a longtime client of the firm, has worked in and written about financial services for more than 25 years. You can find him on LinkedIn.

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