Terrorism Is Changing the Face (and Price) of Vacation Travel

The fear of terrorism is shaking up the travel destinations map, and Canadians should expect to find higher prices in its wake.

Travel industry experts in the UK are reporting fewer vacationers to resorts in Egypt, Tunisia, Turkey, the UAE, and other sun spots in the Middle East and the African continent in favour of “safer,” tried-and-true destinations in Spain, Italy, Cuba, and the U.S.

The effect so far, according to travel packagers, is shrinking accommodation availability and its inevitable by-product—higher prices.

Example: The airline Norwegian is scheduled to start four weekly direct flights from London’s Gatwick Airport to Las Vegas in October 2016. That’s right, Las Vegas—one of Canada’s favorite year-round vacation destinations, accounting for more than 900,000 Canadian arrivals per year.

According to an article in the UK’s Telegraph, Norwegian is taking bookings for £179 one-way outbound flights, and £123.30 return. (The differential is due to the UK’s Air Passenger Duty). Air meals and checked luggage are extra. These prices are indeed fortuitous, since visitors to Las Vegas know well that their pockets will be much lighter on leaving than arriving. That’s about £150 less than the next-best price offered by Virgin Atlantic, and bookings for autumn 2016 and into 2017 are going fast.

And then there is Cuba, where, in addition to a budding American invasion, the new Brit arrivals will seriously cramp the space normally taken by Canadians. Cuba is already overbooked in many of its top resorts and Havana hotels for the coming year. In Cuba, Americans tend to favour tours to old Havana, whereas Canadians remain staunch sun and sand worshippers.

The rerouting of Britons from the Middle East and East African countries is also expected to bump up their numbers to Florida locations, particularly Orlando and Miami.

Travel analyses done by the Conference Board of Canada (CBoC) have traditionally shown that as competition for space intensifies, costs predictably rise. Moreover, as Americans enter a specific tourism stream, prices rise even faster to meet Americans’ higher expectations, demands, and currency valuations.
Although Canadian currency may be accepted in some locations in Cuba, the goods or services offered are priced in American values. Add the Brits, who are fervent travellers (anything to get out of that weather), and the intrinsic cost of hotels, meals, beach chairs, taxis, etc. will go as high as demand dictates.

In Las Vegas, for example, the average hotel room rate in 2016 (according to the CBoC) is estimated at $187 (converted to CAD). It is worth pointing out that much of the increase is attributable to a poor U.S.–Canadian dollar exchange rate. The actual room-rate increase in U.S. dollars was just over five percent over the year. But over the past five years, Las Vegas room rates have averaged more than 50 percent increases, and Las Vegas is known for its relatively favourable hotel room rates. And Bugsy Siegel’s jewel in the desert has other ways of snagging your cash…

If there are any lessons to be learned from this detouring of international leisure travel it’s that planning well ahead is becoming mandatory. Socking away a little more for vacation travel is the way of the future. And getting used to a greater array of accents is strongly advisable.

 

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