Canadian post-pandemic travel surges – but with changing consequences

This is a head scratcher, because snowbirds – who spend from three to six months in the southern US each year – have long been the bedrock of Canada’s winter vacation exodus. Often beginning in mid-October, thousands of motor homes and recreational vehicles carrying snowbirds from all 10 provinces, and even the three territories, hit the US interstate highway system for their two to three-day trek to Florida, Arizona, Texas, or California. It helps that US immigration law allows Canadian visitors travelling on tourist visas to remain in the country for up to six months, less a day (usually 182 days) per any continuous 12-month period. That’s different from the allowances granted to citizens of most other countries who are usually limited to 90 days for tourism.

Asked if this drop in road travel may be more than a temporary aberration, Hendry believes it might in fact be the new normal, given the cost, convenience and growing availability of airline choices, as well as some demographic shifts in snowbird behaviour.

The shift in this market is more related to their desires and motivations, as many are opting for trips to new destinations rather than returning to the same place every year

Though she believes snowbirds will remain ‘mainly auto’ travellers, their choice of destinations will continue to diversify, and they will ‘contribute to the strength of air numbers as they travel back and forth throughout the season (rather than driving each time)’. She added: “The shift in this market is more related to their desires and motivations, as many are opting for trips to new destinations rather than returning to the same place every year. There will still be those with property in Florida, Texas and Arizona, who will stay in place, but as that group ages, our feeling is that there will be more of a shift to long-term rentals and cruising to other parts of the world.”

Certainly, the lure of winter cruising through the Caribbean is already evident among snowbirds. According to the Cruise Lines International Association, 1.04 million Canadians boarded cruises in 2019 – mostly out of US ports, and usually to Caribbean waters. That’s up from 865,000 passengers in 2016. This appears to be a sustainable fit as half of all cruisers are 50 years or older, and there’s also the convenience factor – as the great majority of Canadian snowbirds, except for those in Arizona, are within a day’s drive of the world’s top winter cruise ports in Florida and Texas.

Insurers will have to adapt

Long-term snowbird travel insurance marketing, a highly-competitive travel industry, may be in for serious changes

Long-term snowbird travel insurance marketing – a highly-competitive travel industry – may be in for serious changes, such as shifting customers of more expensive single-trip (up to six consecutive months) products to cheaper multi-trip contracts whose premiums are based on shorter trip intervals. Or providing more frequent single trip options. Whatever is necessary, this is a core demographic that can’t be neglected as 85 per cent carry travel insurance when out of the country, and it is predicted that by 2030 it will account for almost 24 per cent of Canada’s population.

According to CBoC projection data for 2022/2023, annual multi-trip plans surged from 13 per cent in 2019 to 29 per cent in 2021 – and were expected to settle in at 20 per cent for 2023. Meanwhile, the number of single-trip plans, which accounted for 33 per cent of outbound travel policies in 2019, shrunk slightly to a projected 31 per cent for 2022. And since 2019, the number of outbound Canadian travellers covered by employer or association group plans has also shrunk from 42 per cent to 33 per cent in 2022.

Another trend shaping up as outbound travel returns to normalcy is a shift away from employer/association group plans and credit card coverage to direct purchasing from insurance companies or brokers – encouraging perhaps a better understanding by clients of the specifics of coverage, limitations, exclusions, and changing trends. In 2019, 42 per cent of outbound travellers were covered by employer/association group plans. By 2023 that figure is expected to drop to 35 per cent.

And then: the problem of the purse

Given the perilous financial times we all live in, there is no way to ignore, or defray, the reality of rising costs – including those of travel insurance. As has been reported in a TD Bank Group (Canada) Insurance survey issued in March 2023 – although 65 per cent of Canadians plan on taking a trip in the near future, only 36 per cent of them intend to purchase medical and cancellation coverage. And, as might be expected, of those between the ages of 18 and 34, only 27 per cent intend to buy cancellation medical cover. The reason? A third of non-buyers believe medical travel insurance is too expensive.

According to the survey, one third of Canadians aged 18–34 believe that travelling with insurance isn’t necessary; and four out of 10 travellers say they would only be able to cover less than CA$5,000 in unanticipated costs while travelling. The TD survey relates to all travel – within Canada and abroad. Though most travel insurers in Canada advocate insurance for in-country trips on the premise that it covers various benefit differentials between provincially-sponsored health plans, they do not generate the urgency of being hit with a $50,000 bill for treatment of a dislocated shoulder while skiing in Colorado.

The one sign of stability that remains in post-pandemic travel is the tough, determined, southbound compass-fixation of Canada’s snowbirds: be it for a six month less-a-day escape from winter, or partial returns ‘home’ to Canada for Christmas with the kids, side-trips to the Caribbean (or Las Vegas), or cruising the Caribbean.

J. Ross Quigley, CEO of the Medipac International Group, the exclusive travel insurance provider to the Canadian Snowbird Association and the Royal Canadian Legion, concurs that normal snowbird patterns are returning, although there has been an increase in short-term trips. He added: “There seems to be a new generation of retirees that will be different but we are seeing the same patterns that we have seen for 30 years. Snowbirds have always cruised, visited Europe, done many side trips and I believe this will continue. The one major change is that there are now many more retirees and potential snowbirds. Hold on to your hats – a whirlwind is coming.”