Outbound travel from Canada
According to Statistics Canada, in August 2021, overall tourism activity in Canada was 41 per cent below the level reached in August 2019, before the pandemic. This was the third consecutive month in which overall tourism activity increased, and was much improved from May, when overall tourism activity was 69.3 per cent below the pre-pandemic level. The reopening in some provinces during the summer months and the easing of border restrictions starting in July contributed to this improvement.
Although some restrictions on non-essential travel across the Canada/US border remained in August, more cross-border traffic was observed as provinces continued to ease restrictions and the federal government started opening Canada’s borders to fully vaccinated travellers. Canadians made a total of 535,100 return trips home from abroad in July 2021, more than double compared with last year, but still down 89.7 per cent from July 2019.
Elsewhere, Air Canada announced its summer 2022 plans in October, which further indicated confidence in the travel market was returning. Flights to Europe, Africa, the Middle East, and India were all on the list, and in addition to its established year-round services, the airline announced its return to key summer seasonal destinations such as Barcelona, Venice, Nice, Manchester, Edinburgh, and Reykjavik. Seasonal services to Athens, Rome and Lisbon resumed in 2021 and will return next spring, alongside Air Canada's recently launched service to Cairo. Mark Galardo, Senior Vice President, Network Planning and Revenue Management at Air Canada, sent a clear message to consumers: “Start planning ahead and book with confidence.”
Inbound travel shows further industry rebound
In July, US residents took 194,800 trips to Canada, up from 113,400 in July 2020. The July 2021 figure represents just 5.4 per cent of the 3.6 million such trips made in July 2019.
The number of Canadian residents returning from the US in July was 393,800, roughly 160,000 more than in July 2020, but far below the 4.3 million Canadians who returned from the US in the same month in 2019, before the pandemic. Car arrivals by Canadian residents rose by more than 85,000 year over year to 293,000, of which 219,500 were same-day. However, this was down from the 3.5 million return trips by car that Canadian residents took in July 2019. Due to the easing of restrictions for fully vaccinated residents, the number of Canadians flying back from the US rose from 26,200 in July 2020 to 93,200 in the same month of 2021.
In a potential sign of more good news, Statista.com reported: “In August 2021, the number of Canadians travelling back to their home nation from abroad was approximately 714,000. This is the highest figure seen since the start of the coronavirus pandemic in 2020, when most international travel was put on hold. While this figure has seen growth, it did not reach the pre-pandemic levels seen in August 2019 of approximately 4.6 million Canadians returning home from international trips.”
So, in a nutshell, the figures are going the right way, but they are not going as fast as people would like, and are still tiny percentages of the levels seen in 2019. There remains too much uncertainty around rules on whether or not the US authorities will accept travellers that have had vaccines from different manufacturers, and there is the ever-present concern that rules on quarantine will change while a tourist is abroad, which certainly does not incentivise travel.
Governmental support for an ailing travel sector
The Canadian government did not offer any more help to the travel sector than it did any other business affected by the pandemic, and the contraction in snowbird business has undoubtedly meant job losses in the sector. Indeed, the World Travel & Tourism Council found in 2020 that Covid had directly resulted in the loss of almost 400,000 jobs in the travel industry in Canada. Virginia Messina, Senior Vice President WTTC said: “The loss of 373,000 travel and tourism jobs in Canada has had a monumental socio-economic impact, leaving huge numbers of people fearing for their future.
“However, the situation could have been far worse if it were not for the government’s Emergency Wage Subsidy scheme which supported up to 75 per cent of wage subsidy to eligible employers and in turn, allowed many to keep their jobs in the suffering travel and tourism sector.”
Brad Dance, Chief Customer Officer for TuGo, told ITIJ: “The last 20 months have been extremely challenging to say the least. It began with many trip cancellation/interruption claims being paid and then a significant reduction in the sale of outbound travel insurance policies. In terms of the Canadian government, there was no specific assistance for the travel industry. Those of us in the industry could avail ourselves of the same programmes any companies could, including the Canada Emergency Wage Subsidy and the Canada Emergency Rent Subsidy.”
Initial hesitation to travel replaced by determination
Martin Firestone, Senior Account Executive, Benefit and Retirement Solutions for NFP Canada, told ITIJ that until the announcement from the Canadian government about the opening of the land border with the US came in October, snowbirds were hesitant to commit to trips. The company has since seen ‘significant call volume’, but needs further information about acceptance of mixed vaccines before more decisive moves can be made.
Diana Iaquinto, Medical Operations and Provider Relations Manager from Latitude Air Ambulance, confirmed that it was the ‘grandparents’ generation that were ‘desperate’ to see families that were driving enquiries about travel at the moment. While the company was seeing movement between provinces and some small amount of international travel over the summer, now demand is ramping up.
And some snowbirds were more determined than others to get to their holidays in the US, as Dance explained: “It was estimated that 30 per cent of snowbirds left Canada in the 2020/21 winter, with the majority of them buying travel insurance for their trip. With the land borders being closed to all but essential service workers, the lion’s share of the snowbirds did fly. Some, however, were able to get their vehicles across the border by using trucking companies, who were deemed an essential service. The snowbird would then fly to where their vehicle was dropped by the trucking firm.”
However, he echoed the concerns noted by Firestone about government restrictions affecting demand for travel and insurance: “The announcement of the opening has caused a significant spike in the demand for travel insurance. To cross into the US, one has to be fully vaccinated, but no testing is required. The same can’t be said for the return to Canada, where a PCR test is needed and has to have been conducted within 72 hours of you turning up at the Canadian border. Needless to say, for families and short-term travellers, that requirement brings with it a significant additional cost. I don’t believe we will see the full demand for travel insurance until that requirement is done away with by the Canadian government for both land and air travel or alternatively accept a significantly less-expensive rapid antigen test rather than the PCR test.”
Confidence rebounds as travel recovers
Dance said he has ‘absolute confidence’ that the pent-up demand for travel will allow the Canadian travel insurance industry recover to pre-Covid levels: “We are already seeing significant recovery, with more upside to come. We are a resilient industry that has recovered from setbacks prior to Covid and I have no doubt we will once again.” And Firestone agreed: “People will go away longer and more frequently than ever before and take nothing for granted,” he told ITIJ. “Life is short.”
And with renewed confidence comes the need to prepare. Companies have to be ready for the sudden increase in call volume they will experience in the coming months, after three seasons of travel lost to Covid. Iaquinto from Latitude told ITIJ that the firm is currently undertaking training of additional transport teams, including flight and medical teams and operational staff.
And Mike Vallee, Vice-President of Business Development for Air Ambulance Worldwide, concurred that preparations are underway for a busy season: “We have been contacted by many of our assistance company clients in Canada who are optimistic about the upcoming winter season. The world’s longest shared land border finally re-opened on 8 November, after almost 20 months, and south-bound day trippers and vacationers began crossing into the US once again. All indications are that policy sales are robust and both snowbird and vacation travellers are planning time in the sun again this year. After the initial pause at the beginning of the Covid pandemic, flights within the US and from the Caribbean and Mexico back to the US increased in earnest, with AAW adding a seventh jet to the fleet to keep up with increased demand from clients, with plans for an eighth in the months to come.”
Hallelujah! Jobs, security and a return to normality for the travel and health insurance sector is what we are all desperate to see. And it seems that generally, there is an overwhelming feeling of optimism and positivity about the recovery of the travel sector, and with it, the ensuing boost to travel insurance sales.