Canadians flock to U.S. in search of low-cost travel

Have credit, will travel. That seems to be the mantra of so many plastic-carrying Canadians.

Those with Visa cards charged $16.4 billion abroad in 2012, marking a boost in spending by nearly 3 per cent from the year before, according to Visa’s recently released Tourism Snapshot Report.

The United States got the biggest share of Canadian Visa-card holders’ cash ($11 billion), followed by Mexico ($591 million) and the U.K. ($477 million).

Meanwhile, interest in seeing the sights in Japan soared, with Visa account holders spending $64 million there in 2012 – an increase of nearly 19 per cent from the year before, and the biggest jump within the world’s top 25 travel destinations.

And although Canadians are getting out there and seeing the world, the results point to cautiousness.

“VISA spending is increasing on travel to the U.S. and decreasing on travel to other more costly destinations like Europe,” says CIBC managing director and chief economist Avery Shenfeld. “The gap isn’t as dramatic in Statistics Canada data on overall spending by Canadians abroad, but the Stats Canada data also show faster growth in Canadians spending in the U.S. -- up 7.8 per cent in 2012 -- versus spending in other countries, which was up 5 per cent.

“The tilt towards a lower-cost destination is in line with the general trend towards slower growth in retail spending at home,” Shenfeld adds, “both linked to a more cautious attitude in taking on additional household debt, and keeping spending in line with generally modest income growth.”

The study also found that:

• Retail purchases were the largest spending category for

• Canadian account holders traveling internationally in 2012 ($8.9 billion)

• Spending at supermarkets rose by 17 per cent, from $572.4 million in 2011 to $688.9 million in 2012.

• Spending at “quick service” restaurants increased by 20.5 per cent, from $90.4 million in 2011 to $113.7 million last year.

• There was a nine per cent jump in spending on gasoline, from $633 million in 2011 to $694 million in 2012.

“The categories of VISA spending abroad show greater growth at outlets more commonly relied upon in U.S. travel than other destinations -- gasoline, since Canadians often travel to the U.S. by car; quick service restaurants, which are more common in the U.S. than elsewhere; and supermarkets, which are used by snowbird visitors who are actually in the U.S. for a few months a year,” Shenfeld notes.

March, February and August were the most popular months for international travel. Visa holders spent $4.6 billion during those months in 2012, accounting for 28 per cent of the total international travel spending for the year.

People from other parts of the world who picked Canada as a travel spot last year increased their spending here slightly, from $6.6 billion in 2011 to $6.66 billion.

The United States, China, the United Kingdom, France, and Australia were the top source countries of inbound travel, according to the Visa study.

However, data from Statistics Canada show that U.S. travellers to Canada are providing less growth than visitors from other, more distant markets.

“The high Canadian dollar and passport requirements continue to discourage short day trips from U.S. border locations into Canada,” Shenfeld says.

The least surprising result of the Tourism Snapshot? Travellers to Canada preferred timing their visits here between June and September.