Why Canadians Are Choosing Domestic Holiday Travel

Barry Choi has noticed more empty seats on some of his recent flights.

“People are travelling a little less,” said Choi, who writes the Money We Have personal finance and travel site and finds himself on a plane every four to six weeks.

That marks a shift from the immediate post-pandemic years, when many travellers rushed to make up for lost time once borders reopened and flights resumed.

“There was a lot of pent-up demand in 2022; everyone wanted to get away,” Choi said. “Some waited until 2023, but this year travel has generally cooled off.”

That cooler trend looks set to continue through December and January. After a surge in outbound holiday travel last year, more Canadians are staying closer to home this Christmas season. Tight household budgets, softer domestic fares, and the end of the post-pandemic overseas travel boom — combined with a slipping loonie — are all influencing decisions.

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Domestic prices fall, even as fewer Canadians go south

Data from aviation tracker Cirium suggests Canadian flights to the United States this December are down about 2.5% compared with a year earlier, while domestic flight capacity is rising — roughly a 10% increase versus December 2023.

That added capacity on domestic routes has helped push fares down: as of September, Cirium reported that average one-way fares within Canada were about 20% lower than the previous year.

Mike Arnot, a spokesman for the industry, noted that most Canadian carriers except Porter Airlines have reduced U.S.-bound capacity. “Fewer flights to the U.S. generally means higher airfares there,” he said, because available seats are shrinking faster than demand.

At the same time, household budgets are under pressure. Younger travellers — Gen Z and millennials — appear more cautious about spending on experiences, including travel, than they were during the immediate rebound from the pandemic.

“We can’t ignore that people are feeling pinched,” said Ramzi Rahbani, a vice-president at FlightHub. “Interest rates are slowly easing and inflation is moderating, but housing and everyday living costs remain top of mind.”

A FlightHub survey found that slightly more than half of Canadians plan to postpone trips over the holidays this year, underlining the growing caution.

Currency movements are another factor. The loonie, which had been near 72 US cents, slipped to multi-year lows after political news and trade concerns, prompting some travellers to rethink U.S. trips.

“I’m getting a lot of people asking, ‘Do I still want to go to the U.S.?’” Choi said.

The impact of Canada’s currency woes

Canadians who typically escape winter to Florida, Arizona or California are feeling the effect of a weaker dollar most directly. For many snowbirds, everyday costs and accommodations in the U.S. have become noticeably more expensive.

“For snowbirds, the U.S. has definitely become more costly,” said Jill Wykes, who was speaking from Sarasota, Fla.

In addition, many travellers used vouchers and credits from canceled 2020–21 bookings — especially for cruises — and those credits have largely been spent, removing a source of previously deferred demand.

Millennials and Gen Z now make up more than half of air travellers, FlightHub reports, and family visits are the leading motive for holiday travel. That explains why domestic routes and short-haul international trips to family-centric destinations remain strong.

FlightHub also found that bookings from Canada to capitals such as Manila and New Delhi were among the highest between Dec. 20 and Jan. 1, reflecting family reunions and visits to origin-country networks. Meanwhile, tourism-focused trips to some sun destinations have leveled off after rapid post-pandemic growth.

Top U.S. destinations remain popular

Despite the tilt toward staying local, established U.S. destinations still dominate the outbound market for those who do travel. New York City, Florida and California are among the most booked places across age groups.

“Travel habits have stabilized,” said Richard Vanderlubbe, founder of Tripcentral.ca. After the volatility of recent years — with sharp swings in passenger numbers as restrictions changed — patterns now look more consistent.

Statistics Canada data shows passenger traffic at Canada’s eight largest airports rose 4% year-over-year in October, roughly in line with population growth. Air travel since 2019 is up about 5%, which trails the population increase of roughly 10% over the same period, indicating a lower per-capita travel rate.

On budgets, FlightHub found that nearly a quarter of customers allocated $1,000–$2,000 for holiday travel, about 22% set aside $500–$1,000, and most of the remainder saved less than $500.

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