Many retirees spend their winters in southern states. But travel restrictions and COVID-19 concerns will likely impact the snowbird lifestyle this winter, especially if the U.S.–Canada border is closed.
Snowbird living could be affected by U.S.–Canada travel restrictions
Fear of rising coronavirus cases in the southern United States could reduce retirement travel
Canadian snowbirds have a significant impact on the U.S. economy
Snowbirds, especially Canadians who normally come to the United States for the winter, may just nest at home this year.
As coronavirus cases remain elevated in states like Texas, Florida, and other parts of the South, U.S. retirees who have dual residency may avoid leaving northern climes for the Sunbelt. For Canadians, there’s a question of whether they’ll even be allowed to trek south of the border.
Currently, the U.S.–Canada border is closed to nonessential travel until September 21 because of COVID-19. That date has been renewed five times since March and is likely to be extended again. Nonessential travel includes tourism and specifically refers to land travel. Canadians can still travel by air to the United States, although Canadians returning home could be subject to a mandatory 14-day quarantine, according to the Canadian government.
The tourism industry in general has been hit hard by the pandemic. If Canadians can’t or won’t fly south, it could compound the economic toll in southern states popular among snowbirds.
Even if the U.S.–Canada border reopens, snowbirds may decide not to fly south. Rob and Jane Lowe, two snowbirds living in Ontario, Canada, said there is a “great deal of apprehension about traveling to, and in, the U.S. this winter” within their snowbird community, which includes business and personal relationships.
“It primarily extends from the horrific increase in cases that have appeared in states that snowbirds frequent in the winter,” the couple wrote in an email, noting that there’s widespread concern among Canadian snowbirds about a lax attitude toward the virus by local residents as portrayed in the media.
The Lowes added that Canadians who travel outside the country need to buy supplemental health insurance—a necessity whether there’s a pandemic or not. But COVID-19 adds to this consideration. “So far there is some question about how much liability an insurer will bear when someone knowingly travels to a high-risk area, knowing that the health care facilities are overwhelmed with local residents,” the couple wrote.
Many of the Lowes’ friends travel to the United States by RV, which potentially reduces some of the infection risk, but that may be a moot point if the U.S.–Canada border closure is extended. There’s also the question of whether people who stay in hotels or condos want to gamble on the chance of a late-winter border reopening. Prime spots need to be reserved soon and paid in full, the Lowes remarked, adding that many would-be visitors are cautious about forking over money without knowing if they’ll be able to go or get a refund.
Canadian tourism to the United States is significant. The U.S. Travel Association reported that the United States was the destination for 55% of all international overnight trips made by Canadians in 2018. Canadian tourism brought in $16.4 billion that year.
Those visits came to a screeching halt in March when borders closed. In one stark example, Porter Airlines, the popular low-cost airline that flies out of downtown Toronto to many popular U.S. spots, suspended operations completely. The carrier posted on its website that it plans to start flying again in October 2020.
Narrowing in on the Sunbelt, a 2018 report by the Canadian government’s Trade Commissioner Service highlighted the impact that Canadians have on Florida’s economy, stating that the country is the Sunshine State’s most important economic partner, with tourism making up a good chunk of that business.
Another government agency, Statistics Canada, noted Florida is considered one of the best places for snowbirds, with the average Canadian snowbird staying 21.5 days, a full five days longer than another popular state, Arizona. Canadians represent 25% of all international visitors to the state. In 2016, Canadians spent $6.5 billion in Florida, up 69% since 2010. Although this data centers on Florida, it demonstrates how important winter tourism is to the southern United States.
RV sales in North America have skyrocketed, partly because people see these homes on wheels as a way to travel safely. The Recreation Vehicle Industry Association’s June data showed RV wholesale shipments were up 11% in June, the highest monthly total since October 2018. Companies such as Thor Industries (THO), Winnebago Industries (WGO), and Camping World (CWH) have all benefited from the trend.
But if the border between the United States and Canada remains closed, campgrounds relying on that business will suffer.
Canadians tend to cluster around Orlando and Fort Lauderdale, and younger families are attracted to Orlando’s theme parks, according to the report. Although there’s little data on how much Canadians spend at Orlando’s parks, the attractions could use every dollar right now.
Tourists in general are staying away, news reports said, even with the parks offering deep discounts. Universal Orlando, which is a division of NBCUniversal and Comcast (CMCSA), is selling unlimited visits for the price of a one-day ticket for Floridians. Universal announced it paused construction at Epic Universe, its third theme park in Orlando, because of economic uncertainty.
SeaWorld Parks & Entertainment (SEAS) is delaying ride openings. Disney (DIS) is scaling back its hours at four of its Florida theme parks starting in September because of lower-than-expected attendance. The parks division lost out on $3.5 billion in operating income for the three months ending June 27, the company said in an earnings call.
There’s still time for Canadian snowbirds to make winter plans, but the border is a major factor.
The Lowes commented that they’re taking a “wait-and-see” approach for now, but sooner or later they’ll need to make a decision. And they may just decide to tough out Canada’s brutal winter.
“The safest approach is to forgo U.S. travel this year and explore next year,” they wrote.
Debbie Carlson is not a representative of TD Ameritrade, Inc. The material, views, and opinions expressed in this article are solely those of the author and may not be reflective of those held by TD Ameritrade, Inc.
Jayanthi Gopalakrishnan is not a representative of TD Ameritrade, Inc. The material, views, and opinions expressed in this article are solely those of the author and may not be reflective of those held by TD Ameritrade, Inc.
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