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Travel Will Be Second Biggest Expense for Canadians Over the Holiday Season

BMO Survey reveals sunny locales will be the most popular winter vacation destinations

Of the 46 per cent of Canadians who plan to take a winter vacation, more than half (55 per cent) plan to travel to a sunny destination
Others plan to relax at home (12 per cent), take an active trip (8 per cent) or staycate, i.e. enjoy the amenities of their own city or town (6 per cent)
Coincident with findings: there is a growing preference to use prepaid travel cards in lieu of cash and/or travelers cheques for out-of-country spending.

TORONTO, December 15, 2010 – While Canada may be synonymous with snow and shovels this time of year, the majority of Canadians plan to trade their boots and snowsuits for swim suits and suntans, according to BMO's recent Holiday Spending Survey. These findings are in marked contrast to BMO's Summer Spending Survey released in August in which Canadians indicated they were more than twice as likely to part with cash for a vacation close to home (43 per cent) than a trip abroad (17 per cent).

More than half (55 per cent) of Canadians who said they plan to take a winter vacation over the next three months will opt to follow the sun and head to a warmer destination such as Florida, California, Mexico. Only six percent of those polled said they'll choose a ‘staycation' or a vacation close to home. The report showed that travel would represent the second biggest holiday expense for Canadians.

Douglas Porter, Deputy Chief Economist, BMO Capital Markets, said the shift away from ‘staycations' to out-of-country travel may indicate that Canadians are developing a more confident outlook about their personal financial situation after a lengthy battle through the recent economic downturn.

“Consumer confidence is up since the summer lull and significantly higher than levels seen during the recession,” said Mr. Porter. “While we haven't yet returned to pre-recession levels, the latest trend is nonetheless encouraging.”

Prepaid Travel Cards Growing in Popularity

Another growing travel-related trend is a preference to use prepaid travel cards in lieu of cash and/or travellers cheques for out-of-country spending. Prepaid travel cards offer the convenience of cash and travellers cheques without the risks associated with loss or theft. BMO's own Prepaid Travel MasterCard has quickly gained popularity as an easier alternative, gaining double digit growth, year over year, since it was introduced in 2007.

“Prepaid travel cards take a lot of the worry out of travel because you don't have to carry a lot of cash in your pocket and this can help with sticking to a travel budget.” said David Heatherly, Vice President, Payment Products, BMO Bank of Montreal. “But not all cards are created equal. Most prepaid travel cards offer convenience but can be costly to load funds; they can only be loaded once; and they may not offer extensive security features.”

Mr. Heatherly offered some timely advice for Canadians who plan to travel abroad this holiday season:

Have a travel budget – Plan your itinerary and anticipate your expenses. Set a realistic budget and then stick to it. It's also a good idea to have a small amount of the local currency on hand to tip service providers or make other incidental purchases.
But don't carry more cash than you need – Don't carry more cash than you need. A pre-paid travel card provides all the convenience of a credit card without the interest costs and is an effective tool for managing to a travel budget. Choose a card that comes with security features that protect your purchases and give you peace of mind.
Advise your bank before boarding – Bank fraud-prevention measures might automatically block unusual transaction activity such as out-of-country purchases unless you tell your bank in advance.
Carry a converter – Buy a currency converter, available at many retailers, to help you determine how much you're spending before you buy.
Plan to carry a balance? Opt for a low-rate credit card – Travel will be the second biggest expense for Canadians over the holiday season. If you typically carry a balance on your credit card consider a card with a lower interest rate. BMO's Preferred Rate MasterCard carries a 17.5 per cent interest rate and no annual fee, and 11.9 per cent for just a $20 annual fee. (NOTE: on a monthly average unpaid balance of $1,000, you can lower your annual interest costs by more than $55 by choosing BMO's lowest rate (11.9 per cent) over the higher rates that most credit cards charge today (19.5 per cent). Use the handy BMO calculator to determine which rate is best for you.

About BMO Prepaid Travel MasterCard

A BMO Prepaid Travel MasterCard is a purchase card with security features designed to protect your purchases including Zero Dollar Liability, Identity Theft Assistance, Extended Warranty Insurance and Purchase Protection. If your card is lost or stolen when you're travelling outside Canada, you can obtain either a replacement MasterCard or an emergency cash advance usually within 2 business days. Cardholders can also secure an Emergency Cash Advance of up to $1,000 U.S. or an amount equal to the balance on their BMO Prepaid Travel MasterCard, through designated Card replacement centres and cash advance locations.

Furthermore, a BMO Prepaid Travel MasterCard can be reloaded as often as necessary and is valid for three years. Secondary cards can be issued to family members under the same account if required.

Learn more about BMO Pre-Paid MasterCard cards by visiting bmo.com/prepaidmastercard.

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For Media Enquiries:
Ralph Marranca, Toronto, ralph.marranca@bmo.com, (416) 867-3996
Sarah Bensadoun, Montreal, sarah.bensadoun@bmo.com , 514-877-8224
Laurie Grant, Vancouver, laurie.grant@bmo.com, 604-665-7596