Holiday travel – what it really costs

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Money and Our Planet:  How do we squander them?  Let us count the ways

Part 5:  Holiday travel – what it really costs

by Theresa Peluso

I started this series on Money and Our Planet last October by stating that Canadian families, with an average debt-to-income ratio of 171 percent, now have not only the highest level of household debt since records were first kept, but also the highest debt of all G7 countries.  I explained how we Canadians are depleting the Earth’s resources at an unsustainable rate as we accumulate that debt, as I focused on various categories of spending.  This month’s category? Holiday travel.

First, let’s talk about the financial cost. According to Statistics Canada data for 2010, the amount of money spent by Canadians on travel outside Canada in 2010 was about $22,000,000,000.  Well, you might say, the exchange rate of the Canadian dollar was high then (U.S$0.97); spending has decreased since then.  Actually, it hasn’t.  According to the same source, tourism spending in 2015, when the exchange rate was U.S.$0.76, actually increased by a third, to Cdn$31,000,000,000.  That amounts to approximately $3,000 per family, excluding families who travelled within Canada, and those with incomes below the poverty line.

An article in 2015 by the Chartered Professional Accountants Canada explains it this way:

Regardless of who is to blame, the fact consumers continue to spend at heightened levels is worrying. Household spending on goods and services grew by 2.2 per cent in 2013, slightly faster than the economy as a whole. Perhaps shoppers bought in to the foreign accolades about our sound banks and vast resources. Or maybe it was because the once-soaring loonie made us feel richer when shopping online, or going on vacation—according to the World Tourism Organization, Canadians now rank third in international travel spending when measured on a per capita basis, spending $1,007 each and putting us just behind Germany and Australia.

It appears that many Canadians end up increasing their debt levels as a result. A Globe and Mail article (http://www.theglobeandmail.com/globe-investor/personal-finance/how-much-is-too-much-to-spend-on-a-yearly-vacation/article1360225/) cites this advice:

Rubina Ahmed-Haq, a personal finance blogger with alwayssavemoney.ca, says Canadians should allocate no more than 4 per cent of their after-tax income to yearly vacations. “Unless you have no debt, spending more than this amount will erode your long-term savings.”

Canadian debt loads have soared to record highs. Despite worries about how large mortgages and other consumer debts have grown, as well as how few people are adequately prepared for retirement, Ms. Ahmed-Haq still sees holidays as essential….However, going into debt for a holiday is not a good idea, she said. “Never charge your holiday on credit unless you have the cash already in the bank. If your take-home pay is $50,000, your holiday budget is $2,000. Want to spend more? Save longer.”

It is, of course, possible to take a break without spending a pile of money. You can take a road trip, visit family or friends, or have a staycation. (end of quote)

Second, let’s talk about the environmental cost of all this travel.  The impact of travel by Canadians on the health of our planet is part of a much greater trend.  According to statistics from the World Bank (http://data.worldbank.org/indicator/ST.INT.XPND.CD), in 1995, international tourism total spending was $U.S. 462 billion in 1995.  By 2015, it ballooned to $U.S. 1.4 trillion!  A three-fold increase in just 20 years! Internationally, in 1995 there were 626 billion departures, which more than doubled to 1.36 billion departures in 2015.

For comparison, Canadian departures for the same time frame almost doubled from 18,000 international departures in 1995 to 32,000 in 2015.  Canadian international tourism expenditures more than doubled from $U.S. 12.7 billion in 1995 to $U.S. 29.5 billion in 2015.

A great deal of the environmental impact is determined by the mode of travel.  If you have packed your partner and children into a car to take a vacation south of the border, your carbon imprint is minimal, and even less if you travel by bus or train.  On the other hand….

Compare this with the environmental impact of cruise ships. According to Tourism Watch, a German-based quarterly newsletter that provides reports and background information about tourism in developing countries (https://www.tourism-watch.de/en/content/crusade-against-environment):

Cruise tourism poses a number of issues for the environment, including wastewater (both sewage – 32 litres per person per day – and gray water – 350 litres per person per day), solid waste (2.5 – 3 kg per person per day), sewage sludge (28,000 litres per ship per day), oily bilge water (28,000 litres per ship per day), and air emissions from engines (equivalent to 350,000 automobiles) and incinerators. As small cities, cruise ships produce huge volumes and much of this is dumped into the ocean or released into the air. Just in terms of solid waste, cruise ships account for 24 percent of solid waste produced by all oceangoing vessels. Each of these wastes has negative implications for the environment. (end of quote)

Here are some statistics on air travel from Climate Change Connection, a Manitoba-based newsletter published by the Manitoba Eco-Network:

Aircraft use an incredible amount of fuel and they burn it high up in the sky where the air is thin and the chemistry is complex and fragile. Some of the chemicals emitted by aircraft heats the planet and some cools it. The overall impact of aircraft emissions is a warming effect that is 1.9 times that of carbon dioxide alone.

Air travel accounts for a rapidly growing piece of our greenhouse gas emissions. In 1992, it accounted for just 2% of total human-created (anthropogenic) carbon dioxide emissions or about 13% of CO2 from all transportation sources. The world’s air passenger traffic more than doubled from 1985 to 2000 and air cargo traffic grew even more quickly….In 2004, Boeing and Airbus forecast that passenger air travel and air cargo would double the 2004 level before 2020. In 2006 they increased that forecast by 30%, mostly due to demand from new markets like China. This means 22,700 new passenger and freighter aircraft will be required over the next 20 years, 5,400 more than they predicted in 2004. (end of quote)

Given this information, wouldn’t it make sense to think about whether travelling long distances is really worth it?  Do we really need to “escape” to a cruise ship or an all-inclusive beach resort for a week, just because the media brainwash us into believing we “deserve” it?

Many people feel the need to see family and good friends who live far away.  Others, especially younger people, wanting to broaden their horizons, are keen to explore far-away lands and different cultures.  If we try to keep those motivations in mind, then we can try to limit our travel to meaningful experiences, and try to use public or active transportation wherever possible.  It’s not about what we “deserve”; it’s about what we should do to develop our minds and spirits, and create positive connections with the world we live in.  As for Canadian winters, yes, they go on a lot longer than many of us would like, but we live in an affluent society that permits us to avoid the brunt of the cold.  Perhaps we should try to embrace winter, not shun it!  (Mind you, a positive attitude is difficult when the temperature outside is -40 degrees with the wind chill or we wake up to yet another day of freezing rain!)

Consider the advantages of taking the environmental impact and cost of our holidays into account when we plan them.  By vacationing in Canada, our spending contributes to the local economy, and we end up generally getting more value for our dollar.  No concerns about getting bumped from an over-booked flight, missing connections, being subjected to the whims of overzealous border guards, and paying extra for health insurance!

By all means, use your holidays to explore the beauty of other lands and the incredible variety of people and cultural experiences in our world, and also to spend time with friends and relatives who live abroad.  But, barring exceptional circumstances, surely this doesn’t need to be an annual or semi-annual occurrence.  The communities who have been experiencing some of the more drastic effects of anthropogenic climate change, with the knowledge that this will worsen if human behaviour doesn’t change, will thank you for it.  And so will all the animals, on land and sea, whose numbers are being reduced because of pollution and the changing climate.  Last but not least, the stress of paying off your loans or saving for your children’s education and your own retirement will be vastly reduced.