The U.S. economy is on fire, and Canadian sun seekers are about to feel the heat.
That’s the take from experts who track the packaged tour business in Canada, who said this week prices for vacations in Mexico, the Dominican Republic and Cuba are poised to rise because of warmer economic conditions south of the border.
“The recovery in the U.S. economy results in the opportunity for more Americans to travel to Mexico and the Dominican,” analysts at Desjardins said in a new research note.
Desjardins was relaying what Transat A.T. Inc., the largest Canadian vacation operator, told them.
“This increases demand for hotel rooms in the Caribbean. The company expects the higher demand to create room shortages in the region, which is expected to translate into higher prices,” Desjardins analyst Benoit Poirer said.
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The U.S. Commerce Dept. said Tuesday the U.S. economy surged by 5.0 per cent in the third quarter – the strongest pace of growth since late 2003.
“The American economy is growing like gangbusters,” James Marple, a senior economist at TD Bank said. “Wow is all we can say.”
The U.S. is on pace to add more jobs this year than in any 12-month stretch dating back to the 1990s. Apparently that makes for many new travellers.
Cuba too
If Canadian travellers thought they would find a deal in Cuba this winter, warming relations between the U.S. and the popular sun destination could similarly throw cold water on those plans.
“In reaction to the recent rapprochement between the U.S. and Cuba, Transat believes that a potential influx of U.S. travellers to Cuba is likely to put similar pressure on room demand,” Desjardins’ Poirer said.
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