Travel to the U.S. is tanking: Here are the winners and losers in the loyalty space

With Canadians cutting back on trips to the United States, loyalty point redemptions are getting a quick shake-up. Among the winners and losers are global and domestic destinations, Canadian retailers and flexible loyalty programs. Winner: Every other destination Loyalty collectors aren’t restricted to visiting the U.

S. – they can use their points to travel anywhere. “We’ve seen shifts in collector travel patterns over the last few months, including a softening in redemptions to U.



S. destinations,” Jason Beales, the chief strategy and commercial officer at Air Miles, wrote in an e-mail. He pointed to a weaker loonie , the unpredictable U.

S. trade policy, and the impact of increased economic uncertainty on consumer confidence, as driving an “increased preference for alternative destinations.” Canada will likely benefit from this shift since many travellers want to spend their dollars at home to help the economy.

Travellers could increasingly choose the Caribbean, since it’s an easy destination for people in Eastern Canada. Those people avoiding the U.S.

now will also consider Asia or Europe. Loser: The U.S.

tourism sector In a recent shareholder meeting, Air Canada said bookings for cross-border flights have declined by 10 per cent over the next six months. To meet new demand, they’ve shifted some of their U.S.

-bound flights toward sun destinations and Europe – including a new direct Montreal-to-Edinburgh route. WestJet, Porter and Flair are also reducing their service to the U.S.

While there is no concrete evidence, travellers who use loyalty points for flights and hotels appear to spend more on other aspects of their trips, such as dining, shopping and experiences. But if those people aren’t travelling down south, those dollars go elsewhere, reducing the tourism dollars U.S.

destinations are used to receiving. Winner: Flexible loyalty programs Loyalty points collectors avoiding the U.S.

are quickly finding that their points could go much further in other parts of the world. “I recently booked a Small Luxury Hotels (SLH) property in Antigua using my Hilton Honors points and was blown away by the value,” said Sash Bhavsar, co-founder of pointspartners.ca , an award booking and points consulting service.

He added that one Hilton Honors point is typically worth about half-a-cent at Hilton brands, but it’s not hard to find value of 0.8 to 1 cent each for SLH properties. Had the demand to the U.

S. not dropped, Mr. Bhavsar wouldn’t have considered options in the Caribbean and Europe.

The timing couldn’t have been better for Canadians and Hilton, as the SLH partnership launched late last year. Since then, Hilton Honors members have redeemed billions of points on SLH properties, said Brad Anderson, vice-president of Hilton Honors, in an e-mail. Loser: Canadians who need to travel to the U.

S. The reality is that many Canadians will still need to cross the border, whether to visit family, work, or reach their final destination, and that has become more challenging. “With airlines like United and Air Canada cutting back on flights, I’ve had to get creative with connections and routing when using my points,” said Mr.

Bhavsar, adding that Porter’s increased number of routes have helped ease some of that strain. Travelling to the U.S.

remains relatively straightforward. However, depending on your chosen route, it may require more points owing to the limited number of available flights. Winner: Retail stores Beyond travel, many Canadians face economic uncertainty arising from the effects of tariffs.

They may have paused their travel plans, but they’re using points to keep daily costs in check. For example, many travel loyalty programs allow members to use their points on merchandise or gift cards. This strategy increases the foot traffic at retail stores and will likely boost sales, which is good for business.

However, using your travel points for groceries and retail products typically means getting a lower value for your rewards – Air Miles and American Express Membership Rewards being exceptions. That said, getting immediate discounts on your purchases could be worth it when you’re worried about your monthly budget. Barry Choi is a personal finance and travel expert at moneywehave.

com . He was previously affiliated with Air Miles, Air Canada and WestJet but currently has no relationship with any of the brands mentioned..