National tourism indicators

Tourism spending in Canada increased during the first three months of 2007, the 15th consecutive quarterly increase.

Overall spending on tourism in Canada advanced 1.2% as spending by Canadians continued to climb, while that by international visitors slipped for the third consecutive quarter.

Spending up on tourism at home

Spending by Canadians on tourism in Canada was up 1.8% in the first quarter of 2007, a somewhat slower pace than the 2.6% increase during the last three months of 2006. However, it was the 11th consecutive advance since the second quarter of 2004.

Since then, tourism domestic spending has advanced a cumulative 23%. Several factors have contributed to further expansion on the home front, including healthy gains in disposable income, low unemployment and low interest rates.

Canadians accounted for 76.5% of the $17.3 billion in tourism spending in the quarter. This share has increased steadily since the fourth quarter of 2004, when it stood at 69.8%, as a result of continued strength on the domestic front coupled with continued weakness in spending by international visitors.

Continued weakness in spending by international visitors

Spending by international visitors continued to show weakness in the first quarter. Non-resident outlays on tourism in Canada have fallen in eight out of the last nine quarters.

Tourism spending by non-residents slipped 0.4%, for a cumulative decrease of 13% since the end of 2004.

The number of travellers to Canada fell 6.7%, as both same-day and overnight travel from the United States turned down sharply. This was the 10th consecutive quarterly decline in visitors from south of the border. The decline brought the number of US visitors to 6.4 million for the quarter, 27% below its level 10 quarters earlier.

The number of visitors from other countries, who stay longer and spend more on average than US visitors, was up 3.3% for the quarter.

The decline in spending by non-residents was widespread, with the notable exception of air transportation. Spending on accommodation, food and beverage services and other tourism commodities all declined about 1% during the first quarter. Outlays on fuel and vehicle repairs and parts decreased significantly, reflecting less same-day travel from the United States.

Higher spending on air transportation

Tourism spending (by Canadians and non-resident visitors) on air transportation was up 1.6% in the first quarter of 2007. Non-resident outlays rose 4.1%, as more overseas visitors travelled to Canada on Canadian airlines.

Canadians' outlays on airline tickets were up 1.0%, only half the gain of 2.0% in the fourth quarter of 2006. This deceleration reflected slower growth in the number of Canadians travelling by plane to US and overseas destinations.

Overall spending on accommodation services edged up as a 1.0% increase in spending by Canadians was mostly offset by a 1.2% decline in the outlays of non-residents.

Recreation and entertainment services were up 1.3%, as lower spending by international visitors, who contribute over 30% to the total, was more than made up by higher spending by Canadians.

Tourism GDP rising in tandem with the rest of the economy

Tourism gross domestic product (GDP) expanded 1.1% in the first quarter of 2007, just ahead of the 0.9% pace posted for the economy as a whole.

The strength came from the transportation industry and other tourism industries (recreation and entertainment and travel agent services) as well as other non-tourism industries.

Employment attributable to tourism rose 0.8% between January and March 2007, largely the result of gains in air transportation jobs. Job losses were recorded in other transportation industries, accommodation services and travel agent services.

Looking ahead

Economic indicators remain positive for the tourism industry. According to the latest results from the Business Conditions Survey for the Traveller Accommodation Industries, the outlook of Canadian hoteliers for the second quarter is much better than in the first. Expectations for number of room nights booked, occupancy rates, number of business travellers, average daily room rates and number of hours worked are all positive.

On the international front, the Organisation for Economic Co-operation and Development's (OECD) composite leading indicators for April indicate that moderate economic expansion lies ahead for OECD countries. An expansion is foreseen for the United States, Canada, France and the United Kingdom, while the outlook for Japan, Germany and Italy is less positive. The latest indicators for major non-OECD countries point to continued growth in China, India and Brazil, but a weaker outlook for Russia.

On the currency front, the Canadian dollar appreciated against several key currencies including the US dollar, the euro, the Japanese yen, the Chinese yuan, the Mexican peso and the UK pound in April and May 2007. An appreciation of the Canadian dollar makes it more expensive to visit Canada, and cheaper for Canadians to travel outside the country.

Available on CANSIM: tables 387-0001 to 387-0010.

Definitions, data sources and methods: survey number 1910.

The first quarter 2007 issue of National Tourism Indicators, Quarterly Estimates (13-009-XIB, free) is now available from the Publications module of our website.

For more information, or to enquire about the concepts, methods or data quality of this release, contact the information officer (613-951-3640; iead-info-dcrd@statcan.gc.ca), Income and Expenditure Accounts Division.

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