National Tourism Indicators

Tourism plunged in the second quarter, as real spending in Canada by tourists fell 4.3% from the first quarter. This was the largest quarterly decline on record for the National Tourism Indicators, which go back to the first quarter of 1986. The outbreak of severe accute respiratory syndrome (SARS) was the major factor behind the decline, as the number of international visitors, particularly from Asia, plummeted. Tourism spending in Canada fell to $12.2 billion, $1.2 billion below its peak in the fourth quarter of 2000 and its lowest level since the fourth quarter of 1998.

Sharp decline in international visitors

A sharp 14% decline in international visitors to Canada, from the United States and elsewhere, sent tourism into a tailspin in the second quarter. Concerns over SARS, among other factors such as a stronger Canadian dollar vis-à-vis its US counterpart, the Iraq war and sluggish tourism globally, contributed to the decline. Spending by international visitors was down 13% to the lowest level since the first quarter of 1997.

With the drop in spending by visitors from abroad, Canada's international travel deficit deteriorated to $1,103 million at current prices. The deficit was $838 million in the previous quarter. A deficit indicates that Canadian travellers spent more abroad than international visitors spent in Canada. The deficit was moderated by a reduction of Canadians' spending abroad in the second quarter.

Domestic spending weakens

Despite continued strength in overall domestic demand and personal disposable income, domestic spending on tourism slipped 0.2% in the second quarter, after a solid 1.0% gain in the first.

With the sharp decline in spending by non-residents, the domestic share of total tourism spending in Canada rose to 70%, continuing the upward trend followed since the events of September 11, 2001.

Air transport and accommodation hit hard

Looking at the commodity purchases of non-residents and Canadians, spending on passenger air transportation was down a sharp 9.4% in the second quarter, while spending on accommodation dropped 8.5%. Expenditures on recreation and entertainment edged down, while spending on vehicle fuel was flat.

Tourism sheds jobs

The second quarter recorded negligible gains in overall employment, but a substantial drop in tourism jobs. Tourism employment fell 2.4% to 572,000 jobs, after a flat first quarter. The drop in tourism employment was widespread, with the brunt of it borne by the accommodation, food and beverage and travel agency industries.

Tourism GDP down sharply

Tourism gross domestic product (GDP), expressed in constant 1997 dollars, fell 4.1% in the second quarter, after edging down 0.2% in the first. As a result, tourism GDP stood 6.5% below its peak reached in the first quarter of 2001. The drop in tourism production was much greater than the 0.1% decline of GDP for the economy as a whole.

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

Definitions, data sources and methods: survey number 1910.

The second quarter 2003 issue of National tourism indicators (13-009-XIB, free) is now available on Statistics Canada's website. From the Our products and services page, under Browse our Internet publications, choose Free, then National accounts. To order a paper copy of the publication (13-009-XPB, free), contact Client services (613-951-3640; fax: 613-951-3618; iead-info-dcrd@statcan.gc.ca).

For more information, or to enquire about the concepts, methods or data quality of this release, contact the information officer (613-951-3640), Income and Expenditure Accounts Division.