Travel arrangement services, 2018

Released: 2019-12-19

The travel arrangement and reservation services industry group generated $14.0 billion in operating revenue in 2018, up 0.4% from the previous year. This growth was more modest than in recent years as the number of tourists travelling to Canada from abroad increased by 1.2% in 2018, the slowest pace of growth since 2013. Also weighing on demand for travel services was the number of Canadians who travelled to a country other than the United States, down 2.2% in 2018—the first annual decrease in 15 years.

Ontario accounted for the largest share of revenue (46.3%), followed by Quebec (22.3%), British Columbia (18.6%) and Alberta (9.0%).

This industry group is composed of three industries: tour operators, travel agencies, and other travel arrangement and reservation services. Tour operators (62.3%) accounted for the largest share of revenue.

It should be noted that travel arrangement services can be offered to Canadians, mostly digitally, by firms that operate legal entities from foreign countries. Purchases made by Canadian consumers from foreign companies are not included in this survey.

Tour operators

Tour operators saw their operating revenue decline 0.7% to $8.7 billion in 2018, driven by the decline in the number of Canadians travelling to countries other than the United States.

Packaged tours (64.6%) generated most of the sales, followed by group tours (22.2%), mainly for foreign destinations other than the United States. Individuals and households in Canada (80.8%) were the main source of tour operator sales, followed by sales to clients outside Canada (12.7%).

E-commerce accounted for 26.0% of total sales in 2018, with 47.4% of business locations reporting e-commerce sales. Among businesses that made e-commerce sales, 95.8% of locations offered the option to buy through their company's website. Third-party websites (60.7%) and mobile applications (23.6%) were the next-most popular e-commerce methods available to buyers.

Operating expenses declined 0.4% to $8.5 billion in 2018. Cost of goods sold (84.5%) was the largest contributor to industry expenses, followed by salaries, wages, commissions and benefits (5.4%).

The operating profit margin for tour operators was 2.2% in 2018—down slightly compared with the previous year (2.4%).

Travel agencies

Travel agencies generated $2.3 billion in operating revenue in 2018, up 1.8% from the previous year as the number of Canadians travelling abroad rose 2.2%.

Airline seats (35.5%) accounted for the largest share of sales revenue, followed by packaged tours (22.8%) and lodging (8.4%). Most sales were made to individuals and households (58.9%) and businesses (24.5%) in Canada. Tour and cruise packages to foreign destinations other than the United States accounted for the largest share of revenue, at 32.9%, while the sale of other products to foreign destinations other than the United States accounted for 18.9%.

E-commerce accounted for 27.2% of total sales in 2018, with 44.4% of business locations reporting e-commerce sales. Among businesses that made e-commerce sales, 92.5% of locations offered the option to buy through their company's website. Third-party websites (53.1%) and mobile applications (20.9%) were the next-most popular e-commerce methods available to buyers.

Operating expenses were $2.0 billion, down 0.3% from 2017. Salaries, wages, commissions and benefits (50.2%) contributed the most to industry expenses, followed by advertising, marketing, promotions, meals and entertainment (11.4%).

The profit margin for travel agencies increased from 9.9% in 2017 to 11.8% in 2018.

Other travel arrangement and reservation services

The operating revenue for other travel arrangement and reservation services increased 2.6% to $3.0 billion in 2018. Operating expenses rose at a faster rate (+3.7%) to reach $2.8 billion. This resulted in a lower industry profit margin (5.8%) in 2018 compared with 2017 (6.8%).

This industry includes many different types of travel arrangement and reservation services companies, such as automobile clubs, ticket service companies and airline consolidators.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).