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Overview of trends 2006

Worldwide international tourism more popular than ever in 2006

According to the World Tourism Organization, international tourism exceeded all expectations in 2006, achieving positive growth for the third consecutive year and climbing to record levels in the process.

International tourist arrivals (which exclude arrivals by same-day visitors) hit 846 million in 2006, 5.4% higher than the previous year. As a result, worldwide receipts from international tourism reached US$733 billion (constant dollars), about US$57 billion more than in 2005.

These higher levels were partly fuelled by a long period of sustained economic expansion, which contributed to the healthy performance of emerging destinations around the world.

Increases in international tourist arrivals were observed in all regions of the globe in 2006. Like in 2005, Africa led the way with a 9.2% gain in arrivals, followed by the Middle East (+8.9%), Asia and the Pacific (+7.7%), Europe (+5.0%) and the Americas (+2.0%). These regions have also shown a positive average annual growth over the last five years, ranging from 1.0% (Americas) to 9.3% (Middle East). Moreover, of all the sub-regions, only North America has shown an average annual decline since 2001 (-0.2%).

France remained the most visited country in 2006, with 79.1 million international tourist arrivals. However, the United States generated the most revenues, with US$85.7 billion in international tourism receipts.

For the fourth year in a row, Canada failed to crack the top ten in international tourist arrivals as lower overnight travel from the United States continued to hamper Canada’s tourism industry. In 2006, Canada ranked 13^th in international tourist arrivals, its lowest ranking since the introduction of the current collection method in 1980.

Overnight travel from the United States lowest in nine years

Residents of the United States made 13.9 million overnight trips to Canada in 2006, down 3.7% from 2005 and the lowest level since 1997. Overnight travel to Canada by Americans has fallen three of the last four years, or 14.3% since 2002.

Overnight travel from the United States has yet to rebound from the drop in level recorded during the height of the Severe Acute Respiratory Syndrome (SARS) health crisis in 2003. Also, the loonie, which averaged 63.7 US cents in 2002, has increased every year since to 88.2 US cents in 2006.

While fewer Americans are travelling to Canada, more are travelling to Mexico and the Caribbean, suggesting that Americans might be forgoing the cold Canadian climate for more sunny destinations.

Overnight travel from overseas countries continues its upward trend

Overnight travel from countries other than the United States increased for a third consecutive year in 2006. As a result, it climbed to its highest level since 2000 and its third highest level ever.

Travellers from overseas countries made 4.3 million overnight trips to Canada in 2006, 1.2% more than in 2005.

Canadians travelling more and more abroad

Travel to overseas countries set another record in 2006, as Canadians made 6.7 million overnight trips to non-US destinations, up 8.2% from 2005. Increased travel overseas is nothing new, with gains in 14 of the last 15 years. With Canadians still reeling from the aftermath of 9/11, travel to overseas countries fell 3.1% in 2002.

While one might assume that Canadians are increasingly choosing trips to overseas destinations over trips to the United States, it is not entirely the case. Overnight travel to the United States has gone up each of the last three years, with gains of 26.3% during that span. In 2006, overnight travel to the United States reached a 13-year high of 16.0 million trips.

Several factors such as increased curiosity by Canadians, globalization and increased accessibility and competitiveness might explain why Canadians are travelling more overseas. Finally, the changing demographics of the Canadian population may play a role in the increase in Canadian travel to overseas countries, as baby boomers entering retirement search for new ways to spend their time.

Same-day car travel between Canada and the United States going in opposite directions

American residents took only 13.7 million same-day car trips to Canada in 2006, the lowest since record keeping started in 1972. Same-day car travel fell for the seventh year in a row, down a staggering 12.5% from the previous low observed in 2005.

Record gas prices and a faltering US dollar may have kept same-day car travellers, often crossing over to do some shopping, from heading north. The Canadian dollar averaged 88.2 US cents in 2006, up 6.8% from the previous year’s average and the highest since the late 1970s.

Conversely, same-day car travel by Canadians to the United States has increased in the last years. Since 2003, same-day car travel south of the border has jumped 12.4%. In 2006, it reached 23.5 million trips, up 5.3% from 2005.

United States market

Overnight trips from the United States fell in all trip purpose categories in 2006. Business and pleasure travel, which accounted for 91.5% of all overnight trips from the United States, fell 0.7% and 2.2% respectively. Travel for other purposes, which includes shopping, fell 19.1%.

Pleasure travel includes holidays and vacations, visiting friends and relatives, visiting a second home, cottage or condo and attending events and attractions. Business travel includes attending meetings, conventions, conferences, trade shows and seminars, and participating in other work-related matters.

Overnight travel by car and plane, the two most popular methods of transportation used to enter Canada, fell 5.2% and 0.9% respectively. They accounted for 88.0% of all overnight traffic from the United States. Travel by boat, which occurred mostly in British Columbia, increased 8.2%.

The 3.7% drop in overnight trips resulted in lower travel spending from the United States. American residents spent $7.3 billion in Canada in 2006, down 2.5% from 2005. While the average length of overnight trips remained stable at 4.0 nights per trip, average spending per night increased by $2 to $132.

Overnight travel from bordering states down in 2006

Many of the border states observed declines in overnight trips made by their residents to Canada in 2006. Such was the case for Canada’s three biggest US markets – New York State (-3.2%), Michigan (-13.3%) and Washington State (-5.3%). Of the top 15 states of origin, all five border states recorded declines in overnight travel to Canada.

Out of the top 15 states of origin, Florida showed the biggest decline in overnight trips to Canada (-18.2%). Travel from California posted the largest increase (+12.4%).

Drops in overnight visits from the United States observed across the country

For the second year in a row, all provinces observed declines in overnight visits by American travellers. Saskatchewan was the hardest hit province, as overnight visits fell 12.1% in 2006.

Ontario remained the most visited province, with 6.9 million overnight visits by Americans, a 4.4% decline from 2005. This was almost twice as many visits as in British Columbia, the second most popular province. Quebec rounded out the top 3, welcoming 2.1 million tourists from the United States.

Overseas market

Of the 4.3 million overnight trips from overseas, about 3.2 million were made for pleasure reasons, which was slightly more than in 2005. However, the 1.2% increase in overnight trips from overseas countries was mainly the result of more business trips. Business trips, which represented about one of six overnight trips from overseas, jumped 6.4% in 2006.

Despite the increase in trips, residents of overseas countries spent fewer nights in Canada in 2006. They stayed 68.0 million nights, a decline of 0.5% from 2005. As a result, the average length of trips fell from 16.2 nights to 15.9 nights.

Tourists from overseas countries also spent less in Canada, shelling out $5.7 billion, a 0.6% decrease compared to 2005. This said, they spent $1,342 per trip, slightly less than the previous year. Spending per night remained stable at $84.

Europe only region with a drop in overnight trips to Canada

Travel to Canada increased for most of the overseas regions in 2006, with Europe being the lone exception. Overnight travel from Europe, the overseas region sending the most tourists to Canada, slipped to 2.2 million trips, down 1.1% from 2005.

Africa and South America were the two overseas regions that posted the largest increases in travel to Canada. Overnight travel from Africa climbed 19.7% and from South America, 11.3%.

One in five tourists from overseas countries comes from the United Kingdom

The United Kingdom remained Canada’s most important overseas market in 2006, despite a 5.2% decline in overnight travel. Roughly one in five overnight trips from overseas countries, or 842,000, was made by tourists from the United Kingdom. This was more than twice as many overnight trips from Japan, Canada's second most important overseas market.

The top 12 overseas markets remained unchanged in 2006, with little movement within them. Among these markets, China posted the largest increase in overnight travel to Canada (+22.7%) while Japan recorded the biggest decline (-8.7%).

Outbound market

Canadian residents took a record 22.7 million overnight trips abroad in 2006, up 7.7% from the previous high observed in 2005. Like last year, about seven out of ten outbound overnight trips were to the United States.

About 10.6 million overnight trips abroad were done by Ontario residents, an increase of 7.0% from 2005. Far behind, Quebec and British Columbia rounded out the top 3, with its residents taking 4.2 million and 3.6 million overnight trips outside Canada, respectively.

Increases in outbound overnight travel were observed from all parts of the country. Travel from Alberta led the way, with a 17.5% jump in overnight trips, while overnight travel from the Atlantic provinces registered a 1.7% gain.

Both business and pleasure travel posted gains in overnight trips in 2006. Pleasure travel, which accounted for 78.5% of all overnight trips abroad, jumped 8.3%. Business travel, which represented 13.4% of overnight trips abroad, increased 6.8%.

Overnight travel to the United States highest in 13 years

Overnight travel south of the border increased for a third consecutive year in 2006, and in the process, reached its highest level since 1993. Canadians made 16.0 million overnight trips to the United States, up 7.6% from 2005.

The total number of nights spent in the United States also increased, but to a lesser extent. Canadians spent 120 million nights south of the border, a 2.4% increase from 2005. As a result, the average length of overnight trips to the United States fell from 7.9 nights to 7.5 nights.

Spending on overnight trips in the United States climbed to $10.2 billion, an increase of 7.3% from the previous year. Average spending was $640 per overnight trip, or $85 per night.

The automobile remained the preferred method of transportation, as Canadians made 9.3 million overnight trips by car to the United States, up 8.2% from 2005. Canadians also took a record 5.5 million overnight trips by plane, an increase of 7.8% from the previous year.

Canadians visit New York State more often but spend more and stay longer in Florida

Canadians made 2.6 million overnight visits to New York State in 2006, a 10.8% increase over 2005. This was about 500,000 more visits than in Florida, the second most visited state. Washington State, Michigan and California rounded out the top 5.

However, Canadians spent the most time and money in Florida. In 2006, Canadians spent 37.8 million nights in Florida, or about 18.0 nights per overnight visit. On average, overnight visits in Florida lasted more than twice as long as those in any other top 12 state visited. In the process, Canadians spent $2.4 billion in the Sunshine state, or $1,131 per overnight visit. About 22.8% of travel spending in the United States was done on overnight visits in Florida.

Canadians spent $196 per night on overnight visits in Nevada, more than in any other state.

Travel to overseas countries sets another record

Canadians made 6.7 million overnight trips to overseas countries in 2006, an increase of 8.2% from the previous high observed in 2005. As a result, Canadians spent $9.9 billion in non-US destinations, up 5.4% from 2005. They also spent 113 million nights in overseas countries, or about 16.7 nights per trip, a slightly lower average than the one obtained the previous year. Spending per night remained stable at $88.

About 35.3% of trips to overseas destinations, or 2.4 million, included at least one overnight stay in Europe in 2006.

Mexico replaces the United Kingdom as top overseas destination

Overnight visits to the United Kingdom fell 13.3% in 2006 and as a result, Mexico became the most visited country by Canadian residents, excluding the United States. Canadians made only 778,000 overnight visits to the UK, compared to 841,000 visits to Mexico. Overnight visits to Mexico increased 5.9%.

However, spending and the number of nights spent in the United Kingdom remained the highest. Canadians spent $942 million over 9.6 million nights in the United Kingdom, which averaged out to 12.4 nights per visit and $98 per night.

Among the top 12 overseas countries visited, Canadians stayed the longest in Hong Kong and China. Average spending per night was also the lowest in those countries.

International travel account

Canada’s international travel deficit soared to an all-time high in 2006, as spending by Canadians in both the United States and overseas countries climbed to record levels.

The deficit – the difference between spending by Canadians abroad and spending by foreigners in Canada – jumped $1.3 billion to an estimated $6.7 billion in 2006. The travel deficit has increased every year since 2002, and in that span, has more than quadrupled.

The burgeoning deficit was the result of record spending abroad. Canadian residents spent an estimated $23.3 billion outside the country, up 5.7% from the previous high recorded in 2005.

Foreigners in Canada spent an estimated $16.6 billion, a 0.5% decline from the previous year.

While there has been little movement in foreign spending in Canada compared to 2001, Canadian spending abroad has gone up 26.1% during the period.

Travel deficit with the United States highest in 13 years

Canada’s travel deficit with the United States climbed to $4.3 billion in 2006, the highest since the early 1990s. Record deficits flirted with the $6.0-billion mark in 1991 and 1992. In contrast, the travel deficit with the United States was as low as $544 million in 2002.

The increase in the deficit, estimated at $1.0 billion, was the result of higher spending by Canadians in the United States and lower spending by residents of the United States in Canada.

Canadian travellers spent a record $12.9 billion in the United States in 2006, up 6.1% from the previous year. Meanwhile, travellers from the United States spent 3.3% less in Canada compared to 2005. Spending by United States residents in Canada slipped to $8.7 billion, its lowest level since 1998.

Travel deficit with overseas hits record high

Canada’s travel deficit with overseas countries climbed to a record $2.5 billion in 2006, an estimated $295-million increase over the previous year. The rise in the deficit was attributable to higher spending by Canadian residents overseas, which climbed 5.2% to $10.4 billion. Over the past 25 years, spending by Canadians overseas has fallen only once, in 1991.

Travellers from overseas countries spent $7.9 billion in Canada, 2.8% more than the previous year.

The Canadian dollar edged up against other major international currencies in 2006, including the euro, the UK pound sterling and the Japanese yen.