International Travel 2007

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Overview of trends 2007

Worldwide international tourism continues its upward trend in 2007

According to the World Tourism Organization (WTO), international tourism reached record levels in 2007, achieving positive growth for the fourth consecutive year.

With international tourism more popular than ever, it has become a major international trade category for many developing countries. Worldwide, only fuel, chemicals and automotive products generate larger export income.

International tourist arrivals (which exclude arrivals by same-day visitors) climbed to 903 million, about 6.6% higher than in 2006. As a result, international tourism receipts reached US$ 856 billion, up 5.6% from the previous year. Including international passenger fares, international tourism generated over US$ 1 trillion in export income.

All regions and sub-regions worldwide posted gains in tourist arrivals, with Asia posting double-digit gains. Emerging regions such as Africa and Central and South America also fared well.

With the increasing popularity of such regions, the tourism industry has truly become a worldwide industry. While the top-15 visited countries accounted for about 98% of all tourist arrivals in 1950 and 75% in 1970, they absorbed only 57% in 2007.

The WTO expects international arrivals to reach the 1-billion mark in 2010. By comparison, it was at about 25 million in 1950.

France remained the most visited country, with 81.9 million international tourist arrivals. The United States, despite ranking third in arrivals, was first in revenues generated by international tourism. This can be explained by the United States' reliance on higher-spending, long-haul travellers, while France (and other European countries) attracts more short-term visitors.

Canada ranked 14^th in international tourist arrivals, down one position from 2006 and its lowest since the introduction of the current collection method in 1980.

Text table 1: International tourist arrivals in the five world tourism regions

Overnight travel from the United States to Canada hits 11-year low

United States residents made about 13.4 million overnight trips to Canada in 2007, down 3.5% from 2006 and the lowest level since 1996. This was the third consecutive annual decrease in overnight travel from the United States and fourth in five years. The downswing began in 2003, during the height of the Severe Acute Respiratory Syndrome (SARS) crisis.

Higher gas prices and an unfavorable exchange rate may have contributed to the decline in overnight travel by US residents in 2007.

Overnight travel from overseas countries highest ever

Overnight travel from countries other than the United States increased for the fourth consecutive year in 2007, and in the process, reached its highest level ever. Travellers from overseas countries made about 4.4 million overnight trips to Canada, up 2.9% from the previous year.

With the events of September 11, 2001 and the SARS crisis in 2003, overnight travel from overseas countries had fallen 27.0% between 2000 and 2003. Since then, it has increased 37.9%.

Chart 1
Overnight trips to Canada

Canadians travelling abroad more than ever

Canadian residents took an unprecedented 25.2 million overnight trips abroad in 2007, an increase of 10.7% from the previous high obtained in 2006. Overnight travel outside the country increased for the fifth consecutive year, and in that span, jumped 42.1%.

Overnight travel to the United States climbed to a 15-year high of 17.8 million trips, up 11.0 % from 2006. Only 1991 and 1992 saw higher levels of overnight travel south of the border.

Travel to overseas countries reached a high of 7.4 million overnight trips, up 9.9% from 2006. Travel to non-US destinations has steadily shown an upward trend, falling only six times since record keeping started in 1972. The last decline was in 2002 (-3.1%) and since then, overnight travel overseas has increased 58.2%.

Chart 2
Overnight trips by Canadian residents

Same-day car travel from the United States slumping

United States residents made 11.2 million same-day car trips to Canada in 2007, down 18.8% from 2006 and the lowest number since record keeping started in 1972. Back then, Americans had made 21.0 million same-day car trips to Canada.

Same-day car travel from the United States has fallen every year since peeking at 27.3 million in 1999.

A combination of factors may have contributed to this latest downswing in same-day car travel from the United States, including enhanced border security subsequent to the events of September 11, 2001, the increase in the price of gasoline and the rising value of the Canadian dollar. In October 2007, the Canadian dollar averaged above US$1.00 for the first time in over 30 years.

Chart 3
Same-day car travel between Canada and the United States

Same-day car travel to the United States on the rise

Canadians made 24.2 million same-day car trips to the United States in 2007, a 3.3% increase from the previous year and the highest number since 2000.

The bulk of the increase came in the latter half of the year, as the Canadian dollar inched towards parity. In the first six months of 2007, same-day car travel south of the border fell 2.7% compared to the same period in 2006. The second half yielded a 9.3% increase.

Chart 4
Same-day car travel between Canada and the United States, monthly, 2007

Despite the recent increases, the annual figures remain much lower than the 59.1-million peek reached in 1991, at the height of the cross-border shopping phenomenon. While the Canadian dollar was not near parity at that time – it averaged 87.3 US cents in 1991 – it was at the end of a 5-year long upswing. Also, 1991 saw the introduction of the Goods and Services Tax.

United States market

United States residents made 10.4 million overnight trips to Canada for pleasure purposes in 2007, about 3.1% fewer than in 2006. Overnight business-related travel edged up 0.1% to 2.0 million trips while travel for other purposes, which includes shopping, dropped 13.2%.

While about 2 out of 3 overnight pleasure trips to Canada were made by car, about 3 out of 4 overnight business trips were made by plane.

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.

Car travel represented 59.5% of overnight trips from the United States, while overnight travel by plane represented 28.2%. Both fell compared to 2006.

The 3.5% drop in overnight travel from south of the border resulted in a decline in spending from United States residents. Americans spent $7.0 billion in Canada, down 3.2% from 2006. US residents stayed 53.3 million nights in Canada, an average of 4.0 nights per overnight trip, unchanged from the previous year. Average spending per night remained stable at $132.

Overnight travel from top states down

Overnight travel from 10 of the top 15 states of origin, including the top five, declined in 2007. The state of New York, the largest source of American tourists travelling to Canada, saw a 2.9% drop in overnight trips, falling to 1.7 million. Among the top 15 states of origin, California recorded the biggest drop in overnight travel to Canada (-11.0%) while Illinois posted the largest increase (+12.2%).

Text table 2: Top 15 states of origin for U.S. tourists to Canada

Almost half of all overnight trips from the United States include an overnight visit to Ontario

Of the 13.4 million overnight trips from the United States to Canada in 2007, about 6.6 million included an overnight visit to Ontario. British Columbia was the second most visited province, with 3.4 million overnight visits. Most provinces saw declines in overnight visits from the United States.

Text table 3: Overnight province-visits by United States residents

Overseas market

Increased overnight travel from overseas countries was the result of gains in pleasure travel to Canada. Pleasure travel, which represents about 3 out of 4 overnight trips from overseas countries, increased 5.5% compared to 2006. Business travel to Canada fell 9.4%.

Travellers from overseas countries spent $6.0 billion on overnight trips to Canada, about 4.2% more than the previous year. They stayed 68.8 million nights in Canada, or 15.6 nights per overnight trip, slightly less than the previous year. All in all, travellers from overseas countries spent $87 per night on overnight trips to Canada, a $3 increase from 2006.

Over half of all tourists from overseas countries come from Europe

Europeans made 2.3 million overnight trips to Canada in 2007, a 3.3% increase from 2006. Over half of all travellers from overseas countries came from Europe.

Asia was the only region to post a decrease (-2.4%) in overnight travel to Canada, while Oceania had the largest increase (+16.9%).

United Kingdom largest overseas market by far

The United Kingdom remained Canada’s most important overseas market, with its residents making 891,000 overnight trips to Canada in 2007, a 5.9% increase compared to the previous year. This was more than double the numbers from France, which replaced Japan as Canada’s second largest overseas market. About one in five travellers from overseas countries came from the United Kingdom.

Among the top 12 overseas markets, Australia had the largest increase in overnight travel to Canada (+16.7%). Japan had the largest decrease (-14.7%). Taiwan fell out of the top 12 with a 14.5% decline in overnight travel, replaced by Switzerland which had a 1.9% gain.

Text table 4: Canada's top 12 overseas tourist markets

Ontario remains most visited province

Travellers from overseas countries made 2.0 million overnight visits in Ontario in 2007, the most in any province and about 510,000 more than in second place British Columbia. Quebec rounded out the top 3 with 1.1 million overnight visits. About one in four overnight visits to Quebec were from travellers from France.

Outbound market

Both outbound pleasure and business travel increased in 2007. Pleasure travel, which represented 78.5% of all overnight trips by Canadian residents abroad, climbed 10.6%. Business travel, which accounted for 13.0% of overnight trips outside Canada, increased 7.5%.

Like in 2006, seven out of 10 overnight trips by Canadian residents were to the United States. However, Canadians travelling outside the country two weeks or longer slightly favored overseas destinations rather the United States. As a result, spending by Canadians on overnight trips abroad was almost evenly split between the United States and overseas countries.

Text table 5: Overnight trips by Canadians abroad, 2007

Ontario residents travelled the most outside the country, making 46.2% of all overnight trips abroad in 2007. Most of the provinces posted double-digit increases in overnight travel abroad, except for Quebec (+9.0%) and Ontario (+9.8). Overnight travel by residents of the Canadian territories fell 22.0%.

Overnight travel to the United States highest since 1992

Canadian travel to the United States reached 17.8 million overnight trips in 2007, up 11.0% from 2006 and the highest level in 15 years.

As a result of the increase in travel, spending on overnight trips south of the border climbed 12.9% to $11.6 billion compared to the previous year. Canadians stayed 131 million nights in the United States, up 9.0% from 2006. Average spending per night increased from $85 to $89 while the average length of stay fell slightly to 7.4 nights per overnight trip.

About 3 out of 5 overnight trips to the United States, or 10.6 million, were by car, while overnight travel by plane climbed to a high of 5.9 million.

Overnight visits increase in all top 12 states

All top 12 states had increases in overnight visits by Canadian travellers in 2007, with all but three of them posting double-digit gains. Canadians made 3.0 million overnight visits in New York State, up 14.3% from 2006 and more than in any other state. In New York State alone, Canadians spent $918 million and stayed 8.2 million nights. Yet despite being the most visited state, New York ranked third in dollars and nights spent during overnight visits by Canadians.

Canadians spent $2.8 billion in Florida, and stayed 42.9 million nights. Both figures were significantly higher than those for any other state. By comparison, in both cases, California came second, with Canadians spending $1.0 billion and staying 9.8 million nights in that state.

On average, Canadians stayed the longest in Florida (17.2 nights per overnight visit) and spent the most in Nevada ($195 per night).

Text table 6: Top 12 U.S. states visited by Canadian residents, 2007

More than 1 in 3 Canadians travelling overseas visit Europe

Canadians made 2.6 million overnight trips to Europe in 2007, more than to any other region. Far behind was the region of Bermuda and the Caribbean, with Canadians taking 1.8 million trips there.

South America was the only region to post a decline in travel by Canadian residents. Travel to South America fell 15.1%, as possibly more Canadians chose the region of Central America as their main destination. Travel to Central America jumped 38.3%.

Overall, Canadians made 7.4 million overnight trips overseas, 9.9% more than the high observed in 2006. Canadians spent $10.9 billion on trips overseas and stayed 122 million nights, up 8.5% and 9.9% respectively from the previous year.

On average, Canadians stayed 16.5 nights per trip overseas and spent $89 per night.

Overnight visits to Mexico reach 1 million

Canadians made 1.0 million overnight visits to Mexico, more than to any other country. It was the first time that overnight visits to an overseas country reached the 1-million mark. This was the result of a 21.1% increase in overnight visits by Canadians.

The top 12 visited overseas countries posted gains in overnight visits by Canadian travellers. In fact, nine of them posted double-digit increases. Overnight visits to the Dominican Republic jumped 28.7%.

Despite the record number of overnight visits to Mexico, Canadians spent the most on overnight visits in the United Kingdom. They also stayed more nights in the United Kingdom than in any other overseas country. Canadians spent $1.1 billion in the United Kingdom and stayed 11.6 million nights.

Text table 7: Top 12 overseas countries visited by Canadian residents, 2007

International travel account

Canada's international travel deficit hit a new high in 2007, in the wake of substantial gains in travel spending by Canadians abroad.

The deficit (the difference between spending by Canadians abroad and spending by foreigners in Canada) reached $10.0 billion, up from the previous high of $6.8 billion in 2006. In contrast, the deficit was as low as $1.7 billion in 2002.

Higher travel spending abroad fuelled the burgeoning deficit. Canadians spent a high of $26.7 billion outside the country in 2007, a 13.9% increase from 2006.

At the same time, foreign spending in Canada edged up 0.1% to $16.6 billion. Lower spending by United States residents in Canada offset most of the increase in spending by travellers from overseas countries.

Travel deficit with the United States hits a new high

Canada's travel deficit with the United States climbed to $7.0 billion, about $2.7 billion higher than in 2006. In the process, it broke the previous high set in 1991 by $1.0 billion.

The record deficits of 1991 and 2007 have many similarities, as both were fuelled by high travel spending by Canadians in the United States. In both cases, economic factors contributed to these increases in travel spending.

In 1991, the arrival of the Goods and Services Tax and a then-peaking Canadian dollar were the likely catalysts for a surge in cross-border shopping in the United States, which generated record spending at that time. In 2007, a Canadian dollar inching towards parity likely contributed to the increase in travel spending, both on same-day and overnight trips. The loonie reached parity with its US counterpart on September 20, 2007.

Travel spending in the United States climbed to $15.3 billion, a jump of 17.4% from 2006. Automobile purchases in the United States contributed significantly to the increase, as the number of units imported by Canadian travellers nearly doubled in 2007.

The exchange rate may also have hampered spending by US residents in Canada. They spent $8.3 billion in Canada, a 4.6% decrease from 2006 and the lowest level since 1997.

Record travel by Canadians causes ballooning deficit with overseas countries

Canada's travel deficit with overseas countries reached a high of $3.1 billion, a $579 million increase from 2006. The rise in the deficit was attributable to higher spending brought on by record travel to non-US destinations.

Canadian residents spent $11.4 billion in overseas countries, a 9.6% jump from 2006. This was partially offset by an increase in travel spending by residents of overseas countries in Canada. They spent $8.3 billion in Canada, a 5.3% increase from 2006.

Chart 5
Canada's international travel deficit