American tourists: Where have they gone?

In 2004, Americans once again began travelling to foreign destinations in large numbers, but they seem to have ignored Canada. The number of U.S. international tourists ?all destinations combined ? reached a record high of 61.8 million that year, surpassing the previous record set in 2000. And yet, since the new millennium, Canada has noted a significant decline in the number of U.S. visitors. From 2000 to 2004, this figure fell 21.3% and preliminary data for the January to October 2005 period show a decrease of 8.7% compared to the same period in 2004.

Fewer U.S. visitors to Canada

The marked decline in the number of Americans travelling to Canada is of concern to the entire tourism industry, although the drop has not affected all the provinces in the same way. In fact, from 2000 to 2004, compared to the other Canadian provinces, Quebec appears to have been less affected by the Americans’ decision to desert Canada.

If we do a monthly comparison of U.S. arrivals to Canada in 2000 and 2004 (Graph 1), the slump is proportionally less significant during the summer months (June: -18.8%, July: -16.5% and August: 19%). However, in absolute numbers, losses are the highest during the months of the high season (July: 981,777 visitors and August: -1,079,657 visitors).

Major drop in same-day visitors

It is important to note that 98% of the decline in U.S. visitors to Canada is due to a sharp drop in same-day visitors, a situation that affects Ontario in particular since this province welcomed three-quarters (74.4%) of the total U.S. same-day visitors in 2000 (Table 2). From 2000 to 2004, the number of same-day visitors to Ontario fell by over 7.5 million.

Therefore, if we look solely at the number of tourists (Graph 2), the decline in the U.S. travel market is much lower, proportionally speaking. In fact, from 2000 to 2004, the number of Americans spending one night or more in the country dropped a mere 1.11%. During the same period, Quebec even recorded an increase of 3.38%.

2002: Base year or exception?

In 2002, Canada welcomed a record high of 16.17 million U.S. tourists. This increase of nearly 650,000 tourists compared to 2001 occurred at a time when the number of U.S. travellers to international destinations plummeted 1.3 million. Of course, this extraordinary performance can be explained, in part, by the public’s reaction to the events of 2001: travellers sought safety by staying close to home.

The 2002 increase was fuelled primarily by a jump in leisure travel since the number of business tourists in this record year only reached 1.96 million, a decrease compared to the 2.16 million recorded in 2000 (Graph 3). Furthermore, for the past several years, business travel has made up a proportionally smaller share of Canada’s U.S. travel market.

2005: The true decline begins

Preliminary data for the year 2005 (January to October) illustrate a trend of concern to the entire Canadian tourism industry, particularly that in Quebec.

This drop appears to be due to border markets, because in the first ten months of 2005, the number of American tourists arriving by car dropped 13.5%, while the number of those using other modes of transportation increased 6.4%.

Americans travelling to see the world

In 2004, Americans travelled abroad as never before, surpassing the record set in 2000 (61.8 million vs. 61.3 million). However, during this same period, Canada recorded a decrease of nearly 175,000 U.S. tourists. An analysis of the regions visited (Table 4) demonstrates a major shift in the international travel habits of Americans.

According to Table 4, non-traditional destinations are enjoying an upswing in interest on the part of American travellers. At the same time, traditional destinations (Canada, Mexico and Western Europe) saw their market shares drop sharply from 2000 to 2004 (Graph 4).

Preliminary data from the U.S. government for the period January 1 to September 1, 2005, show that U.S. air traffic to overseas destinations rose 5%. Once again, Central America (+14%), Asia (+10%), South America (+9%) and the Middle East (+8%) recorded increases superior to that of Europe (+3%).

The Canadian tourism industry, which still hopes to repeat the success of 2002, must accept that things will never get « back to normal » because American and global realities have been so profoundly altered.

The situation according to the Canadian Tourism Commission (CTC)

In the fall of 2005, the CTC formed a task force to examine the U.S. market. Its preliminary findings seem to confirm that Canada cannot blame factors like SARS, the war in Iraq, exchange rates or border-crossing issues for the country’s failure to attract U.S. tourists. The Americans interviewed by the CTC note that while they have no specific reasons for staying away from Canada, they are not motivated to come here either. This means that Canada is not successfully distinguishing itself from other destinations in an increasingly competitive field. The CTC’s final report is expected in late January 2006.

Sources:
– Canadian Tourism Commission. « US market taskforce expands mandate, » Tourism, Vol. 002, Issue 11, November-December 2005.
– Ontario Ministry of Tourism and Recreation. « Regional Tourism Profile – Provincial Markets Shares », www.tourism.gov.on.ca/english/tourdiv/research/rtp/2003/
ComparitiveReportsProvinces/index.html
– Statistics Canada. “International Travel Survey,” Catalogue No. 66-001-PIB, January 2000 to October 2005.
– U.S. Department of Commerce, ITA, Office of Travel and Tourism Industries. “U.S. Citizen Air Traffic to Overseas Regions, Canada; Mexico 2005,” www.tinet.ita.doc.gov, 2005.
– U.S. Department of Commerce, ITA, Office of Travel and Tourism Industries. « U.S. Resident Travel Abroad Historical Visitation – Outbound 1994-2004, » July 2005.