IVIS Country Analysis – Canada

CANADA

12,660,000 Arrivals in the United States

Loss of 308,000 over 2002, -2.4%

67.7% of all Canadian Outbound Travel

0.1% over 2002

SUMMARY

Total outbound travel from Canada declined by 2.5 percent in 2003. This decline was likely due to the outbreak of Severe Acute Respiratory Syndrome (SARS) in Asia and parts of Canada. SARS virtually halted travel in the Asia-Pacific region and had a strong negative impact on Canadian outbound travel as well. Canadian arrivals to the United States declined 2.4 percent in 2003 over 2002. The majority of the total outbound travel market still comes to the U.S., giving the U.S. a market share (MSI) of 67.7 percent. The U.S. market share (MSI) was flat in 2003 over 2002, remaining at its lowest level this decade.

After weathering the global economic slowdown of 2002, Canada's economy was negatively affected by the results of SARS in 2003. Real GDP expanded only 1.7 percent over 2002. Private consumption grew more robustly, registering a 3.8 percent increase. Consumer prices rose a modest 2.8 percent over 2002 levels. The Canadian unemployment rate rose slightly to 7.7percent. The Canadian dollar appreciated against the U.S. dollar, up 12.2 percent. Had it not been for the impact of SARS on the travel market in 2003, the strength of the Canadian dollar would have increased arrivals to the U.S. for the year.

Over two thirds (67.7%) of all outbound travel from Canada the United States was by far the most popular country destination in 2003. Other popular country destinations for Canadian international travelers in 2003 were the United Kingdom (3.5%), Mexico (3.2%), and France (3.1%) Italy (2.0%), and Cuba (1.8%). Among these countries, only Italy, Cuba, and the UK gained share.

Source: Global Insight

Regionally, the United States was by far the most popular destination for Canadian outbound travel, dominating more than two thirds (67.6%) of the market in 2003. Europe was the second most popular destination for Canadian outbound travel, capturing 13.7 percent of the market, followed by Asia at 6.6 percent. The Caribbean captured 5.6 percent of this market, while South/Central America earned 1.5 percent and Africa earned 1.1 percent of Canadian travel in 2003. Among these regions, the Caribbean and Africa both gained market share in 2003.

Source: Global Insight