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Canada's tourism industry gets a boost from stay-at-home vacationers

Jul 05, 2009

"There's no place like home" appears to be an overriding sentiment these days, one that is influencing Canada's tourism sector.

Canadian travellers, seeing sights in their own country, are filling a gap left by Americans, Europeans and Asians who aren't visiting this country in the numbers they used to.

Trips to Canada by all international travellers were down last March by 12.8 per cent over a year earlier. The only exceptions were India, China and France, with no recorded declines.

Higher oil prices, a more robust dollar and an economic downturn all have reinforced a trend since 2001 whereby travel by Canadians increasingly has been driving domestic tourism revenues.

While locals were responsible for two-thirds of all tourism spending eight years ago, by 2008 that had increased to 80 per cent.

Canadians not only are boosting their own domestic industry, a fair number are travelling abroad.

And because Canadians are travelling so frequently to distant shores, this country's tourism industry experienced a record travel deficit last year -- $12.6 billion.

Still, tourism last year was a $74.7-billion industry for Canada, employing more than 663,000 people. Tourism spending grew by 5.5 per cent between 2007 and 2008, the fifth consecutive gain by the sector since 2003.

Tourism is a coveted enterprise because its growth generally outpaces the country's growth in GDP.

The federal government in recent years has put considerable effort into creating a tourism brand -- "Canada, Keep Exploring" -- and offering marketing guidance for tourism operators.

Until 2001, Canada had been experiencing a surge in tourism by non-residents. In fact, foreigners accounted for 4.3 per cent worth of annual growth in tourism revenues compared to 2.6 per cent attributable to home-grown Canadians.

But of course everything in the world changed that year on Sept. 11.

More recently, Canada's relatively strong dollar and a global recession have worked to make Canada a less appealing destination for vacationers from abroad.

On Monday, new numbers showed Canada has now experienced three consecutive quarterly drops in tourism spending -- a phenomenon that hasn't occurred since 9/11.

The tourism commission, in its 2008 report, singled out a particular group of eager travellers for mention.

Canadian baby boomers, less dependent on the business cycle, are shoring up domestic tourism, despite a soft economy and high oil prices, as well as tourism in other countries.

In their prime travel years and looking for different experiences throughout the world, these boomers, encouraged by a stronger loonie, are drawn to foreign travel.

Another important group worth mentioning is the Americans, traditionally a cherished component of Canada's travel market.

Again, the stronger dollar, higher gas prices and financial woes across North America all have been acting to dampen the appeal of a Canadian vacation.

The Western Hemisphere Travel Initiative, which came into effect June 1, requires U.S. travellers crossing the border to have a passport and can only worsen the situation.

This summer, says the tourism commission, 79 per cent of Canadians are planning a vacation but many say they plan to stay close to home. Only 34 per cent of Americans are planning to go on a summer vacation.

Accordingly, Ottawa is running ads targeted to an economy-minded domestic market: "Discover the Canada you don't know for less."

The tourism commission, in its 2008 report, forecasts a boost in profitability for the industry in 2010, the year of Vancouver's Winter Olympics. But that prediction was made before the economic downturn that began last fall.

Canada's tourism industry gets a boost from stay-at-home vacationers
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