01/09/09, 02:26:32 UTC

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Travel abroad surges, Canadian tourism frets

reportonbusiness.com

Canadians are spending record amounts on travel in the United States, flocking to places like Maine, Vermont and Ohio because of the strong dollar, woeful tidings for this country's tourism industry.

Spending outside the country swelled 4.9 per cent in the third quarter, hitting $6.7-billion from the second quarter, Statistics Canada said Wednesday. The spree, combined with sliding U.S. visitors, caused a record travel deficit, or the difference between spending by Canadians abroad and by foreigners in the country.

Travel spending by Canadians abroad has ballooned in 11 of the last 12 quarters, spurred by healthy economic conditions and a strong currency at home. But more Canadians are flocking to other countries just as fewer Americans are coming here, a worrisome trend for Canada's $67-billion tourism industry.

“It's very much a concern,” said Randy Williams, chief executive of the Tourism Industry Association of Canada, in an interview from Ottawa.

Five years ago, Canada's travel deficit stood at $1.5-billion. Last year, that had swelled to $7.2-billion. This year, it's expected to hit a record $7.7-billion, Mr. Williams estimated.

Dwindling American visitors, deterred by a currency that makes Canada more expensive, are the main reason for the gap. So far, Canadian and other international travellers have picked up some of the slack, but Americans still account for three out of every four visits here.

Mr. Williams frets that now Canadians could start eschewing domestic travel in favour of trips abroad, which could have serious consequences for the industry and the broader economy.

“If we get a slippage in those other areas, combined with the American slippage, we're going to have real challenges in remaining profitable as an industry.”

The Canadian travel industry employs 1.6 million people.

Canada's travel deficit with the United States now stands at its highest level in almost 16 years.

Separate Statscan figures for the second quarter show Canadians are still flocking to New York and Florida, but the largest increases are to Vermont, Maine and Ohio. Pleasure trips account for more than half of overnight trips.

Spending by Canadians in the United States is soaring. Second-quarter spending jumped 8.8 per cent, while average spending per overnight trip rose to $765 from $740, Statscan said.

The U.S. isn't the only destination that's beckoning. The top three overseas destinations for Canadians making overnight visits were the United Kingdom, Cuba and France.

The largest increases were to the Dominican Republic, Ireland and the United Kingdom. Spending on overnight trips leapt 13.4 per cent from the same period last year.

On the flip side, most overseas visitors come from the U.K., though travel from Asia, especially Japan, to Canada declined. Visits from Japan tumbled 16.6 per cent in the second quarter from 2006.

 Printable Version  | published Nov 28, 2007