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Canadian Travel to the U.S.

Canadian Travel to the U.S. Presented to: Discover America Committee-- CANADA. Presented by: MARK BROWN Office of Travel and Tourism Industries International Trade Administration U.S. Department of Commerce October 2010. Agenda for Today. Fun Facts about Canada Big to Small

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Canadian Travel to the U.S.

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  1. Canadian Travel to the U.S. Presented to: Discover America Committee-- CANADA Presented by: MARK BROWN Office of Travel and Tourism Industries International Trade Administration U.S. Department of Commerce October 2010

  2. Agenda for Today Fun Facts about Canada Big to Small Global travel trends Canada outbound volume and trends Canada to the U.S. volume and trends Canada’s importance to the U.S. travel industry Visitation to U.S. states Canadian visitor profile update and trends Looking ahead Primer on the Travel Promotion Act Q & A

  3. Did You Know?Canada Myth-Buster Style China, China, ChinaCanadian visitation to 21 states exceeds total Chinese visitation to the U.S.19 million Canadians in hand is worth more than 1.3B Chinese in the bush. U.K., U.K., U.K.More Canadian air travelers to the U.S. than visitors from the U.K. Canada is 1-1-1#1 visitors ranking#1 visitor spending ranking (attained in 2007)#1 travel balance of trade surplus ranking (attained in 2008) Best “Geo Equity”All U.S. states benefit from Canadian travelers. Best equity of any country.

  4. OTTI’s Canada Travel Program • Dedicated OTTI Research Analyst. • Monthly U.S. Inbound / Outbound visitor volume by travel segments(with ongoing summary). • Annual Report (comprehensive visitor profile). • Dedicated section on TINET website. Substantial addition of historical tables and analyses. • Nurture relationships with Statistics Canada, CTC, CB-C, CS offices, DiscoverAmerica Committee-Canada. • Travel & Tourism Advisory Board consideration for marketing and policy programs. • WHTI tracking on monthly basis. • Monitor demographics / economy changes. • Your head cheerleader as the Travel Promotion Act of 2009 developmentsunfold.

  5. Global Travel Trends

  6. World Tourism Arrivals & Receipts(1980-2010) 2009 880m $852b 2010 YTD +7% Source: U.N. World Tourism Organization

  7. Top Ten Country Rankings of GlobalVisitors and Receipts (2009) The United States leads the world in global travel and tourism exports (spending receipts) and ranks 2rd in global visitation. Destination 2009 World Destination 2009 World Rank Country Receipts* Share Country Visitors Share ($bil) (%) (mil) (%) All Countries $852 All Countries 880 1 United States $110 11.7% France 74 8.4% 2 Spain $62 6.5% United States 55 6.2% 3 France $57 5.9% Spain 52 5.9% 4 Italy $46 4.8% China 51 5.8% 5 China $41 4.3% Italy 43 4.9% 6 Germany $40 4.2% United Kingdom 28 3.2% 7 United Kingdom $36 3.8% Turkey 26 2.9% 8 Australia $25 2.6% Germany 24 2.8% 9 Turkey $22 2.3% Malaysia 24 2.7% 10 Austria $22 2.3% Mexico 22 2.4% U.S. Air Carriers Source: U.N. World Tourism Organization. * Latest data available and excludes air passenger fares ($26.4 billion for U.S. alone in 2009). World shares based on unrounded data.

  8. Spending Update from • VISA: 20% RISE IN U.S. INBOUND TOURISM SPENDING. A new report from Visa Inc. shows the tourism industry has begun to rebound during the first six months of 2010. From Jan. 1 to June 30 of this year, spending by international visitors to the U.S. on their Visa‐branded payment cards was up 20% over the comparable period of 2009. At the same time, Americans are spending at higher levels when traveling internationally: Spending by U.S. travelers abroad on Visa cards was up 9.3% in the first quarter of 2010 compared to the same period in 2009. Total first‐half visitor spending in the U.S. for Canada was $4.6 billion, up 22%; the U.K. was $1.2 billion, up 16%; Japan $387 million, up 3%; Mexico $819 million, up 24%; and Brazil $835 million, up 73%. (www.TravelPulse.com, 8/31) • However, DOC/Bureau of Economic Analysis reports international spending +8% through June and +10% through August.

  9. Traveler Volume from Canada to the U.S.(stays of 1 or more nights) 2010 YTD INCREASE is 13% through July, but should settle somewhat lower by year-end. Source: Statistics Canada.

  10. Trends in Travel from/to Canada(stays of 1 or more nights) Source: Statistics Canada.

  11. Canada Outbound / U.S. Shareannual growth rates 1999-2010YTD--1+ nights Canadians have been traveling outside Canada! U.S. performance trailed non-U.S. performance in 9 of the past 11 years. Not so in 2010!

  12. Canadian Outbound Traveler Volume(percent change same month from previous year) Outbound to the U.S. is often inconsistent with outbound to the rest of the world in magnitude…and recently in direction of change. Outbound to the U.S. was 70% of all outbound in 2008—a proportion that has declined for a decade. 06 /05 07 / 06 08 / 07 09 / 08 10 / 09

  13. Canada to U.S.12-month moving average The 12 consecuting months of decline in 2008/2009 has been matched by 8 consecutive increases in 2009/2010. The growth still has momentum…

  14. Where are Canadians Traveling? After U.S., all other countries are 1.0 million or fewer. Top countries: Mexico, U.K., France, Cuba, Dominican Republic, Germany, Italy, Netherlands, China, and Spain. High growth rates for Mexico, Cuba, DR, China, Spain, HK.

  15. Top Origin Markets forInternational Travelers to the U.S. Origin of Visitor 2009p 09 / 08 10/09 AUG. YTD (000s)(% change) (% change) International Total * 54,958 -5% 12% 1Canada 17,973 -5% 12% 2 Mexico 13,164 -4% 12% Overseas ** 23,756 -6% 11% 3 United Kingdom 3,899 -15%-2% 4 Japan 2,918 -10% 20% 5 Germany 1,687 -5% 2% 6 France 1,204 -3% 8% 7 Brazil 893 16% 36% 8 Italy 753 -3% 12% 9 South Korea 744 -2% 48% 10 Australia 724 5% 27% * International travelers include all countries generating visitors to the U.S. ** Overseas includes all countries except Canada and Mexico. Record year for travel to U.S.

  16. Top Origin Markets forInternational Travelers to the U.S. Origin of Visitor 2009p 09 / 08 10/09 AUG. YTD (000s)(% change) (% change) • 11 Spain 597 -9% 9% • India 549 -8% 18% • Netherlands 548 -10% 3% • China (PRC) 525 6% 57% • Venezuela 507 0%-5% • Colombia 425 1% 19% • Ireland 411 -23%-14% • 18 Argentina 356 12% 21% • Switzerland 356 4% 9% • Sweden 324 -18% 12% Record year for travel to U.S.

  17. Top Ten Travel Export Markets(2009 & record receipts/year) Total Travel Record Year Receipts Travel Record Origin Country 2009 Receipts Set ($bil) ($bil) Canada $16.13 $18.37 2008 Japan $13.05 $17.80 1995 United Kingdom $11.43 $16.72 2008 Mexico $8.05 $9.74 2008 Germany $5.57 $6.68 2008 Brazil $4.57 $4.16 2009 France $4.12 $4.78 2008 China $3.60 $3.61 2008 India $3.57 $4.29 2008 Australia $3.42 $3.73 2008 U.S. TOTAL $120.34 $141.38 2008

  18. International Travel to The U.S. in Perspective U.S. 4% of travelers 17% of travel spending (and…employment, payroll, taxes) 21% of all lodging, 13% of all sightseeing services, 10% of all gaming,2%-4% of all restaurants, recreation/entertainment, sports. Orlando 6% of travelers 17% of spending Large % of lodging NYC 18% of travelers 41% of spending 52% of lodging

  19. Importance of the Canadian Travel Market to the U.S. Canada accounts for 32.7% of U.S. international visitors and 13.4% of visitor spending. …and... Spending had been growing at high rates for several years to produce consecutive records….but tumbled 12% in 2009…but in 2010… For many destinations, Canadian visitation occurs in non-peak seasons and helps to distribute visitors more uniformly throughout the year. All states benefit from Canadian travelers! Geographic equity is best among origin countries (27 states of 2+% of total visitors). Rankings: #1 visitors (17.97 M) #1 spending ($16.13 B) #1 travel balance of trade surplus ($9.91 B)

  20. Key Travel Characteristics of Canadian Travelers(2009) Main Trip Purpose 60% Leisure (49% holiday, vacation; 5% 2nd home; 6% events) 19% Visit Friends or Relatives (VFR) 11% Business (4% meetings; 5% convention; 2% other work) 10% Other (3% pers., 1% transit; 1% study; 3% shop; 2% other) Origin Province Ontario 39% of population but 45% of travelers. BC also higher share of visitors than population (13% vs. 17%). State Destinations A few destinations dominate the numbers. Florida is 15% of visitors, but 33% of visitor-nights due to snowbirds. Every U.S. region and state was down for 2009 in visitors, visitor-nights, and spending.

  21. Top U.S. State DestinationsVisitors, Visitor-Nights, and Spending (2009) Visitor- U.S. State Visitors Nights Spending (millions) (millions) ($millions) TOTAL U.S. (NET) 17.98 142.62 $11.031 1 New York 2.95 8.33 $921 2 Florida 2.64 47.45$3,140 3 Washington 2.06 5.84 $475 4 Michigan 1.29 3.35 $295 5 Nevada 1.29 5.86 $1.120 6 California 1.23 10.78 $1,143 7 Maine 0.84 2.79 $265 8 Pennsylvania 0.76 1.86 $148 9 Vermont 0.74 2.12 $161 10 Massachusetts 0.65 2.43 $264

  22. Key Travel Characteristics of Canadian Travelers (continued)(2009) Transportation (mode of entry into U.S.) 60% auto (34% plane; 3% bus; 3% other). 71% of business travelers flew. Accommodations 56% hotel/motel (16% friends/relatives; 10% camp/trailer/cabin). Hotel/motel differs by purpose (88% bus.; 57% leisure; 29% vfr). Stay Length 37% of Canadian state-visits are day trips. Among overnight trips: 10% are 1-night trips. 6% are 3 weeks or longer. 3+ weeks accounts for 40% of visitor-nights. 7.93 nights average stay length, 9.55 leisure…but this average is misleading…

  23. Canadian Nights in the U.S.(among overnight LEISURE visitors--60% of total state visits--2009)

  24. Key Travel Characteristics ofCanadian Travelers -- continued(2009) Spending (source: Statistics Canada; all records) $11.0 billion (excludes fares to travel to the U.S.) $1,320 per party $614 per visitor $77 per visitor per night Of the 76% of spending reported with detail: 34% accommodations 22% food & beverage 18% other (souvenirs, shopping, etc) 13% transportation (in U.S.) 12% entertainment

  25. Canadian Activity Participation Rateswhile in the U.S. (2009) Activity Total Business VFR Pleasure Other Sum of all 18 activities 348% 233% 341% 392% 225% Go Shopping 73% 53% 69% 78% 73% Go Sightseeing 45% 33% 35% 54% 25% Visit Friends Or Relatives 37% 16% 95% 24% 31% Participate Sports/Out. Activities 32% 12% 24% 40% 17% Go To A Bar Or Night Club 23% 35% 15% 24% 17% Visit A Historic Site 22% 17% 18% 25% 11% Visit A Nat. Or State Nature Park 17% 8% 12% 22% 8% Visit A Museum Or Art Gallery 16% 14% 14% 18% 8% Attend Cultural Events 13% 9% 10% 15% 7% Go To A Casino 13% 7% 5% 17% 7%

  26. Activity Participation Rates (2009) (continued) Activity Total Business VFR Pleasure Other Visit A Theme Park 12% 5% 6% 16% 2% Visit A Zoo, Aquar. / Bot. Garden 11% 6% 9% 13% 4% Golfing 9% 3% 6% 12% 2% Attend Sports Events 9% 6% 9% 10% 5% Attend Festivals Or Fairs 8% 6% 7% 9% 3% Water sports (Canoe, etc.) 6% 2% 5% 7% 3% Downhill Skiing Or Snow Boarding 2% 0% 1% 3% 1% Fishing 2% 0% 2% 3% 1% No Activity Stated 10% 25% 6% 7% 13%

  27. Looking Ahead

  28. Outlook for Canada Travel to the United States http://redkid.net/generator/8ball/

  29. Outlook for Canada Travel to the United States http://redkid.net/generator/8ball/

  30. Traveler Volume from Canada to the U.S.(stays of 1 or more nights) 2010 YTD INCREASE is 13% through July, but should settle somewhat lower by year-end. Source: Statistics Canada.

  31. Factors for 2010 and BeyondEconomy Unemployment about 8.1%and improving-ish.A year ago 8.7%. GDP up 3.7% in September. Down 2.6 in 2009. Household finances strong-ish Household wealth strong-ish. Near-retirees on track regarding retirement planning. Inflation about 1.7% in September (annual rate)a year ago -1% Mortgage / credit card debt??? Unemployment Rate

  32. Factors for 2010 and BeyondExchange Rate Mark makes presentation to DA-Canada 2008

  33. Factors for 2010 and BeyondExchange Rate Mark makes presentation to DA-Canada 2009

  34. Factors for 2010 and BeyondExchange Rate

  35. Factors for 2010 and Beyond + Economy + Currency exchange rate +- WHTI + New U.K. Air Passenger Duty (APD) +- Travel Promotion Act — U.S. destination marketing levels — Low and slowing growth of U.S. economy (but much of the impact is from a growth in U.S. imports (Canada a beneficiary).

  36. Travel Promotion Act of 2009 • Dates: • Passed on February 25, 2010, as Section 9 of H.R. 1299, United States Capitol Police Administrative Technical Corrections Act of 2009 • Signed into law by President Obama on March 4, 2010. • Subsequently amended as Section 5 of H.R. 5623, Homebuyer Assistance and Improvement Act of 2010. • Establishes the Corporation for Travel Promotion • a nonprofit entity, to communicate U.S. entry policies and otherwise promote leisure, business and scholarly travel to the United States. • Authorizes the Secretary of Commerce, in consultation with the Secretaries of State and Homeland Security, to appoint the Corporation’s board of directors, review and approve the Corporation’s annual objectives, and transmit the Corporation’s report to Congress. • Funds the Corporation from the collection of a fee assessed on travelers from visa waiver countries ($14.00) in the completion of a form under the DHS requirement for the Electronic System of Travel Authorization (ESTA).

  37. Travel Promotion Act of 2009 • Establishes an Office of Travel Promotion • within the Commerce Department to serve as a liaison to the Corporation and be responsible for a broad range of additional activities. • Authorizes a major expansion of the research programs • currently administered by the International Trade Administration’s Office of Travel and Tourism Industries. • The intent of the bill • To increase international travel to the United States by improving the image of the United States around the world, thereby creating jobs and stimulating economic growth. • An independent analysis by Oxford Economics found that the legislation could help create more than $4 billion in consumer spending annually and generate 40,000 new U.S. jobs. According to the Congressional Budget Office, the program will reduce the federal budget deficit by $425 million in the next 10 years.

  38. Travel Promotion Act of 2009Corporation for Travel Promotion Funding Details • In year one, the Corporation is to be funded from a drawdown of up to $10 million. • In year two, the drawdown is up to $100 million with a 50% match by industry (80% of the match can be in-kind, 20% must be in cash). • In years three, four and five, the drawdown is up to $100 million with 100% industry match. • In year six and beyond, funding of the Corporation would be by industry assessment only as the Act sunsets in 2015.

  39. Corporation for Travel PromotionBoard of Directors Caroline BetetaPresident and CEO, California Travel & Tourism Commission, CA Stephen CloobeckChairman and CEO, Diamond Resorts International Las Vegas, Nev. George FertittaCEO, NYC & Company, New York, N.Y Daniel Halpern, President and CEO, Jackmont Hospitality, Inc. Atlanta, Georgia Tom KleinPresident, Sabre Holdings, Southlake, Texas David Lim Chief Marketing Officer, Amtrak, Washington, D.C. Mark SchwabSenior Vice President-United Airlines, Chicago, Illinois Diane ShoberTourism Director, State of Wyoming, Cheyenne, Wyo. Al Weiss President, Worldwide Operations, Walt Disney Parks and Resorts Orlando, Florida Roy YamaguchiOwner and Founder, Roy’s Restaurant, California Lynda S. ZengerlePartner, Steptoe & Johnson LLP, Washington, D.C.

  40. Summary of Key Findings Global Travel: Strong +7% rebound YTD led by Asia and South America. Canada Travel: Strong 13% rebound YTD (Aug) to USA following 5% decline in 2009. Non-U.S.2010 YTD also up, but only +3%. New record THIS YEAR is assured strongly likely highly possible! Canada Rankings: #1 visitors, #1 spending, #1 travel trade balance. Profile: travel attributes mostly stable. Watch DEcreases in travel party spending, but increases in casino, souvenir/shopping spending, average stay length. Forecast: Favorable outlook>>economy, currency exchange rate, TPA!! WHTI: Phase III June 2009 full implementation now a year behind us. Travel Promotion Act : Potential for significant level of marketing effort in a year or two and subsequent increase in visitor volume/spending. MVB is head cheerleader for promoting the USA to the Canada market.

  41. Summary of Why Canada! Top dog: #1 in visitors and visitor spending and travel trade balance. Geo-equity: Best of any visitor origin country. Canada marketing (was) on rise: DiscoverAmerica.com, state-level efforts. Shoulder season: helps fulfill many destinations’ expansion goals. Open wallets: $$$ per-visitor per-night grew fast until 2009. Comparisons to other countries is not valid due to short-term stays bringing down average. Economics: looking much better, especially compared to Europe. International!!!!: Canada is a big part of the general story of international (growing) importance. 2009 perhaps an anomaly to long-term trend. Domestic industry may be mature from an industry life-stage perspective???

  42. Thank You! Questions? MARK BROWN Office of Travel and Tourism Industries International Trade Administration U.S. Department of Commerce Phone: 202-482-4754 mark.brown@trade.gov http://tinet.ita.doc.gov

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