Canada. Decline in Tourism spending

Tourism spending in Canada declined 1.3% in real terms in the first quarter of 2009, as outlays by both Canadians and international visitors fell.

This was the first time tourism spending has fallen for three consecutive quarters since 2001, when the tourism sector, already in a downturn, was hit by the events of September 11 and their aftermath. During that contraction, tourism spending fell a cumulative 5.3% in real terms. Subsequently, with the severe acute respiratory syndrome (SARS) outbreak, tourism demand fell 5.8% over the first and second quarters of 2003. Tourism spending has declined a cumulative 2.4% so far in the current downturn.

Spending by international visitors drops sharply

Spending by international visitors fell 5.7% in the first quarter of 2009. This was the 14th decline in 17 quarters, and the sharpest decline since the SARS outbreak during the second quarter of 2003.

International visitors spent less on all tourism commodities. Outlays on transportation were notably weak, down 8.0% from the previous quarter. Consumption of vehicle fuel fell 10.3%, as the number of same-day car trips from the United States continued down. Spending on food and beverage services was also notably lower (-8.0%).

Canadians' spending on tourism in Canada edged down 0.1% in real terms in the first quarter of 2009, after modest declines in the previous two quarters. This was the first time domestic tourism spending has declined for three consecutive quarters since 2001.

Spending on transportation was down 1.2% for the quarter. Fewer numbers of Canadians travelling abroad contributed to the weakness in transportation, as outlays on passenger air transportation fell 2.5% in real terms.

Overnight travel within Canada was up, on the other hand, as indicated by higher spending on accommodation. Gains were also registered in spending on vehicle rentals and gasoline, food and beverages and recreation and entertainment.

Tourism gross domestic product (GDP) contracted 0.9% in the first quarter of 2009, following two negative quarters in the second half of 2008. Tourism GDP was lower across all industries, except for the accommodation industry, which recorded marginal gains.

Tourism employment fell 0.4% in the first quarter of 2009, driven by job losses in the travel services, food and beverage services and air transportation industries. Tourism jobs advanced in the accommodation and recreation and entertainment industries.

Source:Statistics Canada, June 29, 2009

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