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Outbound Canada Travel Trends & Trip Intentions

Jennifer Hendry Senior Research Associate

Canadian Tourism Research Institute

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Topics

• Economic trends and the exchange rate

• Canada’s aging population

• Outbound travel performance – Historical and YTD

• Winter travel intentions

• Short-term outlook for sun destinations – Caribbean, Mexico, USA

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Economic Outlook and the Outbound

Travel Market

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2.6%

2.0%

1.2%

-2.7%

3.4%

3.0%

1.9% 2.0%

2.4%

1.3%

2.3% 2.2%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f 2016f 2017f

Canada’s Real GDP Growth

Source: The Conference Board of Canada

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Provincial Real GDP Growth, 2015

Source: The Conference Board of Canada.

-0.2%

2.0% 1.8% 1.7%

1.3%

2.1% 2.1%

-1.1% -1.2%

3.1%

NL PEI NS NB QC ON MB SK AB BC

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Canadian Population Growth, 2015-2019

Source: The Conference Board of Canada.

1.2%

3.4%

3.8%

5.0%

6.1%

7.5%

5.1%

4.9%

4.2%

Atlantic

QC

ON

MB

SK

AB

BC

North

Canada

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Diversity of Canada’s Population

Source: Statistics Canada, Projections of the Diversity of the Canadian Population, 2006 to 2031

14.1% 18.4% 24.6%

31.4% 36.5%

40.9% 45.2%

48.6% 51.3% 53.6% 55.4%

66.7% 62.2% 54.3%

46.9% 42.0%

36.8% 31.9%

28.1% 25.0% 22.5% 20.5%

1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031

Americas

Europe

Asia

Africa

Oceania

Distribution of the foreign-born population by continent of birth

2006 2031 % change (absolute)

Population (000s) 32,522 42,078 29.4%

Visible minority (000s) 5,285 12,855 143.2%

Rest of the population (000s) 27,237 29,222 7.3%

Source: Statistics Canada, Catalogue number 91-551-X

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Canada’s Population is Aging

• The share of Canada’s population aged 55+ is increasing dramatically.

• Between 2015 and 2019, the proportion of Canadians aged 55-64 will increase 8%, while the share of people aged 65 and older will increase 15%.

• In Ontario, the proportion of residents aged 55-64 will increase 11%

• The proportion of people aged 65+ will increase significantly in both ON (+15%) and QC (14%)

Source: October 2015, CBoC forecast.

% change in population (2019 vs 2015)

Canada ON QC

under 15 5.0% 2.6% 6.4%

15-24 -4.5% -4.4% -8.0%

25-34 4.2% 5.9% 3.1%

35-44 5.8% 3.0% 7.1%

45-54 -6.2% -6.7% -8.3%

55-64 8.4% 10.9% 5.5%

65+ 15.0% 14.8% 13.6%

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More Seniors than Children - First Time in History!

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

population <15

population aged 65+

Source: Statistics Canada, CBoC

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Exchange Rates & Household Spending

• Household consumption is expected to remain stable

• Real disposable income will average 1.9% annual growth

• Loonie lost 20% of its value from 2013-2015

Conference Board of Canada (September 2015 Outlook), Oxford Economics World Outlook.

Economic Indicators (2015-2017)

2015f 2016f 2017f

Real GDP (% change) 1.3% 2.4% 2.2%

Real Disposable Income (% change) 2.5% 1.3% 2.0%

Household Consumption (% change) 2.0% 2.2% 2.1%

CAD/USD (annual average) $0.78 $0.75 $0.79

EUR/CAD (annual average) $1.42 $1.42 $1.35

GBP/CAD (annual average) $1.94 $1.96 $1.86

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Canada: Total Outbound Leisure Trips (‘000 of outbound leisure trips, all destinations)

13

,58

0

13

,75

0

15

,42

0

16

,48

9

17

,84

9

19

,74

1

21

,58

0

21

,29

6

23

,37

6

24

,67

4

26

,39

6

26

,87

2

27

,27

9

26

,91

9

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f

Global Recession

Source: Statistics Canada, CBoC

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Annual Leisure Visits to the Caribbean and Mexico

Source: Statistics Canada, CBoC

1,469 1,650 2,079

2,296 2,329 2,390 2,487 2,334 2,350

707

858

1,022

1,100 1,314

1,407 1,414

1,453 1,511

2006 2007 2008 2009 2010 2011 2012 2013 2014p

Caribbean (000s) Mexico (000s)

Between 2006 and 2014, leisure visits to Mexico grew 10% and leisure visits to the Caribbean grew 6%.

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-11%

-17%

6%

9%

16%

-11%

-1%

2%

13%

5%

-7%

5%

-6%

4%

-11%

-1%

13%

5%

7%

3%

Anguilla

Antigua

Aruba

Bahamas

Barbados

Belize

Bermuda

Cayman Islands

Costa Rica

Cuba

Curacao

Dominican Republic

Grenada

Guatemala

Jamaica

Mexico

Panama

Puerto Rico

St. Kitts/Nevis

St. Lucia

St. Maarten

St. Vincent

2015 Sun Destination Performance (% change, Jan-August 2015 versus 2014)

Source: Country tourism departments and government agencies.

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Winter Travel Intentions

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Winter Travel Intentions • Overall, trip intentions this winter are lower than last year

• Two-thirds intend to spend their longest overnight trip outside the country

• Smaller share plan to travel to Mexico and the Caribbean

62% 65%

41%

65% 67%

41%

67% 69%

38%

61%

77%

41%

65% 65%

34%

Total Trip Intentions Outbound Trip Caribbean/Mexico

2011-12 2012-13 2013-14

2014-15 2015-16

Source: CBoC Annual winter travel intentions survey

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Winter Travel Intentions

• Still a lot of uncertainty; 8% of those planning an outbound trip this winter have not selected a destination, and 6% of those who have selected the Caribbean have not yet determined where they will go

• Demographics keeping intentions from dropping off more drastically; 36% of those planning a winter trip are 55+

• Lower intentions from largest MX/CARIB market (35-54 yrs) who account for close to half of travel to the region

• MX, Cuba, DR will see some growth

• High prices/low dollar will affect other destinations, but higher income travellers are less price sensitive – 35% of travellers planning a trip south have a household income of at least $95k

• One-third of all overseas travellers who are still in the dreaming or investigative phases of their trip planning intend to travel to MX/CARIB

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Travel Outlook: Caribbean Destinations

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1,367,196

2,111,616

2,680,454

3,012,053

3,322,916

905,628

1,348,941

1,386,760

1,608,853

1,729,825

2011

2012

2013

2014

2015p

Caribbean

Mexico

Caribbean and Mexico, Direct Seat Capacity

Source: OAG

Since 2011, direct seat capacity on scheduled carriers has grown at an average annual rate of 22%

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Canadian Visits to Mexico & the Caribbean (thousands of overnight visits each year)

Source: Government of Mexico, Statistics Canada, CBoC

2,487 2,334 2,350 2,405 2,489 2,590 2,650 2,750

1,414 1,453 1,511 1,562 1,619

1,690 1,760 1,850

2012 2013 2014p 2015f 2016f 2017f 2018f 2019f

Caribbean (000s) Mexico (000s)

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Canadian Visits to Cuba, 2008-2019 (000s)

Source: CBoC forecast

818

914 945 1,002

1,072 1,106 1,175

1,235 1,292

1,356 1,428

1,507

2008 2009 2010 2011 2012 2013 2014 2015f 2016f 2017f 2018f 2019f

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Canadian Visits to the Dominican Republic (000s)

Source: CBoC forecast

635 646 658 666 686 684 706 721 733 748 763 782

2008 2009 2010 2011 2012 2013 2014 2015f 2016f 2017f 2018f 2019f

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Canadian Tourism Research Institute

Outbound Canada

Jennifer Hendry Senior Research Associate

hendry@conferenceboard.ca