Canadian Travel to the U.S.

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 2012

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 Update Q & A

3. Did You Know?Canada Myth-Buster Style China, China, ChinaCompared to China, Canada’s 2011 volume is 19X, spending is 3X, and visitor volume growth to 2016 should be 2X. The bulk of Canada visits are “influence-able.” Similar for China??? U.K., U.K., U.K.More Canadian air travelers to the U.S. than visitors from the U.K. Inbound is flat, just like their apartments. 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 geo-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. • Monitor demographics / economy changes. • Your head cheerleader as the Travel Promotion Act of 2009 developmentsunfold.

5. Global Travel Trends

6. World Tourism Arrivals & Receipts(1980-2011) 2011 982m 2011 $1030b Source: U.N. World Tourism Organization

7. Top Ten Country Rankings of GlobalVisitors and Receipts The United States leads the world in global travel and tourism exports (spending receipts) and ranks 2rd in global visitation. Destination 2011 World Destination 2011 World Rank Country Receipts* Share Country Visitors Share ($bil) (%) (mil) (%) All Countries $1,030 All Countries 982 1 United States $116 11.3% France 80 8.1% 2 Spain $60 5.8% United States 62 6.3% 3 France $54 5.2% China 58 5.9% 4 China $49 4.7% Spain 57 5.8% 5 Italy $43 4.2% Italy 46 4.7% 6 Germany $39 3.8% Turkey 29 3.0% 7 United Kingdom $36 3.5% United Kingdom 29 3.0% 8 Australia $31 3.0% Germany 28 2.9% 9 Macau (2010) $28 2.7% Malaysia 25 2.5% 10 Hong Kong (China) $27 2.6% Mexico 23 2.4% Source: U.N. World Tourism Organization. * Latest data available and excludes air passenger fares ($36.6 billion for U.S. alone in 2011). World shares based on unrounded data.

8. Traveler Volume from Canada to the U.S.(stays of 1 or more nights) 2012 YTD INCREASE is 5.1% through June. Source: Statistics Canada.

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

10. Canada Outbound / U.S. Shareannual growth rates 1999-2011--1+ nights Canadians have been traveling outside Canada! U.S. performance trailed non-U.S. performance in 9 of the past 13 years. Not so the last two years.

11. 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 sometimes in direction of change. Outbound to the U.S. was 70% of all outbound in 2011—a proportion that was higher a decade ago. 07 / 06 08 / 07 09 / 08 10 / 09 11 / 10 12 / 11

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

13. Where are Canadians Traveling? Nearly 70% to U.S….after U.S., all other countries are 1.0 million or fewer. US growth of 2.5M (17%). Top countries: GROWTH RATE France 445,000 93% UK 235,000 38% Cuba 536,000 338% Mexico 337,000 121% Dominican Republic 412,000 294% China 384,000 251% Italy 169,000 67% Hong Kong 94,000 51% Germany 114,000 86% Jamaica 90,000 87% Source: UNWTO. Statistical Compendium database. Growth and rate reflect change from 1995-1997 average to 2006-2008 average.

14. Top Origin Markets forInternational Travelers to the U.S. Origin of Visitor 2011 2011/2010 12/11 May YTD (000s)(% change) (% change) International Total * 62,711 5%6% 1Canada 21,337 7% 4% 2 Mexico 13,491 0% 5% Overseas ** 27,883 6% 9% 3 United Kingdom 3,835 -0%-2% 4 Japan 3,250 -4% 14% 5 Germany 1,824 6% 12% 6 Brazil 1,508 26% 19% 7 France 1,504 12% 5% 8 South Korea 1,145 3% 12% 9 China (PRC) 1,089 36% 42% 10 Australia 1,039 15% 6% * 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.

15. Top Origin Markets forInternational Travelers to the U.S. Origin of Visitor 2011 2011/2010 12/11 May YTD (000s)(% change) (% change) • 11 Italy 892 6% -1% • Spain 700 9% -5% • India 663 2% 12% • Netherlands 601 5% 3% • Venezuela 561 14% 21% • Argentina 512 17% 20% • Colombia 497 0% 15% • 18 Switzerland 477 22% 8% • Sweden 439 18% 3% • Ireland 347 -4%-7% Record year for travel to U.S.

16. Top Ten Travel Export Markets(2011 & record receipts/year) Total Travel Record Year Receipts Travel Record Origin Country 2011 Receipts Set ($bil) ($bil) Canada $24.0 2011 Japan $14.8 $17.8 1995 United Kingdom $12.0 $16.7 2008 Mexico $9.2 $9.7 2008 Brazil $8.5 2011 China $7.7 2011 Germany $6.3 $6.7 2008 France $5.0 2011 Australia $5.0 2011 India $4.4 2011 U.S. TOTAL $152.7 2011

17. The Algebra of Canadian Spending

18. Importance of the Canadian Travel Market to the U.S.(2011) Canada accounts for 33.4% of U.S. international visitors (trending higher) and 15.6% of visitor spending (trending higher). …and... 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). Travel exports are 7% of all exports and 43% of services exports to Canada. Rankings: #1 visitors (21.34 M) (next is Mexico, 13.5M) #1 spending ($23.96 B) (next is Japan, $14.8B) #1 travel trade surplus ($16.31 B) (next is Japan, $9.8B)

19. Key Travel Characteristics of Canadian Travelers(2011) Main Trip Purpose 64% Leisure (52% holiday, vacation; 5% 2nd home; 6% events) (up) 15% Visit Friends or Relatives (VFR) (down) 11% Business (5% meetings; 5% convention; 2% other work) (same) 10% Other (5% shop; 2% personal; 1% transit; 1% study; 1% other) (up) Origin Province Ontario 39% of population but 43% of travelers. BC also higher share of visitors than population (13% vs. 18%). State Destinations A few destinations dominate the numbers. Florida is 17% of visitors, but 37% of visitor-nights due to snowbirds. Mixed performance among state visitors, visits, and spending. 36 states up in visitor volume. Pacific, New England, East South Central regions down.

20. Top U.S. State DestinationsVisitors, Visitor-Nights, and Spending (2011) Visitor- U.S. State Visitors Nights Spending (millions) (millions) ($billions) TOTAL U.S. (NET) 21.34 176.11 $16.47 1 New York 3.70 10.28 1.39 2 Florida 3.32 59.62 4.03 3 Washington 2.59 7.49 0.76 4 Michigan (1) 1.54 4.55 0.44 5 Nevada (1) 1.48 6.94 1.37 6 California (2) 1.48 13.07 1.38 7 Maine 0.95 3.14 0.35 8 Pennsylvania 0.93 2.24 0.26 9 Montana 0.89 3.41 0.31 10 North Dakota (2) 0.77 1.58 0.25

21. Key Travel Characteristics of Canadian Travelers (continued)(2011) Transportation (mode of entry into U.S.) 59% auto (35% plane; 3% bus; 3% other). 71% of business travelers flew. Accommodations 60% hotel/motel (13% friends/relatives; 10% camp/trailer/cabin). Hotel/motel differs by purpose (90% bus.; 59% leisure; 30% vfr). Stay Length 35% of Canadian state-visits are day trips. Among overnight trips: 11% are 1-night trips. 6% are 3 weeks or longer. 3+ weeks accounts for 42% of visitor-nights. 8.25 nights average stay length, 9.74 leisure…but this average is misleading…

22. Canadian Nights in the U.S.(among overnight LEISURE visitors--67% of total state visits—2011)

23. Key Travel Characteristics ofCanadian Travelers -- continued(2011) Spending (source: Statistics Canada; all records) $16.5 billion (excludes fares to travel to the U.S.) $1,624 per party $770 per visitor $93 per visitor per night Of the 76% of spending reported with detail: 33% accommodations 22% food & beverage 19% other (souvenirs, shopping, etc) 14% transportation (in U.S.) 12% entertainment

24. Canadian Activity Participation Rateswhile in the U.S. (2011) Activity Total Business VFR Pleasure Other Sum of all 18 activities 353% 253% 352% 393% 217% Go Shopping 75% 53% 70% 79% 76% Go Sightseeing 44% 31% 35% 52% 23% Visit Friends Or Relatives 35% 14% 95% 24% 25% Participate Sports/Out. Activities 29% 10% 24% 37% 11% Go To A Bar Or Night Club 23% 36% 14% 24% 14% Visit A Historic Site 21% 18% 18% 25% 10% Visit A Nat. Or State Nature Park 18% 8% 15% 23% 8% Visit A Museum Or Art Gallery 16% 13% 15% 19% 7% Go To A Casino 15% 8% 7% 19% 10% Attend Cultural Events 13% 9% 10% 15% 6%

25. Activity Participation Rates (2011) (continued) Activity Total Business VFR Pleasure Other Visit A Theme Park 12% 5% 7% 16% 2% Visit A Zoo, Aquar. / Bot. Garden 11% 6% 9% 13% 4% Golfing 9% 4% 6% 12% 2% Attend Sports Events 9% 7% 8% 10% 4% Attend Festivals Or Fairs 7% 5% 7% 9% 2% Water sports (Canoe, etc.) 6% 2% 5% 7% 2% Fishing 2% 0% 2% 2% 0% Downhill Skiing Or Snow Boarding 1% 0% 0% 2% 0% Hunting 0% 0% 0% 0% 0% No Activity Stated 7% 25% 4% 4% 9%

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

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

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

29. Traveler Volume from Canada to the U.S.(stays of 1 or more nights) Source: Statistics Canada.

30. Factors for 2013 and BeyondCanada Economy Unemployment 7.2% and still on downward trend with ups and downs. 2012Q1 GDP growth about 2% annualized average, similar to previous quarter, but lower than 2010’s 2.5% for the year and 2011’s 2.2%. Weak U.S. demand for exports (U.S. economy; exchange rate lower makes imports more expensive) Overstretched households Household finances??? Conflicting data. Near-retirees on trackregarding retirement planning. Inflation 3.0% in 2011%, butmonthly increases are 1.5%-2.5% (annualized rate). Goods exports to U.S. up 14%in 2011, services up 9%.

31. Factors for 2012 and BeyondExchange Rate

32. Factors for 2013 and Beyond +- Economy + Currency exchange rate +- WHTI (whitty what?) + Air Passenger Taxes in Western European countries +- Promoting the USA (TPA: ++; states/cities: --) — Low and slowing growth of U.S. economy. + New duty-free limits (greater than 24-hour stay; June 1, 2012)

33. Updates from Miscellaneous Sources

34. Corporation for Travel Promotion • Operating as Brand USA • www.the BrandUSA.com • ESTA fees collected over the past 12 months is sufficient to provide the maximum funds available to the CTP per TPA legislation, subject to matching fund requirements. • May 2012 campaign launch included Canada, U.K., and Japan. • $3-$4 million in Canada market! • Likely offsets declines in internationalmarketing by U.S. states and cities.

35. Canada on…WWW.TINET.ITA.DOC.GOV

36. Canada on…WWW.TINET.ITA.DOC.GOV This presentation will be added here

37. Canada on…WWW.TINET.ITA.DOC.GOV

38. Canada on…WWW.TINET.ITA.DOC.GOV

39. Summary of Key Findings Global Travel: 2010-2030 annual growth to decline from 4.4% to 2.2%. Canada Travel: Strong 5+% continued growth YTD (Jul) to USA following 7% continued growth in 2011. Non-U.S.2011 also up. New USA visitor volume annual records expected! Canada Rankings: #1 visitors, #1 spending, #1 travel trade balance. Profile: travel attributes mostly stable. Watch increases in travel party spending, casino, souvenir/shopping spending, average stay length. Decline in outdoor activities. ALL these trends continued in 2011!!! Forecast: Favorable outlook>>economy, currency exchange rate, TPA!! WHTI: Phase III June 2009 full implementation now 3 years behind us. Travel Promotion Act: Brand USA multi-million marketing launch in May 2011. MVB is head cheerleader for promoting travel to the USA.

40. Summary of Why Canada! Top dog: #1 in visitors and visitor spending and travel trade balance. Geo-equity: Best of any visitor origin country. On the Radar Screen: White House favored Sector; BrandUSA marketing. Shoulder season: helps fulfill many destinations’ expansion goals. Open wallets: $$$ per-visitor per-night big growth in 2011. Comparisons to other countries is not valid due to short-term stays bringing down average. Emphasize ROI (not R) or $/V/night (not $/V) Economics: Economy O.K., but looking sprightly compared to Europe. International!!!!: Canada is a big part of the general story of international (growing) importance. Is the DOMESTIC industry mature from an industry life-stage perspective??? Most of the messages coming from the US Travel Association pertain to international travel. 4% of travelers/17% of traveler spending.

41. 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