Outbound Canada Travel Trends & Trip Intentions · • U.S. share of outbound will falter but...

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Outbound CanadaMarket Performance & Trip Intentions

Jennifer HendrySenior Research Associate

Canadian Tourism Research Institute

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Today’s Presentation

• Tourism and the economy

• Demographic changes

– Canada’s aging population

• Outbound travel patterns

– USA and overseas

• Summer travel intentions

• Short-term outlook for sun destinations

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Economic Outlook and the Outbound

Travel Market

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2.6%

2.1%

1.0%

-2.9%

3.1% 3.1%

1.7%

2.2%2.5%

1.2%

1.7%

2.3%

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

Canada’s Real GDP Growth% change, market prices (2007 $)

Source: The Conference Board of Canada

At 1.2%, Canada had one of the worst

performing economies in 2015.In comparison, GDP growth in the U.S.

was 2.4%, while it was 3.1% globally.

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0.2%

1.8%

2.2%

0.9%

1.7%

2.4%

2.4%

0.8%

-1.0%

2.8%

NL

PEI

NS

NB

QC

ON

MB

SK

AB

BC

Source: Conference Board of Canada.

Real GDP Growth, by Province, 2016% change, market prices (2007 $)

CANADA (1.7%)

$26 $31

$41

$56

$66

$72

$100

$62

$79

$95 $94

$98

$93

$49

$35

$41

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016f 2017f

-38

%

-29

%

Where are oil prices headed? WTI Crude Price, US$ per barrel

Sources: Bureau of Economic Analysis The Conference Board of Canada.

-48

%

20

30

40

50

60

70

80

90

100

110

120

0.60

0.65

0.70

0.75

0.80

0.85

0.90

0.95

1.00

1.05

1.10

Dollar (left) Oil Price (right)

The Loonie and Oil Prices(USD/CAD, WTI $US)

Sources: The Conference Board of Canada; U.S. EIA; Statistics Canada.

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Exchange Rates & Household Spending

Conference Board of Canada (March 2016), Oxford Economics World Outlook.

Economic Indicators (2015-2017)

2015 2016f 2017f

Real GDP (% change) 1.2% 1.7% 2.3%

Real Disposable Income (% change) 2.7% 1.9% 1.9%

Household Consumption (% change) 1.9% 1.8% 1.9%

USD/CAD (annual average) $1.28 $1.34 $1.29

EUR/CAD (annual average) $1.42 $1.44 $1.37

GBP/CAD (annual average) $1.95 $1.86 $1.86

• Loonie has lost 20% of value since 2013

• Real disposable income will average 1.9% annual growth 2016-17

• Household consumption is flat

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2.4%

1.7%

1.3%

1.7%

2.3%

1.4%

-1.6%

1.4%1.5%

1.3%1.4%

0.6%

0.9%

1.1%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016f

Employment Growth, annual % change

Sources: Statistics Canada; The Conference Board of Canada. 272,000 jobs lost

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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 also 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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U.S. Leisure Trips by Age Group

74%

69%

64%

65+

55-64

45-54

The older Canadians get, the more likely they are to visit the U.S. when travelling outbound for leisure purposes.

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

13

,83

6

14

,19

9

13

,58

0

13

,75

0

15

,42

0

16

,48

9

17

,84

9

19

,74

1

21

,58

2

21

,29

5

23

,20

7

24

,66

4

26

,28

8

27

,06

6

27

,20

5

26

,37

2

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Global Recession

(-1.3%)

Loonie-3.1%

Source: Statistics Canada, CBoC

9/11 (-4.4%)

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$0.60

$0.65

$0.70

$0.75

$0.80

$0.85

$0.90

$0.95

$1.00

$1.05

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

16.0

17.0

18.0

19.0

20.0

21.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

CA

D $

An

nu

al Average

Mill

ion

s o

f O

vern

igh

t Le

isu

re T

rip

s

US Leisure Visits (millions)

CAD $ (annual average)

Annual Leisure Visits to the U.S.

Source: Statistics Canada, CBoC

Leisure visits fell -9.7% to 16.4

million in 2015, slightly less than

the 2011 annual total.

-4.5%

-3.0%

-9.7%

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Auto Travel and the Canadian Dollar

Source: Statistics Canada, CBoC

$0.60

$0.65

$0.70

$0.75

$0.80

$0.85

$0.90

$0.95

$1.00

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Mill

ion

s o

f O

vern

igh

t Le

isu

re T

rip

s

Overnight Auto Trips

Average Annual Exchange Rate

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Canadian Visits to Florida(thousands of overnight visits each year)

1,176 1,227 1,377 1,500 1,563 1,635 1,727 1,810

1,696 1,517

1,7251,819

1,996

2,5522,603 2,404

2008 2009 2010 2011 2012 2013 2014 2015p

Indirect Air & Other Modes

Direct Air Arrivals

Note: Air arrivals reflect direct deplanements in Fort Lauderdale, Fort Myers, Miami, Orlando (MCO, SFB, MLB), Palm Beach, Sarasota, and Tampa.

Source: Statistics Canada, CBoC, OAG, US BTS.

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TRAVEL OUTLOOK

Florida and Other

“Sun Destinations”

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Summer Travel Intentions

53%

25%

14%

4%6%

51%

20%

17%

7%

5%

52%

19%21%

6%

3%

45%

23%

18%

9%

6%

USA Europe Caribbean & Mexico Asia Other

Summer 2013 Summer 2014 Summer 2015 Summer 2016

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Outbound Travellers & Trip Planning

27%

16%

21%

22%

23%

22%

22%

36%

34%

26%

26%

22%

22%

20%

24%

25%

40%

21%

24%

27%

U.S.

Europe

Caribbean/Mexico

Asia-Pacific

Other

Dreaming Investigating Planning Booking

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Intended State of Summer Leisure Trips

19.1%

13.4%

12.6%

8.2%

5.0%

4.5%

4.2%

3.8%

2.2%

2.0%

Florida

California

New York

Nevada

Maine

Washington State

Hawaii

South Carolina

Massachusetts

Pennsylvania

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Direct Seat Capacity from Canada

Source: OAG, US BTS; CBoC. Summer season is May-October

Summer 2014 Summer 2015 Summer 2016f

Fort Lauderdale 159,324 176,579 189,250

Fort Myers 20,693 28,532 29,640

Miami 172,859 184,142 182,977

Orlando (MCO) 193,573 213,984 272,710

Palm Beach -- 266 558

Sarasota -- 4,385 3,808

Tampa 49,220 57,891 67,619

TOTAL 595,669 665,779 746,562

% change 11.8% 12.1%

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Performance of Competitors(% change in annual overnight visits, all trip purposes)

Source: Respective government agencies, Statistics Canada, CBoC.

ALL TRIP PURPOSES 2013 2014 2015

Total Outbound 2.2% 1.7% -3.8%

UNITED STATES 3.0% -1.6% -10.0%

Florida 17.6% 3.4% -2.7%

Orlando 5.1% 2.6% -1.3%

OVERSEAS 0.2% 9.6% 10.0%

Cuba 3.2% 6.3% 10.6%

Dominican Republic 0.3% 4.1% 5.4%

Mexico 1.8% 4.8% 4.3%

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Canadian Visits to Florida(000s of overnight visits each year)

2,7443,102

3,3193,559

4,187 4,330 4,214 4,121 4,224

2009 2010 2011 2012 2013 2014 2015p 2016f 2017f

CAD/USD

$0.78$0.75$0.78

$0.91$0.97

$1.00

$1.01

$0.97

-2.7% -2.2% 2.5%

Source: Statistics Canada, CBoC, estimates, US BTS.

$0.88

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Outlook for Orlando and Area

• Visits fell -1.3% in 2015 to 1.16 million, but direct air arrivals grew from 504 thousand to 537 thousand (+6.6%)

• Indirect arrivals expected to decrease again this year, but additional direct capacity in 2016 will boost overall arrivals

• Additional 109 thousand seats in 2016; result is about 600 thousand direct arrivals

• Airfares are lower than last year, but ADR is up 26% in CAD$

• Higher travel prices will bring a slower rate of growth, but 45% of visits are by direct air and air travellers are not as price sensitive

• Total visits forecast to decrease to 1.14 million in 2016

• Decline not as severe due to airline capacity and regional demographics

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In a Nutshell…

• U.S. share of outbound will falter but rebound by 2017

• Growth in non-auto travel boosting U.S. trips

• Many FL destinations have performed as well or better than sun destinations

– New capacity supporting growth in air travel

– Economic growth is expected in key geographic markets

– Aging population, snowbirds

• Summer travel intentions to US down, but Florida is similar to last year

• 2016 outlook: U.S. -6.0%, Florida -2.7%, Orlando -1.5%

Canadian Tourism Research Institute

Jennifer HendrySenior Research Associate

hendry@conferenceboard.ca