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Canadian Arrivals Decline Sharply Through June 1998; U.S. Resident Travel to Canada Soars
For the first six months of 1998, Canadian travel to the U.S. was down more than 7 percent, with 6.6 million travelers of one or more nights, compared to 7.1 million for the same period of 1997. Conversely, U.S. resident travel to Canada rose by more tha n 9 percent in the first six months of 1998, according to Statistics Canada. During this period, 5.7 million trips were made, compared to 5.2 million from January to June 1997.
The continuing decline of the Canadian dollar, which was trading at $1.54 to the U.S. dollar at the time of this analysis, is anticipated to fuel the loss in Canadian arrivals throughout 1998. Summer travel is likely to be significantly curtailed to both short- and long-distance destinations due in part to the exchange rate but also compounded by the month-long triple-digit heatwave in July experienced in the south and west, the Florida fires in June, and damage and flooding incurred by Hurricane Bonnie along the popular North Carolina coast.
The outlook for the Canadian dollar is not optimistic. Projections in July called for the Canadian dollar to fall to $1.60 to the U.S. dollar by September. This now seems plausible.
Should the year finish at the current rates of change for Canadian arrivals to the U.S., down 7 percent, and U.S. travel to Canada, up 9 percent, we could witness the first traveler deficit with Canada since 1987. That is, U.S. resident travelers to Cana da could outnumber arrivals to the U.S. from Canada by about a half million. This in turn could impact the balance of trade between the two countries and lower the overall international travel surplus.
On the positive side, Canada remains the number one international tourism market for the U.S., with over 15 million visitors recorded annually. Growth continues in the highly lucrative air travel segment of the Canadian market to the U.S. where per perso n spending topped $100 a day in 1997.
JUNE 1998 ARRIVALS FROM CANADA TO THE U.S.
Arrivals from Canada dropped sharply for the month of June, registering 1.0 million, 12 percent lower compared to the same month of 1997. The negative performance for the month of June was reflected by steep declines in all modes of transportation to the U.S., except air travel. Auto travel was particularly hard hit with trips of one nights' duration decreasing nearly 15 percent while longer trips were harder hit, losing almost 19 percent, for a net decline in total auto travel of 18 percent. Undoubted ly the drop in the buying power of the Canadian dollar had an adverse impact on discretionary travel.
Air traffic, which now comprises one-quarter of all Canadian arrivals of one or more nights, was up 2 percent. Nearly 297,000 trips by air from Canada were recorded in June.
Bus travel posted a 12 percent decline, while train travel was down 9 percent. The "pedestrian/other" category dropped 9 percent as well.
JUNE 1998 U.S. RESIDENT TRAVEL TO CANADA
U.S. resident travel to Canada for the month of June continued its upward climb. Travel of one or more nights by all modes garnered another 9 percent gain, making five out of six months positive in 1998.
Air travel posted a notable increase, up more than 18 percent, to 425,000 trips in June.
Auto travel of a single nights' duration rose by 6 percent. The rise in longer duration trips was even greater, up more than 8 percent, for a cumulative increase of 8 percent in auto travel of one or more nights to Canada.
Rail travel to Canada by U.S. residents posted a 31 percent increase in travel volume compared to the same period of the previous year. Bus and pedestrian/other modes of entry to Canada from the U.S. both registered declines in June, down 4 and 3 percent, respectively. However, these three modes generate very small numbers of travelers and are subject to wide shifts in performance.
TRAVEL TO CANADA FROM OTHER WORLD REGIONS
Interestingly enough, arrivals to Canada from other countries and world regions were in decline during the first six months of 1998. Excluding U.S. arrivals, travel to Canada from the rest of the world was down 9 percent through June 1998.
Through the second quarter, Asian arrivals were down 26 percent. South Korea's decline for the first six months was down two-thirds or 62 percent compared to the same period of 1997. Several Asian countries registered declines of 30-40 percent. Cumula tively, through June, European travel to Canada was down 1 percent. More specifically, Germany was down 3 percent while the UK was up 6 percent.
With the summer travel season just getting underway in June, the cheaper Canadian dollar may lure travelers to Canada during the remainder of the year, softening the current decline for Canada from overseas markets.
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