The recently released national tourism indicators for the third quarter of 2023 reveal a mixed picture for Canada’s tourism sector. Despite facing headwinds such as a decline in domestic tourism demand, the overall industry managed to eke out a 0.5% increase in spending.
According to the data from Statistics Canada, the growth in tourism spending was primarily driven by a robust 2.3% increase in foreign tourism demand. However, the domestic market experienced a slight contraction, with a 0.2% decline in tourism demand. These figures underline the resilience of the Canadian tourism sector amid various challenges.
Passenger air transport emerged as a key contributor to the positive growth, registering an increase of 0.8%. This was closely followed by spending on non-tourism products, including groceries and clothing, which also saw a growth of 0.8%. Pre-trip expenditures, such as recreational vehicles and camping equipment, surged by 2.1%. Unfortunately, the growth was offset by declines in sectors like food and beverage services (-0.6%), recreation and entertainment (-0.4%), vehicle fuel (-0.3%), and passenger rail transport (-3.7%).
In terms of tourism’s contribution to the overall economy, the tourism gross domestic product (GDP) experienced a marginal decline of 0.1% in the third quarter. The decrease was attributed mainly to a notable 1.0% decline in accommodation services. However, this was partially balanced by increases in non-tourism sectors like retail trade (+0.7%) and transportation (+0.3%).
The employment landscape in the tourism sector showed a modest improvement, with a 0.1% increase in jobs during the third quarter. Notable contributors to job gains included non-tourism industries (+0.5%), air transportation (+0.9%), and other transportation (+1.9%). However, declines in food and beverage services (-0.3%) and accommodation (-0.4%) industries offset the overall growth.
In terms of international visitors, there was a positive trend, with tourism spending by international visitors increasing by 2.3% in the third quarter. Spending on non-tourism products (+4.8%) and accommodation services (+2.5%) were the primary drivers of this growth. The decline in spending on passenger air transport (-1.4%) moderated the overall increase.
Conversely, tourism spending by Canadians decreased by 0.2% in the third quarter. Domestic spending on food and beverage (-1.7%) and accommodation (-1.3%) services were the main contributors to the decline. Interestingly, this decrease coincided with a 2.3% increase in the number of Canadian overnight travelers returning to the country from other nations by air. Spending on passenger air transport by Canadians rose by 1.4% during the same period.
While the overall tourism indicators provide a nuanced perspective on the industry’s performance, it is essential to consider external factors influencing travel patterns, such as global events and government decisions. For instance, the recent choice of Justin Trudeau to spend his New Year vacation in Jamaica has stirred criticism, potentially impacting the perception of domestic tourism priorities.
As the tourism sector navigates these challenges, industry stakeholders and policymakers will need to closely monitor trends, adjust strategies, and foster collaboration to ensure the continued resilience and growth of Canada’s tourism industry in the coming quarters.