Outbound Canada. Market Performance & Trip Intentions. Jennifer Hendry Senior Research Associate Canadian Tourism Research Institute

Outbound Canada Market Performance & Trip Intentions Jennifer Hendry Senior Research Associate Canadian Tourism Research Institute conferenceboard.ca...
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Outbound Canada Market Performance & Trip Intentions Jennifer Hendry Senior 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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Canada’s Real GDP Growth % change, market prices (2007 $)

3.1%

3.1%

2.6%

2.5%

2.3%

2.2%

2.1% 1.7%

1.7% 1.2%

1.0%

2006

2007

2008

2009

-2.9%

2010

2011

2012

2013

2014

2015

2016f

2017f

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.

Source: The Conference Board of Canada

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Real GDP Growth, by Province, 2016 % change, market prices (2007 $) BC -1.0%

2.8%

AB SK

0.8%

MB

2.4%

ON

2.4%

QC

1.7%

NB

0.9%

NS

2.2%

PEI NL Source: Conference Board of Canada.

1.8% 0.2% CANADA (1.7%)

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Where are oil prices headed? WTI Crude Price, US$ per barrel $100

-38%

$95

$72

$98 $94

$93

$79

-48%

$66 $62

$49

-29%

$56

$41

$41 $35

$26

$31

2002

2003

2004

2005

2006

2007

2008

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

2009

2010

2011

2012

2013

2014

2015

2016f

2017f

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

Oil Price (right)

1.10

120

1.05

110

1.00

100

0.95

90

0.90

80

0.85

70

0.80

60

0.75

50

0.70

40

0.65

30

0.60

20

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

Exchange Rates & Household Spending • Loonie has lost 20% of value since 2013 • Real disposable income will average 1.9% annual growth 2016-17 • Household consumption is flat 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

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

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Employment Growth, annual % change 2.4%

2.3%

1.7%

1.7% 1.4%

1.3%

1.4%

1.5% 1.3%

1.4% 1.1% 0.9% 0.6%

2003

2004

2005

2006

2007

2008

Sources: Statistics Canada; The Conference Board of Canada.

2009

-1.6%

2010

2011

2012

2013

2014

2015

2016f

272,000 jobs lost

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Canadian Population Growth, 2015-2019 Atlantic

1.2%

QC ON

3.4% 3.8%

MB

5.0%

SK

6.1%

AB

7.5%

BC

5.1% 4.9%

North Canada

4.2%

Source: The Conference Board of Canada.

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Diversity of Canada’s Population Population (000s) Visible minority (000s) Rest of the population (000s)

2006

2031

% change (absolute)

32,522 5,285

42,078 12,855

29.4% 143.2%

27,237

29,222

7.3%

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

Distribution of the foreign-born population by continent of birth Americas

66.7%

62.2%

54.3%

18.4%

1981

1986

42.0%

31.9%

25.0%

22.5%

20.5%

Europe

Asia

24.6% 14.1%

46.9%

36.8%

28.1%

31.4%

36.5%

40.9%

45.2%

48.6%

51.3%

53.6%

55.4%

Africa

Oceania 1991

1996

2001

2006

2011

2016

2021

2026

2031

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

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Canada’s Population is Aging •







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

% change in population (2019 vs 2015)

Between 2015 and 2019, the proportion of Canadians aged 5564 will increase 8%, while the share of people aged 65 and older will increase 15%.

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%

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

35-44

5.8%

3.0%

7.1%

45-54

-6.2%

-6.7%

-8.3%

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

55-64

8.4%

10.9%

5.5%

65+

15.0%

14.8%

13.6%

Source: October 2015, CBoC forecast.

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U.S. Leisure Trips by Age Group

65+

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

74%

55-64

45-54

69%

64%

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Canada: Total Outbound Leisure Trips

19,741

17,849 2006

2007

2009

2010

2011

2012

2013

2014

Loonie -3.1%

26,372

26,288

24,664

2008

27,205

2005

27,066

2004

21,295

2003

21,582

2002

16,489

2001

13,750

14,199

2000

13,580

13,836

9/11 (-4.4%)

15,420

Global Recession (-1.3%)

23,207

(‘000s of outbound leisure trips, all destinations)

2015

Source: Statistics Canada, CBoC

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Annual Leisure Visits to the U.S. 21.0 20.0

Leisure visits fell -9.7% to 16.4 million in 2015, slightly less than the 2011 annual total.

$1.00 $0.95

18.0 17.0

$0.90 -9.7%

16.0

$0.85

15.0

-3.0%

14.0

$0.80

13.0 12.0

US Leisure Visits (millions)

11.0

CAD $ (annual average)

$0.75

CAD $ Annual Average

Millions of Overnight Leisure Trips

19.0

$1.05

$0.70

-4.5%

10.0

$0.65

9.0 8.0

$0.60 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: Statistics Canada, CBoC

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Auto Travel and the Canadian Dollar 13.0

Millions of Overnight Leisure Trips

12.0

Overnight Auto Trips

$1.00

Average Annual Exchange Rate

$0.95

11.0

$0.90

$0.85

10.0

$0.80

9.0 $0.75

8.0 $0.70

7.0

$0.65

6.0

$0.60

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Statistics Canada, CBoC

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Canadian Visits to Florida (thousands of overnight visits each year) Indirect Air & Other Modes Direct Air Arrivals

2,552 1,725 1,696

1,819

2,603

2,404

1,996

1,517

1,176

1,227

1,377

2008

2009

2010

1,500

1,563

1,635

1,727

1,810

2011

2012

2013

2014

2015p

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% 51%

52%

Summer 2013

45%

25%

Summer 2014

Summer 2015

23% 20%

21%

19%

17%

18%

14%

7%

9% 6%

4%

USA

Summer 2016

Europe

Caribbean & Mexico

Asia

6%

5%

6% 3%

Other

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Outbound Travellers & Trip Planning Other

23%

Asia-Pacific

22%

34%

Caribbean/ Mexico

21%

36%

Europe

U.S.

16%

26%

22%

27%

Dreaming

24%

27%

20%

22%

22%

22%

Investigating

24%

21%

40%

26%

Planning

25%

Booking

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Intended State of Summer Leisure Trips Florida

19.1%

California

13.4%

New York

12.6%

Nevada

8.2%

Maine

5.0%

Washington State

4.5%

Hawaii

4.2%

South Carolina Massachusetts Pennsylvania

3.8% 2.2%

2.0%

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Direct Seat Capacity from Canada 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

49,220

57,891

67,619

595,669

665,779

746,562

11.8%

12.1%

Tampa TOTAL % change

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

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

2013

2014

2015

Total Outbound

2.2%

1.7%

-3.8%

UNITED STATES

3.0%

-1.6%

-10.0%

17.6%

3.4%

-2.7%

5.1%

2.6%

-1.3%

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%

Florida Orlando OVERSEAS

Source: Respective government agencies, Statistics Canada, CBoC.

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Canadian Visits to Florida (000s of overnight visits each year) $0.97

$0.91

$0.78

$0.78

$0.75

4,214

4,121

4,224

-2.7%

-2.2%

2.5%

2015p

2016f

2017f

CAD/USD $1.00 $1.01 $0.97 $0.88

4,187

3,102

3,319

4,330

3,559

2,744

2009

2010

2011

2012

2013

2014

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

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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 conferenceboard.ca

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%

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Canadian Tourism Research Institute Jennifer Hendry Senior Research Associate [email protected]

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