In the latest monthly bulletin on the state of business from its Top Ten international source markets, year-to-date traffic from Canada’s two large English-speaking markets—the USA and UK—is down slightly, while overall inbound international arrivals are up one percent over last year, which was a record year, according to Destination Canada, the country’s official marketing organization. (See graphic below.)
We speculated at INBOUND as to why U.S. arrivals are down—if only slightly—and thought that it might have something to do with the exchange rate between the U.S. and Canadian dollars. We see that Canadian dollar rose from a low of 69 cents in mid-January 2016, trading at or about 75 cents through much of the year. It later peaked at 82 cents in September of last year before settling in at the $0.76-$0.78 level for most of 2018. In sum, Canada was not the bargain it was two-to-two-and-half years ago, with the cost of the components of a travel package about 10 percent more this year than they were in
- (Recall that, at the beginning of 2013, the Canadian dollar was trading at parity with the U.S. dollar.)
Here is Destination Canada’s travel infographic for July 2018, followed by some insights on the numbers.
—Year-to-date July 2018, overnight arrivals of visitors to Canada from Destination Canada’s ten international markets eased to +1 percent following a slight drop in July (-1 percent) caused by significant contractions in air arrivals via the U.S. in that month from all markets, except India. Global overnight arrivals to Canada year-to-date July 2018 surpassed the peak established in 2017, Canada’s best year ever.
—From January-July 2018, Canada had a record 11.8 million international visitors (+1 percent year-on-year).
—Year-to-date July 2018, the largest growth from our markets was from India (+8%), Germany (+7%), France (+6 percent), China (+5 percent) and Mexico (+3 percent), where increased direct air arrivals outpaced double-digit declines in air arrivals via the US.
In July 2018, Canada received a record number of visitors from France (94,000), Mexico (60,000), South Korea (41,000), and India (32,000).
The drop in U.S. auto arrivals (-1 percent) in July 2018 is linked to the timing of the Independence Day holiday in the U.S., and increased arrivals in 2017 in the midst of Canada’s 150th celebrations over the Canada Day weekend.