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Analyses - July 15, 2004

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July 2004

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Print Facts and figures, Management,

Travel intentions vs. actual travel

The increased number of polls used to determine travel intentions has contributed to the tools used by industry decision-makers. Unfortunately, the existence of more surveys has not necessarily translated into a more accurate portrait of the future. In fact, a look back uncovers major discrepancies between Canadian travel intentions and actual travel.

It is common practice for tourism stakeholders to consult tourism forecasts when developing business strategies. People are periodically surveyed on their travel intentions so pollsters can anticipate the short-term tourism demand. We are accustomed to looking forward, but what about taking a look back? The industry has rarely taken the opportunity to compare stated travel intentions with the actual number of trips taken.

To conduct this study, we reviewed Canadian travel intentions over the past five years. To ensure reliable, homogeneous results, we looked at the findings of a poll published twice a year by the Conference Board of Canada; conducted at the same time each year, these surveys follow the same methodology and may be readily compared.

For the purpose of our analysis, we thought it best to compare the growth rate of planned vacations with the growth rate of reported trips (that is, actual trips taken). Absolute numbers are difficult to reconcile because, while vacations usually refer to stays of three days or more, Statistics Canada survey data on declared travel includes any overnight leisure trip.

Survey reliability: myth or reality?

Should the reliability of forecasts be called into question? An analysis shows that projections have proven to be very different from actual outcomes when it comes to the number of trips taken by Canadians. During the five years studied, the annual growth rates of planned trips and actual trips diverged by 17% on average, a significant gap. Furthermore, the difference between forecast and reality was never less than 10%. Obviously, many factors, including unforeseeable events, have a strong influence on the performance of a given tourism season. For example, the SARS crisis dealt a severe blow to Canadian tourism in 2003. A closer look at each year helps elucidate the reasons behind the discrepancies:

  • In 1999, the economy was in full swing and the stock market was reaching new highs. Actual travel surpassed expectations by 10%.
  • In 2000, the high-tech stock market bubble burst and the economy began to show signs of flagging. Actual travel was 14% lower than planned travel, indicating more Canadians decided to stay home that year.
    In 2001, the travel industry was rocked by the catastrophic events of September 11. However, since most vacations had already been taken before the day of the attacks, actual travel was nonetheless 14% higher than expected. Forecasts had underestimated the strong economic showing of the first three quarters of 2001.
  • In 2002, the «post-September 11» effect had a major impact on travel intentions, which dipped to an unprecedented low. In actual fact, however, Canadians resumed travelling faster than anticipated and actual travel surpassed forecasts by 15%.
  • In 2003, against the backdrop of the war in Iraq, the SARS crisis was a decisive factor in the travel decisions of many Canadians. Surveys were unable to foresee the extent of the crisis and, as a result, actual travel trailed planned travel by 21%.
  • The forecasts for 2004 once again indicate negative growth and the industry remains concerned about year-end results.

Intent is not action

Unforeseeable factors aside, there is a significant difference between the absolute number of trips taken and the number of trips planned. Generally speaking, approximately 60% of Canadians actually follow through on vacation plans made six months earlier.

According to the Conference Board, some 20 million Canadians expressed interest in travelling during 2004. This represented an 8% drop compared to 2003 travel intentions. Although one can predict the direction of the economy with some success, other factors like weather conditions, exchange rates and disruptive events are difficult to anticipate and have a major impact on consumer travel decisions.

For decision-makers, tourism forecasts make up just one variable in a complex equation involving completely unpredictable elements. Travel intention surveys may herald an annual trend, but they are no substitute for managerial instincts and should not form the basis of the decision-making process.

 

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