According to World Tourism Organization (WTO) estimates, the number of international tourist arrivals reached 940 million in 2010, or a 39% increase over 2000. Seen over the longer term, growth has been exponential; only 25 million tourists travelled in 1950.

Since the WTO compiles national statistics, methodologies may vary. For this reason, results must be interpreted with caution. In addition, results for the year 2010 were estimated based on partial data.

Top-ranked destinations

Not only has the ranking of destinations changed dramatically over the years, the sheer number of countries visited by tourists has increased tremendously. Here are some interesting observations about the number of international arrivals at the most popular destinations (Table 1):

• The top 5 countries in the ranking accounted for 71% of all arrivals in 1950, and only 31% in 2010.
• The “Other” category, which represents the next ten destinations in the ranking, accounted for only 3% of arrivals in 1950, but rose to 34% in 1990 and 44% in 2010!
• Canada’s ranking dropped from 2nd in 1970 to 8th in 2000, and finally to 15th in 2010.
• China is not only a very active outbound market; it has also become an extremely popular destination.
• Malaysia, Turkey and Hong Kong have made major inroads into the tourism market.
• The tourism sector has been demonstrating its resilience for over 60 years.

The top six destinations have remained been more or less the same since the year 2000. France enjoys a comfortable lead and China – which outranked Spain in 2010 – is now closing in on the United States. Canada has not been one of the top ten destinations since 2004.

Graphs 1 and 2 illustrate, respectively, the top 20 destinations by international tourist arrivals and by international tourism receipts. The two rankings differ somewhat. In terms of tourism receipts, the United States is in the top position, well ahead of second-ranked Spain, which also outranks France. While some countries occupy similar rankings in both graphs, others appear in one and are completely absent from the other. Countries that rank in the top 20 of arrivals but not in receipts are the Russian Federation (27th), Poland (30th), Ukraine (50th), Greece (21st) and Egypt (22nd). Conversely, some countries have high tourism receipts for a relatively lower number of visitors: the Netherlands (21st), Switzerland (28th), Japan (29th), Australia (41st) and India (42nd).

In fact, not all countries have benefitted from the overall growth in international tourist arrivals. Graph 3 illustratesthe change in arrivals for various countries. While some have more than doubled the number of arrivals, others, like Canada (-18%) and Poland (-28%), have recorded major decreases.

Where do most travellers come from?

Europe is currently the top source market for tourists, generating 55% of all international tourists, followed by Asia and the Pacific (20%) and the Americas (16%) (Table 2). Asia and the Pacific, the Middle East and Africa recorded the strongest average annual growth rate for the period covered. The majority of international visitors, approximately four out of five, travel within their own region. However, it would appear that the number of trips from one region to another has increasedat a faster rate than the number of intraregional trips. Industrialized countries remain the primary source markets of international tourists. However, with the increase in disposable income, many emerging economies have experienced higher growth rates in the past few years.

The data in Table 3about tourist-generating countries is expressed in terms of international tourism expenditures, as published by the WTO, not in terms of number of trips. Total spending grew from US$478 billion in 2000 toUS$678 billion in 2005and to US$850 billion in 2009, for an overall increase of 78%. In 2009, source markets saw their international tourism expenditures fall 10% compared to 2008, due to the economic crisis and the H1N1 flu. In 2000, only 10 countries recorded international tourism expenditures of at least US$10 billion, while 23 countries did so in 2009.

The top three spots have been occupied by Germany, the United States and the United Kingdom since 2000, with France, Italy and Japan following close behind.The explosive growth of the Chinese travel industryhas pushed it into the top five even though its population has only just begun to travel. Chinabegan signing agreements in 1999 to permit leisure travel to various countries, but Canada has only very recently obtained the status of an authorized destination (June 2010). The Chinese still travel a lot within their own country, but the proportion of domestic trips to those outside the country has risen from 71 to 1 in 2000 to 38 to 1 in 2009.

Japan is the only country in the ranking below to have reduced its international tourism expenditures. Hard-hit by economic woes and fuel prices, the population has lost some confidence and travels less than before.

The Russian Federation, Saudi Arabia, Belgium, Australia, Singapore, Norway and Brazil more than doubled their spending during this period.

In short, the tourism market is constantly changing and welcoming more participants so it is easy to get lost in the crowd. The good news? The number of tourists from various regions around the world is growing constantly. We live in an age where physical distances are less intimidating than before and where tourists are choosing to travel just about everywhere. We must design our tourismstrategies to reflect a broader geographic perspective and not be afraid to compete with top-ranked destinations.

Sources:

- World Tourism Organization. “World Tourism Barometer, Interim Update April 2011.”

- World Tourism Organization. “Tourism Highlights, 2009 Edition.”

Concerns for the US market

The rise of the Canadian dollar in relation to that of Uncle Sam has been truly spectacular over the past five years. In 2002, the exchange rate for US$1.00 was CN$1.57 (average annual rate). For many years, the exchange rate was one of the incentives used to attract our neighbours from the south with slogans like “Stretch your dollar!” Clearly, the dollar’s sudden parity is of great concern, given that stakeholders across the board are looking for ways to stimulate this declining market, so key to the health of our tourism industry.

Since 2002, a record year for the number of American tourists in Canada, the numbers have been falling steadily, apart from a brief respite in 2004. And yet, is the exchange rate truly the prime culprit? Have we overestimated its influence on the travel behaviour of Americans?

The situation elsewhere

To better understand and put into perspective how the exchange rate truly affects the travel decisions of Americans, we have compared changes in the value of the loonie with those of other currencies (see Figure 1). We have examined fluctuations in the US dollar since 1995 in relation to the Canadian dollar, the euro, the Mexican peso and the Japanese yen. At the same time, we have charted the annual number of US citizen international departures to Canada, Mexico and overseas. To make the data comparable, we have established 1995 as the reference year, with an index of 100. The lines in the graph below illustrate the increases and decreases noted in relation to the reference year.

This graph shows the decline of the US dollar in relation to the Canadian dollar (red line) is much more dramatic than the drop in the number of American tourists to Canada (broken red line). The departures in question refer to stays of one night or more, as day trips have, in fact. recently dropped more precipitously.

Venturing further afield

It is a mistake to believe Americans no longer travel due to a combination of factors like a weak currency, security concerns, a turning inward, etc. The line tracking the number of Americans travelling overseas (broken blue line) eloquently shows that Americans are more interested than ever in discovering new destinations. For example, according to a survey of AAA travel agencies, reservations for US travellers to Eastern Europe jumped 55% in the summer of 2007.

Though there was certainly a temporary drop in the period immediately following 9/11, interest in far-flung destinations rebounded as of 2003. In fact, the euro is the most relevant currency in the analysis of how exchange rates influence US travel abroad (though we have included the yen for information purposes). Like that of the Canadian dollar, the euro’s value has appreciated significantly (dark blue line) vis-à-vis the US dollar since 2001. And yet, during the same period, the number of international departures from the US increased dramatically.

The example of Mexico

Mexico is a very interesting case because its geographic proximity to the US is similar to that of Canada. Unlike the Canadian dollar, the Mexican peso has been falling steadily in value against the US dollar since 1995 (green line). However, this growing purchasing power has not affected the decision to travel to Mexico, with the number of US tourists to the country remaining relatively flat (broken green line).

A closer look at two other indicators

A basic notion in economics is the idea of “All other things being equal.” This is often used as a premise when analyzing economic phenomena. However, in real life, all other things are never equal, a caveat that must be kept in mind when referring to the analytical model presented in Figure 1.

The travel intentions of citizens are often tied to their country’s economic performance. For this reason, we felt it was interesting to compare the change in the number of American tourists travelling to Canada and overseas with two other economic vectors: the level of personal consumer spending (purple line) and the price of gas (yellow line).

Without doubt, skyrocketing gas prices do nothing to encourage proximity tourism among Americans who usually travel to Canada by car. Over the past few years, the drop in the number of these travellers has been much more pronounced than the decrease in air travellers.

The change in US personal consumer spending is another interesting indicator of Americans’ ability and desire to spend. In fact, the graph shows that the significant increase in international departures is more or less in step with the spending indicator. Though our analysis may not be truly scientific, it does illustrate that Americans’ travel interests are evolving to the detriment of Canada.

Better understand the impact

Surveys show that the exchange rate can influence travel intentions, particularly among certain customer segments. When it comes to international travel, Americans demonstrate a lower sensitivity to currency fluctuations than Canadians.

Certain outside factors can enhance the potential impact of currency fluctuations. One such factor in particular is the media coverage lavished on the phenomenon; it would seem the Canadian media is more interested than the American media in the rise of our dollar.

It is also true that although Americans may not be very aware or influenced by the loss of their purchasing power, they definitely feel it once they reach their destination. The firm Moneris Solutions has studied US credit and bank card transactions at Canadian merchants. Total transactions in US dollars dropped in July and August 2007 compared to the same period in 2006.

This study did not take into account the number of visitors involved. Nonetheless, the numbers do indicate that spending budgets have dropped in a greater proportion than the number of American tourists. Other factors like falling room prices in 2007 also had an affect on the expenditure base. The study reveals the sectors most severely affected: specialized retailers (-35%), campgrounds and trailer parks (-22%), public golf courses (-14%), hotel reservations (-13%), bus travel (-13%) and restaurants (-8%)

A major challenge

Canada’s current difficulty recovering its share of the American market is deep-rooted and not due solely to economic factors. Other studies have reached the same conclusion: Americans no longer find Canada as attractive as they once did and would prefer to set their sights on new destinations. An unfavourable exchange rate and high gas prices are merely additions to the list of deterrents, particularly when it comes to proximity tourism. Now that our currency has reached parity, we must use innovation and an enriched tourism supply to change their minds!

Sources:
- Montet, Virginie. “Les touristes américains découvrent l’Europe de l’Est,” La Presse, September 26, 2007.
- Office of Travel & Tourism Industries.
- Turner, Riva. “US Spending in Canada Sees Significant Decline,” Moneris Solutions [www.moneris.com], September 24, 2007.
- US Census Bureau.

With the arrival of the austral summer in November, tourists – more specifically, cruise passengers – are once again heading to Antarctica.

The majority of Antarctic cruises take place in the Peninsula area, which is blessed with a less severe climate and a greater diversity of attractions (i.e. fauna, flora and a large number of scientific bases and historic sites). In contrast, the other tourism area, the more remote Ross Sea region, features almost exclusively historic sites.

In addition to the more traditional cruise programs combining observation and hikes ashore, a variety of new activities have started to appear in recent years, including scuba diving, sea kayaking, rock climbing, skiing, snowboarding and camping. It is impossible to say, at this point, if these new activities are the result of the arrival of younger and more active visitors, or if the new tourism profile is emerging in response to the products offered by tour operators. What is certain, however, is that Antarctic tourism is growing.

Figures

Compared to the last austral summer (2005-2006), the number of cruise tourists has risen by 12%⁽⁴⁾ . This year, the International Association of Antarctic Tour Operators (IAATO), which represents 95% of the organizers involved in Antarctic tourism, expects nearly 38,000 visitors to Antarctica from mid-November to early March⁽⁴⁾:

• 27,575 tourists will participate in an Antarctic cruise with shore excursions (mainly in the Peninsula area)
• 7,500 tourists will take part in a cruise only (no shore excursion)
• 1,050 tourists will purchase a land tour (skiing, alpinism, etc., in the Antarctic’s interior)
• 1,600 tourists will participate in a sightseeing flight (these flights, generally based in Australia, do not land on the continent and involve large planes like the Boeing 737-200 and 747-400, flying at about 2000 feet (610 m) above the Antarctic coast)

More than any other, polar cruises continue to dominate the Antarctic tourism market, with the number of passengers increasing year after year (Figure 1).

Figure 1

Source: IAATO (2006b)

While polar cruise tourism will continue to increase in the Antarctic Peninsula during the 2006-2007 season, the number of visitors to the Ross Sea region is expected to decline slightly⁽⁴⁾. Compared to the 42 million visitors who entered the United States in 2004⁽⁷⁾, the data regarding tourism in Antarctica – a continent 30% larger than the surface of the USA, may appear insignificant. To understand the importance of the figures presented above, it is necessary to put them into the proper polar tourism context.

A sensitive continent

Antarctica is a continent like no other. This continent, the only one without an indigenous human population, also has extremely limited surface flora and fauna (in species diversity). In summer, when the seas surrounding the polar continent are free of ice, Antarctica and its Sub-Antarctic islands cover an area of 13.6 km². More than 98% of the continent’s surface is permanently hidden under a cover of ice⁽¹⁾⁽³⁾. This ice sheet – the biggest on Earth – may reach a thickness of up to 4.7 km in certain areas and contains no less than 90% of the plant’s fresh water reserves⁽³⁾.

Tourism, like most other human activities, takes place during the very brief polar summer. This is also the reproduction season for most of the continent’s animal species, which are very abundant at this time of year. As a result, the less than 2% of Antarctic and Sub-Antarctic island lands free of ice and snow become very precious for both fauna and visitors (scientists and tourists alike). In such a context, there is a very good chance that fauna (and, to a lesser degree, flora) could be negatively impacted. The scientific community, however, remains divided over the extent of this impact.

Negative Impact

In addition to the pollutants released when tourism vehicles (ships, inflatable boats, helicopters, large and small airplanes) burn fossil fuel, the main disruptions directly attributed to tourism activities include soil disturbances (more limited in the Antarctic than in the Arctic) and fauna harassment (mainly birds). It is important to stress, however, that atmospheric pollution remains the biggest threat to polar ecosystems. Apart from the pollution caused by burning fuel to transport tourists, most of the air pollutants affecting Antarctica are produced outside area and can therefore not be attributed directly to tourism.

Trying to protect the very resources the industry depends upon, the IAATO has created a visitor’s code of conduct entitled “Guidance for Visitors to the Antarctic.” This recommends, among other things, the distances one should respect when observing the various fauna species. In the past, some observers⁽²⁾⁽⁶⁾ have stressed that the guidelines are not applied consistently. The problem is that the code is enforced by guides, who must also see to their customers’ satisfaction. Many of these customers have a hard time containing their enthusiasm once ashore. Other visitors, who have invested considerable sums of money to reach these natural areas, sometimes feel they have earned the right to approach wildlife beyond the distances allowed. According to IAATO⁽⁴⁾, however, the activities of its members have “no more than a minor or transitory impact on the Antarctic environment.”⁽⁴⁾

The organization worries, however, about the 5% of Antarctic operators who have not joined IAATO and therefore do not apply the visitors’ code of conduct. During the 2005 2006 austral summer, 4,639 visitors and an unknown number of small boat passengers set foot on Antarctica with no public record of their visit ⁽⁴⁾. In its annual report, IAATO⁽⁴⁾ expressed concern over two non-member vessels, each carrying 500 passengers, who made shore excursions in spite of the IAATO regulation limiting site access to ships carrying more than 200 passengers.

The tourism forecasts made by IAATO for the 2006-2007 austral summer indicate that the travelling public’s desire for Antarctic adventures knows no limits other than those imposed by the number of ships and places available for such journeys. Negative impacts, as well as incidents involving tourism activities such as the sinking of the Bahia Paraiso in 1989, remind us, however, that tourism growth in such a remote and isolated place as Antarctica requires safe, sustainable management approaches.

Sources:
⁽¹⁾ – Cessford, Gordon (1997) “Antarctic Tourism – A Frontier for Wilderness Management,” International Journal of Wilderness, Vol. 3, No. 3, USA, pp. 7-11.
⁽²⁾ – GRENIER, Alain A. (1998) “Ship-Based Polar Tourism in the Northeast Passage: A Case Study, ” Publication in the social sciences, University of Lapland, Rovanieni, Finland.
⁽³⁾ – HANSOM, James D. and GORDON, John E. (1998) “Antarctic Environments and Resources – A Geographical Perspective,” Longman: UK.
⁽⁴⁾ – IAATO (2006a) “IP 86 IAATO Overview of Antarctic Tourism 2005-2006 Rev 1,” International Association of Antarctic Tour Operators (Website), 21 p.[http://image.zenn.net/REPLACE/CLIENT/
1000037/1000116/application/msword/Trends1992-2007.doc]
⁽⁶⁾ – VUILLEUMIER, François (1996) “Negative Impact of Tourism on Antarctic Animals and Plants,” Southern Connection Newsletter, July, No. 10.
⁽⁷⁾ – WTO (2005) “Tourism Market Trends, 2005 Edition, Annex,” World Tourism Organisation. [http://www.unwto.org/facts/menu.html]

Fewer U.S. visitors to Canada

The marked decline in the number of Americans travelling to Canada is of concern to the entire tourism industry, although the drop has not affected all the provinces in the same way. In fact, from 2000 to 2004, compared to the other Canadian provinces, Quebec appears to have been less affected by the Americans’ decision to desert Canada.

If we do a monthly comparison of U.S. arrivals to Canada in 2000 and 2004 (Graph 1), the slump is proportionally less significant during the summer months (June: -18.8%, July: -16.5% and August: 19%). However, in absolute numbers, losses are the highest during the months of the high season (July: 981,777 visitors and August: -1,079,657 visitors).

Major drop in same-day visitors

It is important to note that 98% of the decline in U.S. visitors to Canada is due to a sharp drop in same-day visitors, a situation that affects Ontario in particular since this province welcomed three-quarters (74.4%) of the total U.S. same-day visitors in 2000 (Table 2). From 2000 to 2004, the number of same-day visitors to Ontario fell by over 7.5 million.

Therefore, if we look solely at the number of tourists (Graph 2), the decline in the U.S. travel market is much lower, proportionally speaking. In fact, from 2000 to 2004, the number of Americans spending one night or more in the country dropped a mere 1.11%. During the same period, Quebec even recorded an increase of 3.38%.

2002: Base year or exception?

In 2002, Canada welcomed a record high of 16.17 million U.S. tourists. This increase of nearly 650,000 tourists compared to 2001 occurred at a time when the number of U.S. travellers to international destinations plummeted 1.3 million. Of course, this extraordinary performance can be explained, in part, by the public’s reaction to the events of 2001: travellers sought safety by staying close to home.

The 2002 increase was fuelled primarily by a jump in leisure travel since the number of business tourists in this record year only reached 1.96 million, a decrease compared to the 2.16 million recorded in 2000 (Graph 3). Furthermore, for the past several years, business travel has made up a proportionally smaller share of Canada’s U.S. travel market.

2005: The true decline begins

Preliminary data for the year 2005 (January to October) illustrate a trend of concern to the entire Canadian tourism industry, particularly that in Quebec.

This drop appears to be due to border markets, because in the first ten months of 2005, the number of American tourists arriving by car dropped 13.5%, while the number of those using other modes of transportation increased 6.4%.

Americans travelling to see the world

In 2004, Americans travelled abroad as never before, surpassing the record set in 2000 (61.8 million vs. 61.3 million). However, during this same period, Canada recorded a decrease of nearly 175,000 U.S. tourists. An analysis of the regions visited (Table 4) demonstrates a major shift in the international travel habits of Americans.

According to Table 4, non-traditional destinations are enjoying an upswing in interest on the part of American travellers. At the same time, traditional destinations (Canada, Mexico and Western Europe) saw their market shares drop sharply from 2000 to 2004 (Graph 4).

Preliminary data from the U.S. government for the period January 1 to September 1, 2005, show that U.S. air traffic to overseas destinations rose 5%. Once again, Central America (+14%), Asia (+10%), South America (+9%) and the Middle East (+8%) recorded increases superior to that of Europe (+3%).

The Canadian tourism industry, which still hopes to repeat the success of 2002, must accept that things will never get “back to normal” because American and global realities have been so profoundly altered.

The situation according to the Canadian Tourism Commission (CTC)

In the fall of 2005, the CTC formed a task force to examine the U.S. market. Its preliminary findings seem to confirm that Canada cannot blame factors like SARS, the war in Iraq, exchange rates or border-crossing issues for the country’s failure to attract U.S. tourists. The Americans interviewed by the CTC note that while they have no specific reasons for staying away from Canada, they are not motivated to come here either. This means that Canada is not successfully distinguishing itself from other destinations in an increasingly competitive field. The CTC’s final report is expected in late January 2006.

Sources:
- Canadian Tourism Commission. “US market taskforce expands mandate,” Tourism, Vol. 002, Issue 11, November-December 2005.
- Ontario Ministry of Tourism and Recreation. “Regional Tourism Profile – Provincial Markets Shares”, www.tourism.gov.on.ca/english/tourdiv/research/rtp/2003/
ComparitiveReportsProvinces/index.html
- Statistics Canada. “International Travel Survey,” Catalogue No. 66-001-PIB, January 2000 to October 2005.
- U.S. Department of Commerce, ITA, Office of Travel and Tourism Industries. “U.S. Citizen Air Traffic to Overseas Regions, Canada; Mexico 2005,” www.tinet.ita.doc.gov, 2005.
- U.S. Department of Commerce, ITA, Office of Travel and Tourism Industries. “U.S. Resident Travel Abroad Historical Visitation – Outbound 1994-2004,” July 2005.