Canada - Travel & Tourism: Leisure driven market (Strategy, Performance and Risk Analysis)
The Canadian travel and tourism industry is highly rewarding, with high volume and value growth. Domestic trips increased from US$108.4 million in 2012 to US$112.0 million in 2016, while international arrivals increased at a CAGR of 5.1% over 2012-2016.
Due to increasing tourist volumes, passenger airlines in Canada have increased their fleet size and number of seats available. Full service airlines recorded the highest number of seats sold for both leisure and business travels in 2016, with its total seats-sold increasing at a CAGR of 2.3% over 2012-2016. However, due to the depreciation of the Canadian dollar, passenger airlines revenue posted a CAGR of -3.4%, from US$18.9 billion in 2012 to US$16.4 billion in 2016.
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Leisure activity is expected to contribute majorly over the forecast period
Car rental revenue posted a CAGR of -3.5%, from US$2,365.5 million in 2012 to US$2,049.5 million in 2016, but is expected to increase at a CAGR of 1.4% over 2017-2021 to reach US$2,277.3 million. This is attributed to the country’s high utilization rate, rental occasions, and rental days, which have all fuelled growth in the car rental market in Canada. Leisure activity accounted for a 64.7% share, followed by business activity with 33.5% in 2016.
Domestic tourism to drive growth in the industry
Total revenue from hotels observed a CAGR of -1.5%, from US$17.6 billion in 2012 to US$16.6 billion in 2016, but is expected to increase at a CAGR of 6.5% over 2017-2021 to reach US$22.9 billion. The growing domestic tourism market, coupled with growth in travelers, will support the growth of hotels over the forecast period. In 2016, upscale hotels accounted for a 45.8% share, followed by midscale hotels with 35.3%. They are expected to increase to 46.1% and 35.6% respectively by 2021.
In-store and online revenue segments are expected to increase over the forecast period
Total revenue from travel intermediaries posted a CAGR of -3.2%, from US$28.4 billion in 2012 to US$24.9 billion in 2016, but is expected to increase at a CAGR of 7.0% over 2017-2021 to reach US$35.4 billion. This is attributed to the increase in online segment revenue, as the demand for internet and online bookings is increasing.