Canada’s Tourism Industry: Industrial Outlook, Winter 2006

Two different stories are buried in the rosy top-line numbers for Canada’s tourism sector. Real domestic tourism spending rose by an estimated 4.1 per cent in 2005, thanks in particular to strong growth in spending on air travel. But foreign tourism spending was much more subdued, owing to a drop in visits from the key U.S. market.

Tourism profits will reach another record high this year, at close to $1.5 billion, but drop in 2007 and 2008, as the implementation of the Western Hemisphere Travel Initiative security measures reduce the number of U.S. visitors.

In the outlying years of the forecast, profitability will begin to improve again because of a gradual recovery from the effects of the security measures, rising travel spending from new markets and the 2010 Olympics. By 2010, tourism profits will climb back to over $1.4 billion.