Canada sees fewer US visitors on high dollar, gas

Other News Materials 19 August 2008 02:32 (UTC +04:00)

Canada saw the fewest foreign visitors in at least three decades in June as gasoline prices and a strong Canadian currency caused US visitors to cut travel north of the border, Bloomberg reported.

Trips to Canada by US residents fell 16 percent in June from a year earlier to 2.56 million, even as voyages by people from other countries rose 2.6 percent to 575,000, Statistics Canada said today. The total number of foreign visitors fell 13 percent to 3.13 million, the lowest since the Ottawa-based agency started keeping such travel records in 1972.

``US visitors traditionally have spent a lot of money here, even more than Canadians do, so it's definitely a hit to our ticket sales,'' Ann Swerdfager, media manager for the Stratford Shakespeare Festival in Stratford, Ontario, said before today's report.

Canada's C$70.6 billion ($66.4 billion) tourism industry has struggled since the 2001 terrorist attacks in the US made travel to and from that country more cumbersome. The currency's 59 percent appreciation since early 2002 also has made trips to Canada more expensive. The lost revenue from foreign visitors is another drain on an economy facing the slowest growth since 1992 this year, amid weak demand from the U.S. for manufactured goods from Canada such as cars and lumber.

The drop in June was fueled by high gasoline costs, the Canadian dollar and passport requirements that are being phased in for anyone entering or re-entering the US The biggest decline was US tourists taking day trips by car, down 22 percent from last year, according to the data, which isn't seasonally adjusted.

Swerdfager estimated her festival has seen a decline of about 16 percent in US ticket sales and said her research shows the drop is mostly explained by higher travel costs. The Shakespeare festival usually attracts between 500,000 and 600,000 theater fans from April 23, the playwright's birthday, to November, she said.

Canada was the world's 12th-most visited country in 2006 with 18.2 million tourists, according to the latest data on the United Nations World Tourism Organization's Web site.

``We're calling it the perfect storm,'' said Holly Ward, a spokeswoman for the Caesars Windsor casino, in Windsor, Ontario, across a river from Detroit. ``When you've got economic issues - the economic climate in Michigan, the dollar, gas prices, the border - all working together, it certainly changes the visitation pattern.''

Gasoline pump prices in the US rose about 34 percent from January to the end of June to $4.15 a gallon, before retreating 6.8 percent since then, according to the US Department of Energy. In Canada, they rose as high as C$1.39 per liter, or $4.97 a gallon, in July, according to data compiled by Bloomberg.

Also, anyone entering or re-entering the US by air has to show a passport as of last year and drivers are scheduled to face a similar rule in mid-2009. US travelers, most of whom do not carry passports, used to be able to get into Canada and back home with a driver's license or birth certificate.

The downward trend for US visitors prompted the government-owned Ontario Lottery and Gaming Corporation to partner with Harrah's Entertainment Inc. to add a theater to the Windsor casino and re-brand it as a Caesars to attract more Americans, Ward said.

Canada's tourism sector is on the ``brink of a crisis'' and needs ``urgent'' support from the government, according to the Tourism Industry Association of Canada.

The government could help by negotiating more open-skies accords to lower airfares or working with countries such as China to make trips to Canada easier, said Randy Williams, the tourism group's president and chief executive officer.

The tourism industry employed 623,900 workers in the first quarter, or 3.6 percent of Canada's total workforce, according to Statistics Canada.

Some operators are seeing an improvement now that gas prices and the Canadian dollar are easing.

The currency, dubbed the loonie for the aquatic bird on the one-dollar coin, has weakened about 4 percent against its US counterpart since the end of June. It fell 0.5 percent to C$1.0641 per US dollar at 4:07 p.m. in Toronto from C$1.0593 on Aug. 15. One Canadian dollar buys 93.97 US cents.

``At the beginning of the season, we were down about 15 percent for the American market,'' said Alain Brochu, vice-president of sales and marketing with Intrawest ULC's Mont Tremblant Resort, about 100 kilometers ( 62 miles) north of Montreal. ``But we've really witnessed an improvement in recent weeks, so we're making up a bit of the lost ground.''