Trump Slump? Not really.

(Note: None of the following should be interpreted as an endorsement of the U.S. president’s odious conduct, in office or beforehand.)

When Donald Trump was sworn in as U.S. president in January, promising tourism-unfriendly ideas such as more aggressive border screening and a “Muslim ban”, this led to questions about whether or not the U.S. tourism industry would experience a “Trump Slump” as international tourists chose to holiday elsewhere.

So far, results have been mixed. “It’s official: Trump slump slows summer travel to the U.S.”, the MarketWatch business news site proclaimed in late April, noting that “online searches by prospective travelers to the U.S. have fallen by 6% year-over-year in the first quarter of 2017, according to a study from software company Adobe”. Yet in July, The Economistno friend of the president – noted that “Donald Trump’s effect on tourism has not been as bad as feared”.

The same words might apply to Canadians’ travel tendencies. Statistics Canada released its July 2017 international travel numbers this morning – the first month of the peak holiday season – and the findings show that the number of Canadians returning home from the U.S. was slightly higher in July 2017 than in the same month in 2016.

Returns home by Canadians visiting the U.S. were up three-tenths of a percentage point in July, compared to the same month in 2016, on a seasonally adjusted basis, which smooths out seasonal variations. On an unadjusted basis, which I’ll use below, the July 2017 numbers were up seven-tenths of a percentage point over July 2016.

This suggests that if there is a “Trump Slump” in Canada, it’s a mild one. Although one could argue that the small rise in cross-border traffic failed to keep up with population growth – Canada’s population grew 1.2 percent between July 2016 and July 2017 — and that per capita visits to the U.S.  were actually down a bit, Trump’s election and inauguration doesn’t seem to have had a drastic effect on Canadians’ travel habits.

More noteworthy is an ongoing change in how Canadians visit the U.S., and the growing international competition for the Canadian tourism dollar.

The number of Canadians returning home from the U.S. by automobile has been lower each July compared to the same time the previous year in each of the past five years. The effect was particularly noticeable in Manitoba, where the number of Canadians re-entering the country via one of our highway entry points along the Minnesota and North Dakota borders had declined for several consecutive years now, from 182,938 in July 2012 to 116,668 in July 2017.

Canadian cross-border travel has been shifting in recent years from road trips to air trips – up a whopping 15 percent year-over-year in July — which could suggest we’re less keen to visit nearby border states but still willing to visit more distant places like California and Florida; or perhaps New York City, a destination less suitable for motor trips.

The U.S. tourism industry also continues to feel the effect of increased competition from other countries. From 1972, the first year in which Statistics Canada started tracking these numbers, to 1997, 95 percent or more of Canadians returning from abroad each July were returning from the U.S. This enormous market share remained at 90 percent or better into the mid-2000s.

During the past four years, however, other destinations have been making quick inroads into the Canadian market. Whereas only two percent of Canadians returning from abroad in July 1972 were returning from countries other than the U.S., their collective share of the market ballooned from 11 percent in July 2013 to 19 percent in July 2017, pushing the U.S. share down from 89 percent to a still-dominant 81 percent.

The American tourism industry’s standing among Canadian summer travelers doesn’t seem to have suffered much as a result of the Trump presidency; but the availability of a growing array of international destinations at reasonable prices is certainly taking a bite out of their market share. This shows signs of being particularly felt in the northern border states whose tourism industries long courted road-tripping Canadians — a form of travel losing some of its lustre as more exotic options beckon.

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About theviewfromseven
A lone wolf and a bit of a contrarian who sometimes has something to share.

2 Responses to Trump Slump? Not really.

  1. derick says:

    I don’t know the data but I suspect a majority of the travel to/from the US is for business rather than discretionary personal travel. Business travel would not be likely to change much due to Trump.

    I do know a couple people who are cutting out personal travel to the US, but I agree — that impact is probably not large either.

  2. theviewfromseven says:

    I agree. It’s too bad business travel can’t be separated from leisure travel. That’s why I took a particular interest in the July numbers: leisure travel is extremely seasonal in Canada, and July is a peak month for it in addition to being a weaker month for business travel.

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