Tourism Winnipeg

4 The Winnipeg Barometer Report | Volume 8, 2016 Tourism Highlights The Conference Board of Canada noted in its 2016 Autumn Travel Markets Outlook that overnight travel is estimated to increase 3.0% in 2016. The increase in visitation is attributed to lower gas prices and a weaker Canadian dollar. Domestic visitation is set to increase overall 2.0% and is comprised of softened growth in business travel of 1.2% and 2.3% growth in leisure travel. The Conference Board of Canada's Index of Consumer Confidence has been unstable since the fall in oil prices in 2014. Nationally, as of October 2016 consumer confidence stood at 96.7. This is up from December 2015, where consumer confidence was reported at 91.0. Provinces with more diversified, stable economies like British Columbia, Manitoba and Ontario will likely continue to see strong growth in domestic pleasure travel due to the increase in consumer confidence and household disposable incomes. These economies are benefiting from lower operating costs and growth in export demands. This is unlike oil-rich regions where consumer confidence remains unstable and spending is cautious due to economic uncertainty and soft employment growth. These provinces: Alberta, Saskatchewan, and Newfoundland and Labrador are seeing lower levels of consumer confidence, and visitation is expected to remain flat in 2016. Recently, the Conference Board's Index of Business Confidence has also been volatile. In the first quarter of 2016, the index reached a level of 86, its lowest value since 2010. The persistent weakness in the price of oil and other commodities has negatively impacted business investment plans, which has hurt employment growth and business travel budgets. The index rebounded to 98 in the second quarter however, the overall economic uncertainty in the business community will result in softening domestic business travel in 2016 to a small gain of 1.2% and 2.4% in 2017. Canada has seen growth in direct air seat capacity and according to the Conference Board it is expected to increase 2.9% in 2016. This increase in capacity allowed for more convenient air travel and will have assisted in facilitating some gains in domestic pleasure travel offsetting the weakness seen in business travel. For 2017, The Conference Board of Canada expects visitation will grow 3.0%, with overnight domestic travel to continue at a solid rate of 2.7%, overnight domestic business travel growing 2.4% and domestic leisure travel growing 3.2%. Domestic travel is expected to be strengthened by the positive increase in consumer confidence, an increase in disposable income, as well as festivities for the 150th anniversary of Confederation and Montreal's 375th anniversary. Disposable income will see a boost as it is expected employment will see positive growth in 2017 and the unemployment rate will fall from 7.3% to 6.9% Turning to the United States, in 2015 the economic situation changed and the strong U.S. economy, weaker Canadian dollar, the reduction in gas prices, along with improvements in the U.S. labour markets (the unemployment rate in the U.S. economy fell to 4.7%, reaching pre-recession levels) and increased marketing efforts are favourable conditions for U.S. travel; Canada saw a 9.9% growth in overnight visitation. This exceptional growth is expected to continue for 2016, projected to post a 7.8% increase in U.S. visitation to Canada. For 2017, more moderate gains are expected of 3.9%. As noted in the table below, strong growth was expected in air travel by U.S. travellers for 2016 and will continue through to 2017. The increase in air travel is as a result of strong gains in air capacity and lower airfares. Airlines need to be more competitive as there is an increase in competition, lower fuel prices and a lower Canadian dollar. While air travel will see the strongest growth, automobiles will also see an increase in travel volume; however, it is the most price sensitive market – the weak dollar and gas prices will continue to play a major role in attracting American visitors. National Canada

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