October 20, 2018 | Xing Brew
Tourism Trends in Ontario

According to the UN World Tourism Organization (UNWTO), tourism has become one of the fastest growing economic sectors in the world. Ontario’s Ministry of Tourism, Culture, and Sport has made much of its tourism data openly accessible online and so I decided to sift through their database, as well as some other open data sources to find some interesting insights about tourism trends in Ontario. Below are some highlights.

Unless otherwise stated, the data used to create the charts in this post come from the Ontario’s Ministry of Tourism, Culture, and Sport database here.

How Tourists Spend Their Money

Tourism receipts are used to calculate the overall impact of tourism spending on GDP, jobs and taxes. For Ontario, this amounted to $34.1 billion in 2016 - approximately 4.3% of the province’s GDP. The tourism industry also contributed to 391,000 jobs or about 5.5% of the province’s employment.

Tourism receipts include the spending of those who visit the province as a destination as well as those who are either passing through or leaving the province on their way to other destinations. This could explain the notably high amount spent on public transit, as seen in the plot below. Other areas where tourists spend a significant amount of money include food at restaurants/bars, accommodation, and private transportation.

Length of Stay

Most overnight visitors from Canada (outside Ontario) and from the US stay between one and three nights. Most travelers coming from overseas spend at least six nights in Ontario, with the majority staying 10+ nights.

International Visitors

While the majority of international tourists to Ontario come from the US, the number of American visitors has declined from 17.4 million in 2006 to 12.4 million in 2016. The number of overseas tourists, contrastingly, has increased from 2.3 million to 2.7 million in the same decade. While they made up 11.5% of all international visitors in 2006, overseas visitors made up 18.1% of all international visitors in 2016.

Overseas Visitors & Spending Habits

The majority of Ontario’s overseas visitors over the past few decades have come from the UK (384,000 visitors in 2016). However, there has been steady growth of visitors coming from China and India over the past two decades.

This is good news for Ontario’s economy, as Chinese, Brazilian, and Indian visitors have the highest per capita spending. In 2016, the per capita spending for visitors from these three countries respectively were $3,001.19 (CAD), $2,975.38, and $2,420.75. Visitors from the UK spent $1,599.21 and the most frugal travelers were the French, who spent $1,137.38 per visitor.

According to the UNWTO, much of the growth of tourism worldwide has been attributed to the emerging middle classes of countries like Brazil, Russia, India, China, and Mexico. Ontario’s tourism industry is certainly reflective of and benefiting from these trends. The plot below illustrates spending per visitor from select countries in 1996, 2006, and 2016. In 1996, visitors from India spent the least per capita ($449.12) and in 2016, they were among the highest spenders ($2,420.75).

Accommodation Trends

Accommodation makes up a large portion of tourism receipts. All overnight tourists need a place to stay after all, regardless of how much they decide to spend otherwise during their visit. The average price of hotels in Ontario, and especially in city centres, has increased sharply since 2013. It is likely that the rapidly growing prominence of short term rental platforms - notably Airbnb - has had an impact. Notice the similar growth pattern of Airbnb listings in Toronto and Ottawa and hotel prices in the respective cities.

Below is a map of current Airbnb listings in Toronto from Inside Airbnb to better illustrate the pervasiveness of Airbnb in the city.

This may seem a bit counterintuitive since with increased competition, it would make sense for hotels to lower prices to stay competitive. However, it is possible that smaller, budget hotels have gone out of business entirely and only the higher-end chains have been able to survive in city centres. Also, visitors traveling on tighter budgets are more likely to use Airbnb, and so rather than trying to compete with the lower cost short-term rentals, hotels are maintaining or even increasing their room rates and catering to business and luxury travellers.

Types of Travellers and Accommodation Choices

Most visitors to Ontario come to visit friends and relatives (VFR) and they mostly stay in private homes/cottages, including the homes of the people they are visiting as well as rented Airbnb units. Tourists coming for pleasure make up the second highest number of visitors and they are about as likely to stay in a private home/cottage as they are in a roofed commercial establishment (hotel, motel, or commercial cottage). It is only those coming for business purposes (who make up a relatively small portion of all visitors) that are more likely to stay in commercial establishments than other types of accommodation. No wonder hotels have such huge qualms with Airbnb!

It will be interesting to see how Ontario’s tourism industry and trends continue to evolve as a result of global economic changes and the continued growth of platforms like Airbnb.

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