How Canadian Merchants Can Tap into $5 Billion in Global Tourist Spending

December 22, 2015         By: Erika Napoletano

As of July 2015, Canada had already said “welcome” to more than 2.9 million non-U.S. visitors, an almost 7 percent increase over the same period in 2014.

All told, tourists spent CA$5.6 billion in the country last year, offering businesses an opportunity to capture this valuable spend from overseas visitors. To further illustrate the value of inbound tourism to Canada from travelers around the world, below is a snapshot of tourist demographics, spending habits, and purchase methods for businesses interested in wanting to grow sales within this segment.

2014: Top 10 Countries Visiting & Spending in Canada (excluding U.S. visitors)

International tourism broke down by visitor and average in-country spend (listed in alphabetical order by country of origin):

Country Visitors Money Spent (CA$)
Australia 281,000 $817 M
Brazil 99,900 $253 M
China 454,000 $920 M
France 482,000 $708 M
Germany 327,000 $537 M
India 176,000 $280 M
Japan 258,500 $430 M
Mexico 173,000 $252 M
South Korea 163,000 $262 M
UK 676,000 $1 B
Totals 3,090,400 $5.459 B

U.K.-based visitors lead the overall tourism spend, but it’s important to note which countries have the largest average spend per visitor. Here’s how it breaks down on a per-capita basis:

China: $7,845 per visitor

  1. Australia: $2,907 per visitor
  2. Brazil: $2,532 per visitor
  3. Japan: $1,663 per visitor
  4. Germany: $1,642 per visitor
  5. India: $1,590 per visitor
  6. South Korea: $1,514 per visitor
  7. UK: $1,479 per visitor
  8. France: $1,468 per visitor
  9. Mexico: $1,456 per visitor

The Importance of Millennials to Canadian Global Tourism

Defined as those ages 18-34, Millennials are a key segment across many industries, and this is especially true with tourism, where, according to the Wyse Travel Confederation, they account for 20 percent of all global travelers.[1] Within 2012, USD $209 billion of the USD $1 billion tourism spend worldwide came from young travelers.[2] The Canadian Tourism Association (CTC) reported nearly 1 million Millennials (912,736) arrived in-country from origins other than the U.S. and spent in excess of CA$1.5 billion, accounting for nearly 70 percent of the total money spent by all millennial visitors during the year. In fact, millennial travel is expected to increase in the future—the number of international millennial trips is forecast to nearly double, potentially reaching about 300 million trips per year globally by 2020.[3]

So what are Millennials spending their money on? As noted by the CTC, Millennials often spend more in destinations than other tourists because they travel for longer periods, travel more frequently and further than other age groups, and, of note to merchants who may not think tourists reach their doors, millennials are pioneer travelers who discover and promote destinations not yet visited by traditional tourists.[4]

Going beyond the Data: The Importance of the Transaction Experience

Tourists from across the globe are traveling and using their credit cards more frequently. According to research from the International Trade Administration, credit cards were the highest ranked payment method used during overseas travel.[5] With international tourists playing a key role in Canada’s economy, Canadian merchants should look to ensure that a visitor’s transaction experience is as seamless as possible.

“The high number of international tourists spending at Canadian merchants is a compelling reason for merchants to expand their acceptance capabilities, in particular as the majority of tourists prefers to use their home credit card while overseas,” said Joe Hurley, Senior Vice President of Global Business Development at Discover. “We know this is important to travelers, including those with Discover Card and Diners Club cards, and Discover’s strategic network alliances with several domestic payment networks around the world enables merchants accepting Discover Global Network to open their doors to more shoppers from around the world.”

When you accept cards that run on the Discover Global Network, the third-largest payment network in the world, businesses are  opening their doors to more than 70 million cardholders, including Discover Card from the U.S., Diners Club International, and Network Alliance partners. In fact, these cardholders seek out merchants who accept their cards, with two-thirds of these cardholders looking for Discover Global Network signage before choosing a merchant when they are traveling. Accepting cards running on Discover Global Network means businesses have the potential to capture sales from these travelers.

For more information about Discover Global Network, visit DiscoverGlobalNetwork.com. To learn more about accepting Discover Global Network, reach out to your Acquirer/Payment Processor for information.

[1] https://www.wysetc.org/research/publications/new-horizons/

[2] https://www.wysetc.org/research/publications/new-horizons/

[3] Youth travel forecast prepared by the UNWTO.

[4] Canadian Tourism Commission. Canada Millennial Domestic Travel Summary Report, March 2015.

[5] https://travel.trade.gov/outreachpages/download_data_table/2014_Overseas_Visitor_Profile.pdf