Market Readiness Index
Domestic traveller confidence and arrivals show modest gains, while demand from the US and other international markets continues to grow through the summer.
Canadian domestic travellers show initial optimism on the back of the BoC rate cut announcement in June and domestic visitation demand shows moderate gains year-over-year (+5%) bringing it to par with 2019 levels.
Arrivals from the U.S. market continued to grow year-over-year in Q2, now at 85% of 2019 levels; however, June saw a minor pullback in demand with arrivals down -1.7% for that month. U.S. GDP grew in Q2 but higher-than-expected unemployment and the perceived delay in the Fed cutting rates have added uncertainties in the market pushing consumer confidence down to 98.35 (compared to 99.1 in the previous quarter).
Overseas markets continue to show mixed levels of readiness. Visitation demand from the U.K. remained strong throughout Q2 (+12% YoY) backed by strong consumer confidence. Germany saw growth throughout most of Q2 (+7% YoY) with some pullback in June (-11% YoY). Visa requirements for Mexicans continued to impact demand throughout Q2 with arrivals ending 23% below the 2019 level and -28% YoY. Despite recent setbacks due to visa restrictions, arrivals from Mexico are expected to rebound as the economy and consumer confidence in the market remain strong.
Arrivals from China increased 69% YoY, though they remain 65% below 2019 levels keeping China the farthest from recovery amidst ongoing geopolitical challenges and severely constrained direct air capacity (-94% compared to 2019). Travel demand and interest from Japan have continued to show steady growth year-over-year. Arrivals from Japan increased 37% YoY but remained 50% below levels observed in 2019. The weakness of the national currency, Yen, continues to be a limiting factor for outbound travel.
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