It’s May, and while in many parts of Canada we had a milder than usual winter, it seems Spring is taking its time getting started, but it’s here now. That means the start of tourist season. So how can your business take full advantage of this year’s tourist season? What can we expect after a few years of rising numbers out of the pandemic? Is there still room for more growth? Al welcomes Joe Passarelli from Discover Global Network to talk about what to expect from the upcoming tourist season and what advice he might have for businesses in tourist areas.
It’s May, and while in many parts of Canada we had a milder than usual winter, it seems Spring is taking its time getting started, but it’s here now. That means the start of tourist season.
So how can your business take full advantage of this year’s tourist season? What can we expect after a few years of rising numbers out of the pandemic? Is there still room for more growth?
Al welcomes Joe Passarelli from Discover Global Network to talk about what to expect from the upcoming tourist season and what advice he might have for businesses in tourist areas.
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Allan: [00:00:00] Happy May everyone. After a few false starts, spring has finally caught on. Trees are budding, the weather is warming, and folks are out tending to their gardens. Your business may also be preparing for the warm months to come. Maybe you're setting up a patio, or getting ready for outdoor markets. And if you're in the tourism sector, you'd better be ready.
You don't need me to remind you how short tourist season is here in Canada. So what can you expect this year? How can you prepare? And why now? Because it's just good business.
I'd like to welcome my co host for this month, our resident blogger, Niyati Buriraja. Niyati, thank you so much for co hosting this month.
Niyati: Thank you so much for having me, Al.
Allan: It's my pleasure. We have a jam packed episode this month, so we should get started. The reason I asked you on this month, was because it's May and tourist season is ramping up.
Niyati: Yes, it is.
Allan: And in Canada, we have a [00:01:00] limited time for tourism due to our short summer. So it's important for businesses to prepare to take full advantage of the season.
Niyati: That's right. But what does that have to do with me?
Allan: Well, tourism takes on many forms like outdoor activities, sporting or cultural events, natural attractions.
Niyati: Yes.
Allan: And cosmic events.
Niyati: Ah, now I know where you're going with this.
Allan: You recently posted an Insights blog article on Muneers. com about consumer spending around the solar eclipse. I did. Can you share some of the highlights?
Niyati: Of course. So we looked at two locations, Niagara Falls and Hamilton, because they were located on the path of totality.
Allan: Now, I saw that on the news, uh, they were expecting big crowds.
Niyati: Yes. Did you know they were anticipating up to 1 million visitors in Niagara? Which is why the mayor declared a state of emergency to help with the expected crowds.
Allan: I saw that on the news too. So, what was the final number?
Niyati: Estimates say over 200, 000 visitors total to both locations. I think people became concerned when the state of emergency was called, and the fact that the weather looked like we might not even get to see the eclipse.
Allan: Still, [00:02:00] 200, 000, that's a big number.
Niyati: It sure is. Hotels were booked months in advance. Restaurants and attractions saw a surge in consumer spending. Some categories saw an increase of nearly 200 percent year over year.
Allan: That is significant
Niyati: in Niagara Falls. Hotels were up 1 91 percent and restaurants were up by 160%.
Allan: Amazing.
Niyati: The blog post breaks down all the numbers in greater detail.
Allan: Well, I'll make sure to add a link to that in the show notes, but here's a treat. I was in Niagara Falls just yesterday, interviewing Andrew Virgilito owner of Italian ice cream. And I asked him about how the eclipse affected his business. Here's what he had to say.
I'm joined by Andrew Virgilito. Actually, we're at Italian Ice Cream in Niagara Falls with Andrew. Thank you for joining me today.
Andrew: Thank you for having me.
Allan: The theme for May is tourism, and I couldn't think of a better person to talk to than you because you're in Niagara Falls, Canada's honeymoon capital, and lots of tourists come through here. But a couple of weeks ago, a big event happened, the eclipse, and that caused thousands of people to converge on Niagara Falls. Talk [00:03:00] about that day and maybe your preparation leading up to that day.
Andrew: Wow, it was something we didn't know what to expect, to be honest. We didn't know how busy it was going to be or how slow it was going to be. Basically, this was something new. Reports, there was someone saying that we were going to have 10 times we normally have. On our busiest day.
Allan: Right.
Andrew: And that's a lot.
Allan: Yeah.
Andrew: Like on New Year's Eve, it's so busy around here, you will not find any parking.
Allan: Sure.
Andrew: There's bumper to bumper cars, traffic, people looking for parking spots.
Allan: Mm-Hmm.
Andrew: it, it, it gets crazy here. And, and that's in the neighborhood. They say usually at the falls, close to a hundred thousand.
Allan: Wow.
Andrew: So 10 times that, that's quite a bit.
Allan: Now, in the news, they were talking about declaring a state of emergency to get maybe some extra help here. Did that happen?
Andrew: It did. The Niagara region declared a state of emergency, which in turn, I think, made it worse.
Allan: Oh, really?
Andrew: I think it scared some people. Like the hotels, they had their bookings.
Allan: Yeah.
Andrew: You can see people [00:04:00] walking all over. There was people in town.
Allan: Yeah.
Andrew: Was it the numbers that they were expecting? No. Well, how are you ever going to know that?
Allan: I mean, a lot of that had to do with, I mean, the day turned out to be pretty overcast, and we weren't sure we were going to be able to see the eclipse, the totality, right?
Andrew: Correct. That, that was how I was going to gauge how it was going to be. Like, Friday, Saturday, Sunday, leading up to the eclipse on Monday, it was a busier weekend. It was like a summertime weekend. It was busy, and there was a lot of people around, and it was a beautiful weekend. That morning, it was overcast. Around 10, 11 o'clock, it rained here for a little bit. And I knew, okay, usually, like, if the sun doesn't come out, even in the summertime, it'll happen. If the sun doesn't come out, people aren't out and about. And it happened like that. There was people starting to come at noon. You could start to see some cars, but not the numbers that they were. For us, we were just, I just waited to see.
Allan: So in the end, looking at the final numbers, you say, It was akin to a summer weekend, but in April,
Andrew: I called it. We had an extra summer weekend. It was better than a regular. If [00:05:00] that weekend there was nothing going on, there was no eclipse. I'd say business would have been half of that, but it was a good weekend. The eclipse happened. There was people on our patio. It was kind of nice. People were enjoying themselves. Just the Enjoying the moment when it was full eclipse. You couldn't see because of the clouds, but when it was dark out there, that feeling everyone was just like, that pause, that silence, just that awe. And you can feel like it was just a little bit eerie too, because it just got cold because the sun was blocked. There was that cold feeling. It was almost like a horror movie happening. And then you can see just the beauty, like off the distance, like up the street, you can start to see the light start to come almost like the sun rising and slowly come across the street. And it lightened up everything, and then, you know, it was funny because I'm here, half hour after the eclipse, the clouds cleared up, and it was busier after the eclipse than before the eclipse.
Allan: Because, yeah, it was a nice sunny day again.
Andrew: Patio was full, there was people outside, it was good, you know.
Allan: So, overall though, was it a magical experience for you, or were you too busy working to enjoy it?
Andrew: I [00:06:00] enjoyed the moment too. I mean, sure. I said, you're working, you're having glasses. I don't care. I took all the precautions. We had the blinds down just in case, you know, I told her, you know, look, have glasses. We had all this stuff. We had people out there. Yeah, we enjoyed the moment.
Allan: Excellent. Thank you so much, Andrew.
Andrew: Thank you.
Allan: That was Andrew Vergolito, owner of Italian Ice Cream in Niagara Falls. And if you want to hear his story, it'll be featured in episode seven of Yes, We Were Open podcast this season. But for now, Niyati, what did you think?
Niyati: It sounds like the numbers are pretty much what we shared and spending in the area was close to the double norm. Just like how Andrew said.
Allan: Imagine the state of emergency, though. If it wasn't called and the day wasn't overcast, how many more people there might have been?
Niyati: I think it might have been more chaotic for sure.
Allan: So, it's obvious that an event like an eclipse or a sporting event like we talked about back in March can have a short term positive effect on local business, especially in the tourism industry.
Niyati: So, who do you have lined up today to talk about it?
Allan: Well, first I have Joseph Passarelli from Discover Global Network, and he's going to share a ton of data on how much foreign spend tourism brings to Canada, and he shares some tips on how [00:07:00] small businesses can prepare for that.
Niyati: Sounds good. What else?
Allan: Then, of course, we have our resident data expert, Sean McCormick, and he's got all the data on domestic tourism and what we can expect from Canadians who are choosing to stay local.
Niyati: Sean's great.
Allan: And I'm really excited because this month, we're bringing the final installment of the Merchant Journey, and we're finally going to see how the addition of Mineris Online to Saving Grace's website Has helped their business and you're going to want to hear this ending.
Niyati: I can't wait.
Allan: But first let's begin with my chat with Joe Passarelli from Discover.
I'm joined by Joe Passarelli. He's the Head of Acceptance Canada at Discover Global Networks. Joe, thank you so much for joining me today.
Joe: Thank you Al. It's a pleasure.
Allan: Today we're talking about tourism in Canada as Head of Acceptance Canada. What do you do in your role at Discover?
Andrew: My team is tasked with growing acceptance with Canadian businesses with the end goal, really, to make sure that our cardholders that come from around the [00:08:00] world have a great experience when using their cards and market.
Allan: Okay. Now, in terms of tourism in 2024 for Canada, what do you see happening?
Joe: Well, you know, tourism has been a great story, you know, since the fall of 2022, obviously. The pandemic had huge impacts on travel, but since then, I think we moved past recovery and our well into a rebound. We predict that we'll be back to pre pandemic levels by 2025, which is much faster than was expected.
Allan: Yeah, absolutely. Now, in terms of the amount of money that is brought into the country from international tourism, do you have any data on that?
Joe: It's huge. It's huge. International tourism contributes north of 43. 6 billion to Canada's GDP. It generates over 105 billion of spend. Not to mention it also involves one in 10 jobs, and believe it or not, by 2030. We expect that international tourism will generate north of 66. 3 billion and 160 billion of spend, which is [00:09:00] significant.
Allan: Yeah, that's, that's big business. Where are these tourists coming from?
Joe: It's a mixed bag Al. We're seeing visitors from all regions of the world, US, Mexico, Europe, Asia, and Australia. Of course, the U. S. being such a close proximity, they are, in terms of numbers, the greatest numbers of travelers to Canada. They represent almost 69 percent of the tourists that visit Canada.
Allan: Yeah, that makes sense. Now, have you seen any trends in these numbers?
Joe: We have. Obviously, the United States and Mexico, We're witnessing a huge recovery in demand for Canada. It's driven mainly by awareness being so close, proximity and a strong dollar. From an American's perspective, I'll think about it. Visiting Canada is an amazing bargain. Their dollar yesterday was worth 1. 36 Canadian. Could you imagine having an almost a 40 percent discount coming into the market and seeing such a beautiful country that has so much to offer?
Allan: Mm hmm.
Joe: Europe, the European markets are experiencing some recovery despite some economic uncertainties. And when it comes to Asia and [00:10:00] Australia, Australia is doing amazing and leading the pack with a swift recovery. While Asia itself is facing some challenges due to some economic and geopolitical tensions and I'd say some interesting trends out that we're seeing is educational terrorism. Oh. The number of international students that we've seen or have in Canada now has topped one million in 2023, which was a 29 percent increase year over year. But what's interesting is that the Canadian institutions that are hosting these students in terms of numbers, right, almost equal the number of students that are in the U. S. in their equivalent institutions.
Allan: So what you're saying is we have as many students visiting Canada as there are visiting the U. S. with one tenth of the population.
Joe: Exactly what I'm trying to say.
Allan: Why is that? Is it because we're offering more incentive? Or because Canada is more attractive in terms of our educational institutions? Do you know why that might be?
Joe: I think cost is one. The fact that we're a very safe country and have a great reputation.
Allan: Oh, okay.
Joe: And [00:11:00] interestingly enough, out of those international students, 40 percent come from India. One of our products is from India. It's the RuPay card that runs on our network. And on the education front, Al, what's important to note is that these folks stay for a longer period of time, right? It's not your two weeks, three weeks a month, right? They're here for the semester. They're here for the duration of their study. So that's one area of growth. Another one, which is a little bit unusual. You may have heard of it. It's called Bleasure.
Allan: Bleasure.
Joe: So it's, it a mix of business travel.
Allan: Oh, okay.
Joe: And leisure.
Allan: Sure. All right.
Joe: So you've heard about work from home, right? So everybody knows what that means. This is more like work away from home. So think of it as folks going to their preferred destination, setting up shop for a longer period of time, right? Working because they have flexible hours. Right. And then enjoying the amenities of being away on their leisure time. So that's a little bit of a growing trend, right? We still don't have numbers to measure it, but it did [00:12:00] have an impact on some businesses that cater to that, right? Okay. Hotel have to accommodate that kind of a clientele by providing more meeting rooms to accommodate hybrid work, right? Airbnb's, you know, VRBO's to accommodate that clientele. So it has that a little bit of a change to the environment that the businesses have to manage. so much.
Allan: Interesting. So Joe, other than the U. S., from which other countries are visitors coming to Canada?
Joe: Al, Canada is a top choice for many international markets, but we're seeing very strong interest from travelers from France, UK, Germany, Mexico, and of course the U. S. In fact, Mexico, France, and Germany, for them, Canada is ranked as the number one destination in terms of how much consumers like and respect the nation's brand.
Allan: Wow.
Joe: And we are considered a very safe country to visit. That is very important and it attracts a lot of visitors.
Allan: Now, on this podcast, I love data. So, just shower me with as much data as you have, please. What kind of data do you have for all this tourism?
Joe: Well, you know, [00:13:00] some very nice insights. Just in February, which is not that long ago. U. S. residents took 1. 1 million trips to Canada, which was a 20 percent increase from the previous year. 75 percent of those trips were by car. Yeah. And have you ever been at a Canada U. S. border crossing during a U. S. holiday?
Allan: Oh, no, I'm smart enough to avoid those.
Joe: The lines are without end with Americans coming into Canada for short duration trips. It's just amazing.
Allan: Yeah. Well, like you said, with the dollar the way it is and the proximity, especially for border states, it makes a lot of sense.
Joe: Absolutely. I mean, I would, I would do it if it wouldn't be the other way around for sure. And then, you know, for overseas travels, what we've seen is an equivalent increase, you know, almost 30 percent year over year from countries like France and the United Kingdom. Interestingly enough, Al, most overseas residents or travelers that come, come to airports in Toronto, Vancouver, Montreal, and Calgary. Combined, those airports represent over 97 percent of all overseas arrivals.
Allan: Wow, those are [00:14:00] busy airports for sure. Now, with all this travel, and you mentioned that by 2025, we should have bounced back fully from COVID. Is that correct?
Joe: Absolutely. What we're seeing is that international visits are projected to surpass the 2019, that's pre COVID levels by 2025, which is much faster than was anticipated. The U. S. again remains the largest market. And just to let you know, in terms of numbers, international visits were about 22. 1 million in 2019. So that's 22. 1 million visitors coming to Canada.
Allan: Yeah.
Joe: And we expect that these levels will reach 23. 5 million by 2025.
Allan: Wow.
Joe: Uh, those are huge numbers of visitors. In 2023, Uh, we saw an increase of 58 percent versus 2022, which is huge in 2024. We expect a 13 percent increase. You know, there is a little bit of a weak economic outlook in terms of different regions, activities from us and Mexico is expected to exceed the 2019 levels by 2024. So they're on track for that. Europe. will exceed in [00:15:00] 2024, Australia as well, but the rest of Asia, we expect should reach the pre COVID levels by 2026. And one interesting fact that we've gathered, Al, is that by 2030, China, believe it or not, is expected to be the largest overseas market. So by the end of the decade.
Allan: So of all the, you know, cause you mentioned millions of people coming in, in the last few years, where are they going?
Joe: Canada is such a beautiful country. I'm so proud of it. Popular destinations include Vancouver, Victoria, Whistler. Banff, Calgary, Toronto, Thousand Islands, Niagara Falls, and many, many, many more. And we've got premier events such as the Formula One in Montreal. We got the Calgary Stampede, the Blue Jays, the Raptors. We have seven NHL teams. We have the PWHL that just started this year. The Toronto Film Festival, the Montreal Jazz Festival. Ottawa Tulip Festival. We have national parks across Canada that attract many visitors around the world. Upcoming events that are coming to Canada include the [00:16:00] Four Nations NHL event in 2025. That's replacing the All Star game.
Allan: Oh, okay.
Joe: And the 2026 World Cup that's shared across North America between US, Canada, and Mexico.
Allan: That's going to be a big one.
Joe: Just amazing places and events to attract visitors. And in Quebec, if you don't mind, I'll switch to French.
Allan: Oh, allons y.
Joe: Quebec being the only French speaking destination in North America, tourists are attracted to it by its European charm. By places such as Old Montreal, Old Quebec, the Bletch cantons, Laurentides, Mont Tremblant, as well as events such as Formula 1, the Jazz Festival, sports tourism, including the Montreal Canadiens,
Allan: now let's shift gears a bit and talk about Discover Global Network for a second and your role in international travel. Uh, what is it?
Joe: You know, Discover Global Network is one of the fastest growing [00:17:00] networks in the world. We process. Well north of 550 billion in volume, and we serve 300 million cardholders, a business that accepts Discover Global Network, not only accept Discover Card, they also accept Diners Club International, we have 55 franchises around the world, and we have many network alliances that use Discover. Our network, and some of them include Elo from Brazil and Rupe from India, which is the card I mentioned earlier. In other words, Al, if a business is unable to accept Discover Global Network, they can accept multiple cards. So think of us as multiple cards, one network. And we want to support our cardholders on their customer journey by making sure that acceptance is strong in verticals linked to tourism. These include transportation. Air, train, taxi, ride shares, public transport, restaurant, hospitality, lodging, anything related to hotels, motels, Airbnb, VRBOs, leisure [00:18:00] destinations, as we just mentioned earlier, retail. Ultimately, we want to ensure a great customer experience.
Allan: Now, you know, travelers abroad, how will they know where they can use their Discover card?
Joe: It's actually quite simple. Discover cardholders around the world are trained and informed to look for. Discover signage wherever available. And to make it even easier, we offer free signage and supplies to all Canadian businesses, ensuring that travelers know they can use their Discover card wherever they go. Furthermore, while traveling internationally, these are very interesting stats. 61 percent of cardholders changed merchant or spend behavior if their payment type was not accepted. 72 percent of cardholders would visit the merchant again if their preferred payment type was accepted. 29 percent of cardholders form a worse opinion of the merchant if they do not accept the preferred form of payment and 80 percent of cardholders feel that it is important for retail merchants to accept the preferred payment type.
Allan: You mentioned multiple cards, one network is obviously one of the things that set you [00:19:00] apart. What are some of the others?
Joe: Our research shows that Discover cardholders prefer to use their cards when traveling. They value the rewards program. Cashback and the absence of foreign exchange fees, which is pretty important. Plus we offer very competitive pricing for businesses, making it a win win for the Canadian businesses, as well as the travelers. And we work with payment partners like Moneris to enable acceptance with Canadian small businesses.
Allan: And speaking of those small businesses and hopefully the entrepreneurs and donors listening to this podcast right now. What advice do you have to these small businesses that are looking to support international travelers?
Joe: Small business should prioritize accepting all car types to provide as seamless possible payment experience for the travelers. By providing as many options as possible, the small business is not only making sure that they are catering to tourists, but will ensure that they facilitate the sales process. At the end of the day, The equation is very simple. The business wants to sell, the customer wants to buy. If we can remove any noise or friction, everyone walks away a happy camper. Additionally, small businesses should focus on [00:20:00] embracing new technologies and understanding regional differences. The pandemic accelerated the adoption of a lot of new technologies, right? Including mobile ordering apps, online booking platforms, digital wallets. QR codes, in app payments, and outsourced delivery. Businesses needed to adapt quickly to meet consumer needs. While, you know, customers have returned to in person dining, the technology shift has forever changed the expectations that people have for engaging with restaurants. The genie is out of the bottle, and small businesses that want to be successful need to embrace this change and support it.
Allan: Very good. Now, back to the tourism in Canada. Do you have any final thoughts before we sign off?
Joe: Well, Al, with the rebound, we're seeing the promising trends in international travel, the future looks absolutely bright for the Canadian tourism sector. It's an exciting time for businesses to take advantage of the opportunities international visitors can provide. We just need to remember and adapt to visitors needs and make the way they pay as frictionless as [00:21:00] possible.
Allan: Well put. Now, Joe, if our listeners wanted to learn more, where would they go?
Joe: If your listeners want to learn more about Discover or need to order some signage, I can direct them to discoversignage. com.
Allan: Great. Thank you so much for your time today, Joe.
Joe: Thank you so much, Al. It's been a great experience.
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Allan: All right. It's time for the final installment of our merchant journey series. And joining me once again is Sydney. Sydney, thank you for joining me today.
Sydney: No problem. All good to see you.
Allan: So once again, for those of you who haven't been following along with this story, I strongly suggest you go back four episodes of just good business and listen. To the first four parts of this story to know what brought us here today, but just to sum it up, it's been months since we met Sam and Saving Graze. We met her back at the end of the summer and we started this journey with her. She had this charcuterie business where she took orders in an online form and then took payments using email transfer and it was a very manual process, a lot of back and forth, and we knew that we could help her improve her business. So we hooked her up with Amberlynn, our salesperson, and Amberlynn suggested to her Moneris Online as a solution. And then our developer team led by Shyra helped her build her new [00:23:00] site. Last month, we heard about how happy she was with her new site and the new online ordering system. Now we're fast forwarding three months. She's had. a good sample size with the new system, and we're going to hear about how she's doing it, whether it's helped her business or not.
Sydney: Yeah, I was happy to catch up with Sam, you know, just to hear how things are going. So here's my interview with Sam.
Hi, Sam. How are you doing?
Sam: I'm great. Thanks. How are you?
Sydney: I'm good. So last time we spoke, you had mentioned that before the e commerce integration into your website, you were getting about. 800 visits to the website and approximately four or five sales. So, you know, now that it's been a few months with the new integration, how has that changed for you?
Sam: It has definitely increased traffic. I would say it's increased by 85%. We are getting a lot more, not just traffic, but actual orders. People are definitely like paying online seamless and that's having to go back and forth with companies. So yeah, it's definitely a win for us.
Sydney: That's great to hear. So overall, what has been your [00:24:00] favorite part of the setting up with Moneris Online?
Sam: The ease of payment and not worrying about credit card purchases and having sort of it just go right into your bank account and everything is handled by Moneris. If there was a declined card, any of that, we don't have to worry about that. And, you know, it's definitely helped us increase our sales for sure. We didn't realize prior to this, how many people definitely use credit cards at the end. Definitely pay online shopping with credit cards. So yes, it's been a huge learning curve for us, but it's also been so beneficial to have.
Sydney: Being part of this whole process, would you recommend the Moneros online solution to other small business owners as well?
Sam: Definitely. Takes a lot of work off owner's plates, having to worry about payments coming in and with credit card fraud, all that, it's nice having a company as big as Moneris sort of handle everything and take that stress off for sure.
Sydney: So since we set you up before the holiday season, did you notice an increase in orders during that season?
Sam: Yeah. November, December were really [00:25:00] fantastic months for business. It was corporate customers buying gifts. It was parties. So for us, November, December were fantastic, definitely having e commerce available, credit card payments made it seamless, and it was a busy two months for us, which was fantastic compared to the previous 2022 year. So yes, based on even the past six months, we're seeing a huge improvement from last year's sales.
Sydney: Okay, so before we started this whole process, Saving Grace was your side hustle. And with the increase in sales and orders, has this become more of a full time gig for you?
Sam: The fall showed both Lindsay and I that we needed to put a lot more time into the business to grow it and with the sales and with the help of Moneris, it definitely shone a light on what it could be and grow to be. And it definitely is off to a great start of becoming well more than a side hustle. For me, I did leave my job. And this is my full time hustle. So it's not a hustle, it's a full time business. Yeah, [00:26:00] it definitely helped me see the potential and it's definitely worth the risk and yeah, it's been a very enjoyable process.
Sydney: That's great. Okay, Sam. So we have officially come to the end of our journey together. It's been an awesome process. We've been so happy to have you come along with us. Do you have any final comments?
Sam: I'm very grateful to have the opportunity that was offered last summer to get connected with Manaris and through Wix. And I would definitely, you know, when other businesses ask, I definitely say that Moneris made it seamless and it, and I would definitely stand behind having Moneris as our e commerce site and yeah, no, it's been great. It's been a great journey and I thank you guys for giving us that opportunity to take the leap and take that risk. Thank you.
Sydney: Thank you, Sam.
Allan: Well, that was amazing. Not only has her business gone up, but she, she's turned her side hustle into her main hustle. I mean, we couldn't have asked for a better result.
Sydney: I agree. I'm so happy that everything worked out for her and she seems to be beaming about the new website.
Allan: And just [00:27:00] so many more ideas are coming to her now and she's adding new streams of revenue to her business and stuff. So, I mean, we can't take full credit for everything, but we can at least say that we've helped facilitate her side hustle becoming her main hustle.
Sydney: Yeah. I couldn't be happier for her.
Allan: So there you have it, folks. That's our merchant journey. I hope you enjoyed that journey and hopefully we can do one of these again in the near future and help another small business owner build their business.
Sydney: Yeah. I'm so happy with the overall result and you know, I'm looking forward to coming back in the summer to hopefully start up another merchant journey with you.
Allan: That's great. And thank you, Sydney, for all the help and work you've put in to help tell this story.
Sydney: No problem. I really enjoyed doing it.
Allan: I'm joined by our data expert, Sean McCormick. Sean, thank you so much for joining me again this week.
Sean: My pleasure, Alan. A happy belated National tourism Week to you.
Allan: Oh, thank you very much. And that's a great segue into our theme for this month. It's [00:28:00] tourism spend, obviously. And actually you were all over LinkedIn with your data on tourism spend. So let's talk about that. Like in the last few years coming out of the pandemic. It seemed like tourism bounced back really strong and we were seeing really great numbers and it was hot. So what can Canadian businesses expect this year? A continuation? Is there room to grow?
Sean: You look at tourism through the lens of two different cohorts. You have your foreign Tourism and you have your domestic tourism and traditionally these two cohorts have trended somewhat in line with each other. But what we've seen is a divergence of those trends in the early part of 2024. Let's take a step back and look at. Hotel spending in Q1 of 2023. Yeah, we were talking like 30 to 50 percent year over year dollar volume growth in Q1 of 2023. It was enormous. It was hot. There was a post pandemic effect where the demand was through the roof. And we all know what happens with [00:29:00] demand outstrips apply, the prices go up, right? And it was not uncommon to see, uh, it's still not uncommon in some areas to see hotels in downtown Toronto or Vancouver or Montreal going for five, 600 a night, hotel rooms that would have been 300 a night, you know, just a couple of years ago.
Allan: Right.
Sean: So that was Q1 in 2023. That's what was going on. The numbers that we look at for Q1 in 2024, there's a normalization going on there because the demand is coming back to normal levels and our year over year data is comparing against Q1 of 2023 when it was through the roof.
Allan: Right.
Sean: So there's that before I talk about the numbers, then. You split this out into foreign spend and domestic spend. So travelers coming from outside of Canada and Canadians who are traveling domestically. So that could be someone who lives in Pickering who's coming into downtown Toronto with their husband or their wife and they're staying in a hotel in downtown for the night. That is a domestic tourist [00:30:00] just like someone traveling from Vancouver for a week with their family to stay in Toronto. Is also a domestic tourist, right? So what do hotels look like year over year in Q1 for foreign spend? They're up just under 1 percent plus 0. 87 percent dollar volume growth year over year. So that's, that's still, it's still pretty healthy. But if you look at the March break numbers for hotels across Canada, we looked at March break 2024 vs 2023.
Allan: Sure.
Sean: Hotels in Ontario were down 17%. Hotels in Quebec were down 21%. Hotels in Alberta were down 11%. There's two different stories being told there one that's being told by the foreign traveler who still sees Canada as a good destination to come and visit and spend their money. Maybe it's good value for Americans. Let's say where they're, you know, their dollars going further than it was a couple of years ago. And then you got your domestic tourists. Which it's easier for that family of Pickering to say, no, I'm not coming to stay in a hotel in downtown Toronto. We're going to do something in Pickering, right? Like it's a quicker [00:31:00] decision. So what we're seeing is a demand that's falling off for hotels for domestic tourists in Canada versus the foreign tourists. We're still making it rain. So they're still coming to spend money in Canada.
Allan: Yeah, it makes a lot of sense. I mean, with the cost of, Inflation is still really high and interest rates high that domestically, we're going to see that slow down, but it's interesting to see that international events bringing in that tourism like F1 in Montreal or places where international tourists will flock to like Banff, like Whistler and places like those.
Sean: Yeah. And you know what? We do studies every year on F1. That's a big event that we always like to take a look at because from foreign tourism standpoint, it's huge. Like tons of Americans cross the border up through Vermont and New York state. And basically the Northeastern United States, there's tons of American visitors, but also European visitors, like wealthy European visitors that just go on tour with F1. There's a lot of them and that's spend. We always break out foreign versus domestic for that event. Uh, and that one will be interesting to compare the foreign and the domestic, because what we're [00:32:00] seeing across a lot of spending categories and the bank of Canada has been echoing this. If you've been following any of the reports coming from them in the last couple of months, is that from a category breakdown, Canadians are pulling back. They're not pulling back so much that we are in a recession.
Allan: Right.
Sean: They're just pulling back. And I look at getting back to March break of this year, restaurants spend in Ontario during March break was off 2 percent versus March break last year. Quebec was off 1 percent versus March break last year. Alberta restaurants were off almost 9%. Versus March break last year. And then looking at the apparel category during March break, because when you're on March break and you're traveling, you're buying, you know, toques and gloves at the ski hill, things like that. Right? So Ontario apparel, March break, 2024 versus March break, 2023, Ontario apparel was down 21%.
Allan: That's big.
Sean: Quebec apparel was down 10 percent and Alberta apparel down six and a half percent. So there's a pullback happening.
Allan: Yeah.
Sean: [00:33:00] And this isn't just Moneris data telling you this, we're the ones that make you like raise an eyebrow and go, holy! Wow, that's real, but this is not, if you've been listening to what the Bank of Canada has been forecasting, the forecasts are real and they're, they're accurate and the data is just starting to articulate that now.
Allan: So two takeaways I'm getting from this one is we are comparing to last year where it was super hot. So some of these drops are pretty small. And so therefore compared to last year, not as bad as it looks. Two, if you are going to focus any marketing on tourism, you may want to focus outside of the country in terms of bringing in the international .
Sean: Yeah, you're back on. There is an effect where the demand was abnormally high in 2023. It was way high. You talk about abnormally high in 2023. 2022 was even more abnormally high. Right?
Allan: Right.
Sean: But that is now tapering off. Now where people reality is set in and now they got to pay some bills. It's not about, okay. You only live once. We just came out of a pandemic pandemics in the rear view.
Allan: Yeah, exactly.
Sean: And we're getting back [00:34:00] to reality.
Allan: Excellent. Well, thank you so much for your time this month, Sean.
Sean: Thanks Al.
Allan: Joined by Daniel Stranges. He's the senior events and sponsorship specialist at Moneris. Daniel, thank you so much for joining me today.
Daniel: Hey Al, I'm happy to be here.
Allan: So you're here to talk about May's calendar. What's going on in May?
Daniel: Absolutely. So for May, Moneris has partnered with the Bears Lair, an indigenous owned and operated organization that focuses on supporting indigenous entrepreneurs and providing entrepreneurial education through indigenous youth camps. We're honored to continue our investment with. Bear's lair by sponsoring their entrepreneurship dream camp in KU's Creek, British Columbia. And that'll take place from May 3rd to May 6th.
Allan: Amazing. I'm so glad we're still doing that last year was such a huge hit. So I'm glad they're doing it this year again.
Daniel: Oh yeah. We're happy to support it.
Allan: What else do you have for us?
Daniel: Next on the docket, Moneris' very own Sean McCormick will be hosting a Lunch and [00:35:00] Learn session at the RCC Store, Canada's biggest retail conference. Sean will host a session titled, "Data Solutions that Empower Your Business". The purpose of this session is to provide insights into consumer behavior by looking through the lens of data driven decision making and how it can play a role for retailers overcoming various challenges. Sean's session starts at 12. 15pm, taking place on may 28th.
Allan: Amazing. And listeners of this podcast will know Sean very well. So they know that if they have a chance to go check out his session, they should.
Daniel: Absolutely.
Allan: Do you have anything else?
Daniel: That's it for the month of May.
Allan: All right. Well, thank you so much for joining today.
Daniel: Thanks, Al.
That's all we have time for this month. Nyadi, did you learn anything new today?
Niyati: I learned that Canada is one of the top destinations to visit in the world.
Allan: Yes. And how about that?
Niyati: What about you, Al? What did you learn?
Allan: I learned that solar eclipses [00:36:00] are also good for business. We should have more of them.
Niyati: I don't think it works that way, Al.
Allan: I think it's a great idea. If anyone wants to read Niyati's blog article about the eclipse or learn more about Discover, Saving Graze or anything else we talk about in this episode, I'll post links to the show notes. If you're listening right now and you have any questions about anything business related, you can email us at podcast@moneris.com and we'll try to answer them in future episodes. Niyati, thank you so much for co hosting this month.
Niyati: You're welcome, Al. Anytime.
Allan: And on behalf of Niyati, myself and the rest of Moneris, it's just good business saying, thank you for listening. See you in June.