Canadian Business Travel Forecast Looks Promising

October 9 2009 by Bryson Forbes

canada-economic-recovery-wr.jpgAccording to a market forecast from American Express, a sharp spike is expected in the amount Canadian businesses spend on travel next year. After what has been characterized as the "worst recessionary period in our history" travel and tourism in Canada is starting to see positive signs of recovery. The market forecast projects corporate Canada to increase its spend by 15 percent in 2010, far outpacing a miniscule 1 percent increase from the US and an expected further decline in Europe.

I can attest to the business travel market starting to turn. For the corporate agency I work at, September was the first month in 2009 we were back to pre-recessionary levels. I am cautious though about declaring the trouble completely over just yet. There are three things I am waiting to see before I ink my declaration:


1) Unemployment Levels
Last year in August the national unemployment rate was 6.2 percent and it has not decreased once in the last 12 months climbing to 8.7 percent this August. That means 2.5 percent more employable Canadians are out of work - more than 650,000 jobs. That hurts and definitely affects us all. I'd like to see the number go down before we declare that we are out of the woods.

2) More positive US outlook
Let's face it; we go as the US goes. The outlook remains much bleaker down south; in fact US unemployment just hit a 26 year high. As our biggest trading partner by a landslide, companies will be reluctant to visit clients who aren't in buying mode. We need stability down south, we need the Canadian dollar to retract a little, and then travel and tourism will spike sharply.

3) Inflation
From August 2008 to August 2009 we actually experienced a deflanationary period in Canada. Average prices for consumer goods and services actually dropped. A good thing? No, not so fast; prices which were largely driven down by oil greatly hurt a big exporter like Canada. Modest inflation would be better and this is another statistic that I would like to see turn around soon.

The good news is my three statistics may have already changed and led to some improvement, but let's wait and see. A 15 percent increase in business travel spend would be absolutely delightful and a sure sign that we are back to a stable economic environment.

Are there any key economic indicators you feel are crucial to the recovery?

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