With the third anniversary of the pandemic behind us, Moneris data reveals encouraging signs of recovery in foreign spend as the tourism industry boasts significant improvements in foreign volume and transactions.
The pandemic was brutal on most industries but almost crash-landed the travel industry. Travel restrictions profoundly impacted foreign spend, resulting in substantial decreases in volume and transactions for 2020 and 2021. However, as restrictions began to ease in 2022, foreign spend showed signs of improvement.
- Year-over-year data for March 2022 revealed a significant increase in foreign volume and transactions, with an increase of 80% and 137% respectively.
While foreign travel has not yet reached pre-pandemic levels, foreign spend at the beginning of this year experienced an increase. Although the increases were not as dramatic as in 2022, volume
and transactions continued to improve throughout the first quarter. The average foreign transaction size remained higher than the average domestic transaction size, emphasizing the importance of foreign spend for businesses.
Moneris' foreign spend data indicates for several key categories in the tourism industry. When comparing March 2023 to March 2022, the following increases were also recorded:
- Hotel foreign volume saw an increase of almost 50% (48%)
- Entertainment foreign volume saw an increase of over 70% (71%)
- Restaurants’ foreign volume increased over 60% (62%)
Based on year-over-year data for March, the average foreign transaction size was 56% higher than the average domestic transaction size.
Canadian restaurants’ foreign volume up 400% since 2021
The rebound is especially notable when you compare today’s data to two years ago. Examining March 2021 versus March 2023, the following significant increases in foreign volume were observed:
- Hotel foreign volume saw an increase of almost 300% (286%)
- Entertainment foreign volume saw an increase of over 500% (558%)
- Restaurants’ foreign volume was up over 400% (446%)
Additionally, Moneris' data highlights Canada's commitment to supporting those affected by the Russian invasion of Ukraine. For March 2023, Ukraine ranked second in foreign volume change year-over-year in the prairies region and placed in the top five in most Eastern regions of Canada, including Atlantic Canada and Ontario.
Providing Solutions for Paying in Home Currency
Businesses in the tourism industry can enhance customer experiences by offering solutions that allow customers to pay in their home currency. Moneris' Dynamic Currency Conversion (DCC) is a solution that offers international customers the choice to pay in their home or the local currency.
Here's how DCC works:
- During the point-of-sale process, the solution inserts a prompt showing the real-time exchange rate, allowing the customer to decide whether to pay in their home or local currency.
- This convenience factor helps customers feel more at home when traveling abroad and provides them with a reliable reference point for costs.
- Regardless of the customer's choice, whether local or home currency, the business will be settled in their local currency.
Enabling DCC is free for businesses, and it may even serve as a revenue generator as they receive a portion of the mark-up to enable the real-time exchange. Importantly, the mark-up is transparent and visible to customers at the point-of-sale.
Article filed under:insights and trends