Tourism spending dips significant

By Brian Morton

Tourism BC is keeping a close eye on declining hotel revenues across the province.

“What we’re anticipating is a decline in hotel revenues of about five per cent [for December, January and February compared to the same period the year before],” Tourism BC president Rod Harris said in an interview Monday. “It’s very significant. This is province wide.”

While revenues were strong in the first half of 2008 compared to 2007, Harris said that they’ve been dropping since then. “We’re anticipating a two-per-cent overall decline in hotel revenues from April 1, 2008, to March 31, 2009.

“We’re obviously concerned about what may or may not happen in the next several months. We’re waiting to see what this winter’s going to produce.”

Harris made the comment after data released Monday by Statistics Canada showed tourism spending plunged last year across the country with soaring fuel prices and poor weather blamed for many Canadians and international tourists staying at home instead of travelling.

The federal agency said overall spending in Canada fell 0.7 per cent in the third quarter of 2008, bringing an end to five years of growth following the SARS (severe acute respiratory syndrome) epidemic in the second quarter of 2003.

The steepest decline was in dollars spent by international visitors, which fell 2.1 per cent in the third quarter, the third consecutive decline.

Data suggests the number of travellers from the United States and abroad were down, the agency said.

Although there was no provincial breakdown from StatsCan, Harris said the local industry looks at hotel revenues as its leading indicator.

He said hotel revenues in July, September and October were down in 2008 compared to the same period in 2007, although he noted that revenues were up in the same period in 2007 compared to 2006. He said revenues in August 2008 were about the same as August 2007.

Harris added: “The last three years we’ve seen a six-to-seven-per-cent rate of growth [in revenues] every year. We’re comparing current market conditions to three years of very strong growth.”

According to the StatsCan report, the number of airline passengers from foreign countries travelling on Canadian carriers fell 6.1 per cent while vehicle fuel consumption also sagged.

In addition to foreign visitors, Canadians also spent less on tourism in the third quarter, down 0.4, compared to the previous quarter when spending was up 0.7 per cent.

Given the fact that the summer of 2008 was the third wettest in 61 years and travel was marked by the high price of gasoline at the pumps and fuel surcharges on airfares, StatsCan suggested Canadians stayed close to home.

Another indicator was that domestic spending on recreation and entertainment, and non-tourism commodities such as food and alcohol or clothing and books, was up.

Canadians’ travel spending outside Canada fell 1.7 per cent in the third quarter, as both same-day and overnight travel to the U.S. declined. However, travel to non-U.S. destinations was up for the 12th consecutive quarter.

Overnight travel within Canada was lower as indicated by the 0.6-per-cent decrease in spending on accommodation. Declines were also recorded for passenger air transport spending and vehicle fuel consumption.

Employment in the tourist industry was also down, although job gains were made in the recreation, entertainment and services industries.

Harris said that B.C. is also experiencing a decline in international travellers, especially those from the U.S. He said the number of visitors from the Asia Pacific region from January to the end of October was about the same as the previous year, with a one-per-cent drop in visitors from Europe and a nine-per-cent drop from the U.S.

However, he noted that local operators were helped by the fact that the number of B.C. and other Canadian travellers held up.

Harris said the industry is cautiously optimistic about the coming year, because of the buildup to the 2010 Olympics next February, a more favourable exchange rate with the U.S. dollar, cheaper gas prices and more direct flights to B.C. “The visibility from three billion viewers will bring unprecedented awareness levels.”

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