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Canadian Tourism versus Us Tourism

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May 22, 2008 – Comments (4)

Today there is an article in the Globe and Mail on the absence of Americans visiting Canada.

I consider that BC was particularly hard hit with Canada's debt load.  Twenty-four years ago when Canada started working on its debt problem when Brian Mulroney was elected Prime Minister BC was known as a "have" province and government policy of a certain standard for all Canadians means that BC got hit the hardest with transfer cuts.  At the same time forestry and mining were dying a slow death.  

BC was able to focus on tourism.  About half of BC's population is in the Greater Vancouver area.  The province has a relatively small population for the land mass, about 4 million people.  Overall the population density is in the range of 1/30th that of California.

The numbers are important to consider the leverage of the help to the BC economy from tourism.  With a small population, a big world, and a weak dollar, tourism was a growth industry for many years.  I have looked at tourism before and was evidence of a top in tourism.  The revenue from tourism has continued to increase, however, in recent years the number of rooms booked has started to decline and what is carrying the increase is increased prices.

Well, now there is a strong Canadian dollar.  With the unreasonable rate of price increases in hotel rooms, tourism taxes, and now gross decline in the US dollar, well, a Canadian vacation is now costing about twice as much for Americans.  Proximity has meant that Americans have been Canada's strongest tourism group.

BC is going to take a big hit to tourism at some point here.  The business conventions have been boosting tourism and hotel rates.  The cheapest rooms you can find these days is about $100 and with taxes it comes to about $120.  Just go the regular selection of hotels and $120-150 before taxes is fairly standard.

Business is hurting.  How long before conventions slow down?  And I think Vancouver has been expanding its convention center capacity...

My sister's partner is a ski instructor and although Whistler has suffered a slow down in tourism this past year, he has never been busier.  There are more European and Russian tourists and they are still learning to ski.

Tourism helped BC and Canada big time.  The US has about 10 times the population.  The numbers on taking a vacation in the US by Canadian are still no where near as attactive as Canada was to the US.  Our face value wages for the majority were/are fairly similar, yet Americans were able to travel to BC and get up to $1.60 per American dollar.  American vacations have gotten more affordable for Canadians, but exchange is about par.  Relatively speaking, it is still about 1/3 more expensive to Canadians then when the cost of Canadian vacations were at their most affordable for Americans.  It means that although Canadian vacations to the US are more affordable, they are still expensive compared to Mexico or the latin American countries.

The larger population means the ability for tourism from foreigners to help the US is about 1/10th.  The places people have in their mind that they'd like to visit, like New York, will benefit, but I think for the masses that New York is a place you see once if getting there requires airfare.  I could be wrong, but I think a place like Whistler has a very strong return appeal to skiers.  I have skied at about 10 different mountains, including the Rockies, and Whistler leaves the rest in the dust with the quality of the skiing.  If you like skiing and can afford it, you will return to Whistler.

In short, Canadian tourism is going be hurting.  I suspect room rates will not be increasing much and might decline, although not in Whistler until after the 2010 winter Olympics.  The US will benefit, but it won't be able to help the tax base the way it was able to the tax base in Canada because of population size.

4 Comments – Post Your Own

#1) On May 22, 2008 at 10:42 AM, abitare (58.10) wrote:

Time for some Famous Canadians (besides Dwot):

Bob and Doug - Topic - Snow Routes and Space Arm

 

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#2) On May 22, 2008 at 10:45 AM, abitare (58.10) wrote:

Some more?

Bob and Doug - Topic - How to get a mouse in a Beer Bottle

 

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#3) On May 22, 2008 at 4:26 PM, Tastylunch (29.54) wrote:

LOL at the videos. People forget that Rick Moranis can be funny. They had a movie too right? I remember liking it. I loved visiting BC and Vancouver as a kid. Went to the '86 expo.But it's pretty far from where I live. Yeah Canadian tourism can't be a good bsuiness to be in this summer. 

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#4) On June 15, 2008 at 3:25 PM, hansthered0 (< 20) wrote:

That movie was terrible....eh. Take off!

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