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Strengthening dollar not necessarily good for tourism industry
As most Canadians are already aware, the value of our dollar has been rising at a significant rate for the past few months, with the most optimistic of estimates calling for a peak of $0.85 by the end of 2005.
While a rising dollar generally means a strong economy - economic development, housing starts, salary increases - for an industry that banks on using its "value" to extract money from the pockets of US tourists, the news is not a cause for unbounded optimism.
Researchers at the Canadian Tourism Commission (CTC) has been following the upward climb of the loonie and has published a report that can help decipher what effect this could have on your tourism business. It focuses on distinct scenarios covering the most likely range of possibilities for the coming year, with a base-case assumption of $0.742 against the US dollar.
A 5% appreciation of the value of the Canadian dollar - which has already happened - could reduce (by 0.7%) the 6.8% growth in the volume of overnight U.S. travel to Canada forecasted in the base-case scenario.
From a travel deficit perspective, a 10% increase in the value of the Canadian dollar could amount to a $1.2 billion increase in spending by Canadians travelling to the U.S in 2005 compared to the base case.
A 15% increase in the value of the Canadian dollar could see Canada's world travel deficit reach $6,677 million in 2005 compared to $4,404 million in the base case.
August stats reflect rising dollar
Travel to Canada from other countries fell by 4.0% in August, while Canadian travel to other countries edged down 0.2% compared with July. Furthermore, travel from the United States to Canada fell 4.5% as an estimated 2.7 million American residents made a cross-border trip. Meanwhile, Canadian travel to the United States remained virtually unchanged (+0.1%).
Concerns about border delays as a result of increased security may have influenced travellers as the number of American residents making car trips to Canada plummeted. Just over 1.3 million Americans made same-day car trips in August, the lowest figure on record. Overnight car travel also declined 5.6% compared with July. All modes of overnight travel from the United States to Canada fell in August.
Travel by Canadian residents to the United States remained stable in August as 2.9 million made a trip. Same-day car travel was relatively unchanged (+0.1%), while overnight travel rose overall. Even though the number of overnight trips by plane fell 3.9%, the decline was offset by a 4.9% increase in overnight car trips.
The value of the Canadian dollar increased for the third consecutive month to US 76.2¢.
Travel to Canada from other countries increased slightly (+0.2%), the fifth increase in the last 7 months.
An estimated 345,000 overseas travellers arrived in Canada in August, up 0.2% from July. Travel was also up in 7 of Canada's top 12 overseas markets. Switzerland led the way with an 8.0% monthly increase, followed by Hong Kong (+6.7%). However, travel from the United Kingdom fell 16.7% after setting a record high in July.
Latest lodging report (week ending October 30) from the Canadian hotel industry showing 'revenue per available room' (RevPAR).
|Newfoundland & Lab.||$73.29|
|Prince Edward Island||$40.82|
**RevPAR is typically defined as room revenue divided by rooms available.
High insurance costs are hurting business
It's not just owners of rental properties who currently face a challenging insurance market where high premiums, elevated deductibles and lower coverage levels are the norm. And that's where coverage is available at all!
Ecotourism operators say huge increases in insurance premiums could drive many businesses into bankruptcy. They say their insurance costs have skyrocketed in the past 2 years alone.
Jordy Bowen runs a small adventure tourism company in B.C.'s Okanagan Valley. Selah Outdoor Explorations takes people on kayak and canoe trips, and although he's never had an accident, his insurance has gone through the roof. He says premiums have more than tripled since 1999 for less coverage. He wants the B.C. government to introduce a law that would prevent insurance companies from gouging small tourism operators. But the Insurance Bureau of Canada says there's no gouging involved.
Spokesman Dennis Prouse says the rise in premiums simply reflects a similar rise in liability payouts. "The amount of money coming in has to match the money going out," Prouse says. "The insurance industry had record revenues coming in, that's true but they also had record payouts." Prouse says larger liability awards from Canadian and U.S. courts are driving up the costs of insurance.
If the government tried to limit premium increases, many companies have said they won't offer liability insurance at all. And without insurance, tour companies wouldn't be able to operate.
Global tourism in good health
Global tourism has enjoyed a "spectacular rebound" for the year to August after the Iraq war and SARS pummelled the industry in 2003, World Tourism Organization (WTO) said in its autumn barometer report published last week.
The WTO said it estimated that international tourist arrivals rose 12% over 2003, with Asia and the Pacific "leading all regions with an exceptional increase of 37%."
North America also emerged from 3 years of negative arrival trends to post a 12% annualized gain, while Africa and also the Middle East, led by strong demand for Jordan and Dubai, also progressed.
According to WTO projections global arrivals in the peak month of August topped 90 million for the first time with the overall January-August figure hitting an estimated 526 million, which is 12% up on 2003.
The WTO, which said exponentially increasing demand for tourism in China coupled with strong demand in Japan had helped to produce figures which were healthy even taking into account the problems the industry suffered in 2003. "This leap is of course first of all a reaction to last year's depressed figures due to the Iraq war, SARS and the weak economy. "Nevertheless, compared to the corresponding months of the previous record year 2002, the gain is still 41 million arrivals (or 9%)," the report stated.
Outbound travellers from China numbered 20.2 million in 2003. Year-to-date (Jan-July 2004) it is already at 15.99 million (an increase of 63.7% over the Jan-July 2003 figure) so outbound travellers are expected to exceed 30 million for full year 2004. By 2020, the World Tourism Organization predicts, the Chinese will be the world's fourth most prolific travellers, taking 100 million trips, trailing only the U.S., Germany and Japan.
Postcards without the hassle of travel
A U.K. company that sends postcards from far-flung destinations - on behalf of people who have never even been there - is said to be doing well.
The MayDayCard company collects personally written cards and sends them from exotic locations around the world, to impress the recipient of the card. The going rate for cards to the U.K. from Los Angeles or Mauritius is £8.50, or £13 if you want to send a card from Hawaii.
A team of 20 people working in the travel trade, including pilots and flight attendants, are involved in the operation. The service has been selling more than 1,500 cards a month since it was launched at the beginning of the year.
Sport Tourism in Saint John
Venue Saint John rolled out the red carpet to more than 15 Provincial Sporting Associations during its 2004 Sports Showcase. For two days in October, Venue Saint John partners toured more than 25 sport event organizers around the city, enticing them to host future events in Saint John.
"Sport Tourism is the fastest growing tourism sector in Canada, worth over $1.3-billion a year," says Venue Saint John chair, Sally Cummings. "Sporting events not only attract visitors to our area, but also focus the media spotlight on us, and generally enhance community pride. So their business is very important to us."
In 2003, Saint John, New Brunswick hosted about 100 major sporting events which brought over 23,000 sport participants and their families to its community. Sport events have been worth about $9 million in direct expenditures annually to Saint John.
Vancouver voted top city in Americas
Condé Nast Traveler magazine has voted Vancouver the "Best City in the Americas" at its annual Readers' Choice Awards ceremony held in New York.
Vancouver won the top spot over Victoria and Quebec City, followed by San Miguel de Allende, Mexico, and Buenos Aires. Cities are scored on ambience, friendliness, culture and sites, restaurants, lodging, and shopping, to give a final ranking. Last year Vancouver was ranked second in the same category.
Vancouver Island ranked first ahead of Nantucket and Prince Edward Island in the North American Island category. This is the fifth consecutive year that Vancouver Island has received this honour.
Vancouver and Victoria placed second and third respectively in the Top Cities in the Pacific Rim category behind Sydney, Australia. Each month, the magazine is seen by an audience of 3.2 million readers, predominantly from the USA.
Manitoba to be highlighted
In 2003, the London office of the Canadian Tourism Commission (CTC) worked with the U.K.'s top breakfast television program (GMTV) to film two 8-minute specials on Quebec's whale watching opportunities.
GMTV is the most watched breakfast show in the whole of Europe with a monthly viewership of 25 million people; almost 50% of the UK population.
The UK office of the CTC is currently working with Tourism Manitoba to create a filming itinerary for the GMTV crew who will return to Canada in early November to produce a show to highlight Manitoba's polar bear product. GMTV will board the tundra buggies, meet with tourists, and capture the experience of polar bear viewing for the UK audience.
Non-stop Sydney to Vancouver
Good news for all Aussie visitors heading to Whistler this coming season as Air Canada announces the launch of the first ever non-stop service between Australia and Canada. This new flight will reduce northbound travel time by two hours and 15 minutes. The new non-stop, daily service flight between Sydney and Vancouver will start on December 16, 2004, just in time for Whistler's up-coming holiday and winter season.
"This announcement is a great boost for our Australian market," said Barrett Fisher, President of Tourism Whistler. "Australia has long been one of the resort's key markets, and we are excited about the time savings and convenience that the new daily flight will bring to travellers."
Nearly 5% of overnight visitors, representing 25,000 room nights, in the winter season (November through April) are generated to Whistler each year from Australia. This new service, with its added convenience, will serve to attract even more travellers from this market.
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