BUSINESS

THE WARY TOURISTS

HIGH CANADIAN TAXES AND PRICES ARE KEEPING VALUED VISITORS AWAY AND HURTING A VITAL INDUSTRY

PATRICIA CHISHOLM September 3 1990
BUSINESS

THE WARY TOURISTS

HIGH CANADIAN TAXES AND PRICES ARE KEEPING VALUED VISITORS AWAY AND HURTING A VITAL INDUSTRY

PATRICIA CHISHOLM September 3 1990

THE WARY TOURISTS

BUSINESS

HIGH CANADIAN TAXES AND PRICES ARE KEEPING VALUED VISITORS AWAY AND HURTING A VITAL INDUSTRY

There has been sunshine, ample accommodation and a $30-million federal advertising campaign promoting Canada’s attractions. But in vacation spots across most of the country, from picturesque Peggy’s Cove in Nova Scotia to Victoria’s historic harbor on Vancouver Island, members of Canada’s tourism industry are worried. So far this year, the number of tourists travelling in Canada is down sharply—and many resort operators say that they expect no improvement in the near future. Keith Gouthro, the owner of a recreational-vehicles park near the scenic Cabot Trail in Nova Scotia’s Cape Breton, says that high prices for food and gasoline are keeping visitors away from his camp this summer. Gouthro says that his business is off by 12 per cent, with a large part of the loss caused by a decline in U.S. visitors. And with the tourist season almost over, he says that he is concerned about the future of his $1.2-million investment. Declared Gouthro: “If this trend continues, it’s going to be a very scary situation.”

The stakes are high for operators of all sizes. Tourism has become one of the pillars of the Canadian economy. According to Statistics Canada, it is the country’s third-largest industry in terms of the foreign revenues it earns,

after the auto-manufacturing industry and the auto-parts industry. Canadians travelling in their own country—about 83 per cent of all tourists—as well as visitors from the United States, Europe and Asia, spend about $25 billion annually, providing employment for more than 622,000 people, almost 4.6 per cent of the Canadian workforce. And while the federal government, in conjunction with the provinces, spends close to $40 million annually on promotion, some critics now say that even greater amounts should be spent to attract vital tourist dollars. Declares Ann Pollock, president of Tourism Research Group, a Van-

couver-based independent consulting firm: “I don’t think tourism gets enough attention, considering how much foreign exchange and employment it generates.”

Indeed, government support is likely to become even more critical as more people, unsure about their economic futures, are staying at home. Concern that the economy may be weakening sharply has convinced many increasingly budget-conscious Canadians and Americans to travel less.

The steeply rising Canadian dollar, which reached a 12-year high of 88.58 cents (U.S.) last Thursday, is also convincing American visitors—80 per cent of the almost 15 million foreign tourists who visit Canada annually—to stay away. Since 1989, the number of visitors from the United States has dropped steadily, down 4.5 per cent in 1989 after barely climbing in 1988.

For many travellers, the rugged beauty of the Canadian landscape is the country’s most powerful attraction. But, so far this year, attendance at some of Canada’s most renowned national parks has slumped. Newfoundland’s Gros Mome National Park, on the island’s west coast, offers stunning vistas of jagged cliffs rising from deep ocean inlets, but it has received three per cent fewer visitors so far this

year than it did during a similar period in 1989. At Fundy National Park in New Brunswick, one of the most popular in Atlantic Canada, attendance has plummeted by 14 per cent.

Some normally crowded western wilderness areas are also suffering. In Alberta’s Jasper National Park, the number of visitors has dropped by 9.3 per cent. And even at Campbell River, a world-famous draw for salmon fishermen on Vancouver Island, business has dropped slightly this summer. Said Paul Bains, assistant manager of the Coast Discovery Inn: “The fishing has been great, but it just hasn’t attracted the numbers.”

In Montreal, hotel occupancy rates have dropped nearly 10 per cent to 53.3 per cent for the first five months of this year. According to André Jean-Richard, executive vice-president of the Montreal-based Quebec Hotel Keeper’s Association, that is partly due to a perception among American tourists that the Mohawk siege at Oka has created an unpleasant climate in which to travel. Said Jean-Richard: “There are too many negatives in the media.”

Most of the decline—about 80 per cent—is occurring in Central Canada, where concerns about an economic slowdown appear to be the greatest. Popular Ontario destinations, such as Niagara Falls, Toronto and the Muskoka-Georgian Bay cottage region, have suffered declines in visitors, but tourist operators in these areas say they still hope to pull even by the end of the season. Peter Elmhirst, president and owner of Elmhirst’s Resort near Peterborough, Ont., says that, while British and Swiss travellers are still booking, his traditional business from the northeastern United States is down significantly. And like his counterparts across the country, Elmhirst blames tax-driven higher prices for food and alcohol, and a less favorable exchange rate. “Americans are always complaining about prices,” says Elmhirst.

There are a few notable exceptions to the cross-country slump. In Whistler, B.C., a mountain resort 120 km north of Vancouver, tourist bookings have ballooned by 45 per cent this summer, with visitors from the United States, Japan, Vancouver and Central Canada making up most of the clientele. Tour operators in Banff, Alta., also report strong tourist numbers buoyed by the continuing interest of Japanese tourists. Said Pat Bell, a spokesman for the Calgary Convention and Visitors Bureau: “Marketing that mountain experience has stopped any slide.”

Critics say that even more needs to be done to sell Canada abroad, as well as to its own citizens. According to some reports, Canada’s share of the world travel market has fallen to less than two per cent at the end of the 1980s from six per cent in the 1970s, partly because of strong competition from nations like Australia and the United States. Indeed, Canadians spend more tourist dollars abroad than foreign travellers do here, resulting in a national tourism deficit that reached $3.5 billion in 1989.

To meet the challenge of increased international competition, NDP tourism critic Lyle MacWilliam says that Ottawa should spend even more'on tourism advertising. In fact, the federal government has cut its tourist promotion budget by 30 per cent over the past two years. Said MacWilliam: “I’m concerned that the federal government hasn’t recognized that tourism is a major growth industry poised to become a global industry in the next century.” If that is the case, the beleaguered Canadian tourism industry may be facing an even more ferocious fight for the dollars of increasingly cost-conscious travellers.

PATRICIA CHISHOLM

MICHAEL HARRISON

JOHN HOWSE

HAL QUINN