Business

Passport to profit

Summer heralds a boom in the tourism trade

JOHN SCHOFIELD July 28 1997
Business

Passport to profit

Summer heralds a boom in the tourism trade

JOHN SCHOFIELD July 28 1997

Passport to profit

Summer heralds a boom in the tourism trade

JOHN SCHOFIELD

CHRIS WOOD

DALE EISLER

JOHN DeMONT

BRENDA BRANSWELL

BARBARA McKENNA

Business

It may not be one of Canada’s scenic wonders, but the fake waterfall in the lobby of the Sheraton Hotel in downtown Toronto elicited appreciative stares last week from a weary group of middle-aged Japanese tourists. Nearby, a young Spanish couple browsed leisurely through a gift shop, while two-dozen British travellers lined up by the main door to board a tour bus. Sanjay Gupta, an Indian expatriate who now lives in Memphis, Tenn., relaxed in a hotel armchair, relishing the cosmopolitan spectacle and savoring his first glimpses of Canada. “I’m pretty excited,” said the 28-year-old marketing manager. “Anyone I’ve met who’s been to Canada goes on and on about it.”

The word seems to be getting around. From sea to shining sea this summer, foreign travellers are pumping billions of dollars into the country’s tourism industry. Thanks to favorable exchange rates, a major marketing push and the buoyant U.S. economy, the number of American visitors to Canada rose 2.1 per cent in the first five months of the year over the same period a year earlier. But the hottest trend by far is the increase in overseas visitors. Since 1994, Canada has moved from 12th place to 10th among the world’s most popular tourist destinations, placing it just behind Poland. Almost half the record $12.1 billion that tourists spent in Canada last year came from countries other than the United States. “It’s looking like a really good year right across the board,” says Debra Ward, president of the Ottawa-based Tourism Industry Association of Canada.

Atlantic Canada, often the last to see boom times, is enjoying a banner season. Celebrations all year marking the 500th anniversary of John Cabot’s discovery of Newfoundland are expected to attract an extra 60,000 visitors to the province, bringing the total to 360,000. The Matthew, a carefully crafted reproduction of Cabot’s ship, is drawing large crowds at each of its 17 stops around the province. Festivals are bursting out everywhere. As well as the customary bake-apple fairs and salmon shindigs, there are “come-home” events this summer in 40 communities across the province. In September, the Summit of the Sea—16 separate conferences related to the world’s oceans—will give a major boost to St. John’s convention trade. “There are just so many events overlapping that, no matter where you go, you can find something to do,” says Cathy Duke, executive director of Hospitality Newfoundland and Labrador, an industry association. “It’s just a tremendous year for us.”

Prince Edward Island’s new, 12.9-km link to the mainland has also spurred Eastern Canada’s tourist trade. “There’s a steady line of traffic across that bridge,” says Don Cudmore, executive director of the province’s Tourism Industry Association. All told, the Island is attracting an estimated 25-per-cent more visitors, most of them day-trippers from New Brunswick and Nova Scotia. And the bridge itself has become one of the area’s biggest tourist attractions. “A lot of people never thought it would happen in their lifetime, so they want to see it,” says Carl Nicholson, manager of New Glasgow Lobster Suppers, one of the province’s largest lobster restaurants.

In the West, Asian tourists comprise the fastest-growing group of visitors. An increase in Japan’s goods and services tax last spring is blamed for a drop in package tours from that country, but Taiwan and South Korea are picking up the slack. Individual travel from Japan is also up, says Mark Andrew, general manager of Vancouver’s Hyatt Regency Hotel and chairman of the Greater Vancouver Visitors and Convention Bureau. The city expects a record eight million tourists this year, up from 7.6 million in 1996. ‘When it gets sunny, it’s just insanely busy,” says Ich Diochee, assistant manager of Earl’s On Top, a popular downtown eatery.

Further east, this month’s 10-day Calgary Stampede beat all attendance records, herding 1.7 million visitors through the turnstiles. For many sojourners, however, the mountains are the biggest attraction. “We drove through the mountains and back again and I loved every moment,” said 26-year-old Scottish tourist Jennifer Field, gazing towards the Rockies from the top of the Calgary Tower. “It was even more beautiful than I imagined.” Sharing the view were M. S. Narayan, 66, and his wife Uma, 50, from Bangalore in southern India.

“In India, you often hear that Canada is such a beautiful place,” said Uma. We love every corner of it.”

For most tourists, the country’s major cities are as much a draw as the great outdoors. “It really is impressive how clean the cities are,” says Texan David Byboth, a computer engineer who was spending a week with friends in Vancouver. “And you don’t feel like someone’s going to come up behind you and mug you, like you do all the time in Dallas.”

Fully a third of all overseas trips to Canada last year included a stop in Toronto. About 23 million visitors are expected this year, making the city Canada’s most popular destination. Local boosters squeezed every ounce of promotional potential from a report in last November’s Fortune magazine that rated Toronto as the No. 1 city in the world in which to live and work.

Less trumpeted is Montreal’s continuing appeal to travellers. On sunny summer days in the heart of Old Montreal, Place Jacques Cartier is filled with tourists, vendors and, on one recent afternoon, the soulful sound of a busker’s saxophone. “I like the cafés and the little art galleries,” says Pete Diomede, 53, a carpenter from Staten Island, N.Y. Two hours west, in Ottawa, 49-year-old Bob Frizzell from Edmonton was exploring Parliament Hill with his wife, Mary, and their two children: We came because it’s important for us and our children to see the national capital.”

While international travellers account for most of the growth in tourism, Canadians still account for the bulk of the industry’s business. The country’s tourism deficit—the shortfall between the amount spent by Canadians outside the country and the amount spent here by foreigners—fell to $4 billion last year from about $8 billion in 1992. Fierce competition and price wars in the domestic airline industry have encouraged more travel within Canada, especially in the West. But nothing has kept Canadian dollars at home more than their meagre value compared with the American greenback. “Frankly, I’m happy to keep the dollar where it is—forever,” says Hotel Association of Canada president Tony Pollard, whose industry derives 20 per cent of its revenues from international travellers.

Canadians’ appetite for travel appears certain to expand in the coming years. A recent report by the Conference Board of Canada predicted that tourism spending will more than double by 2010, hitting $25 billion. One reason for the projected increase: the financial windfall baby boomers can expect over the next two decades from inherited wealth. Growing prosperity in Asia and Latin America should also fuel a steady increase in overseas travel, ensuring tourism’s, status as the world’s fastest-growing industry.

WHERE THEY’RE COMING FROM

Determined to attract its share of that business, the federal government joined forces with the country’s travel industry in 1994 to create the Canadian Tourism Commission, an organization responsible for improving the marketing of Canada at home and overseas.

Since then, Ottawa’s budget for promoting Canadian travel has soared from about $20 million to $65 million this year. The industry kicks in another $70 million. The CTC has developed separate marketing strategies for the United States, Europe, Asia, business travellers and the rapidly growing ecotourism market. Last week, Industry Minister John Manley announced a $500-million loan fund for companies planning to open or expand hotels and tourist attractions outside of major urban centres. CTC chairman Judd Buchanan named British Columbia’s Okanagan Valley, Ontario’s Niagara wine region and Nova Scotia’s Cape Breton Island as areas that could become major destinations with resorts, hiking trails and other new facilities. For increasingly sophisticated international travellers, fake waterfalls are no longer enough.