The numbers from StatCan are out for the month of April. According to the International Travel: Advance Information Bulletin US visitations were down 15.5% for the month of April 2008 compared to the same period in 2007. For the period of Jan to April US visits are down 14%. The only dim light in the report was a 1.3% increase in US visits by plane, albeit not enough to neutralize the year to date decrease of 2.7% Same day US visits by automobile were down by a whopping 23%! (visits by bus down 14.7%). Provincial Data is not much better but some provinces and territories are being hit harder than others. The Yukon, for example, saw a 64.2% drop in non-automobile visits in April '08 compared to '07. When it comes to automobile visits all provinces and territories experienced significant declines. The Yukon and Manitoba were the worst performers with 41.7% and 22.4 % declines respectively. In the last 4 years US visits to Canada have declined by 39%!-
Visits by Non US residents were not much better in April 2008 but at least there was no decline. There was a 0.8% increase compared to April '07. YTD (Jan to April) there was a 2.3% increase from Non US visitors to Canada. Mexico was down 10% from April of last year, but that's to be expected because of the Easter effect. If Easter falls in March there will always be a decrease in April and if Easter falls in April there will always be a decrease in March. For the year to date period of Jan to April, however, Mexican visits are up a very healthy 15.5% compared to last year. (only Malaysia shows higher growth albeit with very low absolute numbers). Spain and South America are doing fine with 7.3% and 7.2% growth for the first four months of the year.
-
US numbers are so large compared to any other visitor segment (YTD approx 5 M Americans versus 1 M Non-US visitors) that the Tourism Industry Association of Canada is right in saying that the Canadian Tourism Industry is on the verge of a crisis. And they said it before Air Canada announced a cut in seats and massive layoffs. With pundits forecasting oil prices to stay around the $115 to $120 per barrel of oil for at least another year, it is clear that the cost of travel will increase, thereby reducing demand. What can the industry do? What's going to happen if or when oil hits $200 per barrel?
-
Individually, businesses need to revisit their business plans, decide on the best target market for the next little while (one to three years) and go after it. Businesses will also need to look at their expenses and try to reduce them to improve their bottom line (apparently the rationale for Air Canada's moves). However, in my opinion, what businesses should not do is compromise on the quality of service they provide. This would only make things worse (especially in the era of Travel 2.0). As an industry (via TIAC and the provincial DMO's) we should redouble lobbying efforts to get governments to pitch in and help. What form this help may take I leave to experts to decide, but one that comes to mind is in the area of airport rents and airfare extras (such as the security tax). Both of these should be reduced. The federal government is raking in additional revenues from oil exploitaton and gas taxes, so it's not like we are asking for help from a cash strapped administration.
-
Another way to help would be to increase investments in destination marketing (e.g. on the CTC and provincial DMO's) in order to develop new markets and support inbound markets that are doing well. This, in my opinion also entails making sure that we work on better marketing - take some risks (see my "Dream Campaign" post).
-
It looks like the next two years at least will be quite challenging for the Canadian Tourism Industry. It remains to be seen whether the 2010 games will really be of benefit to the industry before and after. But Olympics are statistical outliers (up or down, but outliers nonetheless). I am not aware of a long term plan, but I think we need one going forward for the next 10, 20, 30 years. Any ideas or comments?
-
Regards,
Jaime Horwitz MBA
Share on Facebook
Follow the conversation at YackTrack!
No comments:
Post a Comment