Tourism shows signs of slowing, but ‘is still healthy’

After six consecutive years of growth, Greater Victoria’s tourism industry is cooling off a little.

According to data compiled by Chemistry Consulting, tourism operators have seen little, if any, growth through the first half of 2019, with major indicators such as hotel occupancy down slightly and B.C. Ferries reporting flat traffic numbers.

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“After six straight years of growth, it is clear that there will not be a seventh record year in a row, but it is still healthy,” said Destination Greater Victoria chief executive Paul Nursey. “We are trending close to 2017 numbers. We were expecting a bit of a softening compared to 2018, but it is a bit deeper than we had thought.”

The tourism industry appears to be facing a broad suite of issues, including economic woes in key markets such as Alberta, strained relations with China and fewer sunny days.

Nursey said some of the slowdown might be due to the cyclical nature of the tourism business.

“Leading global tourism observers have been calling for a cyclical slowdown in travel for some time,” he said, noting some studies have suggested global travel is on the wane due to a lack of consumer confidence and the fact travel has been riding high for so long it was bound to cool off.

Hotels in the region have reported average occupancy was down 1.12 per cent through the first six months of this year compared to the same time in 2018, though their revenue per available room was up $2.40 to $124.78 on average.

B.C. Ferries’ busiest route — between Swartz Bay and Tsawwassen — saw a 0.59 per cent increase in vehicle traffic and a 0.3 per cent increase in passengers, while its tour bus traffic was down 11.7 per cent.

Victoria International Airport, which this year has been dealing with the grounding of Boeing’s 737 Max fleet and the loss of United Airlines, which stopped its United Express service between Victoria and San Francisco in January, has seen a 3.25 per cent drop in passenger numbers so far this year versus last year.

Reid James, general manager of the Hotel Grand Pacific, said price might be playing a role in the downturn in some of their tour business.

“Our July and August numbers are down from 2018,” he said, noting their business from Canada is basically the same as last year and U.S. business is down a little. “The rest of our shortfall is in bus tours from the U.S., Australia and Asia. Our large [tour] operators are saying that Western Canada has become too expensive.

“They also mentioned that flying across Canada is the same price as flying overseas. As a result, their customers are selecting other destinations.”

Scott Meis, vice-president of marketing for Clipper Navigation, which runs passenger ferry service between Victoria and Seattle, said they have seen a bit of softness this year compared with 2018, some of it is due to the weather and hotel room availability in Victoria.

However, he noted, some of that is balanced by increased Canadian travel.

“With the falling Seattle hotel prices, we are seeing Seattle rise in popularity with our Vancouver Island market and that is offsetting some of our lighter northbound numbers,” he said.

Hospitality industry consultant Frank Bourree, principal of Chemistry, said relatively speaking, the travel and occupancy levels remain “really strong” and he expects July and August to be good months for the industry.

Nursey agreed, adding: “August is looking fairly healthy, perhaps down a touch off 2018, September a bit weaker and October and November very strong, but those are [usually] slower months. For 2020, we will start the year with a solid base of conference business and we are still booking a few; 2020 will all depend on how the economy holds and if tensions with China and Alberta ease.”

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