Tourism industry booms
Gains in 2013 come despite big challenges
Despite a devastating flood and some internal squabbling within the industry, tourism in Calgary was a booming business in 2013 — and will continue to be, observers say. The numbers tell the story. As of the end of November, there were 81,033 more hotel rooms sold in 2013 than in the same period in 2012.
“If anything, all the flood did was kind of define who we were, showed what we’re capable of and went on to kind of show the nation and all in the world that Calgary’s a pretty special place,” says Cindy Ady, chief executive of Tourism Calgary.
That special place attracted 7.5 million visitors and tourism spending of $1.6 billion in 2013.
“We’re always stronger when we hunt in a pack. That’s just the truth about tourism or in the space that we sit ... When we partner, we’re stronger.”
It was a tumultuous year for partners in the industry even before June’s destructive flood hammered the city.
At its annual general meeting in April, Tourism Calgary reported that 5.2 million visitors spent an estimated $1.4 billion in the city in 2012. But in a speech during that meeting, Mayor Naheed Nenshi said that “parochialism and small-mindedness” within the city’s tourism sector needed to be addressed.
Less than one week after reporting the record-breaking year, Tourism Calgary replaced CEO Randy Williams. The organization, in announcing Williams’ abrupt departure, said he was being replaced on an interim basis by former Alberta tourism minister Ady. She continues in that role.
Then in mid-May, the Calgary Hotel Association announced it was pulling its $2.5 million in annual funding for Tourism Calgary and reallocating the money to other partners. About two-thirds of the association’s 63 members voluntarily contribute to the destination marketing fund. A three-year funding agreement, which was set to expire in December, was not going to be renewed, it said.
Ady was brought in to solve that key stakeholder issue and says there has been progress.
“I think there’s going to be a resolution and we’re getting close ... I’m feeling a positive pull in that direction. That’s my mission in life, and what I’m here to accomplish, and I think we’re in a better place today than we were yesterday,” says Ady.
“Always within this space, it’s a matter of where you focus resources and energy and how do governance structures work together. And so in Calgary we’re trying to create something much like the Travel Alberta model where we create the opportunity for it to act and react like a business and to ensure that the right resources are going to the right places.”
Jon Jackson, executive director of the Calgary Hotel Association, says the group is committed to delivering the maximum return on investment to its members with their contributions.
“We have been having discussions about a potential long-term partnership with Tourism Calgary with the goal of ensuring both short- and long-term benefits to our members, the industry at large and the city as a whole. To that, we have made an offer to Tourism Calgary towards a partnership and they are currently considering it,” he says.
Developing those partnerships was a key message in 2013. That was evident during and immediately af- ter the flood.
Prior to the flood, the industry was well on its way to stellar growth with a 5.6 per cent increase in visitor growth.
When the flood hit, the tourism industry rallied in a co-ordinated response. It certainly helped that the Calgary Stampede decided to go ahead with the Greatest Outdoor Show on Earth “Come Hell or High Water.” And the recovery for tourism was quick as it registered a 4.8 per cent hike in visitors for 2013 — a figure above the national average.
“We could have gone into destruction with everyone cancelling their plans and no one coming to Calgary. That could have happened. But we still had a 4.8 per cent growth for 2013,” says Ady.
“(Calgary) is the economic engine of the country so you have a certain amount of business tourism. But it matters because they stay in hotels, eat in restaurants, use taxis.”
That’s weekday business. Ady says the job of Tourism Calgary is to move the needle on the weekend business and it had some success in that area in 2013.
Part of it was through the natural growth of the city’s population as family and friends came to visit.
But more importantly, it saw sustained growth in sports tourism and major events like the PGA Seniors Tour and the Tour of Alberta.
Sports tourism alone accounted for almost 49,000 hotel rooms for this year.
Ady says this area will be one the industry continues to pursue vigorously.
There are many signs that the tourism sector in Calgary will continue to boom in the years ahead as Tourism Calgary sets a goal of $2.3 billion annually in total tourist spending by 2020.
Recently, the Conference Board of Canada said Calgary will lead all Canadian cities in spending growth related to overnight visits.
It estimates 2013 overnight visits will reach 3.4 million, a 1.6 per cent increase from the previous year, and is predicting a further four per cent jump in 2014.
The board forecast calls for longer term growth of 3.1 per cent in 2015, 3.4 per cent in 2016, and 3.3 per cent in 2017, while estimating total spending from overnight visits this year will rise almost five per cent to just over $1 billion. A further 6.8 per cent increase in spending is expected next year.
Ady says Tourism Calgary will continue to work in the area of research to make sure it is making the right decisions and backing them up by clear measures.
It will expand its ability to attract major events. It will go after new international and national markets, seeing tremendous growth potential there. It’s also working more with developing partnerships with Banff and Canmore for 2014.
The expansion of the Calgary International Airport will help as will more events being announced for the city.
Ady says tourism growth doesn’t happen by accident. It takes a lot of hard work.
A key indicator of the health of the tourism market is hotel rooms and occupancy. Calgary has the highest occupancy rate in the country.
Jackson says there are 12,300 hotel rooms in the city with a projection of a 20 per cent increase by 2016.
As of the end of October, year-todate occupancy was 75 per cent and it was projected to be the highest occupancy rate in the country.
“It’s been a strong year for the hotels ... It continues to be the business traveller leading the way. The Monday-to-Thursday business with the sheer number of head offices we have in the city, we have such a high demand for the business traveller to find hotel space,” says Jackson.