Tourism forecast bright on low dollar

The limping loonie is expected to fuel another strong year for tourism in 2016, according to industry insiders.

Coming off a strong year that saw Greater Victoria record a 3.5 per cent increase in hotel occupancy, the region should be able to reap the reward of the Canadian dollar’s weakness compared to the U.S. greenback.

On Tuesday, the loonie ended trading up nearly a cent at 71.05 cents US, but is expected to remain well below par because of continuing weakness in the price of oil.

“If you’re looking for predictions, I’d say we are hoping to replicate what we saw this year and hopefully do a little better,” said Tourism Victoria chief executive Paul Nursey.

He expects an increase of between three and four per cent again this year, partly due to the dollar.

The result could mean as many as 3.7 million people staying overnight in Victoria this year.

Nursey said hoteliers and attractions are already seeing strong reservation numbers for the second, third and fourth quarters this year, though the start of the year is expected to be a little soft given the Coho car ferry is out of service until the end of February due to dock repairs.

“But our core region, the Pacific Northwest still looks to be very strong and we have more flights coming in,” Nursey said.

Dave Cowen, general manager of Butchart Gardens, agreed the year ahead looks good, but said the dollar can only take so much credit for it.

“It’s not as if there’s a heavy campaign publicizing the Canadian dollar. It’s the more astute consumer and generally it’s the border cities that are aware of it,” Cowen said.

“The long-haul traveller and the lucrative traveller from California that Destination Canada is going after is not necessarily going to be aware of it.”

That weak dollar plays two roles — attracting some visitors from the U.S., but keeping Canadians at home — and if they are going to travel in Canada they tend to come west, said Cowen.

“But going forward, we need to be concerned about Alberta,” he said, noting the oil-rich province’s woes with continued low oil prices will have an effect on travel behaviour. “We need to be aware of that and be a little cautious. Alberta is very important to us.”

Increased visitation from Alberta played a role in driving strong numbers for the tourism sector last year.

According to figures released Tuesday by Chemistry Consulting, the hotel industry saw a 3.5 per cent increase in occupancy and a $13.41 increase in revenue per available room to $103.65 a night in 2015.

At the same time, B.C. Ferries reported a 5.4 per cent increase in vehicle traffic, 4.8 per cent increase in passengers and a 3.3 per cent increase in bus traffic.

Victoria International Airport recorded a 3.6 per cent increase in passengers this year with 1.7 million through its gates.

And there was a record cruise-ship season with 227 ship visits carrying a total of 533,000 passengers. Next year, even more passengers are expected.

Cowen said the region benefited early last year from improved U.S. consumer confidence and pentup travel demand, while later in the year the dollar became a factor.

“It was a very strong year. We haven’t had a year like that in more than 10 years,” he said.