Thursday, March 25, 2010

Tough Times in Tourism

Dan Sumner
Economist, ATB Financial

March 25, 2010
The effects of the high Canadian dollar in Alberta are often spoken of in terms of their impacts on exporters and profits for energy, agriculture and forestry companies. But there is another sector whose fortunes are heavily impacted by the loonie – tourism.
In 2009 the average monthly number of Americans coming to Alberta fell by just over 3% to 53,089 people; for other international visitors the annual decline was 14% to 25,417 people.
The number of Americans coming to Alberta has been on a downward trend since 2004 as the rising value of the loonie has sapped American demand for vacations in Alberta. However, up until 2009, higher numbers of international tourists had been somewhat offsetting the decline in Americans.
The high value of the loonie can have a bit of a double impact on Alberta’s tourism industry – not only do fewer people come to Alberta for vacations but more Canadians opt to vacation internationally as their purchasing power has improved abroad.
The global recession has clearly had some additional impacts on travel as people from all over the world
opted to hold off on discretionary spending like vacations. Although the global economy is recovering, the value of the loonie is widely expected to remain elevated for some time. Considering this, Alberta’s tourism operators are going to have to work hard to market themselves to attract visitors.

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