By Bruce Parkinson
Asked to characterize the year ahead from a leisure travel perspective, two travel industry leaders used the same brief description – “OK.” While it may sound like damning with faint praise, that’s what passes for optimism in an industry buffeted by recession and a series of debilitating events ranging from flu to volcanic ash.
A group of senior travel industry leaders presented their annual “Leisure Travel Outlook” this week in Toronto. Hosted by the Best Western hotel group and led by moderator and travel radio show host Chris Robinson, the panel included Alison Hermanson, Executive Vice President CAA National, Chris Jones, Vice President Public Affairs for the Tourism Industry Association of Canada and Dorothy Dowling, Senior Vice President Marketing & Sales for Best Western.
“I think 2010 will be an OK year,” says Hermanson. “We’re still not out of the woods. Europe was very strong pre-volcano and our dollar is at a level that’s very good for Canadians heading south. But price-points are still stagnant and we’re feeling that on the retail side. We’re looking ahead at a strong winter and a real rebound in 2011.”
With the hotel group she represents firmly ensconced in the mid-market value segment, Dowling says she’s seeing an impressive turnaround as the economy recovers. She believes there’s pent-up demand for travel but consumers are still watching their wallets quite closely.
“I’m convinced the worst is behind us. March was the first really positive month, April was better and we’re seeing extraordinarily positive summer bookings.”
On the inbound side, TIAC’s Jones used similar terminology to express some cautious optimism. “It’s shaping up to be an OK year, with reasonably robust domestic travel. But many of our members saw a 7-15% drop in 2009, so there’s some recovery to achieve.”
With U.S. visitor numbers down over 50% in the past decade, Canada’s tourism industry continues to struggle. Already burdened by high taxes, there are fears that the introduction of the HST in Ontario and B.C. will act as a further disincentive, both for international visitors and domestic travellers.
“It’s a big pill for some travellers to swallow,” says Jones. “It makes our price-point a little more expensive.”
Jones says that if the government wants to help the Canadian tourism industry it needs to take a look at things like airport rent and other fees that are making Canada uncompetitive in the fiercely competitive global travel market. “The government is the source of many of the user fees and taxes the industry is subjected to. It takes $500-700 million out of the pockets of the airline industry and those costs are passed through to the customer.”
In a graphic illustration of how high costs in Canada impact the outbound market, CAA’s Hermanson said that 80% of air bookings at CAA’s Niagara club are from U.S. border airports. “2.5-million Canadians are crossing the border to fly because they can save hundreds of dollars for a half-hour drive.”