There are occasions, when a New
Year is upon us, we can look back and say "good riddance" while we look
forward to a better and more promising future year. Unfortunately, we
welcome 2016 with apprehension and trepidation and not our usual excitement and
optimism. Economically, we expect 2016 will be as challenging as 2015, if
not more.
You may ask what the problems
are with the tourism and hospitality industry. After all, as an export
industry the price of tourism products for foreign visitors, especially
Americans, is very attractive these days because of the weak Canadian
dollar. And on the flip side, Canadians are hesitant to use their
undervalued Canadian dollars to travel in other countries because they will be
paying 30-40% more for foreign destinations. This should be good news for
the Alberta tourism industry having all these Canadians vacationing more
frequently in Canada. Also, with fuel prices so low, transportation
companies in the tourism industry, like airlines, motor coach operators
and many others, are seeing dramatic expense savings on fuel. These
three benefits of the current economic conditions will have some positive
influence on hospitality and tourism. Unfortunately, not nearly enough!
Business travel associated with
the Oil and Gas industry is Alberta's and Calgary's bread and butter, but this
has virtually dried up. Christmas parties and other events, travel
budgets and expense accounts have all been shaved back in an environment of
expenditure freezes and layoffs. Business travel and expense accounts are
a higher dollar yield per visitor or patron than leisure travelers and so when
business travel is bad everyone feels the hurt. When layoffs occur and
unemployment rises there are less people with disposable income which is
critical to the health of the travel and tourism economy. And finally,
when consumer confidence is low because of losses in the investment markets,
ongoing announcements of more layoffs, uncertainty in the political arena, and
the war on terrorism, the travel and tourism industry is negatively
impacted. Travelers need to feel safe, secure and able to spend before
vacations and family getaways are taken with the same fervour Canadians usually
embrace travel.
And so, I am afraid we will
continue to hang on tight for another challenging year in tourism and
hospitality. We hope that in December 2016 we can say good riddance to
the past two years, confident 2017 will be a brighter one!!
Randy Williams (click to see Randy's profile)
Head of Practice - Hospitality, Tourism, Destination Management
