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Monthly
Update
April 2009 Source: Photo and Video Library, ATPR
Research staff at Alberta Tourism, Parks and Recreation has compiled this update of events and trends that may affect
the tourism sector. The information in this briefing is current to April 30th, 2009.
Overview
Direct entries from the U.S. into Alberta increased in February.
Alberta moves into a surplus labour market.
Canada’s airlines struggle to fill their planes.
Calgary Stampede, Edmonton International Fringe Festival get funding from the federal government.
Recession-weary Americans escape by fishing
Key trends for the Canadian travel industry.
Tourism Statistics
Direct entries from the U.S. into Alberta increased in February. According to Statistics Canada’s Interna-
tional Travel: Advance Information, international travel (U.S. and overseas) to Alberta for the first two months of
2009 decreased –1.1% ,compared to the first two months of 2008. Overnight direct entries from the U.S. into
Alberta for the first two months of 2009 were up +4.1%, compared to the same timeframe in 2008. Nationally,
the decline was –5.3%. Overnight overseas direct entries into Alberta for the first two months of 2009 were
down –7.1%, compared to 2008. Nationally the decline was –5.8% (Statistics Canada, April 20, 2009).
Economy
Alberta moves into a surplus labour market. According to Statistics Canada’s Labour Force Survey, employ-
ment in Alberta for March declined by 16,500 people in the Goods-Producing sector and increased by 1,600
people in the Services-Producing sector for a net decrease of 14,900 jobs compared to February. Alberta’s year-
over-year employment decreased by -0.7%, or 14,000 people. Part-time employment grew by +14.8% while full-
time employment decreased by -3.5%. Alberta’s unemployment rate edged up to 5.8% in March, from 5.4% in
February. The national unemployment rate was 8.0% in March from 7.7% in February. Alberta’s unemployment
rate is considered to be a surplus labour market. Since October, employment losses have totaled 48,000
(-2.4%), mainly in the good-producing sector (Statistics Canada, April 9, 2009).
Tourism Issues April 2009
Airlines
Canada’s airlines struggle to fill their planes. WestJet unveils service guarantees. WestJet Air-
Both Air Canada and WestJet Airlines struggled lines Ltd. unveiled a new list of customer–service
with declining demand for air travel in the month of guarantees as part of an aggressive new marketing
March and fell short of filling their planes to the campaign aimed at winning market share from Air
levels they did last year. WestJet was unable to Canada and staving off the need for the proposed
stimulate demand enough to keep up with its ca- passenger bill of rights now before Parliament. Many
pacity deployment plans, leading to a 4.7 point of the customer-service guarantees are already part
drop in its load factor to 81.9%. “Given that last of the airline’s regular operations, including two free
year’s March benefited from Easter travel and a checked bags. Other services publicize practices that
much stronger economy, we are encouraged by were discretionary, including providing meal vouch-
our solid March load factor that hits the top of our ers for passengers delayed by more than two hours
optimum operating range of 78 to 82%,” said Sean and hotel rooms for those delayed overnight. How-
Durfy, WestJet’s chief executive. WestJet has ever, the customer-service guarantees does include
been actively trying to grow its network in the some new services, such as a cash-back guarantee
downturn by adding more planes and stimulating for a cancellation made within 24 hours of booking a
demand through lower prices. Air Canada re- flight. The move comes on the tail of an apparent
ported that their March load factor slipped 2.2 shift in strategy at Air Canada under the leadership
points to 80.7%. “Air Canada continues to reduce of its new chief executive, Calin Rovinescu (Financial
capacity in order to meet demand, but this is the Post, April 21, 2009).
first month since capacity reduction began in June
2008 where the company was not able to maintain Alberta
or improve load factor, leading to a concern that
the company may be reaching an operational Calgary Stampede, Edmonton International Fringe
limit,” said Chris Murray, CIBC World Markets Festival get funding from the federal government.
analyst (Financial Post, April 6, 2009). The Calgary Stampede received $2-million in funding
and the Edmonton International Fringe Festival received
Air Canada may scrap “a la carte” fares. Air $400,000 in funding from the federal tourism support
Canada’s new chief may ease off a consumer program to help promote and support “marquee events”
strategy his predecessor used to tack on extra in 2009. The Stampede plans to put the $2-million into
fees for travellers. Calin Rovinescu, who replaced marketing the summer event to B.C., Saskatchewan,
Montie Brewer, will be reviewing the strategy Mr. and the U.S. Pacific Northwest. The Edmonton Interna-
Brewer deployed over the past four years. Mr. tional Fringe Festival plans to use their funding to partner
Brewer believed consumers would support having with hotels or airlines to buy media in the United States
choices, similar to ordering individual items from a and U.K. “Our annual marketing budget is very small.
menu, or “a la carte.” He received praise from in- The festival itself relies very much on word of mouth,”
dustry analysts for finding innovative ways to com- said Julian Mayne, the festival’s executive director. The
pete against WestJet, notably stripping ticket federal tourism support program will run for two years
prices to a bare minimum, then charging extra for and is worth $100-million. Both events plan to re-apply
items such as advance seating. Consumer groups for the funding for 2010. Other winners include the To-
decried the shift away from Air Canada’s roots as ronto International Film Festival ($3 million), Quebec City
a full-service airline as it cancelled complimentary Summer Festival (nearly $3 million), Charlottetown Festi-
hot meals on North American routes, opting in- val ($958,000), Montreal International Jazz Festival ($3
stead to charge for sandwiches and snacks. A $25 million), Stratford Shakespeare Festival ($3 million) and
fee for checking a second bag for lower-priced Shaw Festival (about $2 million) (CBC, April 27, 2009).
tickets within North America, effective last July,
was reversed in September after a backlash from
passengers resulted in a slowdown in revenue
(Globe and Mail, April 1, 2009).
Tourism Issues April 2009
Travel Trends
Recession-weary Americans escape by fishing. As Economic woes hitting Canadian tourism.
Americans forgo expensive vacations, costly dinners Canadian tourism operators could take a hit this
and shopping mall splurges, many are opting instead summer as the weak economy prompts many
for the quiet simplicity of fishing, according to the sport travellers to scale back or even cancel vacation
fishing industry and reports from bait shops and fisher- plans. During a private roundtable discussion, op-
man. From the icy north to fly-fishing streams in Texas, erators from across the country reported summer
angling is on the rise. For families, it’s an inexpensive bookings are down about 10%, said Michele
outing. “I’m seeing a lot more fishermen down here,” McKenzie, president and CEO of the Canadian
said John Miller, owner of Bob’s Sport and Tackle in Tourism Commission. Business travel is down
Katonah, N.Y. “With the economy the way it is, people more than 20% year-over-year, said Don Gau-
are getting laid off from work and don’t want to sit at dette of the Association of Canadian Travel Agen-
home and do nothing.” Hard times have had this effect cies. However, tourism officials haven’t given up
on Americans before. In the last U.S. recession, from on the summer yet. Many Canadians are hunting
2001 to 2002, spending on fishing rods and reels rose for bargains, they say, and will make bookings
12% to $343 million. In Texas, fishing license sales closer to their departure dates. The same thing
have increased considerably in recent months, said happened after the 9/11 terrorist attacks and the
Tom Harvey, a spokesman for the Texas Parks and SARS outbreak, Mckenzie said (Canwest News
Wildlife Department. In 2007, as the U.S. economy be- Service, April 5, 2009).
gan skidding into recession, spending on fishing rods
and reels hit a 10-year high of $356 million (Calgary
Swine Flu
Herald, April 5, 2009).
Visitors to Canada boosted spending in 2008. Canada issues advisory warning against travel
According to Visa Inc., visitors to Canada spent about to Mexico. The World Health Organization has
$300 million U.S. more on their Visa cards in 2008 raised the pandemic alert to Phase 4 and the Pub-
than they did in 2007. Visa Inc. said that in 2008 tour- lic Health Agency of Canada has issued an advi-
ists put more than $9 billion in new spending on its sory warning against travel to Mexico. Air Transat
brand of credit card. That figure was up 7.3% com- and Sunwing vacations have cancelled all flights
pared to 2007. For that amount, American travellers to Mexico, while WestJet is suspending service to
represented more than 50% of tourism spending in Cancun, Cabo San Lucas, Mazatlan and Puerto
Canada. Visitors from Europe, Asia and Australia ac- Vallarta as of May 4. Air Canada is suspending all
counted for an additional 23% in Visa spending. Be- operations to Cancun, Cozumel and Puerto Val-
sides the spending figures, Visa noted that three of larta immediately until June 1. However, Air Can-
four survey respondents said they were likely to visit ada flights to Mexico City will continue until May
Canada in the future and 25% pointed to the 2010 6th. Although an advisory has been issued for
Olympic Games in Vancouver as a reason to travel to travel, Albertans are still travelling to Mexico. Two
Canada (CBC, April 17, 2009). cases of the swine flu have been confirmed in Al-
berta. Both cases were found in travellers return-
ing from a vacation in Mexico. Both cases are said
to be mild and one has already recovered, while
the other is on the road to recovery. More cases
are expected as more travellers return home from
their Mexican vacations (The Edmonton Journal,
April 29, 2009).
Source: ATPR, Photo and Video Library
Tourism Issues April 2009
Key Trends for the Canadian Travel Industry
Prospects for the Canadian travel market have deterio- In a separate online survey, the Conference
rated rapidly in recent months, as economic concerns con- Board asked Canadians about the kinds of
tinue to worsen. Canadians are increasingly worried about trips they were planning to take this summer
their financial situation and that is dampening travel confi- compared with what they did last year. More
dence. Moreover, it is changing the way some Canadians than half of those polled (56.5%) said they had
travel. taken a short-break holiday during the summer
of 2008 of one to three nights, not including
Over the last five months, Canadian consumer confidence trips to see friends of relatives. Of this group,
has hit its lowest levels since the economic recession of 20% plan to take more short breaks in 2009,
1981-82. Despite a small gain in March, the Conference while 62% intend to take the same number
Board’s Index of Consumer Confidence still stands at just this year. About 18% said they would take
71.5 (2002 = 100). Although there has been a small im- fewer short breaks this summer.
provement in sentiment about buying big-ticket items, the
majority of Canadians still believe it is a bad time to make The main reason why many Canadians are
a major purchase. choosing to travel less or not at all this year is
financial concerns. Among those planning to
Consumer spending is forecast to cool off significantly in take fewer or no summer vacations of a week
2009, with growth slowing to half the rate of 2008. Weaker or more this year, 30.2% of respondents said
labour markets, softer income gains, lower housing starts, they could not afford it, by far the most fre-
and falling consumer confidence all play a role in the quently cited reason. A smaller group (16.3%)
weaker outlook. Still, prospects for consumer spending indicated they planned to take more short
would be worse this year were it not for the tame rate of breaks rather than a long vacation.
inflation, low interest rates, and the incorporation of a gen-
erous fiscal stimulus package. Profits in Canada’s accommodations industry
are forecast to decline by more than 42% in
According to the Conference Board of Canada, travel in- 2009, dropping to $514 million.
tentions for the Summer is down to 59.2% compared to
last year’s Intentions of 62.4%. Furthermore, only 39.3% Canada’s air transportation industry is facing
expect to take a vacation in Canada compared to last an even greater decline in profits this year.
year’s intentions of 42.8%. Although oil prices have fallen by more than
half since their peak last summer (helping to
A regional analysis of the survey results suggests that do- lower operational costs), demand for domestic
mestic-travel intentions are highest among residents of air travel continues to plummet. As a result,
Quebec and Alberta (each at 47%). In comparison, plans industry profits are expected to fall to $106
for trips to Canadian destinations were much lower in On- million this year, a drop of nearly 86%.
tario (31%).
Both industries (accommodations and airlines)
Although fewer Canadians are planning a summer vaca- are anticipating 2010 to be brighter. The ex-
tion this year, the ones who are still travelling will likely pectation is that the 2010 Vancouver Olympic
take more short breaks and trips to see family and friends, Games and at least a partial recovery in the
rather than take long vacations. economy will provide a much-needed boost to
demand in these sectors.
Produced by:
Alberta Tourism, Parks and Recreation Source: The Canadian Tourism Research Institute
Tourism Business Development, Research and March — April 2009
Investment Branch
Kristy Hubscher
Phone: 780-415-1224
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