Posted June 13, 2014
The tourism industry in Nova Scotia tells us that it is a $2 billion source of expenditures in the province. Readers may be surprised by what spending is included in those numbers, and how they are calculated.
Tourism’s economic impact is notoriously difficult to measure. Restaurants and shops do not record whether a patron is from around the corner or around the world. Tourists are often from other parts of the province. Someone from Halifax visiting Yarmouth or Louisburg is just as much a tourist as someone from Boston.
To get a number requires two sets of data. First the number of people entering the province is counted at airports, ferry landings, and border crossings. Secondly an estimate of average expenditures per person is developed by surveying visitors. Multiplying the two gives an estimate of $1.18 billion for out-of-province visitors.
The process is repeated for Nova Scotians, with the estimated number of trips and average expenditures developed by another set of surveys. This adds $.84 billion.
The practice in Nova Scotia is consistent with national and international standards, but that does not make it any more precise. The numbers give an indication of trends but should be viewed as very approximate.
Most pictures we see from tourism advocates show leisure travelers enjoying outdoor experiences away from Halifax. Those visitors to rural Nova Scotia represent much less than half of what is counted in tourism. Consider:
- Most (54%) of the spending is in Halifax.
- “Tourism” includes people travelling for business or leisure. In Halifax, one experienced operator estimates that 70% of room nights are for business travel. These are of course no less valuable to the economy, but are not what most people think of when they are talking about tourism.
- Of the $2 billion spent, about $.8 billion is for accommodation, food, and recreation. These all represent high value consumption of local products and services. The rest is made up of groceries, other shopping and transportation, including flights.
- Any non-routine trip by a Nova Scotian of more than 40 km counts as tourism.
Thus your gas money counts if you travel from Halifax to Middleton to visit Aunt Thelma. So will your car repair if you have a problem en route. If you drive in from Truro for a day’s shopping at Dartmouth Crossing you will also count what you spent at Best Buy or the Mattress Gallery.
If you own a plumbing business in Halifax and make a trip to Bridgewater to look at an operation you might buy it will count. So will the trips to Halifax by your New Glasgow employees attending the national plumbers’ convention. So will the flights to Halifax by out-of province plumbers.
The rural tourism business is highly seasonal. The occupancy rate of accommodations outside of Halifax is three times as high in May till October as it is in the other half of the year.
The resulting jobs are mostly seasonal and many of them are low wage. They are good for students and as second incomes in a household, but do not form a hub around which an economy can be built.
The Ivany report proposes 19 ambitious goals for the next ten years. One of them is to double our revenue from tourism. It would be great if we can have twice as many people coming to Nova Scotia to play golf or to attend plumbers’ conventions. But it does not much help our economy if we buy more TV’s and mattresses, and Aunt Thelma may not want to see us twice as much.
The report recognizes that the goals need work:
“To set the process in motion the Commission is proposing the following goals to guide the development of a ten-year action plan for economic transformation and renewal in Nova Scotia. It is assumed that more in-depth analysis, consultation and refinement will be required before they are formally adopted. The core assertion here is that goals of this challenging nature are needed to orient and motivate leaders…”
It would be a disservice to the report to adopt the goals without debate. Rather they should be studied and debated by a broad range of players, and amended where necessary, so that the final version is well considered and well understood.
In the process we should not lose two essential characteristics of the proposed goals. First, they are highly aspirational and transformative. Secondly, they are concrete and measurable so that all Nova Scotians can know how we are progressing toward them.