Tourism Can Continue To Grow With Better Regulation and Facilities
Posted January 18, 2019
Through to the end of October, Nova Scotia Tourism visitor numbers were about level with 2017, which had been up 9% from 2016. The year 2017 was Canada’s 150th birthday, which encouraged Canadians to stay in the country, especially with national parks being free for the year.
The province and the tourism industry continue to pursue the goal of doubling the size of the industry in the decade ending 2024. Here is a look at some of the key factors:
- Getting Here: While road arrivals were declining slightly, Halifax’s airport had a robust growth of 7% in number of enplanements, and of out-of-province visitors.
The biggest growth was in visitors from outside North America, but to put that in perspective there were more visitors from Ontario than from the USA and all other countries combined.
In last year’s provincial budget, the government established a one-time $11.1 million fund for the airport authority to promote international tourism and to incent airlines with seed money to establish new routes.
This and other efforts have resulted in revivals of service from Philadelphia and Chicago, expanded capacity from Boston and New York, and a new service to Dublin.
Visitor arrivals by air in the peak June to October period average 33,000 per week, representing a significant contribution to tourism.
- Attractions: Nova Scotia has a long list of events, both large and small, to attract visitors. The Tattoo in Halifax and Celtic Colours in Cape Breton are just two examples.
Each event requires a suitable facility. The most important new addition is the much-delayed convention centre in Halifax. It had a great first year in 2018, in part because of a backlog of groups who had been postponed from previous years.
There were 140 events attracting about 190,000 visitors. This year will be less exciting with perhaps half as many people attending a smaller number of events.
The centre is part of a larger project, the development of which has been disappointingly slow. The Sutton Place Hotel originally announced for “a grand opening scheduled in Spring 2019” looks to be delayed well past the peak season.
Likewise, all the retail spaces on Argyle street remain unoccupied. The Atlantic Lotto office could open soon but is hardly the kind of facility that adds to the vibe on the street.
- Accommodations: Room nights sold by licensed operators were up 1% through October. Room nights booked through Airbnb and similar operators were up 90%, but this number includes bookings of both licensed and unlicensed operators using those services, so the picture is not clear. Nevertheless, it seems likely that there was considerable sales growth in the sharing economy.
A working group was commissioned by government to make recommendations on short term rentals.
It noted that: the new technologies are changing the way consumers interact with each other, and are altering traditional economic models and markets; peer-to-peer reviews in the online marketplace have taken over the role of quality assurance from unenforced regulations; a shortage of licensed accommodations is a threat to achieving the goal of doubling our tourism business; some people feel that short term rentals contribute to housing shortages.
Accordingly, the group’s recommendations include:
- The Tourist Accommodations Act should be scrapped
- A levy on online bookings of unlicensed operators should be considered, with the proceeds to be used for tourism promotion
- Tourism operators, TIANS (the industry association), Tourism Nova Scotia, and online booking platforms should work together to grow Nova Scotia’s tourism sector
The general tone of the recommendations is to embrace short term rentals as adding both diversity and quantity to the inventory of accommodations available to visitors. There is a nod to the notion of leveling the playing field with licensed operators.
TIANS was part of the working group, but felt the need to step away and issue a response to the report. In it, they recommended a list of costs and regulations on short term rentals that, taken together, would hobble the short-term rental business.
The median revenue of operators is estimated to be $6,000, so the great majority of renters are small operators below the level where HST must be collected or heavy regulation makes sense.
The government should welcome the sharing economy as a useful addition to the accommodation options available to visitors and to the prospects for growth in our tourist industry.
At the same time, it should proceed with a levy to help tourism promotion, and insist that online platforms provide aggregate data on activity. Beyond that a light regulatory touch is appropriate.
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