Continuing Success in Tourism is Great, But There are Limits to What it Can Contribute

Nova Scotia has had another excellent year in tourism. Even better, the gains were focused outside of Halifax. Can the winning streak keep going?

To the end of September, visitor numbers were up 9%. At that rate we will end the year with about 2,440,000 total visitors—a growth of 200,000.

Visitors from Quebec, Ontario, and Western Canada grew by 17%, while visitors from The United States grew by 10%.

Air visits had the biggest increase at 12%, while road visitors, including ferries, grew by 8%. The Yarmouth ferry brought 17,000 visitors, about 0.7% of the expected total for the year, at a cost of just under $1,000 per visitor.

Room nights sold outside of Halifax were up 6%. The big winners were Cape Breton, helped in part by the growing international reputation of Cabot Links; and the Annapolis Valley, which is cultivating a following by foodies and wine enthusiasts.

Meanwhile in Halifax, room nights were down by 2%. The numbers can be explained in part by two hotels being out of commission for renovations. The rest of the hotels had higher occupancy than in 2016, which may have boosted prices and restricted availability in peak periods.

It is nevertheless surprising that the growth in room nights sold are so much lower than the corresponding visitor numbers. One possible explanation is sharing economy resources such as Airbnb. It may also be that visitors to Halifax shortened their stays because of all the construction.

This is the fourth consecutive year of visitor growth. Tourism was strong across Canada, in part because of the Canada 150 events, including free admission to national parks.

Exchange rates have been favourable; gas prices were reasonable; disaffection for Donald Trump may have discouraged visits to the United States. Nova Scotia had terrific weather, while Ontario was experiencing a soggy summer.

All of these factors except the Canada 150 events, and perhaps the weather, should be the same next year. On the positive side, while construction in downtown Halifax will continue to be busy, the new convention centre will be up and running starting in January, and the Argyle Street entertainment district will be back in business.

Further growth is possible, but there are challenges that need to be met. Today’s sales by restaurants and entertainment venues are heavily influenced by what yesterday’s customers think and say about their experiences.

In tourism more generally, future visitor numbers will be impacted by word-of-mouth and social media comments about experiences in prior years.

Availability of accommodations are important. There appears to be agreement within the industry that services like Airbnb can be useful in handling peak season demand, and providing low cost alternatives for travelers who might otherwise not visit the province at all. These services must be made subject to appropriate accommodations fees and regulations.

Finding the necessary workers is becoming problematic in the most successful areas outside Halifax. For example, at Cabot Links there is a big demand for housekeepers and restaurant workers, and an even bigger demand for caddies. Many of those they find are inexperienced, and it shows. Operators need to invest more in training.

Staffing challenges become greater in September and early October, when occupancy is still strong but many of the workers have gone back to school. Conversely, the universities provide a helpful complement to tourism in and around Wolfville, Antigonish, CBRM, and Halifax.

Outside of Halifax, there is no escaping the seasonality of the industry. Occupancy from November to April is a quarter of what it is in the peak summer months, even less in Cape Breton.

Operators look for ways to extend their seasons, but that means trying to get things going earlier in June, and extending later into October. It is not going to affect business in winter.

It is exciting to see tourism do well. Success is much more visible than, say, if Michelin makes 100,000 more tires. That does not make it more valuable. Outside of Halifax the majority of tourism jobs are low wage and seasonal. They are good for students, and for families wanting a second income for part of the year.

But they do not form a foundation for a strong economy. For these we need Michelin, other manufacturers, year-round seafood and agrifood processors, and most of all, industries that take advantage of our natural resources, including fishing, forestry, farming, and mining.


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