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Vancouver tourism woe is a boon for the locals

Aug 02, 2009

VANCOUVER — For hotel general manager Marion Harper Treskin, it is the type of visitors filling her rooms at the Westin Grand Hotel that tells the tale of this recession-ridden tourist season.

They are families, short-distance visitors, booking at the last minute for short stays, all cashing in on the discounts hotels have to offer these days to fill rooms.

"We're seeing visitor numbers down," Harper Treskin said, "but the percentage drop in [hotel] occupancy isn't as great as what we're seeing in the average room-rate drop."

Usually, Vancouver hotels will run at over 90-per-cent occupancy during the high season, she said. This year, occupancy rates are in the 80-per-cent range, even the high 80s in some months.

But hoteliers are throwing discounts as deep as 30 per cent into the market and relying more heavily on third-party channels such as Expedia or Travelocity to book their rooms, Harper Treskin said.

And they know who isn't travelling: The corporate executives, salespeople and managers coming into town to do business. She estimates that business visits at the Westin Grand are down by as much as 25 per cent, and perhaps 20 per cent citywide.

"We're trying to focus now on who is travelling," Harper Treskin said. "I think that concept of 'stay-cation' is definitely something we're seeing a lot more of."

These are more budget-conscious travelers, too. The discounts draw many stay-cationers to hotels that would normally be out of their price range, Harper Treskin said. And once ensconced, they are much less likely to order room service, send clothes out for cleaning, or open up the mini-bar.

"The overall [visitor] spend is affected by that," she said, which puts a direct hit on the bottom line of hotels.

"It's a direct impact on profitability. It doesn't matter if a guest is paying $100 or $400 per night. You still need a doorman at the door to greet them, a bellman to assist them with their bags, someone at the desk to check them in.

"To a lot of full-service properties, your fixed costs, your labour costs, are the same as they would be if they were paying $300 per night."

It is a common refrain across the industry: Visitor numbers down, more of them are stay-cationers, and they're looking for bargains.

By Tourism Vancouver's count, Metro Vancouver welcomed 2.7 million overnight visitors to the end of May this year, a decrease of 245,000 — 8.3 per cent — from the same period in 2008.

In terms of volume, the biggest drop in numbers has been visitors from other parts of Canada, which were down 158,000, or 8.6 per cent.

In percentage terms, visits from Malaysia (54 per cent) Japan (25 per cent) the Netherlands (24 per cent) and South Korea (24 per cent) experienced the biggest declines.

A similar picture has been unfolding at Vancouver International Airport, which saw 6.45 million passengers move through its terminals, 802,000 fewer to the end of May, an overall decline of 11 per cent from the same period a year ago.

Paul Vallee, Tourism Vancouver's executive vice-president, said the visitor trend remained consistent through June.

"What we're starting to see in July is [visitor] numbers pick up a bit, but the next thing happening is that there are a lot of good deals out there. So the industry revenue, it's down quite a bit from the previous year."

Tourism Vancouver has experienced that directly, since it is funded from Vancouver's hotel-room tax, and the lower room rates have translated into about a 20-per-cent hit to its budget so far.

Vallee said Tourism Vancouver prepared for that eventuality by trimming some of its promotion budgets, particularly in Asian markets where it knew it was going to be challenged to attract visitors, and by cutting staff by 14 positions.

"We scaled back our budget quite a bit," Vallee said, "by about 20 per cent, which is where we've been ending up [with revenue]. That's unfortunate, but it is 20 per cent fewer dollars in the marketplace."

Vallee said attractions and operators that cater more to the local market are the ones faring best, which mirrors the experience of hoteliers.

"What we're seeing a lot is, the more local that a tourism operator is, the closer in their market, the better they're doing," Vallee said.

That is certainly the experience of Grouse Mountain, which has seen its bus-tour business decline by 15 per cent, but overall visitorship rise by 12 per cent in June and July on a year-over-year basis, mountain spokesman William Mbaho said in an interview.

"What we've noticed is that locals are taking up the idea of the stay-cation," Mbaho said. "We're seeing an increased number of locals who choose to visit. Green season typically is 65 per cent of our business, and we're still seeing the same numbers."

The mountain has diversified its attractions, with adventure-oriented features, such as ziplining, that appeal to locals and tourists alike.

The Vancouver Aquarium is still seeing "a healthy number of people coming in," but overall visits are down, said Kent Hurl, the aquarium's public relations manager.

"What we've found, and it probably really speaks to that stay-cation question, is that we've got quite strong support from local visitors," Hurl said, adding that membership sales are "doing quite well."

The city bus-tour business is having a harder time, reliant more on freer-spending distant tourists and facing increased competition with the entry of a third operator at the same time visitor numbers have dipped.

"We're definitely off," said Mike Cafferky, vice-president and general manager of the Vancouver Trolley Co., which runs hop-on-hop-off bus tours.

"Some of it is a loss of market share," Cafferky said. "And then there is a component of it that is certainly the market itself."

Cafferky said some of Vancouver Trolley's more expensive offerings, such as an evening tour that extends to the North Shore, are a harder sell this season, and the company has been more creative in putting together package deals that include admission to an attraction on the route, such as the aquarium or Vancouver Art Gallery, that includes discounts on the combined price.

Gerry O'Neil, operator of Stanley Park Horse Drawn Tours, said his regular tour business was doing okay, but took a dive in July. Outside bookings for weddings and private events are down substantially.

Being a discretionary item, and a bit of a luxury, O'Neil said his tours can be a hard sell when people are worried about the economy.

"July and August are the months you're going to make it up, and it's not really happening," he said.

Vancouver's cruise-ship business is another relative bright spot. Port Metro Vancouver CEO Robin Silvester said passenger numbers are up slightly from last year, though the port expects the year to finish about on par with 2008.

"The big issue for cruise, we know next year we're going to be substantially down," Silvester said, as the cruise lines move some ships to Seattle as home port for their Alaska cruise business.

At the Vancouver Convention Centre, delegate numbers are close to last year's, general manager Ken Cretney said.

Some events have definitely seen fewer delegate numbers register than expected, though that has balanced out with stronger attendance at other events. Total delegates, Cretney said, were close to 49,000 up to July, compared with the 50,000 expected.

"What we're seeing in other centres is attendance down 15, 20, 25 per cent," Cretney said. "So I think we feel pretty fortunate for our numbers to be as strong as they've been."

As Vancouver heads into the B.C. Day long weekend, tourism operators are looking for a shot in the arm from the convergence of the World Police and Fire Games, the Pride parade and Festival of Lights fireworks finale.

"We're certainly feeling the effects of the recession, like most destinations are," said Amber Sessions, a travel media relations specialist at Tourism Vancouver. "But this is a very welcome weekend every year because of all the visitors, and the World Police and Fire Games is the icing on the cake."

Vancouver tourism woe is a boon for the locals
Vancouver / Image via


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