BCAdvantage 2008; Business and investment across British Columbia

Like Australia, Alberta and Utah before it, British Columbia stands primed to capitalize on an enormous economic benefit. When the province opens its doors to the world for the 2010 Winter Olympics and Paralympics, it will be a watershed moment that has the potential to boost B.C.’s economy by more than $10 billion.

The large influx of visitors, the major infrastructure projects, the emphasis of B.C. as a gateway linking North America and Asia, and the potential for increased retail sales are only a few examples of the impact and significance the Games will have.

In January 2002, the B.C. Ministry of Competition, Science and Enterprise completed a study of the economic impact of hosting the 2010 Winter Olympic Games, which was updated later that year by InterVISTAS Consulting Inc.

Considering four scenarios – low, medium, medium-high and high – the update determined that incremental economic activity impacts (i.e. generated by out-of-province expenditures) would range from a low of $2 billion to a high of $4.2 billion GDP; and 45,000 to 99,000 person-years of employment. The impact of expanding the Vancouver Convention and Exhibition Centre (VCEC) alone would be $4.1 billion to $6.5 billion.

“The economic impact has two components,” said Mike Tretheway, chief economist at InterVISTAS and author of the updated study. “The first is the construction and build-up, and the second is the after-the-Olympics phase. I think our construction forecasts have been right on, with the construction costs being higher … The costs have changed, but the economic impact, in terms of the jobs generated, has not changed.”

For a “medium-high” scenario, the benefits are:

•$3.3 billion in total GDP ($8.4 billion if the impacts of the VCEC are included);

•the creation of 55,000 direct person-years of employment and 77,000 total person-years through 2015, with a peak of 22,000 in 2010;

•$1.9 billion in wages and salaries in B.C.; and

•187,000 person-years of employment over a 30-year time period, if the impact of the VCEC expansion project is included.

Tretheway believes that terrorist threats should not dampen outcomes. Although 9-11 had a profound impact after the 2000 Sydney Games, “when we look at the subsequent seven years, there’s no question the Sydney Olympics definitely did lift Sydney in particular and Australia generally, and was very successful in renewing the Australia tourism brand.”

Of bigger concern is capitalizing on the Olympics as a way of boosting B.C.’s status as a gateway between east and west. The 2010 Olympics, following so closely on the Beijing Olympics, offer a unique opportunity.

“At a time when the Chinese market is emerging as the fourth-largest outbound tourism market in the world, that was going to be a very major factor,” said Tretheway. “The challenge we face is attaining the approved destination status (ADS) for Chinese to come and visit Canada.”

The ADS traffic is a relatively modest proportion of the overall tourist traffic – only 20%-25% – but without it, the ability of Canadian tourism to market itself in China is very limited.

Ray Leblond, director of corporate communications with Tourism British Columbia, said predicting when or if ADS will be granted is speculation. “We know there are no further negotiations planned at this time, and Tourism BC is not involved in any way. The biggest issue with not having ADS is that Canada and the Chinese travel trade are unable to advertise, though the travel trade can sell Canada.”

In a presentation last year to Tourism BC, Roy Chou, a former manager with Daricny Travel Co. Ltd., which specializes in inbound tours from Asia, outlined some of the hard reasons to take advantage of the Chinese travel market. Among them:

•outbound Chinese travellers totalled 34.5 million in 2006, with only 93,000 coming to B.C.;

•the booming economy, growing personal wealth and disposable income is making a difference, whetting an appetite for global experiences;

•China is very competitive as a sporting nation;

•Chinese tourists are concerned about quality travel, with unique destinations, on which B.C. can capitalize; and

•gift buying is important for friends and family, so they are big shoppers, making them some of the highest spend-per-capita tourists in the world.

Cindy Gobin, Tourism BC market development manager for Asia, in an interview with Business in Vancouver, said the lack of ADS status can actually create a bit of a buzz for Chinese tourists.

“There’s a bit of a mystique around Canada of … ‘Why can’t we go there; let’s find a way’; and the other thing is that once a country gets approved destination status and all the tour groups start going, the agents start getting highly competitive and getting into price wars with each other, and because we don’t have ADS status, ... the agents see [Canada] as a good, profitable destination to sell.”

According to Leblond, Tourism BC currently markets in 10 countries around the globe – the U.K., Ireland, Germany, the Netherlands, Japan, South Korea, Taiwan, Australia and New Zealand – and will spend more than $7.5 million in 2008 and 2009 in overseas markets with plans to increase this up to $9.5 million in 2010/11 to capitalize on the Games. In 2007, it launched its Tourism2010.com website, focusing on everything Games-related.

With the U.K. being the province’s largest overseas ski market, delivering more than 40,000 skier visits to the province’s winter resorts, it became the launching point last October for Tourism B.C.’s Olympic “booth,” with 2010 marketing materials, such as Games information, banners and souvenirs. The same thing is planned for Australia in May.

Among the infrastructure being built or upgraded for the Olympic Games, as well as to address population and traffic increases in the Mainland/Southwest, is the transportation corridor between Vancouver and Whistler.

In 2004, the B.C. Ministry of Transportation embarked on the Sea to Sky Highway Improvement Project, a $775 million program to improve the 100-kilometre stretch of highway.

Upgrades include widening and straightening the highway and improving passing lanes. It is expected to complete by 2009, creating 6,000 jobs in B.C. as a result of increased activity along the highway; and increasing provincial GDP by $300 million between 2010 and 2025.

The population along the corridor is expected to almost double by 2025, with the number of vehicles increasing from 14,000 to 22,000 per day.

Whistler has enjoyed very strong growth in real estate values in recent times. Sea to sky communities such as Squamish and those situated to the north or south of Whistler are benefiting from rising demand for homes. Development remains strong and new businesses are moving in as the market grows. •

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