B.C.'s beleaguered tourism sector took a few more strides to recovery in 2013, but remained sluggish under the weight of uneven global economic growth and a relatively high Canadian dollar.
Despite a tapering of momentum in the second half, demand for tourism services picked up in 2013 as the flow of international visitors increased. B.C. counted about 4.42 million tourists to the province last year, marking a 4.6% gain from 2012 and the strongest performance since 2008 as cross-border overnight visits from the U.S. rose about 4% and the number of overseas visitors increased by 5%.
Of the latter, higher flows from certain Asian markets – particularly China and Hong Kong – drove gains, while Mexico and Germany were also significant sources of growth. In contrast, weak economic conditions tempered travel demand from many European countries compared to 2012.
While hotels, restaurants and tour operators are likely breathing a sigh of relief that the worst of the tourism lull is behind them, the sector is far from recovered. Annual gains aside, total visits in 2013 were still 10% short of mid-decade levels as U.S. entries remained stunted, in contrast to a rebound to near post-2000 highs in the number of overseas visitors.
Nonetheless, a broad tourism sector recovery is expected to persist in 2014 and onward. Positive momentum in the U.S. economy and a lower Canadian dollar will drive tourists northward and keep some Canadians closer to home. Meanwhile, Chinese tourists will likely become an even more important component of the tourist landscape.
In recent years, B.C. has looked to China to boost tourism as weak economies in the U.S., Japan and Europe – traditionally major sources of tourist inflows – and a high Canadian dollar have curtailed demand.
While tourist visits from Europe declined more than 10% from 2007-2010 levels due to the European recession, the number of visitors from China has more than doubled and it is now the second largest source country for tourists, after the U.S., surpassing Japan, Australia and the United Kingdom. Continued growth in the economy and incomes mean China will remain a flourishing source of tourism dollars going forward. •
Bryan Yu is an economist at Central 1 Credit Union.
