Local tourism unaffected by loonie’s rise

By John Schudlo

Although visiting Canada is no longer a bargain for Americans because of the soaring value of the loonie, Ottawa’s tourism industry is in great shape thanks to a recent push to attract more domestic sightseers, says Ottawa Tourism.

Traditionally, a strong dollar has meant higher costs for travellers coming to Canada and a drop-off in tourism.

Yet, even in face of the loonie’s steady rise against the greenback since 2002, Ottawa’s tourism industry has reported improved business this year. Area hotel bookings were up by 11 per cent in July over a year ago, and five per cent in August.

Jantine Van Kregten, Ottawa Tourism’s communications director, says tourist businesses are confident the strong loonie – which hit par with the U.S. dollar on Sept. 20 – won’t affect their bottom line much because the local tourism sector doesn’t rely heavily on out-of-country customers.

Van Kregten says that in recent years her organization, which works to promote the tourist industry in Ottawa, has put a stronger emphasis on luring Canadians, rather than foreign travellers, to the nation’s capital.

Most of Ottawa Tourism’s advertising dollars are spent in major cities between Windsor and Quebec City.

“You go where your bread is buttered,” she says. “We’re not spending billions of dollars in the U.S. market trying to bring people from San Francisco to Ottawa. We’re trying to be strategic.”

Van Kregten says that before the terrorist attacks of Sept. 11, 2001, 20 per cent of Ottawa’s tourists were from the United States. Since then, issues such as tightened border controls, SARS and high gas prices have all combined to make Canada a less attractive destination for Americans.

U.S. residents now account for eight per cent of Ottawa’s tourists, while Canadians make up 85 per cent.

Dick Brown, executive director of the Ottawa Gatineau Hotel Association, says that the shift toward a Canadian focus was a smart move for Ottawa’s tourist industry, given the unpredictable nature of influences such as the dollar. He says the change has helped insulate the market and allowed the hotel industry to have a successful 2007 summer.

Brown says he isn’t too concerned with the loonie, which hit par with the U.S. dollar on Sept. 20, because it won’t affect the number of Canadian visits to Ottawa.

“Canada has always been Ottawa’s primary market,” he says.

Still, the local tourist industry says it hasn’t given up on Americans altogether.

Ottawa Tourism still advertises in New York, and will soon begin an ad campaign in Boston.

Van Kregten says the American ad campaign focuses on selling the experience of Ottawa, not its price.

“We’re trying to sell on value,” she says. “People don’t go to London because it’s cheap. They don’t go to New York because it’s cheap. There’s value in going to Ottawa.”

And for some businesses, that strategy is working.

Roger Fleury, director of operations for the Bytown Trolley Co., says his sightseeing business has experienced a “pleasantly noticeable” jump in American customers this year, despite the stronger dollar.

Last year, he says American tourists made up about one or two per cent of his clients. This year, that figure has shot up to between five and eight per cent.

“(The dollar) has unexpectedly had no effect whatsoever,” he says.

Fleury says the overall numbers still do not compare to a decade ago, when 30 to 40 per cent of his customers were American. But, he adds, he is happy to see that Ottawa’s tourism sector is not a slave to the fluctuating dollar.

The strength of tourism in Ottawa stands out as an exception to the rule among most Canadian tourist cities.

Currently, many tourist hot spots such as Niagara Falls, Toronto and Vancouver are suffering greatly from a decrease in American tourists.

The number of American visitors coming to Canada has fallen 34 per cent in the past five years.

“The American market is a disaster right now,” says Randy Williams, president and CEO of the Tourism Industry Association of Canada. “They are our number one customers, and when that’s shrinking by a third, that’s bad news.”

Williams says that the dollar has a lot to do with the drop in U.S. visits.

He adds that he thinks domestic tourists can help minimize the impact of lost American visitors in the short run, but cannot be the future foundation of Canadian tourism because Canadians don’t spend as much money here as foreign travellers do.

“(Canadians are) low-yield customers,” he says. “We can’t build our business on low-yield customers.”