Albertans cutting back on travel plans

But the news isn't all bad

July 11, 2012

EDMONTON, AB, Jul 11, 2012/ Troy Media/ – The kids are out of school, the sun is out and it’s time to hit the holiday trail! Just like many retailers have to wait for the Christmas spending binge before registering profits, the tourism industry is largely dependent on a few short months of sunshine to ensure survival.

However, the upcoming tourism season looks a little different than last summer.

Alberta is blessed. Not only do we have an abundance of natural resources, but the natural beauty of the mountains, the landscape of the badlands and the vibrancy of festivals in our major cities also gives rise to a vibrant tourism industry. Tourism GDP numbers aren’t broken out provincially but, nationally, Statistics Canada estimated there was $17 billion of tourism related expenditures made in the first quarter of 2012. And Alberta certainly saw more than its fair share of that figure.

An interesting fact about tourism spending is that about three quarters of spending is done by Canadian residents, not foreigners. The proportion will vary from attraction to attraction, but at the end of the day the industry depends a great deal on local family vacations. ATB Financial wanted to get a better feel for what Albertans planned to do with their holiday time, so we asked them in a recent survey.

The survey was conducted in June, a month during which there was a lot of economic uncertainty (with oil prices dipping below $80/bbl), so it is not surprising responses were less optimistic than in a similar survey from last year. For instance, respondents to the survey indicated they intend to spend an average of $2,085 this year on vacation, down from $2,657 in 2011.

While Albertans plan to spend less this year on vacation, on average, this may be a result of more of them deciding to stay home. There was far less interest this year in travelling abroad, with only 5 per cent of respondents planning a trip overseas (down from 9 per cent in 2011) and only 16 per cent planning a trip to the United States (down from 21 per cent in 2011). In contrast, 23 per cent of Albertans planned to visit one of Alberta’s national parks (up from 20 per cent in 2011) and 20 per cent indicated no plans of taking a vacation at all this year (up from 17 per cent in 2011).

Economic uncertainty influences travel and vacation plans, but so do other factors such as the value of the currency and the cost of gas. When Albertans were asked whether or not these factors influenced their decision, it appears as though the majority of respondents had already incorporated the higher dollar and gas prices into their travel plans. In 2011, when gas prices started their march higher, 23 per cent of Albertans indicated that they’d stay closer to home due to higher prices and 17 per cent of respondents indicated the higher Canadian dollar influenced their decision to travel to the U.S. By 2012, the influence of the dollar on travel plans dropped to 4 per cent and gas prices induced 15 per cent of Albertans to stay closer to home.

The bad news is that Albertans may be spending less in 2012 on vacation plans; the good news, however, is it looks like more of those dollars will be spent here in our province. So long as international bookings remain strong it looks like tourism operators will have a fairly good year.

Will Van’t Veld is an economist with ATB Financial.

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