Alberta Tourism, Three Reasons to Celebrate
In July my girlfriend and I attended a friend’s wedding at the beautiful Banff Springs Hotel. It rained all morning during the ceremony, but in between the ceremony and the reception, the sun finally came out. In its full force, my girlfriend and I decided to take a selfie on the lounge deck. We soon realized that every photo was a fail: click, “Ugh, my eyes!” click, “I can’t see!” The sun was too much.
A man saw us struggling. We were blinded and frustrated; we just wanted a photo! The man approached us. In his southern drawl, he asked if he could rescue us from our selfie-shenanigan and take our photo. The gentleman and his wife were from North Carolina and were visiting Western Canada for the very first time. They were impressed with Alberta’s vastness, its diversity, its beauty and…its inexpensive shopping.
A few months before, I was in a hotel lounge in Calgary, sipping on a whiskey sour. I overheard a gentleman from San Diego having a conversation with someone at the bar. It was his first time in Alberta, too. He was in town to take a tour to Lake Louise, and like the visitor from North Carolina, he too was in town to do some shopping.
There’s been a lot of coverage nationally about what the decline in oil prices means for Alberta and our economy. And as an economist at ATB Financial, I spend my days researching and writing about what will happen in the months ahead. The answer is that Alberta is set to experience a moderate contraction in 2015 and the price of oil has a lot to do with it. But, as our province looks to diversify its economy this year and for the years ahead, tourism can play an important role.
Tourism is Alberta’s fourth largest sector and in 2013, the tourism industry accounted for about five per cent of Alberta’s economic output (gross domestic product, or GDP). Like in previous years, tourism can help cushion some of the damage that low oil prices have brought upon Alberta’s economy.
Moving into 2016, the above stories reveal that Alberta’s tourism sector has three factors working in its favour, factors that should help it thrive in the years ahead.
First, tourism is a proven sector in our province. Tourism operators in all corners of our province have been operating for quite some time and in short: they know what they are doing. Statistics also show that Alberta is becoming an increasingly popular place to visit. The latest figures reveal that since 2010, the number of international visitors has grown by 8.2 per cent, and appear to be growing. At the same time, the number of other travellers (immigrants and former residents as well as others) has grown by 10.5 per cent over the same five year period. As Alberta establishes a greater profile on the global stage through our relationship with other nations via our energy products, our province will become increasingly popular. As it stands, our operators have the experience and the resources to deal with the increase in visitors.
The second factor (and the one working most in tourism’s favour) is Canada’s ongoing foreign exchange battle. Currently, one Canadian dollar equates to about $US 0.80 cent – which means more tourists are crossing our borders because traveling and shopping in Canada is cheaper. For example, a night’s stay for a German in Canada is less expensive than it was a couple of years ago. And for an American, those designer sunglasses they’ve been eyeing south of the border? They’re about 20 per cent cheaper here. There’s also the fact that Alberta currently has no provincial sales tax, unlike Canada’s nine other provinces. We anticipate this low loonie for the next couple of years and should be the main reason for an increase in tourism. This favourable exchange rate for our southern friends may also lift Alberta’s retail sector.
And finally, while I am an economist, economics isn’t the only thing that draws visitors to Alberta. From the hoodoos in Drumheller to the stunning landscape of Head-Smashed-In Buffalo Jump to fresh powder skiing in Jasper and Banff, Alberta’s diverse geography offers tourists plenty to do and plenty of gorgeous sites to visit. It’s also worth mentioning the quality shopping and fantastic restaurant options in our major cities. Our province’s landscape and its destination-restaurants gives Alberta’s tourism sector an upper hand in comparison to our friends in other provinces – helping to attract both visitors domestically and from abroad.
Our tourism sector can celebrate in the coming years for three reasons: its proven experience, Canada’s sluggish loonie and our natural beauty. And, for the record, the gentleman from North Carolina and the fellow from San Diego both said (with conviction) that they’d be back. Sure, a lot had to do with less expensive shopping and discounted accommodations, but most importantly, they said they’d come back because Alberta offers something special. And I wholeheartedly agree.