The Tourism Sector on Vancouver Island
Vancouver Island has, since 2007, received honours as the top North American Island destination by Condé Nast Traveler Magazine and continues to gain international recognition as a top vacation destination. This sector is supported by businesses providing accommodation, food services, transportation, retail, arts and culture as well as recreation. According to a 2014 Regional Analysis by Destination British Columbia, residents from BC make up the largest share of overnight visits to Vancouver Island (66%) and spending (41%). Although there are slightly more Washington visitors to Vancouver Island, Albertans spend more money while visiting Vancouver Island.
Following a strong performance in 2015, current Tourism indicators suggest that 2016 will be up moderately year over year. In the first six months of 2016, passenger volumes on BC Ferries were up approximately 4 percent and vehicle traffic was up approximately 6 percent compared with the same period in 2015. Similarly, passenger traffic at regional airports increased by approximately 6.8 percent. In the first quarter of 2016 occupancy rates were down slightly but have since increased and in the second quarter were up approximately 6 percent year over year. Tourism’s continued strong performance is likely related to the favourable exchange rate and the continued strength in the US economy. These factors are expected to be encouraging Canadians to stay in Canada and Americans and international visitors to travel to Canada.
A study in the mid-2000s by the Canadian Travel Commission found that each 10% gain in the value of the Canadian dollar relative to the US dollar led to an increase of between 15% and 16% in overnight trips to the US by Canadians. The relationship between exchange rate fluctuations and travel decisions was not found to be as strong for American visitors to Canada. For Americans, a 10% increase in the value of the US dollar increased overnight trips by between 3% and 4%.
Depreciation in the value of the Canadian dollar encourages more Canadians to vacation at home and this is likely among the most significant factors behind the recent improvements in the Tourism sector.
For more information including visitor indicators, employment, wages and number of businesses in this sector, consult recent editions of VIEA’s State of the Island Economic Report.
by Tom Coleman