How does the destination travel market look right now?
On Tuesday the Organisation for Economic Cooperation and Development predicted the UK economy is likely to fall into recession this year. The Chancellor of the Exchequer, Alistair Darling, recently said the UK was facing “the worst economic conditions in 60 years.”
The Paris-based OECD think tank was also pessimistic about growth prospects in the rest of Europe. It said Europe’s three other largest economies, Germany, France and Italy, will barely grow at all this year.
On Tuesday in Australia, that country’s central bank cut interest rates for the first time in seven years as the Australian economy slowed but inflation remained high.
The Japanese government unveiled a stimulus package on Friday worth 11.7 trillion yen (US$107 billion), designed to boost that country’s economy.
The Japanese stimulus package was less than the $167 billion the U.S. government spent on tax rebates and other measures in July to boost the sagging American economy. And that investment, in fact, appears to have had some positive impacts. But as travel consultant Peter Yesawich told Tourism Whistler members in July, 74 per cent of Americans polled said they would experience difficulty if their paycheque was delayed even one week. In other words, it’s still going to be a while before many Americans begin thinking about winter vacations in Whistler.
In Canada’s most populous province, and one of Whistler’s biggest destination markets, the U.S. economy and the strong Canadian dollar have devastated Ontario’s manufacturing sector. Deere & Co., the world’s largest maker of farm machinery, announced Tuesday it was closing its factory in Welland, Ont. and severing another 800 manufacturing jobs.
In most parts of the world, people are paying more for energy and more for food than they were last winter, while at the same time many are watching the value of their homes decline.
And even as oil prices fall from $147 a barrel two months ago to less than $110 a barrel this week, the costs of many other products derived from oil remain high. The New York Times reported Tuesday that Procter & Gamble has raised by 7-10 per cent the prices it charges retailers for items made with ingredients derived from oil. And the company is planning to maintain the prices “to recover costs already incurred,” a spokesman said.
Airlines, also, aren’t ready to roll back fuel surcharges and other fees added in the last few months as oil prices soared.
So with most countries’ economies in trouble and many people watching their spending more closely than ever, the destination markets would not appear to be the focus for Whistler this winter. In fact, given the extent of the economic downturn and the apparent difficulty in convincing people to visit during an Olympic year, it may be a couple of years before the destination market rebounds.
The regional market will continue to be the foundation of the Whistler economy. And with the emphasis on “value” last winter and again this fall, the regional market has grown a little bit, drawing people from the Lower Mainland and the Fraser Valley, including some who had given up on Whistler and gone elsewhere.
“Value” often starts with discounted accommodation prices, which isn’t a long-term strategy for hotels but it helps draw people to Whistler — which is the first and most important step in keeping the local economy running.
How long it will take to get the economic picture to turn around is a matter of debate. (Have two economists ever agreed?) But given the current numbers, the forecasts, the political situations in Canada and the U.S., and the volatility in energy prices right now, maybe Whistler should be working on a two-three year business strategy in preparation for a rebound the winter after the 2010 Olympics.
Maybe now is the time to reach out to British Columbians, including all those who continue to see Whistler as a favoured fat cat, and entice them here to experience Whistler first hand. At the very least they would learn more about Whistler; at best they would become ambassadors for Whistler and repeat visitors.
And it might be worthwhile to have more Whistler ambassadors in Vancouver leading up to and during the 2010 Olympics.
Whistler needs to make an impression during the Games if it is to realize the full potential of post-Olympic tourism. Making sure Whistler becomes the base for the German Olympic team and German television coverage of the 2010 Games is one part of that.
These are uncertain, rapidly changing times. Strengthening Whistler’s foundation of regional support now is a good foundation for future growth when economies around the world recover.