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COVID-19: Victoria tourism businesses need return of foreign tourists to thrive

American tourists spend 70% more than Canadian tourists, while overseas visitors spend 133% more

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VICTORIA — Hoteliers, tourist attraction operators and downtown Victoria merchants are welcoming the return of the summer tourist season, but they’re bracing for a trickle, rather than a flood, of visitors this year.

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The CEO of Destination Greater Victoria said visitor numbers increased after June 15, when intra-provincial travel restrictions were lifted and the numbers continued to increase when the province entered step 3 of its COVID-19 restart plan on July 1.

“Things are coming back to life, so locals and B.C. residents are starting to come here,” said Paul Nursey. “Our large hotels are busy on the weekends, with about 75 per cent occupancy, but weekdays are still very quiet. We’re seeing 30 to 50 per cent occupancy during the week, but there is buzz and there is energy and that’s exciting to see that come back.”

Over the weekend after Canada Day, the streets of the capital city were alive with people strolling along the inner harbour that is flanked by the landmark Fairmont Empress Hotel and the green copper-topped provincial legislature building. Nearby Government Street, which is dotted with souvenir shops, bars and restaurants, was closed to vehicle traffic in the afternoons, in favour of pedestrians and outdoor patios.

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Victoria Mayor Lisa Helps said the excitement was palpable.

“If you go to Government Street and Broad Street, it feels like Europe right now. If you walk down there, you don’t even know what city you’re in. I biked down Government Street on Saturday and I almost didn’t recognize it. After the noon hour there were no cars on the street, there were kids running around and the patios were packed so it had a really good feel, a vibrant feel,” said Helps.

Tourism is the third largest driver of economic activity in the city. According to Statistics Canada, Greater Victoria hosted 4.2 million visitors in 2019. They spent $1.5 billion dollars in the region. But Destination Victoria estimates those figures plummeted by 80 per cent last year. And, 2021 marks the second summer of tourism during the pandemic.

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The executive director of the Downtown Victoria Business Association, Jeff Bray, said tourism businesses know they’re in for another lean year, but the mood is different now.

“What’s different this year, even over last year, is a sense that we really are coming to the end of this and there is very high confidence we will reach the final step in re-opening by September and people are feeling better about being out and about, and that has really lightened the mood of everybody,” Bray said.

However, that sense of optimism isn’t shared by all.

Ian MacPhee, financial controller with Prince of Whales, outside the company’s Victoria offices. The pandemic has cost the company “millions.”
Ian MacPhee, financial controller with Prince of Whales, outside the company’s Victoria offices. The pandemic has cost the company “millions.” Photo by Chad Hipolito /PNG

“We’re screwed. It couldn’t be any worse. We’ve lost millions of dollars. The word ‘devastating’ doesn’t cover it,” said Ian MacPhee, the controller at Prince of Whales Whale Watching Tours.

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The city’s oldest and best-known whale-watching company relies on international visitors, who provide 80 per cent of its revenues. Most of those revenues are earned during the summer season. But this summer, the border remains closed and MacPhee said domestic tourism won’t make up the difference.

“We are a bucket list item. You don’t go whale watching every weekend, like you would for pizza, so we’ve tapped that well hard in the first summer and we’ll continue to tap it hard this summer, but local tourists don’t spend the way international tourists do,” he said.

A Prince of Whales vessel returns to the Inner harbour with passengers from a whale watching tour on July 6, 2021.
A Prince of Whales vessel returns to the Inner harbour with passengers from a whale watching tour on July 6, 2021. Photo by Chad Hipolito /PNG

While Canadian travellers make up half of all visitors to Greater Victoria, they account for much less than half of the total spending by tourists in the region. Visitors from the United States spend 70 per cent more than Canadian tourists, while international visitors spend 133 per cent more, according to Statistics Canada.

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The border closure means the U.S. ferries that ply the waters between Victoria and Washington State remain shut out of the Victoria market altogether. In 2019, the Coho and Clipper ferries delivered 730,000 visitors to Victoria. Since March 2020, there has been none.

Officials from both ferry companies said they are frustrated by what they said is the lack of a border reopening plan from the federal government. For the past 15 months, Ottawa has announced consecutive month-long extensions of the closure. The latest is set to expire on July 21st.

The Empress Hotel in Victoria on July 6, 2021.
The Empress Hotel in Victoria on July 6, 2021. Photo by Chad Hipolito /PNG

“What we want even more than dates now is the criteria for opening. What is the plan? What are the metrics we need to meet so we can plan for our business?” asked Dave Gudgel, the president and CEO of the Clipper Navigation, which until the pandemic, provided foot passenger service to Seattle.

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The president of Black Ball Ferry Line, which runs the Coho passenger and vehicle vessel between Victoria and Port Angeles, Wash., agreed the Canadian government has been vague and unsure about what it’s doing.

“They say it will be a slow, phased approach, in seven stages, but what does that mean? And with this vaccine certification, how will that work and how quickly can they roll it out?” asked Ryan Burles.

The absence of U.S. and other international travellers “has been a struggle and a grind,” for the Island’s largest bus company, Wilson Transportation.

The 40 year-old, family-run firm suspended operations of its B.C. Ferries Connector, Island Connector, Tofino Bus and sightseeing tours no less than three times during the pandemic.

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“It’s been a start-stop-start-stop business model for the past 15 months,” said the company manager, Samantha Wilson.

People shop in Fan Tan Alley in Victoria’s Chinatown on July 6, 2021.
People shop in Fan Tan Alley in Victoria’s Chinatown on July 6, 2021. Photo by Chad Hipolito /PNG

During that time, revenue dropped by 98 per cent and staff was cut from close to 300 to a skeleton crew of less than a dozen. Wilson said it’s been a steady climb since June 15, when the company resumed its routes.

“Since then we have been able to bring back some of our staff and we are very happy about that, but we are not up to peak season. We are down to about 100 staff and we don’t anticipate getting back to our pre-pandemic levels until 2023, maybe 2024,” said Wilson.

“That’s because one of the core parts of our business is our charter division, which is mainly international group tours in the summer months. We anticipate that coming back at a much slower rate.” she said. “We do anticipate the return to pre-pandemic levels will be a walk, not a run.”

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Another important source of international tourism to Victoria is cruise ships. More than 700,000 cruise ship visitors arrived in Victoria in 2019, but the future of that business is in doubt. Ottawa has banned cruise ships from Canadian ports until next February at the earliest. In the meantime, the U.S. Congress has waived the requirement that cruises between U.S. destinations must include at least one stop at a foreign port. That former requirement meant 257 U.S. cruise ships to Alaska stopped in Victoria during the summer season in 2019 and their passengers spent $130 million when they were here.

Nursey called on Ottawa to make its cruise ship intentions clear.

“I think it is incumbent on the federal government to tell us soon so that we can prepare. Cruise line companies need a long lead time. Keeping us in the dark is not acceptable. It’s very frustrating for planning and we need a pathway back,” he said.

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While there is optimism about the summer tourism season, many Victorians worry about what will happen in the fall and winter.

“In September, when the kids are back in school and the office workers are back on the job, we still won’t be getting all the business travel and the conferences yet, so it’s still going to be a long haul,” according to Bray.

The loss of conferences has cost the city of Victoria just under $4 million in direct revenues from its convention centre. The centre has been rented for mass vaccine clinics since March, but the mayor said the loss of conventions has wider implications.

“It’s very negative because when people come for conferences, they often stay a day or two after or will bring a spouse or will think ‘this is a great city and I will come back,’ so it’s been really, really difficult from that point of view,” said Helps.

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Destination Victoria is confident that convention business will return. Nursey said the centre has rescheduled half of the conferences it lost during the pandemic and the city will host the Over 55 Games and the Francophone Games next year. But he said “the challenge is surviving 2021.”

The expectation of the return of the domestic tourist market this summer has prompted B.C. Ferries to resume its summer schedule. Spokesperson Deborah Marshall said there is already a stark contrast to the 80 per cent drop in passengers the ferry corporation had experienced for most of the pandemic.

“July 1 was typical for a holiday weekend. We started to see traffic pick up on the Wednesday afternoon before Canada Day as well as Thursday and there were some overloads. Now that restrictions have been lifted, we believe people want to travel.”

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Domestic airlines appear to believe it, too. The upstart Swoop Airlines began flying to Victoria in mid-June and Flare resumed its service on July 1. Air Canada and Westjet have introduced new flights from Winnipeg, Ottawa and Calgary to augment regular service from Vancouver and Toronto.

Rod Hunchak, the director of business development and community relations for Victoria International Airport said, “Our numbers, especially this past weekend, are nearing the numbers we had in March 2020. We haven’t seen this many passengers in a day in well over a year.”

The Airport Authority predicts a return to 50 per cent of its pre-pandemic passenger levels this year.

Those who depend on the tourism industry in Victoria are grateful for the domestic tourists they are starting to see returning, but they know it’s not sustainable.

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“We are a large city with a lot of tourism infrastructure and we will never be full without conferences, visitors from the U.S. ferries like the Clipper and the Coho and international tour groups,” said Nursey.

“We will not make it on the domestic market alone but it’s all we have right now and we’re getting our fair share, so we’re happy.”

Mayor Helps believes the tourism industry will recover and expand in Victoria. She pointed to two proposals for new hotels that are in the works.

“The fact that we are seeing companies investing in new hotels in downtown Victoria is a sure sign that tourism is on its way back. Not one of these projects has stopped despite the pandemic and when money is being put on the table, that just sends the strongest signal we could hope for about what the future of tourism holds for the city of Victoria.”

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