The Saint Croix Courier

St. Stephen, NB

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2006 August 15

Life on the Edge:
The Four Horsemen of the Tourism Apocalypse

by Gerald MacEachern

At the beginning of the tourist season a tourist operator I know, a friend, was on the verge of a stress meltdown and ready to pack it in. That was in May, around the time I gave a presentation to the tourism industry folks in St. Andrews. Many of them told me that they were concerned about their immediate future, and whether they were going to be able to survive the year.

Tourism, all too often, is a survival industry. The numbers of wealthy tourism operators anywhere are very few and far between. It's an industry that runs on the margin, that is the narrow margin of profit that an operator can shave from the total operation each season. If something affects the industry, that narrow margin can quickly disappear.

So why should someone living and working in a service centre town such as St. Stephen, New Brunswick care? After all, most of their jobs and profits come from retail stores, the forest products industry, government administration and some manufacturing.

Well, according to some estimates, tourism in the region (mostly in St. Andrews and the Fundy Isles) brings a $400 million-a-year income into the local economy. That income means that operations such as Sobey's can justify building a brand new, 40,000 square-foot store in St. Stephen, and Kent can justify its new facility on King Street. In short, every dollar earned from tourism in the area finds its way to St. Stephen, one way or another. Putting it another way, St. Stephen has everything to lose by not supporting a thriving tourism industry in nearby towns. If tourism disappears, so do the service sector jobs. Retail stores lose profits and close, people leave town, government offices scale back or close down, and only core businesses remain. Tourism is not only a quality of life experience for the tourist; it is a quality of life issue for everyone who lives in the host area.

Anyway, now it's August. The tourism season is in full swing and the tourist operators are busy making hay while the sun shines. But those of us who live in an area that depends on tourism should be concerned about the health and future of this important industry. And it's an industry that's currently facing some big challenges, especially here in Atlantic Canada.

Here are the challenges, or what I've called the four horsemen:

1. Economy
2. Government
3. Local scene
4. Variables.

The economy is a global challenge, so there's nothing that we can do to change it. We live with it, good or bad. Unfortunately, the news is not particularly good. High fuel prices are keeping tourists closer to home. Longtrips or impromptu trips are getting too expensive, especially for those who own gas-guzzlers. The low Canadian dollar, our longest running tourism incentive, is also running higher, and is now creating a reverse tourism trend, sending Canadians south to shop in the States. And to cap it off, there are clear signs that the North American economy is cooling off; housing and real estate prices across the continent seemed to have peaked and are now level or falling and the stock market has been under performing, all of which tends to warn ordinary people away from spending money foolishly, on a impulsive vacation, for example. The gossip on the street is that tourism in Atlantic Canada is down about 15 percent, largely for these reasons, I suspect.

In Canada, all avenues lead back to the government, which is probably our biggest employer. The government here has long been in the tourism business, as has the government to the south. Since September, 2001, border security and a more isolationist American stance is now a tourism reality. The recent call for cross-border visitors to carry passports will also have a dampening effect on the free flow of tourism traffic, especially in our region. There is little that our provincial and federal governments can do to offset these developments. However, our governments can do a better job of marketing what we have.

If governments marketed like businesses do, they would market to strength. In other words, they would market those tourism products that were performing the best. But governments have a mandate to equalize opportunity and redistribute wealth. Which means, that instead of aggressively marketing a town like St. Andrews which is Canada's oldest (and arguably most successful) seaside resort town, our senior levels of government tend to develop emerging tourism sites in the Bay of Chaleurs area, City of Moncton and elsewhere.

This is not necessarily a bad thing, but to leave successful tourism dependent places such as St. Andrews to more or less fend for themselves — to run on their existing word-of-mouth reputation — is not a good thing. The simple fact of the matter is that St. Andrews and area is seriously under-capitalized in its marketing effort. And that should be a real concern to a province that derives, by some estimates, almost a third of its tourism revenues from this small area.

The local environment can also impact tourism traffic, mostly by word-of-mouth. Just the mere threat of liquefied natural gas (LNG) terminals on Passamaquoddy Bay may be enough to discourage visitors from coming here, let alone putting off those retirees who would like to migrate here and live on our shores.They, like we, are reading the signs, too many "For Sale" signs on the front lawns and in front of waterfront hotels. The subtle message may be: "If local business seems to want out, why should visitors want to come?" Add to that the news of drug-related civil unrest and the possibility that the new traffic patterns from the upcoming third bridge that may speed traffic past the St. Andrews turnoff, and you might conclude that the local scene is becoming a tad tourism-unfriendly.

Finally there are the variables.These are the usual threats to tourism; bad weather, regional disasters, international disputes such as the war in Iraq and so forth. Normally, these things occur at random or in cycles, and most tourism businesses are healthy enough to weather the storm.

But what about the perfect storm? I don't know if the four horsemen I have mentioned are collectively strong enough to pull in a perfect storm. However, there are somethings we can do to offset their effects.

First, businesses in Atlantic Canada can begin to market inregion tourism, to encourage people to travel within the Maritimes. Second, tourism businesses may want to make more of an effort to satisfy this market by providing more four-season tourism experiences, which may be missing in places such as St. Andrews. And finally, the provincial and federal governments may want to put a bit more marketing money into supporting one of Canada's premiere tourism destinations — St. Andrews-by-the-Sea — which has long proven that it provides an excellent return on itstourism investment. Especially when doing nothing doesn't seem to be much of an option.

Gerald McEachern is the communications director for Save Passamaquoddy Bay / Canada and is a writer and business consultant living in St. Andrews by-the-Sea.