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John Thomson  

Thomson report

Well it’s that time of year again as we look to the visitors from all over BC and Alberta to make their annual treks to the Okanagan Valley for fun with the family.

Tourism and travel professionals across the country say they are optimistic this summer season will be busier than last year. Those families that we long for are saying that instead of flying somewhere for a summer vacation they are going to drive this year. They will travel more this summer than last year. Some of these families will be travelling with another family to make the trip more fun for everyone.

Certainly it's not because they have more money to spend, it's because the family needs a holiday away together. It has been a rough couple of years and the economists keep telling us it's all over and it's going to get better. They will spend more on food, lodging and entertainment but of course there are those who say they will spend less. We just want them to come.

The price of gas is lower and there is every indication with the more than adequate supplies available this will hold over the summer months.

I was in the office of Gavin Perry, the General Manager of the Coast Capri Hotel in Kelowna where we always get the straight word on the market and his thoughts about the summer.

“Right now we are trending a little differently than our competitors. We have had a very strong first four months and now I am concerned about where we will be going over the next eight months. Summer business is the one that is the big question right now. Leisure travel has fallen off and our core business has been our conference business. Thank goodness for that and our corporate clientèle because the leisure segment has fallen off.”

Are you talking about tours in that segment?

“Our tour business has just been decimated and once again it is emerging and you are getting certain pockets that are doing well. It is the low-priced tour market that is doing okay. But what we are seeing is a change from tour packages. Getting on the bus with forty of your closest friends and going around - that market from my standpoint has pretty much disappeared. But what we call the FIT (Foreign International Travel) that is very strong right now. You know people want to come to Canada but they don’t want to be stuck on the tour bus, they want to be on their own and they are saying, 'I would like to stay an extra night here'. You know one of the biggest comments we had four years ago from the tours was that they wished they had another day in Kelowna. I don’t know if that had an effect on what we are seeing now, but certainly the economy had a big effect. But tour business as such and the segment that is doing well is the discounted business. The tours that are coming through have been heavily discounted to get them through the doors because people are looking for deals. The government has made it very difficult for us to do business with international tours through the canceling of the Visitor Rebate Program.

The way that the tour companies have to claim the GST, you’ve got to jump through hoops to do it and we used to be able to do it from our end but now they have got to claim it back and it ends up costing them. That was one of the topics at the Hotel Association meeting the other day.

It is going to be an interesting year.


How does the new HST tax affect the business?

“It is hard to put a number on it and what is going to happen. You know, from the room tax situation Joe Q public is traveling for one per cent less in BC.

But the downside is the traveler is paying more for the food and beverage. The Canadian Restaurant Association says it is going to be Armageddon. The industry is going to come to a halt. I don’t think that is going to be the case. It will be similar to the implementation of other things in prior years. Where you get the blow up and people start coming back. I believe that is going to be the case initially. But once again the consumers are a lot more savvy and certainly with the internet they can go out there and research everything. It is a hard one to tell. The upside is from a conference standpoint the companies putting on conferences are going to be able to get that PST back. As long as they are registered they will get it back. I don’t see that much of hit. But we are seeing from some our clients taking a look at what it will mean to the cost of their lunches and dinners and it is a concern.”


More John Thomson articles

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About the Author

John Thomson is the Okanagan's pre-eminent business columnist writing his column, Rumours and Things, for over 24 years. Plugged in to the valley's who's who, John keeps his readers coming back for more with his straight talk and optimistic perspective on where we are headed next.

When John is not writing his column, he runs a sixteen year old think tank called the Executive Roundtable and holds his popular "Thomson Presents" quarterly business speaker seminars.

Have a comment, question, or tip for John? 

E-mail John at
[email protected]
or send him a fax at 250-764-8255.

 



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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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