The Hindu Business Line : Fighting the trickle

Driving through the Rainbow Bridge into Canada, you cannot help but notice it. The number of cars on the freeway has dwindled. Most of them parted company near Buffalo, the last big city on the American side as one nears the Canadian border. Those th at continued had Canadian licence plates. At the immigration counter on the Canadian end of the bridge, a bored looking young man flips through our passports, stamps them without a question and raises the barricade. Out of curiosity I ask if this is how his typical day is. “Nah! There aren’t too many people driving in these days so I am (relatively) free,” he says. I prod him and he says there haven’t been more than 60-70 cars coming in from the US today. Strange, considering it is Friday evening, the time most people choose to drive to Canada so they can spend the weekend there.

Our hotel, situated about a kilometre from the immigration counter on the Niagara River Road, flashes a neon “Vacancy” sign. So do a couple of other inns and hotels. The recession has had its impact on Canadian tourism, particularly in the Niagara Falls area. Americans make up about 86 per cent of non-resident tourism to Canada and most of them drive into the country. According to Statistics Canada, the country’s national statistical agency, there were 9.1 million same-day car trips from the US to Canada last year, a 19 per cent dip compared to 2007. This is also the lowest annual figure since 1972. Figures from January to April show a further decline in numbers.

Canada’s travel deficit with the US too is increasing – from $7 billion in 2007 to $8.9 billion in 2008. (All figures are in Canadian dollars unless specifically mentioned.) This indicates that Americans are spending less money in Canada. The fluctuating exchange rate between the Canadian dollar and the US dollar (in a range of 26 per cent over the last one year) has kept American visitors at bay. Statistics Canada says American spending in the first quarter of 2009 dropped 7 per cent to $1.8 billion – the lowest in 11 years.

Additionally, from June 1, 2009, as part of the Western Hemisphere Travel Initiative, all American citizens have to have their passports as proof of identity while entering Canada; previously, any US Government-issued photo ID and supporting documents sufficed. This move too is expected to affect Americans visiting Canada. According to the US State Department, about 16.2 million passports and pass cards were issued in 2008, 11 per cent less than in 2007.

The hotel I stayed at and several others in the neighbourhood bear testimony to the sluggish tourist arrivals from America.

My room cost $85 (USD) per night. Six months ago most hotels on this scenic stretch would charge an average of $135 (USD) a night.

I spoke to the hotel manager who identified himself as Burt and requested that the hotel remain unidentified. He confirmed that while the number of tourists from the US had reduced, those from Europe (mainly France and Germany) and Asia (China and India) had increased. However, this balance in numbers does not necessarily translate into balance in revenues as Americans are big-ticket spenders while the others are not.

Americans usually stay longer and spend more time in the casinos and the hotel’s onsite bar, Burt said. At about $5 a drink, a hotel could be looking at making good money. Tourists from other countries prefer to go sightseeing and spend their money on tours, attractions and souvenirs. While this may add to the country’s income from tourism, it does not help the hotels, Burt points out.

Therefore, many hotels including the one Burt works at have resorted to innovative pricing to attract customers, starting with reduced room rates.

The Howard Johnson by the Falls hotel has a “recession buster” package for two people that contains a $25 (USD) breakfast voucher to be availed of at the onsite restaurant, a $45 (USD) dinner voucher that can be availed of in four nearby restaurants — The Keg Steakhouse, TGI Friday’s, East Side Mario’s or Denny’s, a 2-for-1 Baskin Robbins coupon and Niagara Falls and casino shuttle passes for the duration of the whole stay.

Other hotels are selling passes to the local attractions at discounted rates of 15- 40 per cent.

The Niagara Parks Commission, the body in charge of the administration of the tourist attractions in the Ontario area, too has taken some interesting measures.

Instead of paying for every attraction, how about paying a discounted rate for a package of 3-4 attractions? Attractions outside the package are then made available at half price and commute across all these locations is free. Nearly everybody I noticed bought not just a package but also used their half tickets to gain entry to and spend money on rides and souvenirs.

The Commission also spent $7 million in building a virtual reality show called The Niagara’s Fury that creates the experience of the evolutions of the falls.

A report in The Niagara Falls Review newspaper quotes Joel Noden, the Commission’s Executive Director of revenue operations, marketing and business development, as saying that visitor attendance has increased by 20- 30 per cent at the attraction.

Clifton Hill adjoining Niagara Falls is bustling with activity. Restaurants, pubs, shopping centres and Las Vegas-type casinos and other attractions jostle with each other for space on this barely-1-km-long stretch.

Look carefully and you will see that many of them are in various stages of renovation.

The Canadian side of Niagara Falls alone has at least 100 construction projects in the pipeline, various reports point out.

Confidence perhaps stems from the fact that the Canadian government has allocated around $800 million to improve the country’s tourism and travel sector.

About $150 million will be spent on upgrading national parks and historical sites. Over two years, about $40 million will be spent on marketing ($20 million on domestic markets and $20 million on emerging markets).

The idea is to ensure that all potential tourist venues are upgraded to handle tourists visiting Canada for the Winter Olympics in 2010 to be held at Vancouver.

As I drove out of the hotel and crossed the bridge to the US side of life, I was stopped at the US immigration counter and subjected to at least 10 rapid-fire questions.

As I muttered to myself “These Americans, they have to suspect everything!”, the man at the counter said “If you were coming from Canada I would have let you in with no questions.”

(The writer, a former Business Line staffer, is currently based in New Jersey, USA.)

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