Printed from the Review
Riding out Niagara tourism’s ‘perfect storm’
MONIQUE BEECH
Tuesday, July 03, 2007 – 07:00
Local News – Around the corner from Niagara Fallsview Casino and a wall of towering hotels, the two-storey Ritz Inn Niagara features a sign boasting deep discounts heading into the peak tourist summer season.
The 25 per cent price cut is the only way Niagara Falls motel owner Hoat Oey foresees surviving what some are calling the perfect storm hitting Niagara’s tourism industry.
Skyrocketing gas prices, the soaring Canadian dollar, confusion over U.S. border entry requirements and the end of GST refunds for foreigners have many forecasting a lean summer for one of the region’s largest economic sectors.
Oey knows it, and he’s shoring up for a potentially rough season by charging near winter rates for his 30 rooms – inconveniently tucked out of view from tourist row.
The Indonesian immigrant bought the Dunn Street motel last year, and found he had trouble attracting enough business his first summer. This just makes it worse.
“People say, of course, because the Canadian dollar is getting stronger, less and less Americans come to Niagara Falls, Ont.,” Oey, 47, says.
“It’s true. Otherwise, we keep on struggling.”
So is the rest of Ontario’s tourism industry, which is trying to recoup visitors following the terrorist attacks on the U.S. on Sept. 11, 2001, and the 2003 SARS outbreak in Toronto.
And now this latest bout of tourism trouble.
“There’s no question, as people refer to it, the perfect storm has hit,” says Ontario Tourism Minister Jim Bradley, MPP for St. Catharines.
“What we see in Niagara is what we’re seeing right across Canada. The Americans are simply not coming into the country in the numbers they once did.
“It’s understandable, but it’s also perturbing.”
Experts expect a serious dive in rubber-tire tourists – those who drive across the border – this summer across Canada.
Pump prices have been stuck above $1 a litre for weeks.
The loonie is expected to hit US 96 cents later this year and stay strong well into 2008, analyst Shaune Osborne, chief currency strategist at TD Securities Inc., says.
The U.S. Department of Homeland Security’s Western Hemisphere Travel Initiative that may eventually require all people entering the U.S. to have a passport has caused confusion.
Currently, non-U.S. citizens travelling to the U.S. by air require a passport to enter the country. A huge demand for passports recently led the U.S. government to delay the same requirement for its own citizens until Sept. 30.
Passport requirements at U.S. land and marine border crossings have been pushed back, possibly as late as 2009. Last week in Buffalo, Homeland Security Secretary Michael Chertoff said the U.S. might scrap its passport plan in favour of an enhanced driver’s licence – a plan long pushed for by Bradley.
All the changing chatter has left people confused, says Arlene White, executive director of the Binational Tourism Alliance.
About half of tourists think they already need a passport for land crossings, says White, whose group has been lobbying for alternatives to the passport requirement.
Business is hurting across all of Canada’s border regions as a result, she says.
“Niagara, of all the cross-border regions, probably has the highest dependency on the majority of the U.S. market and it is a drive market,” White says from her office in Niagara Falls.
“That’s when something like this hurts us dramatically.”
EARLY SIGNS THIS YEAR aren’t good.
Border traffic at Niagara’s four crossings was down 18.7 per cent in March compared to 2006, according to the Ontario Ministry of Tourism.
It’s not surprising to Nina Ramunno.
Up the road from Clifton Hill, the flashy, carnival-like tourist epi-centre of Niagara Falls, Ramunno is trying to make a buck at her souvenir shop and rock-themed wax museum.
It’s a Wednesday afternoon, and Ramunno, owner of Rockworld on Centre Street, stands behind a square glass counter walled in by an endless stream of brash T-shirts and jewelry.
If trinket shops gauge the appetite of American tourist spending, Ramunno is starving.
Business is down about 40 per cent these days. Her American customers aren’t happy about the rising Canadian dollar, and neither is she. The pending border rules are also keeping tourists away, she says.
“We make a living off them,” Ramunno says of Americans. “If they don’t come … It’s terrible. It’s how we make a living.”
So far, the negative ripple effect seems to have fizzled before hitting parts of Niagara-on-the-Lake.
At Jackson-Triggs and Inniskillin wineries, business was up in May. American traffic was down, but that was offset by more domestic travellers, particularly from Quebec, says Del Rollo, hospitality manager for both wineries.
Those who did come from the U.S. are “focused buyers” and are spending more, Rollo says.
The town’s bed and breakfasts have noticed a slight dip in American tourists during the past year, says Kenn Moody, president of the Niagara-on-the-Lake Bed and Breakfast Association.
Again, sophisticated domestic travellers seem to be filling in the gaps, says the owner of Newark Manor Bed & Breakfast on Lakeshore Road.
“The bulk of the people that are coming over and staying with us already have passports,” Moody says.
“There’s some hope that that’s not going to be the defining issue (for business).”
Across the Niagara River, business is booming.
Canadians, once gun-shy because of the weak loonie, are heading in droves to the outlet stores of Niagara Falls, N.Y., and the Seneca Niagara Casino – particularly attractive since Ontario enforced its sweeping smoking ban.
Hotel occupancy and business at key tourist attractions in Niagara Falls, N.Y., was up in May, says Kate Scaglione, director of marketing and communications for the Niagara Tourism and Convention Corp.
Como Restaurant on Pine Avenue in the heart of Niagara Falls, N.Y.’s Little Italy, has long been a landmark for many Canucks looking to grab a bite after hitting the nearby Fashion Outlets of Niagara.
When the dollar took off, so did Como’s business.
The same type of crowds that frequented the long-established family restaurant in the late 1980s seem to be coming back, manager Steve Hall says.
“It’s the difference between being busy and very busy,” Hall says, a white apron draped around his sturdy frame.
“That’s the difference. We can be busy with a mediocre trade coming from Canada. But when they’re really coming over here, it really adds to business.”
Scaglione says the current tourism climate is a boon to the U.S. side of the Niagara River. Long term, it’s not good for either side, she says.
“It damages the region as a whole because people really do want the binational experience. They do want to come to the U.S. side and see what we have to offer and vice versa.
The passport requirement, long term, is not good for anyone in the tourism industry.”
NIAGARA’S TOURISM industry has weathered worse storms, says Patrick Gedge, chairman of the Niagara Economic Development Corp., which runs Tourism Niagara.
The game plan is to keep bringing in tourists.
More domestic visitors. More international tourists. Target people from farther away in the U.S., such as New York City or beyond.
Move away from what Gedge calls “middle America” and focus instead on the more “sophisticated” traveller who understands what it takes to cross a border, has a higher income and is willing to spend more for a unique, satisfying experience.
Package Niagara as a destination.
“The fact that the Canadian dollar can go up and down. The fact that the border continues to be very much a communications issue. – those are just realities in the marketplace,” Gedge says.
“You can’t focus on those things that you can’t control. What you can do is focus on things you should have an effect on.”
OEY HOPES THE $20,000 he sunk into marketing this year pays off. He went with ads in CAA and AAA brochures.
For now, his prices are staying low.
“We are hoping to get as much revenue as possible, even though we have to lower down our price.
“Some of our competitors are charging $35 per night. So what can we do?
“We have to follow the trend.”
Border crossing facts
The percentage changes at border crossings at the Peace Bridge, Whirlpool, Rainbow and Queenston-Lewiston bridge.
March 2007 over 2006 March 2006 over 2005
U.S. TOTAL -18.3 per cent -7.5 per cent
U.S. Overnight -6.0 per cent -1.3 per cent
U.S. Same-day -22.6 per cent -10.5 per cent
Overseas 8.1 per cent -22.8 per cent
Note: Overseas border crossings represent a very small volume (between one and two per cent) of the total Niagara Region crossings.
The percentage change at all Canadian border crossings.
March 2007 over 2006 March 2006 over 2005
U.S. TOTAL -15.1 per cent -8.8 per cent
U.S. Overnight -6.9 per cent -4.3 per cent
U.S. Same-day -20.3 per cent -12.5 per cent
Overseas 9.2 per cent 0.3 per cent
Source: Ontario Ministry of Tourism
ID- 594902
© 2007 , Osprey Media. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Niagara Falls Review acticles reprinted with permission by the authority of Joe Wallace, City Editor of the Niagara Falls Review.
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