Canadian dollar helping B.C.’s 2018 tourist trade

2018 is shaping up to be another strong year for B.C.’s tourism sector.

Propelled by a surge in U.S. visitors since August, international tourist inflows to the province remained elevated at a stellar 495,100 persons (seasonally adjusted) in March. Year-over-year, visits rose 5%, with the underlying trend 13% above previous cycle highs observed in the early 2000s.

B.C.’s tourism sector is benefiting from various drivers. A favourable Canadian dollar, growth in travel demand from emerging markets and political instability south of the border have shone a positive light on Canada as a destination. Other factors include a healthy cruise ship market, which is likely attracting visitors to Metro Vancouver, as well as increased interest in northern and other interior B.C. destinations. U.S. visits have returned to a level unseen since the early 2000s, which preceded a thickening of borders following the 9/11 attacks, and appreciation in the Canadian dollar. Meanwhile overseas visits remain strong.

Through the first quarter, total international tourist visits rose 8% from same-period 2017, led by a 10% increase from the U.S. and 5% from other markets. Among the latter, gains were led by growth in the number of visitors from Australia (up 11%), Taiwan (up 30%), China (up 11%), Germany (up 18%) and South Korea (up 18%). Led by China and Australia, these countries collectively accounted for all of the net increase, while a decline in visits from the United Kingdom, Hong Kong and Mexico was a significant offset.

The number of individuals receiving employment insurance benefits in B.C. continued to trend lower in March. The total seasonally adjusted EI count of 43,610 persons was 3.2% (1,440 persons) below February, and down 17% on a year-over-year basis. Levels were the lowest since late 2008. Relative to February, the largest declines among occupations were in the education, law and community/government service sectors (down 620 persons), and in trades, transport and equipment operation (down 480 persons).

While benefits expiration naturally erodes EI counts over time, the persistent decline and low absolute level of recipients speak to the province’s tight labour market, characterized by low unemployment rates and ample job opportunities. At 4.7%, the unemployment rate in B.C. was the lowest in the country during this period. On a comparative basis, the ratio of EI beneficiaries to the size of the labour force in March was 1.7%, which was second lowest among provinces next to Ontario. Similarly, the trend for initial and renewal applications for benefits is also falling as unemployed workers are readily finding opportunities.•

Bryan Yu is deputy chief economist at Central 1 Credit Union.