International tourist visits to B.C. slowed in February but the level remained consistent with the range observed in late 2013, with inbound visits reaching a seasonally adjusted 373,875 persons. While this was 2.3% lower than in January, visits were 3.4% higher than a year ago. Moreover, total visits over the first two months of the year were up 6%, pointing to a positive contribution to economic growth from tourism-sector-related activity.
The flow of overseas visitors to B.C. has rebounded to pre-recession highs and has driven overall gains. Year-to-date visits were 8% higher than a year ago, led by growth in Asian markets. In particular, flows from China were up nearly 30%. Other countries contributing significantly to growth included India and Mexico. Weak economi c growth has continued to hamper a rebound in European inflows with the exception of France.
In comparison, growth in visits from the U.S. was a more modest 5%. While levels are still a far cry from levels observed during the early- to- mid-2000s, the flow is moving in the right direction and trending at levels observed in early 2008.
International visits are forecast to grow by nearly 10% this year to 4.83 million overnight travellers, but remain below levels observed in the early 2000s. Although high-profile events like the TED Talks provide a boost, improved economic conditions in the U.S., growth in the Chinese economy and a lower Canadian dollar will do the heavy lifting to drive higher tourist inflows to the province.
Alongside gradual improvements in international tourist flows, B.C.'s economy will likely experience less drag from cross-border shoppers to the U.S. than it did over the past five years.
While cross-border flows remain high, the trend has stabilized over the past year with some signs of easing. Return entries held range-bound near 1.15 million persons, but fell for a third successive month in February to a seasonally adjusted 1.13 million. The Canadian dollar has declined about 10% over the past year and hovers near US$0.90, cutting into cross-border purchasing power. Add increased domestic retail competition to the mix and residents are likely finding fewer incentives to brave those border lineups. •
Bryan Yu is an economist at Central 1 Credit Union.
