Luxury tourism sector looking to recover

High-end resort operators coming off a dismal 2009 season

Operators of many of B.C.’s high-end resorts are casting a wary eye on news reports in the U.S. suggesting luxury hotels will see business rebound this year.

It was a dismal 2009 in B.C., with one of the province’s first high-end resorts, the Aerie, shuttered and revenues at many others dropping 10 per cent or more. As this year’s tourist season looms, local highend operators are taking a wait-and-see approach.

Craig Murray, owner of Nimmo Bay Helicopter Fishing and Wilderness Adventures, noted in his usual straight-to-the-point manner:

“2009 was the pits. But 2010 seems to be a little bit of a rebound, though there’s probably a later booking season. Then again, nobody in the world has any crystal balls for what will happen.”

Murray says he can only be hopeful, after a 2009 when they did enough business “to still have black ink on the bottom line,” that 2010 brings more people looking for adventure in the aftermath of the recession.

Victoria - (Times Colonist) Charles McDiarmid, managing director of the Wickaninnish Inn in Tofino, said 2009 was their worst year ever “by a significant amount” and is reluctant to expect much better this summer.

“I’m not optimistic that it will just bounce back and everything will be wonderful,” he said. “We planned for a small increase over 2009, but [projections show] the business we have on the books for this summer is about the same [as 2009] which is not great.

“We are hopeful there will be more last-minute demand,” he said, adding there is also hope the afterglow of the Olympics could have an effect.

“We’re hoping the Olympic halo we were counting on comes through as soon as this summer, that Europeans and Americans that saw those wonderful pictures will  come back to B.C., and if they come to Vancouver that could float all of the boats.”

Hospitality industry consultant Frank Bourree of Chemistry Consulting is more pessimistic about feeling an immediate Olympic impact, but says he believes the high-end market could feel a rebound.

“At the high end, many of the long-haul tourists feel they have a God-given right to travel and nothing will stop them,” he said referring to the recession and the high Canadian dollar. “Middle-income people may be feeling stressed, but rich people don’t care.”

That is why Bourree does not advocate dropping rates to draw in tourists at that market — a practice that ran rampant in the U.S. last year, according to Bloomberg News.

“A lot of operators cut off their nose to spite their face last year,” he said, noting the Fairmont Empress discounted rooms last year, which led to the rest of the city following suit. “I think they realize now it was a mistake.”

Murray, whose Nimmo Bay adventure packages start at $7,250 for a threeday program, refused to buy in to discounts.

“I don’t play that game. It’s not a good place to go especially when you are offering a good service,” he said. McDiarmid, whose Wickaninnish Inn high-season rates start at $500 a night, agrees and says it can lead to lower revenue and less cash to invest in upgrades, maintenance and service — which means the deterioration of standards.

“We made a decision early on that we weren’t going to compromise quality or service and we weren’t going to compromise rate, we weren’t going to do whatever it would take to bring people in,” he said. “You can do it shortterm, but all of a sudden you get less revenue and I frankly don’t believe you make it up with more volume. Plus the market you attract is temporary, when rates go back they are going somewhere else.”

It’s unlikely anyone will be going to the Aerie Resort this year.

The 19-year-old resort closed its doors in November, citing three years of difficulty. According to owner Maria Schuster, she is still working with different investors but no deal to sell the property has been finalized.

“I can’t see that the Aerie will be open this year,” she said.

The resort is now under the care of court-appointed receiver Glover-Drennan.



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