‘Showcase what makes Canada special’: Analyst says trade war creates opportunities for tourism sector

Hospitality analyst Zach Pendley discusses if Canadians will stay close to home this summer amid U.S. tariffs.

California governor Gavin Newsom released a video on Monday to recruit Canadian travellers to the golden state as tourism numbers fall amidst trade disputes and boycotts.

Zach Pendley is a hospitality analyst with EY Canada. He said the video is the most pointed advertisement he’s ever seen in the tourism industry.

“With all of the rhetoric we’re hearing south of the border it is nice to hear from some Americans in positions of power, letting them know that Canadians are in fact welcome in the United States,” Pendley said.

In the promotional video, Newsom said California is 2,000 miles away from Washington, D.C., and “a world away in mindset.”

Pendley said the trade war and cost of currency conversion have a lot of Canadians rethinking their summer plans -- but there is a silver lining.

“Many folks are choosing to stay home,” he said. “So the advanced bookings this summer and tourist destinations and leisure destinations across this country are at levels that we have not seen in years.”

Pendley said Canadians book their trips in the cold winter months, so the timing of their travel decisions coincided with the start of the trade war.

“Expect hotels in Canada to be quite busy in these summer months,” he said.

The upcoming tourism season feels like 2021, when “staycations” became a common response to the pandemic, Pendley said -- but with fewer restrictions.

“It was very difficult during COVID for someone from Ontario or B.C. to come to Halifax. That’s not the case this year.”

Pendley said this is an opportunity for Canadians to see more of their own country. He predicts a lot of interprovincial travel.

“At the same time, there’s a feel-good sentiment that you’re supporting Canadian businesses at a time when we all need to be on the lookout for ways to support one another.”

Travellers around the world are changing their plans in response to U.S. tariffs and policy.

In Atlantic Canada there are more direct flights from Europe this summer. Combined with the uptick in domestic tourism, Pendley said some parts of the country are scrambling to meet increased demand, especially since COVID created a spike in construction costs.

“You haven’t seen a significant increase in the supply of accommodations, of hotels, of attractions across the country,” he said. “So what supply we do have is a bit constrained.”

Pendley said travel into the U.S. is down 10 per cent from all destinations and Canada is one of the beneficiaries of travellers changing their plans, but there has not been a drop in American bookings destined for Canada. He said this is probably because of a favourable dollar and less media coverage of the trade war in the U.S.

“Of all of our international travellers to Canada, Americans represent 78 per cent of them all,” Pendley said. “So even if we see, you know an uptick in travel from Europe, it will pale in comparison to what the United States represents in terms of our international tourism market.”

Pendley said it’s good Americans are still coming, but Canadians who have not booked summer holidays should do so before things fill up. He said tour operators and even the real estate sector should prepare for the opportunity ahead.

“Here’s our chance to showcase what makes Canada so special.”