Trade disputes, border issues, a soaring dollar, war and political posturing are just a few of the factors that have severely cut the stream of American tourists flowing north, leaving Canada's tourism treading water, says the industry's national lobby group.

Still, efforts are under way across the country to turn the tide in this important market, which some estimate accounts for 80 per cent of foreign visitors to Canada.

The Tourism Industry Association of Canada (TIAC) says that in the last five years, roughly 40 per cent fewer U.S. citizens have been crossing the border, walloping the tourist industry.

"Visitations from the U.S. have been sliding since 2000," says Randy Williams, TIAC president and CEO. "Same-day visitors from the U.S. are down 40 per cent to the end of October 2005, and overnight visitors are down around three per cent - it's all very troubling."

Bayne Stanley, Business Edge
Granville Island Hotel operations manager Jill Butterworth Penner hasn't seen much of a downturn in U.S. tourist visits.

According to Statistics Canada figures, 38.84 million visitors entered Canada in 2004 - of those, 34.63 million came from the U.S., a drop from a total of 48.64 million in 2000, of whom 43.99 million were U.S. residents.

Williams says that while 9/11 has played a part in the drop, several other factors have contributed, such as Canada's refusal to support the Iraq War and the missile-defence program, "inappropriate" comments made by Canadian politicians regarding the U.S. government, the softwood lumber dispute and the 2003 SARS outbreak.

The strong Canadian dollar and the U.S. Western Hemisphere Travel Initiative are also to blame. The latter Homeland Security initiative will require Americans entering the U.S. through airports and seaports to present passports starting Dec. 31, 2006; for those entering by land the date is Dec. 31, 2007.

Data from the Canadian Tourism Research Institute estimates the new passport regulations will cost Canada 7.7 million U.S. visitors between 2005 and 2008.

TIAC, meanwhile, has asked Ottawa to consider a number of measures to limit the impact of the U.S. regulations.

"There are a lot of negatives and not too many positives when it comes to our U.S. market," Williams says.

Across the country, tourism officials are alarmed by the falloff in American travellers, but good news on the Asian and European fronts has helped take out a bit of the sting.

Ontario reports that for the nine months ended in September, international border crossings to the province were 7.9 per cent below the level achieved during the same months in 2004, a decline led by the U.S. rubber-tire market, which fell nearly 13 per cent.

"While the U.S. travel market is a huge priority - we are trying to bring them back - we're also seeing a significant increase in international visitation to Ontario, specifically (from) Europe, Asia and the U.K. These are all areas where we've seen numbers gone up," says Gary Wheeler, spokesman for the Ontario Ministry of Tourism.

Overseas visitors grew in the first nine months of the year by nine per cent, ministry statistics reveal.

Derek Coke-Kerr of Travel Alberta says the province could experience a jump in visitors coming from abroad.

Derek Coke-Kerr, managing director of Travel Alberta, also reports visits from south of the border have continued to suffer in 2005, although not as badly as in Ontario, which relies heavily on rubber-tire tourists.

Most visitors to Alberta coming from outside the western provinces fly in, he says.

However, Coke-Kerr predicts that based on preliminary numbers, Alberta could actually experience a five- to 10-per-cent jump in visitors, largely on the strength of markets outside of North America.

"A lot of that increase, of course, we're counting on to come from ... Asia-Pacific, which is really showing strongly; Europe and the U.K., too," he says.

Vancouver, meanwhile, reports overnight visits from the U.S. down 2.4 per cent from last year, says Stephen Pearce, vice-president of leisure travel with Tourism Vancouver.

"By the same token, Japan is down by two per cent, but our other Asia-Pacific markets did well, so overall we're up by two per cent," says Pearce. "The European market is up by eight per cent" all of which will likely mean overall visitations will rise by at least one per cent this year compared to 2004.

The Granville Island Hotel, located at Vancouver's popular Granville Island tourist destination, worries how issues such as new U.S. passport requirements will play out in the long term, but says its 85-room facility has lost little U.S. business despite the high Canadian dollar and other cross-border issues.

"So far we haven't seen much of a downturn in our U.S. guests," says Jill Butterworth Penner, the hotel's operations manager. "I think the ones who are coming from Seattle and elsewhere and who are staying with us just want to get away for a few days, to they aren't put off so much from the high Canadian dollar."

In addition, the hotel has experienced a spike in domestic bookings, particularly those from Alberta, Manitoba and Ontario.

B.C.'s Lower Mainland also works closely with the ski resort area of Whistler. Tourism Whistler indicates that bookings have fallen steadily for the past four winters, due to bad weather and cross-border issues.

Bayne Stanley, Business Edge
Granville Island Hotel operations manager worries about new U.S. passport requirements

One province that has escaped relatively unscathed from declining U.S. tourist visits is Saskatchewan.

Besides the hunters and anglers who flock to the prairie province each year - which Tourism Saskatchewan president and CEO Ray Anderson calls a "very stable" market - American tourists account for a small number of visitors.

"Our No. 1 market, other than from our own province, has been Alberta. We've got some extremely competitive products, water-based recreation for example. We've retooled in terms of our (marketing) investment because we still feel there's still opportunity for significant growth from Alberta residents."

In fact, Anderson says, Saskatchewan's tourism industry has enjoyed a banner year, thanks in large part to the province's centennial celebrations that drew in excess of 50,000 visitors to homecomings and other special events.

Meanwhile, Canada's tourism officials continue to seek new ways to rally their industry.

The Banff Lake Louise Tourism Bureau wants to increase its marketing budget from $1.5 million annually to $5-$7 million over the next five years. To achieve this, it is examining raising membership fees or charging a special hotel tax. The organization is also considering working closer with partners such as the Town of Banff, Parks Canada and Travel Alberta to leverage its own marketing efforts.

Referring to a study the organization released earlier this year, Julie Canning, tourist bureau president and CEO, says: "We found other organizations are investing significantly more to protect and grow their market share. The second thing was that our market share was at risk, and also that our ability to grow our market share was extremely challenging."

Travel Alberta says it will continue to try and lure more visitors from historically strong states such as California and Texas, but in 2006 will also target New York, now that Air Canada is adding a direct flight between Calgary and Newark, N.J., beginning in February. "We think there's a big ski market we can attract from (the New York) area," Coke-Kerr says.

TIAC, meanwhile, is proposing that Ottawa substantially increase funding to the Canadian Tourism Commission from $80 million per year to $180 million, which Williams says would ultimately return $200 million in annual tax revenue to federal, provincial and municipal coffers. The association has written letters to each of the federal party leaders asking for their stance on tourism and expressing concern for the state Canada's tourist industry.

Williams adds that despite a forecast to rise to about $59 billion from $57.7 billion in annual revenue from tourism in 2005, this growth pales in comparison with many other countries where revenue has, on average, increased by between four and six per cent.

"Other countries have stepped up and we in Canada haven't, and that's got to change if we're going to turn these things around," he says.

(John Ludwick can be reached at ludwick@businesssedge.ca)