Leading Travel Companies Discuss State of Industry, 2007 Travel Trends

Best Western International, TIAC and HAC Optimistic About Future Growth of
Canadian Travel Market; Multiple Factors to Influence, Impact Industry
Throughout 2007

TORONTO, Aug. 10 /CNW/ -- Growth of the $62.7 billion Canadian travel industry is on track and many sectors are expected to exceed 2005 figures, despite issues ranging from government changes, the Western Hemisphere Travel Initiative (WHTI), a higher Canadian Dollar and increased energy costs. Executives from Best Western International, the Tourism Industry Association of Canada (TIAC) and the Hotel Association of Canada (HAC) recently convened in Toronto to discuss these and other topics important to the business and leisure travel market. From the continuing shift in global travel patterns to new trends affecting vacationers across North America, industry leaders shared their views on a wide range of issues that could impact the travel industry for months to come.

BEST WESTERN'S BEST YEAR ON RECORD
Dorothy Dowling, senior vice president of marketing for Best Western, said 2006 is on track to be another record year for the world's largest hotel chain. With North American revenues up 11 percent over 2005, and the average daily rate (ADR) in Canada up nearly $10 to $92.25 FYTD ending in June, growth across the country continues at a steady pace. Fifteen new hotels, or 1,043 rooms, were added in 2005, with another 15 to be flagged in 2006.

"Growth continues to be hot in Quebec, Manitoba and Atlantic Canada -- specifically Halifax -- as well as Alberta, where we've opened nine hotels in the past 18 months alone," said Dowling. "This expansion mirrors our business travel base throughout Canada, where 55 percent of our guests come from the corporate side. By contrast, business travellers make up 44 percent of our business in the U.S. market."

Best Western currently operates more than 180 hotels, or 16,747 rooms, across the country. The portfolio includes conference centres that offer meeting space/banquet facilities, as well as properties that offer amenities such as award-winning dining or water slides, and guest rooms that offer fireplaces, Jacuzzis(R) and spectacular views.

CANADIAN TRAVEL INDUSTRY "MOSTLY SUNNY"
Tony Pollard, HAC president, said this year's Hotel Association of Canada/Fleishman Hillard 2006 Annual Travel Intentions Survey revealed that the travel industry is on a healthy upward pace for several reasons. Among them:

-- The percentage of Canadians traveling in 2006 increased by 10 points over 2005, from 57 percent to 67 percent

-- Room rates are up 2 percent nationally to an average of $118 per
night; RevPAR is up 5.6 percent

-- Air Canada's load factor hovering at 84 percent versus 79 percent
last year; WestJet up to 77 percent from 71 percent in 2005

-- Consumer confidence is up as is the GDP at 3.1 percent while
unemployment is at its lowest point since the early 1970s. This all
bodes well for the lodging industry

"The clouds we're seeing on our travel horizon are due to a slowdown in inbound travel from the U.S., the WHTI issue and the continued high cost of fuel," said Pollard, "but with just 4 percent of survey respondents planning to curtail their travel plans because of the price of a tank of gas, we're still expecting to be back to pre-2000 profitability levels this year."

FACTORS AFFECTING TOURISM MARKET
Canadian markets are adjusting their three-year marketing plans to account for problems that may occur as a result of WHTI, the U.S.- led program that will require all travellers to present a passport or other appropriate secure document(s) when entering or re- entering the United States by air or sea after December 31, 2006. With WHTI's implementation date edging closer, TIAC and the HAC are moving forward to mitigate its effects on the tourism industry across both sides of the border.

TIAC President and CEO Randy Williams said that although the effects of WHTI will not be fully realized until it is implemented for land-border crossings on January 1, 2008, its $2.5 billion impact is being felt now and will continue to do so throughout 2007.

A recent U.S. study also sought to measure the impact of the U.S. traveller on the Canadian tourism industry. While a majority of Americans (71 percent) are still taking leisure trips, nearly one- third (29 percent) are planning to take less holidays than last year. The reasons, however, are not a direct result of factors such as the rising cost of fuel.

"The top three reasons why Americans aren't taking a leisure trip have to do with their ability to balance their budget, balance their work issues and manage the chores building up at home -- the cost of gas is one of the smallest pieces of financial pie," said Williams. "Travel is a discretionary spend, so the more disposable income consumers have, the more likely they are to travel."

CHANGING DEMOGRAPHICS RESULT IN NEW TRENDS FOR 2007
The Gen-X market is on the cusp of driving the travel market, taking that moniker away from Baby Boomers, said Pollard. This group is taking more atypical, offbeat vacations away from city centres than Boomers have traditionally sought. As a result, the industry is changing to respond to these needs.

The ability to understand and customize the marketing message to a particular consumer group is paramount to the industry's success, said Dowling. Best Western has developed innovative programs specifically designed to reach individual target audiences. Today, women and children are the key decision makers when it comes to family travel, which is directly tied to the company's marketing strategy. Best Western's current summer promotion that partners the hotel chain with YTV and the hit television show The Fairly OddParents provides a vehicle for reaching this highly sought-after demographic.

All the panelists agree that many undiscovered and affordable treasures are ripe for discovery across the country. From heliskiing and survival camping in the North to mushroom picking in Montebello, Quebec, travellers to Canada (both locals and foreigners) will find much more to do besides skiing, camping and hockey tournaments.

And with 2,400 locations throughout North America for Canadians to explore, Best Western in particular is working hard to make sure everyone knows it has a hotel to fit many tastes and many budgets across the continent.

"While business travellers appreciate our free high-speed Internet access, the Gen-X and Gen-Y crowds value our locations near almost every outdoor adventure activity thinkable," said Dowling. "Those participating in the 'grandtripping' phenomenon -- grandparents traveling with their grandkids -- appreciate our locations near national parks, as well the properties that have onsite breakfast and swimming pools."