“Tourism is down this year.”
It’s a common refrain this summer.
The tourist crush of the pandemic has come and gone, and visitor levels have ebbed to what might be the new normal. It’s been a difficult adjustment for some, particularly short-term stay accommodators, from AirBnBs to hotels, and for wineries and distilleries — while others appreciate a return to quieter times.
The benchmark, for revenues and numbers, seems to be the year 2019. If revenues have gone back five years, however, labour and other costs have not. It’s created a tough situation for many County businesses.
Sherry Karlo, of Karlo Estates, reports international travellers starkly down, a result of worries about lingering Covid restrictions and airline chaos. “The Americans have almost disappeared this summer; they think they will have to wear a mask if they cross the border. And the Europeans are not yet braving overseas travel.”
“Meanwhile, a regular mainstay, visitors from Toronto — after the chaos of the pandemic here, with extreme parking restrictions and crowds, they are simply not coming. They feel unwelcome.”
Luckily, our wine-loving friends from Quebec, who compose a full 40 of Karlo’s, and the County’s, tourist trade, are still here.
A data website called AirDNA tracks holiday rental accommodations offered on the major platforms – AirBnB, VRBO and the like. It shows key tourist data almost in real time. There are 907 licensed accommodators in the County — and about 1100 STAs on the market. Many of those are waiting for a license.
Occupancy rates are down, though not tremendously, about 7 per cent over the summer of 2022. The number of places to stay is up, however, by 10 or 15 per cent. If actual tourist numbers are holding steady over the peak season, occupancy rates are down because that number is divided over the total number of rooms. Bookings are not at capacity, but that is because capacity has increased. The same holds true for the wineries and distilleries, breweries and cideries. There is simply more competition for fewer customers over a shorter season.
That is putting pressure on prices, which at the moment are high. Accommodators are holding prices steady while increased supply means people can shop around. And they are. Those accommodators who have dropped prices are booked solid.
“We dropped our rates 35 per cent from what they were in 2022,” said Davelle Morrison, who owns six one- and two-bedroom units on Mary Street in Picton. Her rates, in other words, are what they were in 2019. It’s worth it to stay booked. “In fact, my revenue is slightly up from 2019,” she noted.
Stephen Matyasfalvi had the same experience. He and his partner own a three-bedroom water-view cottage with beach access on the Adolphus Reach. “We have noticed a pattern – the high was 2021,” he said. “We started 2023 at the same rates as last year and had no bookings at all. As soon as we dropped to exactly 2019 rates the bookings started coming in.”
The average nightly price of an STA in the County in July 2019 was $343. In July 2022 it was $528. Right now it’s about $500.
That 30 per cent increase from 2019 reflects a combination of higher rental prices and higher fees – not only the municipal accommodation tax (MAT) must be charged, but all accommodators now must add HST. Mortgages, too, have been hit by a double barrel of inflation and interest rates.
“I’m so shocked people are holding their rates steady and have not dropped,” added Mr. Matyasfalvi.
But Ms. Morrison and Mr. Matyasfalvi are the exception. Most accommodators, facing inflation pressures, increased taxes, higher labour costs, and steep interest rates, have not been able to move as quickly to drop prices. The pressures are so intense, many investors have been forced to sell.
For Maria Hristova, who owns Kinsip Distillery, the season has been “a very tricky, stressful situation.” Revenues are down 35% over those of 2021, even sitting a little below what they were in 2019. Meanwhile costs, likewise, are high, unsustainably high. She reports both lower visitor numbers and intense competition.
Ms. Hristova thinks the County needs to work harder to get the tourists it has lost coming back. “We are seven years in,” she says, referring to her family’s launching of the distillery, “and we are still welcoming many, many people who have never been here before or who have never heard of the County. There is an incredible opportunity in front of us to create new repeat customers.”
Growing a sustainable tourist economy the real challenge
Meanwhile, the real challenge lies ahead: the shoulder seasons. If the summer has been (just) ok, AirDNA shows fall bookings down 30% in September and 40% in October over the same months in 2021.
The peak season is much shorter than it has been. The summer of 2021 was one of glory days for tourism, not just because the peak lasted almost two months – for six weeks the County was 90 per cent booked — but because bookings were robust all year round.
From April to September 2021, accommodators were at least 75 per cent booked. By 2022, only July and August hit that mark. The same holds this year. In April 2020 occupancy was 60 per cent. In April 2023, it was 45 per cent —nothing like what it was.
The County has returned to a very short tourist season, at least this year. That skews plans to create a year-round tourist destination.
“It’s true,” says Eleanor Cook. “Visitors are not flocking here.”
Ms. Cook is the Executive Director of Visit the County, the new destination management organization funded through the Municipal Accommodation Tax. That tax is yielding hefty windfalls. What to do with them is a question.
Visit the County’s budget this year is about $400,000. It has been tasked with managing both sides of the tourism equation: getting people here, and ensuring a sustainable tourist culture once they arrive. It’s a bit of a double bind.
“It’s a very big responsibility, to grow tourism in the county sustainably and responsibly,” says Ms. Cook.
The pandemic created a situation of over-tourism that the County is still recovering from. “It created a lot of negative perceptions toward the tourism industry, within the county, as well as a negative reputation, perhaps, in the tourism market in general,” said Ms. Cook.
Back to normal means that outside of a pandemic, the county must compete for tourists.
“We have to realize we are in the same marketplace with Muskoka and Niagara-on-the-Lake. There are a lot of pain points from 2020, 2021, 2022. But we are not experiencing those years of over-tourism anymore.”
International travel is the top draw this year for those who can afford it. And for those who cannot, the County is becoming too expensive.
Ms. Cook, however, sees an opportunity to focus on building tourism in the other parts of the year. The ideal is a county bustling with visitors year-round, not filled to capacity for two hot, overstuffed months.
“We need to support our local tourism industry, and recognize that the things that attract tourists are also exactly the things that makes this such a wonderful place to live. Our wineries, artists, heritage, and natural environment,” she said.
“Tourism marketing is strategic; we need to tell the right story, and that story is the one that residents want told. Our visitors are coming to an island, to a quiet, rural, agricultural community.”
Visit the County wants to create a culture of responsible, sustainable travel. It is focused on inviting visitors who will respect and value the natural environment and the built heritage.
“Tourism won’t work here unless residents fully support it, are involved in the enterprise of welcoming visitors to the county,” said Ms. Cook.