Elasticity of Tourism in Canada

There are many factors that affect tourism in Canada and I'll talk about a few of them. We have the price of fuel and flights, weather and conditions, and finally decisions made by our government. I feel that the tourism industry in Canada is quite elastic and only small changes can have a significant effect on the industry.

I'm sure we have all passed the German couple in the rented RV driving to slow through the mountain passes. As we know our country has great cities surrounded by fantastic scenery, part of the problem for tourist is the actual amount of scenery/ distance between the cities.This makes the price of fuel to run an RV or even a car a deciding factor on vacations in Canada. At the same time the price of fuel for our cars goes up, the price of flights also rises. We being a part of an oil producing nation it helps drive our economy and inflates our dollar value. All of these things work together against tourism. There are the factors to which we have less control over such as weather and conditions that affect ski hills to house boating. On the other side of the spectrum there is policies of our government. As of this years budget cuts will shorten the seasons for parks Canada and will cut the number full time employees. Right now there are different opinions on how this will affect local economies.

Although Canada has experienced growth in the tourism industry it has also been losing part of its market share. The change in the budget for 2012 shows that the current Canadian government believes that the tourism market is inelastic. This assumption is made apparent by believing that cutting investment in the tourism/ parks will net greater savings than revenue lost. Time will tell how this all plays out.


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