Newfoundland and Labrador Product Development Strategy

- 6 -Approximately 45% of these trips are overnight trips, with the balance being same day trips ofat least 80km one way. Total spending by residents travelling in the province is some $320million.Market TrendsOverviewThe 1990s saw strong growth in global tourism markets supported by relatively strongeconomies, booming stock and real estate markets, and the large baby boom market whosought out a wide variety of travel experiences to compensate for the stresses of managingtwo income families and high pressure jobs. The events of September 2001 bought an end tothis period of growth in the tourism sector, although in retrospect analysts agree that thesoftening North American economy and the ‘tech market’ bubble burst were impacting travelactivity long before September 11. Global and national events of early 2003 (Iraq War,terrorism concerns, SARS, Mad Cow disease) further distressed an industry that wasbeginning to show signs of recovery following 9-11. Canada, particularly central Canada,was hard hit in 2003 due to the impact of SARS and the decline in the group tour market fromthe US.The big question is what will happen to tourism over the next decade or more? And opinionsare mixed. On the negative side, concerns about safety and security, future terrorist attacksand a weak economy, low interest rates and relative poor stock market are likely to continueto impact travel activity. Those on fixed incomes, dependent on interest rates, are expected tobe one of the segments most negatively impacted; this segment is also likely to have moresecurity concerns. Moreover, as the baby boomer market moves closer to retirement, thereare some expectations that a combination of paying for their children’s education and savingfor retirement will mean that they have fewer resources for travel.On the other hand, travel has always been important to the baby boom market (and it is thisdemographic market segment that will drive travel activity for the next twenty years) – theysee travel as almost a birthright. As they start to retire, many early and many more withpensions than was the case for earlier generations, the baby boomers will have more time toindulge in their travel interests. And the baby boomers are interested in experiences, seekingout new destinations and new things to see and do; they are also well-educated. And the welleducatedtend to have a higher participation rate in travel. Baby boomers are also much morefit than earlier generations and evidence indicates that this generation is going to doeverything in their power to ‘age gracefully’.As the baby boomers age, the 55 – 64 age group will grow faster than any other marketsegment – averaging 5% per year until at least 2010 in the US. The spending on travel by thismarket segment today is 20% above the average. For many of those remaining in theworkforce, these will be their highest earning years - the high income earning segment of the55 – 64 year age group ($100,000 per year and more) is expected to double by 2010, reachingover 5 million households in the US.THE ECONOMIC PLANNING GROUP of Canada Newfoundland & Labrador Tourism Product DevelopmentD. W. Knight Associates Strategy and Accommodation Needs Study