TourismKarenComment

Encouraging sustainable wine tourism, Part 1

TourismKarenComment
Encouraging sustainable wine tourism, Part 1

Part 1 – What are the economic benefits? The advance trickle of endorsements by the BC government of uncontroversial recommendations from the Liquor Policy Review continued in mid-December. Several of these were warmly welcomed in BC wine tourism circles.  Among the tourism-friendly announcements (also applicable to craft breweries and distilleries) were: streamlining producer licenses to allow expansion of on-site tastings areas to e.g. picnic spots in vineyards; permitting sales in satellite (off-site) tasting rooms; and opening up sales of BC products at farmers’ markets and festivals (press release here).  Also promising is the government’s commitment to work with the industry to develop tools (maps and apps) to guide tourists around BC’s growing wine (and craft brewery/distillery) regions.

In a period of flat domestic sales of BC VQA wines,[1] tourism is a bright light for the industry, particularly in the Okanagan Valley, the province’s most established wine region. The Okanagan Wine Festivals Society reports continuous annual growth in attendance at wine festivals over its 20 year history, and the Thompson Okanagan Tourism Association notes that growth in visitor numbers and economic contribution to the region has outpaced the provincial average over the past decade. Tourism Kelowna counts general tourism in the Kelowna area in 2011 as generating $653 million of total direct economic output. Unquestionably, the impressive growth and improved reputation for quality of the Okanagan wine industry has played a role in the Okanagan’s tourism growth.  It also appears that tourism is contributing to the vitality of the wine industry.

How important is tourism to the overall economic health of the BC wine industry?

It turns out that it is very important, most notably in the Okanagan.  A recent study for the BC Wine Institute estimated direct and induced revenue in 2011 of $187.5 million, and direct and induced employment of $75.7 million from wine tourism. As a share of the BC grape and wine industry’s overall economic contribution, tourism revenue accounted for 17% (of $1.1 billion) in domestic wine industry revenue, and tourism employment accounted for 19% (of $264 million) in domestic wine industry wages.[2]

Whether these figures are generally accepted by all stakeholders is another matter.  Consistent general wine industry statistics are hard to come by, as the data provided to industry organisations like the BC Wine Institute or collected by BC Stats or Stats Canada sometimes diverge widely.  In addition, not all economists would agree on what should get counted as “induced” or “indirect” revenue or employment, and they usually cringe at the much-abused “economic multiplier” that is usually drawn from impact studies for use in promotional brochures. So there is room for interpretation of the data in the Economic Impact Report prepared for the BCWI.

All the same, tourism is an important component of the BC wine industry’s role as an economic generator, even if there is debate about the actual quantitative impact.  Tourism will likely be an increasingly important driver of the BC wine industry’s success, especially if it is not able to resolve (e.g. through direct exports) its domestic sales challenges, including oversupply, highest average per-bottle price for domestic wine in Canada (per BCWI Economic Impact Study) and flat sales.  Additionally, the language emerging from government and the Liquor Policy Review recently is of a “wine and food culture” in BC.  This is a potentially exciting development and could evolve into a smart tourism marketing strategy.  While there are impressive efforts, talent and multicultural flavours contributing to the culinary scene in BC, our wine and food culture are really just beginning (in terms of identity and wide uptake) compared to more established regions around the world.

So for various reasons, the industry and government are aligned in their motivation to boost wine tourism in BC, and the sneak peeks at the Liquor Policy Review recommendations hint at this emphasis.  However, there are multiple facets to wine tourism, and to focus solely on the economic benefits is to risk compromising the very attributes that make wine country attractive (and economically beneficial) in the first place.

Part 2 to follow…