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Qualicum Beach Retail and Tourism Gap and Opportunity Analysis

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Qualicum Beach Retail and Tourism Gap and Opportunity Analysis Qualicum Beach Retail and Tourism Gap and Opportunity Analysis May 2009 Prepared for: Town of Qualicum Beach By: Coriolis Consulting Corp. RETAIL AND TOURISM GAP AND OPPORTUNITY ANALYSIS Table of Contents 1.0 Introduction ............................................................................................................ 1 2.0 Retail and Service Market Analysis ...................................................................... 2 2.1 Qualicum Beach’s Role in the Regional Retail and Service Market ................. 2 2.2 Trade Area Population Trends and Projections ................................................. 2 2.2.1 Existing Population and Recent Trends ................................................... 2 2.2.2 Population Projections ............................................................................. 4 2.3 Retail and Service Market Conditions in Qualicum Beach ................................ 4 2.3.1 Types of Businesses ............................................................................... 4 2.3.2 Vacancy .................................................................................................. 5 2.3.3 Recent Development ............................................................................... 6 2.3.4 Commercial Character ............................................................................. 6 2.3.5 Demand for Retail and Service Floor Space ............................................ 6 2.4 Economic Viability of Retail Development ......................................................... 9 2.5 Prospects for Retail Growth ................................................................................ 9 3.0 Tourism Market Analysis .................................................................................... 11 3.1 Study Area .......................................................................................................... 11 3.2 Existing Accommodation Inventory ................................................................. 11 3.3 Indicators / Trends ............................................................................................. 12 3.3.1 Room Revenues .................................................................................... 12 3.3.2 Highway Traffic Volumes ....................................................................... 13 3.3.3 BC Ferries Passenger Volumes............................................................. 14 3.3.4 Airport Passenger Volumes ................................................................... 14 3.4 Recent Tourism Development in the Region .................................................... 15 3.5 Prospects for Growth in the Regional Accommodation Market ..................... 16 3.6 Qualicum Beach’s Advantages & Disadvantages for Tourism Development 16 3.7 Conclusions ....................................................................................................... 18 4.0 Comments from Chamber of Commerce and Tourism Association ............... 19 5.0 Conclusions and Recommendations ................................................................. 20 CORIOLIS CONSULTING CORP. PAGE I RETAIL AND TOURISM GAP AND OPPORTUNITY ANALYSIS 1.0 Introduction The Town of Qualicum Beach commissioned Coriolis Consulting Corp. to complete an analysis of the existing retail and tourism market conditions in Qualicum Beach, identify gaps in the current market, evaluate new retail and tourism opportunities, and suggest strategies that the Town could consider to take advantage of the opportunities. The Town intends to use this analysis as an input to community planning, economic development plans, and evaluating any future proposals for the redevelopment of lands that are used for commercial or tourist accommodation. We have structured this analysis in four main sections: First we analyze the retail market, including a description of the existing situation and a forecast of development potential over the next decade. Second, we analyze the tourism market, including a description of the existing situation and an outline of development opportunities over the next decade. Third, we summarize the input we received from some local organizations interested in the retail and tourism sectors. Finally, we summarize our overall conclusions and recommendations, including some suggestions for planning directions. CORIOLIS CONSULTING CORP. PAGE 1 RETAIL AND TOURISM GAP AND OPPORTUNITY ANALYSIS 2.0 Retail and Service Market Analysis 2.1 Qualicum Beach’s Role in the Regional Retail and Service Market The Town of Qualicum Beach is located within a large geographic retail and service trade area that spans from about Nanaimo on the south to Courtenay on the north and inland to Port Alberni. The dominant urban centres within this regional trade area are Nanaimo and Courtenay, which offer a wide selection of major retail and service chains, department stores, big box retailers, warehouse retailers, and restaurants/entertainment. Retail and service businesses in Qualicum Beach (and nearby smaller communities) mainly cater to the day-to-day needs of the local community and to tourists. The Qualicum area does not include the destination-oriented retailers that draw trade from a large regional area. These kinds of businesses are concentrated in Nanaimo and Courtenay. 2.2 Trade Area Population Trends and Projections 2.2.1 Existing Population and Recent Trends The large central-Island regional trade area that contains Qualicum Beach is made up of three Regional Districts (Nanaimo, Comox-Strathcona, and Alberni-Clayoquot) in which the main urban centres are the cities of Nanaimo, Courtenay, and Port Alberni. Table 1A shows that the 2008 population of this entire region is about 284,000. Over the decade from 1998 to 2008, the entire regional population grew at an average annual rate of less than 1%, although the Regional District of Nanaimo was by far the fastest growing part of the area. During the more recent past (2003 to 2008), growth has been more rapid than the decade average, and the Regional District of Nanaimo (which contains Qualicum Beach) was again the fastest growing part of the whole region. Table 1B shows that the 2008 population of Qualicum Beach was about 8,700 people, which is about 3% of the total of the three Regional Districts and about 6% of the population of the Regional District of Nanaimo (compared to the City of Nanaimo which, in 2008, had about 57% of the population of the Regional District of Nanaimo. Table 1C shows the population growth trend in Qualicum Beach compared to the Regional District of Nanaimo. This table uses Census data instead of the BC Stats data in Tables 1A and 1B because the BC Stats data is not adjusted for municipal boundary changes but the Census data is. Qualicum Beach annexed some adjacent residential areas, so the BC Stats data would show an artificially high growth rate based on annexation versus real growth. Table 1C shows that CORIOLIS CONSULTING CORP. PAGE 2 RETAIL AND TOURISM GAP AND OPPORTUNITY ANALYSIS Qualicum Beach has been growing at close to the same rate as the whole Regional District of Nanaimo. In addition to the 8,700 people who live in Qualicum Beach, there are other people who live in very nearby residential areas including Deep Bay, Bowser, Dunsmuir, and Errington. We estimate that these areas have a combined total population of about 6,400, meaning that Qualicum Beach has a total local trade area population of about 15,000 people.1 These small nearby communities do not have much commercial space and they are close enough that residents can conveniently travel to Qualicum Beach for day-to-day retail and service needs. Of course, they also live close enough to Nanaimo or Courtenay that, like residents of Qualicum Beach, they spend some of their retail and service dollars in these larger communities. Table 1A: Population Growth in the Regional Trade Area by Area (BC Stats data) Average Annual Growth 1998 2003 2004 2005 2006 2007 2008 98 to 08 03 to 08 RD of Nanaimo 128,912 133,502 135,099 138,248 141,246 143,020 145,870 1.2% 1.8% Comox-Stratchona RD 101,827 98,885 99,732 101,365 103,128 104,769 107,104 0.5% 1.6% Alberni-Clayoquot RD 32,168 30,501 30,704 30,865 31,077 31,102 31,280 -0.3% 0.5% Regional Trade Area 262,907 262,888 265,535 270,478 275,451 278,891 284,254 0.8% 1.6% BC Total 3,983,113 4,122,396 4,155,170 4,196,788 4,243,580 4,310,305 4,381,603 1.0% 1.2% Source: BC Stats (2009 data) Table 1B: Qualicum Beach’s Current Share of the Regional Trade Area’s Population, 2008 (BC Stats data) 2008 Regional Trade Area 284,254 Qualicum Beach 8,666 Qualicum Beach as % of Regional Trade Area 3.0% Table 1C: Historic Population Growth in Qualicum Beach, 2001 to 2006 (Statistics Canada data) 2001 2006 Annual Growth Rate RD of Nanaimo 127,016 138,631 1.8% Qualicum Beach 7,802 8,502 1.7% Source: Statistics Canada Note: Statistics Canada figures for 2001 and 2006 reflect municipal/regional district boundaries as of 2006. 1 This figure includes the population of Electoral Area H (Deep Bay, Bowser, Dunsmuir, Dashwood) plus 50% of the population in Electoral Area F (Coombs, Errington, Hilliers). CORIOLIS CONSULTING CORP. PAGE 3 RETAIL AND TOURISM GAP AND OPPORTUNITY ANALYSIS 2.2.2 Population Projections BC Stats completes detailed population projections for Local Health Areas (LHA). Qualicum Beach is part of a LHA that includes Parksville, Nanoose Bay, Bowser and other nearby communities to the north of Nanaimo and to the south of Courtenay. The population projections for
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