March 06, 2009 Features & Images » Feature Story

The next big hassle 

Passports, enhanced I.D., and a whole new headache for tourism

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On the U.S. State Department's website there's an actual countdown clock, ticking away the minutes, hours and days until 12:01 a.m. on June 1, 2009, when the final part of the Western Hemisphere Travel Initiative (WHTI) comes into effect. As far as the Canadian tourism industry is concerned, whereas U.S. visitors can account for about a third of all visits, it might as well be a ticking time bomb.

The WHTI is an initiative by the U.S. Department of Homeland Security that will impose new and more stringent identification requirements to get into the U.S. for foreign nationals, as well as new requirements for U.S. citizens to get home when travelling abroad.

It was implemented in 2004 as a response to the Sept. 11, 2001 terror attacks, but it is also meant to clamp down on illegal immigration, smuggling, and other border encroachments. The enhanced I.D. requirements will make it almost impossible to cross the border with forged, stolen or borrowed identification, while also making it easier for border agents to verify the identity of people crossing the border using information in various government databases. The WHTI is all about information.

While that may sound like a good idea, various state governors, Canadian governments and tourism industry associations lobbied hard against the specific passport requirements in WHTI to allow for the use of other forms of enhanced identification. They have largely been successful, and even succeeded in delaying WHTI for 18 months.

However, there are still major concerns on both sides of the 49th parallel. Too few Canadians or Americans currently meet the WHTI's identification requirements despite years of publicity and efforts on both sides of the border to sign people up. Fewer Americans with proper I.D. could eventually translate to fewer visitors to Canada, B.C. and Whistler.

Some people are simply not aware of the WHTI, or don't realize yet how it might affect them in the future. Others are concerned about the costs associated with acquiring enhanced I.D. - as much as $100 for a passport, which can add up for a family with two adults and 2.1 children.

The fact that governments are lobbying so hard to change the rules and have succeeded in delaying the WHTI twice might have convinced some people to wait it out before spending the money, while others are no doubt confused about the different identification options on the table, and what constitutes valid I.D. at land, sea and air borders. If you're an American, do you spend the money for a book passport when you don't plan on flying over the border any time soon; or do you spend half as much money for a Passport Card or enhanced driver's licence that gets you over land borders but give up the option of flying if the situation arises?

The final push to register people for enhanced I.D. could also be sidetracked by the current economic crisis, where millions of people may not have the money to purchased enhanced I.D., or know whether they will even be able to afford to travel in the future. Getting a passport probably ranks pretty low in the average person's list of concerns right now.

According to Jean-Sebastien Roy, a spokesperson for Passport Canada, the number of Canadians holding passports has doubled since 2004. Roughly 25 per cent of Canadians carried passports then compared to the current 53.6 per cent. Roughly 65.5 per cent of adults have passports, and 46.1 per cent of children 17 and under.

In B.C. the adoption rate is even higher than the national average at 61.56 per cent.

"In the last fiscal year, 2007-08, we issued 4.8 million passports, which was a record for us, compared to 3.6 million the past year," said Roy.

There was a massive rush to get passports before they became a requirement at air borders on Jan. 23, 2007, a time when people were camping out overnight at passport offices in order to speak to an agent and get an expedited passport. Mail in waits were also longer than ever, and wait times slid from 30 days to three months.

Passport Canada added new agents and offices, and simplified the passport renewal process. They also changed the requirement that every passport application had to be signed by a guarantor such as a doctor or lawyer, allowing any Canadian holding a passport to act as a guarantor for an applicant.

But while Canadians have been lining up for passports in record numbers, Americans have been slower to respond. When the WHTI was announced in 2004, less than 20 per cent of Americans carried passports. As of February 2009, almost four years later, that number is just 28 per cent.

That eight per cent increase is roughly equivalent to the entire population of Canada, but it is still troubling for the Canadian tourism industry that roughly 72 per cent of Americans won't be able to travel to Canada after June 1.

The U.S. State Department has created a separate Passport Card, which costs $45 for adults and $35 for children, and in the past few months more than 700,000 Americans have purchased these cards. Eight U.S. states have also created enhanced drivers licences for an extra fee, and the pickup has been good. According to stats collected by Tourism Whistler, over 40,000 residents of Washington state have purchased the licences since they became available last year.

While that represents a small percentage of the overall population, it is still somewhat promising.

However, as the June 1 date counts down the demand for passports is diminishing on both sides - the opposite of what happened when passports became mandatory at air borders.

Roy says passport applications to Passport Canada have slowed down considerably compared to recent years, but says there could still be a last minute rush as people become more aware of the deadline.

"There could be a massive surge, although that's hard to predict," he said. "But if I had a message to communicate to your readers it's don't wait until the last minute to apply for a passport and plan your trip because we don't know what to expect."

As for the U.S. situation, Roy referred Pique to a recent article published by Tribune Newspapers, "Passport applications dampened by recession."

According to the article, the U.S. State Department expects to issue 12 million passports in 2009, down 25 per cent from the previous year and five million fewer passports than they forecast before Sept. 30.

"Demand has fallen so quickly that the State Department has made what an official called 'painful reductions' in contract employees," according to the article, "those who perform tasks such as processing payments and keying in data."

In California, one of the states hit worst by the financial crisis, demand for passports decreased 36 per cent in January 2009 from January 2008.

Their statistics didn't take income or age demographics into account, and studies by Tourism Whistler show that people that ski and snowboard, and travel to mountain destinations, are more likely to carry passports.

It couldn't come at a worse time

Tourism in Whistler has faced a series of challenges since the Sept. 11 terror attacks, which immediately exacerbated a recession and resulted in airline bankruptcies and a general choking of land, sea and air borders. Travel, for a while, became a huge inconvenience.

While that situation improved within months of the terror attacks, Whistler's numbers started to decline in 2002-03 and 2003-04. Then came 2004-05, and the lowest snowpack in Whistler's history. December was decent, but a Pineapple Express at the start of January melted almost all of the snow on the lower mountains, and the situation didn't turn around until March. The overall decline was in the neighbourhood of five per cent.

Three good snow years followed, and Whistler experienced back-to-back record summers and near record numbers of skier visits. Then the current economic crisis that was slowly unraveling last winter was ripped wide open in September.

Snow has also been a major issue again this winter, though better than 2004-05, and at this point overall visitor numbers are down 10 to 20 per cent compared to last year. Everybody is keeping their finger's crossed for good spring skiing, but for most businesses summer can't come quickly enough - weather is less of a factor, and summers have been busier than winters in recent years (at least in terms of visitor numbers, although summer visitors spend a lot less).

The WHTI is the wild card in the mix, and we really won't know how it will affect us until after the rules come into effect on June 1, although Tourism Whistler has studied the issue and polled visitors both here and at home.

Dave Clark, senior manager of visitor services at Tourism Whistler, says the resort has been surveying visitors since 2006, and in 2008 commissioned surveys in California and Washington state.

"We did our first survey more than two years ago prior to any implementation of WHTI, and found that 87 per cent of North American travelers already had passports. From key long haul destination markets, about 94 per cent of Californians had passports and 98 per cent of New Yorkers," he said. "The following year, 2007-08, we found passport uptake in California and New York was nearly 100 per cent - mostly because those markets needed a passport to fly here. But from Washington we saw an increase to 85 per cent from 74 per cent the previous year."

That accounts for visitors who were already in the resort. To get a better sense, Tourism Whistler commissioned studies in California and Washington state. To qualify, those surveyed had to have taken a ski trip in the previous five years, and were planning a trip in the next few years.

In that group, some 74 per cent of respondents in California had passports, and 68 per cent of Washington residents.

Clark is also encouraged by the uptake of enhanced I.D. like the newly introduced Passport Card and enhanced drivers licences.

"Any time you put up a barrier to travel it is possible to lose market share, but I do know things are happening and there is a big push for pieces of alternate identification," he said. "If you're flying by air you're pretty much stuck using a passport, but when you look at it regionally there are alternatives. There is some concern for the drive market in the border states this summer, and this season in particular we're relying on our regional market and visitors from Washington state.

"...But due to great lobbying efforts from the tourism industry and transport industry... the WHTI has backed down from its passport requirement to allow other forms of I.D. In Washington state, for example, there are two brand new travel documents (Passport Card and enhanced drivers licence) that are substantially less money, and I think that will cut down a huge barrier to travel."

While the WHTI may reduce numbers in the short term it may be hard to measure the actual impact as U.S. visitor numbers to Canada were already declining before the latest developments. According to Statistics Canada, visitors from the U.S. made 5.2 million overnight trips to Canada in the third quarter of 2008, July through September, a decline of more than eight per cent compared to the previous year. At the time, U.S. visitors were dissuaded by a Canadian dollar at a 30-year high compared to the U.S. greenback, and record fuel prices.

While the dollar and gas prices have gone down to the advantage of American travellers, the economic crisis that led to the insolvency of major U.S. banks, investment banks, insurance agencies and other financial players, and contributed to millions of layoffs, is already a bigger threat.

The most recent statistics available at Tourism B.C., the number of U.S. visits to B.C. dropped 17.3 per cent in December 2008 compared to the previous December, including a decline of 16.5 per cent in overnight visits.

By way of comparison, visits from Europe and Asia/Pacific declined 8.2 and 6.0 per cent respectively.

Industry Canada also studied the potential impact of the WHTI on the Canadian tourism industry. They looked exclusively at U.S. visitors, but took into account Canadians without travel I.D. who would likely have to vacation at home.

They measured the impact as 11.5 per cent in 2008, 9.5 per cent in 2009, and 8.3 per cent in 2010, with numbers declining each year as more Americans apply for passports and purchase enhanced identification. However, that 8.3 per cent figure still represents 2.76 million trips for business, pleasure, or other.

From 2005 to 2010, they measure the total economic impact of 11.7 million U.S. visits at $3.2 billion.

The WHTI compromise
Originally the WHTI called for mandatory passports, but under pressure the Department of Homeland Security has since adjusted its requirements to include other forms of enhanced I.D., like Passport Cards. So far the list of enhanced I.D. includes Nexus cards that have been bought by frequent border crossers; Fast/Expres Cards issued to commercial truckers; and Enhanced Driver's Licences that are so far only available in B.C. and eight border states.

There are a few exceptions after June 1. Children under the age of 16 will still be able to travel across land borders with originals or copies of birth certificates and other proofs of citizenship. Kids age 16 to 18 travelling with sports teams, school groups, social organizations and religious groups can pass the border under adult supervision as long as the adult has a valid passport and they have birth certificates or citizenship card. This has become known as the "hockey clause" because of the number of teams that regularly travel across the border for league play.

While Clark would liked to have seen government scrap the requirement altogether, the tourism industry has resigned itself to the fact that change is inevitable. Now the goal is to get the information out to visitors before June 1. "Our job is to help people get used to it," he said.

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