As any Bellingham business owner knows, if your bottom line depends on patronage from around the area, you’ll quickly become familiar with two distinct demographics: college students and Canadians. And while long-term residents, especially the retired, still make up a substantial chunk of Bellingham’s paying customers, it’s hard to deny that business in this town often lives or dies on its ability to appeal to tourists and 20-somethings.

The last few years have seen some interesting fluctuations in the amount of folks coming to or from this town. Border crossings, especially southbound, are on the rise, and enrollment at Western Washington University – the biggest of several higher education institutions in the area – is slowly trending up as well. Read on to find out what this means for your Bellingham small business!

Decreases in Border Traffic

While 2013 brought tourists from lower British Columbia in record numbers, that wave has eased slightly, according to trend reports from the CBER. From January to August of 2014, a total of 10.9 million southbound border crossings occurred, down 1.1% from the previous year.

Total border crossings tell a similar story. Although 2013’s numbers, with 16.2 million total crossings, represent the highest since 1997, this year’s are slightly lower. Still, the overall trend is positive, with total crossings increasing on average since an overall low in 2006.

One of the most significant areas of decline has been traffic from lower British Columbia through Bellingham Airport. According to the Bellingham Herald, 37,901 travelers flew out of the airport in September, the lowest number since February 2011.

Part of the decrease is likely due to the Canadian dollar’s falling value. After remaining close to equal or above the value of the US dollar for several years, the Canadian currency has fallen steadily since 2013 and is currently hovering around 88 cents to the US dollar. That means budget-conscious tourists are probably a little less likely to pull the trigger on a trip south, even if it is cheaper to buy all your groceries at Costco.

Small Increases in Western’s Enrollment

While the rate of tourism from Canada has begun to decrease, enrollment at Western Washington University has started trending up for the first time since 2010. The University’s Academic Factbook shows enrollment peaked at nearly 15,000 in 2010, and then fell slightly over the next two years. In 2013 Fall enrollment rose again to within 29 students of 2010’s numbers.

As one might expect, a lot of this can be traced to the overall state of the economy. According to Inside Higher Ed, total enrollment began to fall around 2010 as the economy began to rebound from the 2008 recession. Recessions usually bring a rise in secondary education enrollment as workers who have been laid off go to back to school, and undergraduate students choose advanced degrees over entering a stagnant job market. Public universities usually see the largest increases in enrollment during recessions due to cost, and the largest decreases during the economic rebound.

With the end of the recession, hiring and funding freezes for public institutions also come to an end. With resources once again available to try and offer more to new students, it should come as no surprise that enrollment is increasing again. As the cost of attending college continues to rise, more students will likely choose public universities over private colleges as
well, meaning that enrollment rates at Western should continue to rise.

What This Means for Local Business

Both the student population and tourism from Canada have been central factors in Bellingham business for decades. Local businesses cater to one or both according to the services they provide. The new information is mostly significant for new and small businesses who are considering where to allocate their marketing resources, and industries that offer services to travelers and vacationers.

Canadian tourists provide valuable income for a few key local industries due to price discrepancies in commodities such as gasoline and milk. Decreasing border crossing rates are unlikely to affect these industries since the cross-border price difference still compensates for the weakness of the Canadian dollar.

The hospitality industry will be one of the most affected zones of industry. Fewer travelers through the airport mean fewer hotel stays, and the exchange rate will likely cause more Canadians to vacation without crossing the border. Increasing student enrollment might help offset the cost of the decrease. As of 2014, 10.5% of Western students are from out of state, and family visits from those students will likely involve hotel stays.

For new and small businesses, the changing demographics indicate that a focus on business from local students and their families might be more rewarding than targeting travelers from BC. The data should be useful when planning new advertising campaigns and product offerings.

Photo credit: BuffBlack.com