2016 OUTLOOK - NOT-FOR-PROFITS

The trouble with making predictions is that they come back to haunt you later. However, my discussions with a range of Executive Directors, Board members and professional fundraisers has revealed some consistent points of view which I feel confident about.

It will be no surprise that top of everyone's list is the financial impact our weakened and still weakening economy will  have on the not-for-profit sector. Unfortunately, this is one time when trickle down economics does actually happen and as the corporate funding sources battle with their own significant challenges, community support and donations are already shrinking and will continue to do so. This may mean the disappearance of some smaller charities and not-for-profits whose support base is restricted to one or two energy sector sources who can no longer make the donations.

The survivors will be those who have had a broad base of donors and who have not been dependent on one or two sources for the majority of their funding and who also, perhaps, have many individual donors who are able to keep donating through difficult times. However, one thing that donors have often asked about and may now have to happen as a means of survival, is sharing of services and consolidation of charities who all operate in the same area but focus on different issues. For example, there are myriad organizations dealing with homelessness, and many of them deal with different issues around the same concern. There are several organizations dealing with different aspects of addiction and rehabilitation, and it may now be the case that they all have to consolidate and share resources, and this can be done without compromising each organization's focus or integrity. I believe that in 2016 we will see donors looking for that kind of different thinking from charities and not-for-profits and territorial or turf wars within a specific sector may spell doom for some organizations.

Finally, Boards will have to be more active, work harder and think differently. Governance will still be a key role of course, but without actually stepping into the operational or Executive Director’s areas, Boards will need to make connections, seek innovative revenue sources and even social enterprise or for-profit opportunities. I believe Boards in 2016 will no longer have space for place holders or other non-contributors as they struggle to find strategies and plans that require different thinking than was necessary when money was easier to get with $110 oil.

Blane Hogue (click to see Blane's profile)

Principal

2016 OUTLOOK - HOSPITALITY & TOURISM

There are occasions, when a New Year is upon us, we can look back and say "good riddance" while we look forward to a better and more promising future year. Unfortunately, we welcome 2016 with apprehension and trepidation and not our usual excitement and optimism. Economically, we expect 2016 will be as challenging as 2015, if not more. 

You may ask what the problems are with the tourism and hospitality industry. After all, as an export industry the price of tourism products for foreign visitors, especially Americans, is very attractive these days because of the weak Canadian dollar. And on the flip side, Canadians are hesitant to use their undervalued Canadian dollars to travel in other countries because they will be paying 30-40% more for foreign destinations. This should be good news for the Alberta tourism industry having all these Canadians vacationing more frequently in Canada. Also, with fuel prices so low, transportation companies in the tourism industry, like airlines, motor coach operators and many others, are seeing dramatic expense savings on fuel.  These three benefits of the current economic conditions will have some positive influence on hospitality and tourism. Unfortunately, not nearly enough!

Business travel associated with the Oil and Gas industry is Alberta's and Calgary's bread and butter, but this has virtually dried up. Christmas parties and other events, travel budgets and expense accounts have all been shaved back in an environment of expenditure freezes and layoffs. Business travel and expense accounts are a higher dollar yield per visitor or patron than leisure travelers and so when business travel is bad everyone feels the hurt. When layoffs occur and unemployment rises there are less people with disposable income which is critical to the health of the travel and tourism economy. And finally, when consumer confidence is low because of losses in the investment markets, ongoing announcements of more layoffs, uncertainty in the political arena, and the war on terrorism, the travel and tourism industry is negatively impacted. Travelers need to feel safe, secure and able to spend before vacations and family getaways are taken with the same fervour Canadians usually embrace travel. 

And so, I am afraid we will continue to hang on tight for another challenging year in tourism and hospitality.  We hope that in December 2016 we can say good riddance to the past two years, confident 2017 will be a brighter one!!

Randy Williams (click to see Randy's profile)

Head of Practice - Hospitality, Tourism, Destination Management

2016 OUTLOOK - OIL & GAS

We continue to consume over 90 million barrels of oil a day and the outlook for 2016 is that we will consume even more. That said, the world's oil industry continues to produce more. Major world events that, 20 years ago would have caused huge spikes in the price of oil, barely register. While North American production will continue to drop over the next twelve months, due to strong downward pricing pressure, other lower cost producers will continue to fill the void, resulting in little change to the price of oil. There will be some significant consolidation in small oil producers and service companies here in Alberta, in the hope that being larger will allow them to wait out the price collapse.


Simon Batcup (click to see Simon's profile)
Principal

2016 OUTLOOK - INFORMATION TECHNOLOGY

Companies will continue to move their data to the Cloud and their software requirements to S.A.A.S. (software as a service). While there are still concerns regarding internet security, the ease with which companies can operate on 3^rd party servers and software will mean that this side of the business will continue to grow in 2016. The number of Cloud providers will shrink as players in this market gobble up their competition. There will continue to be I.T. consolidation across north America and around the world.

Simon Batcup (click to see Simon's profile)

Principal