As tourism season sweeps across Canada, and visitors from far-away lands — or from just across the 49th parallel — flock to the seaside golf resorts of Prince Edward Island, the Just for Laughs Festival in Montreal, Pride Week on the streets of Toronto or to bask in the afterglow of the Vancouver Olympics from a patio in trendy Gastown, it’s easy to get caught up in the moment. But, while the hospitality industry celebrates this season’s tourists, there’s significant trepidation bubbling just beneath the surface smile.
While Canada remains an undeniably attractive tourist destination — ranked number 1 in terms of global tourism brand, according to the New York-based, FutureBrand— the sheen falls from the Maple Leaf, as soon as it comes time for international tourists to translate their desire to visit into a flight landing on these shores. In fact, while Canada’s tourism reputation has never been higher — we ranked between sixth and 12th for most of the decade before owning the podium in 2010 — the newfound global respect has coincided with the country slipping in terms of global ranking in the battle for international arrivals.
In fact, according to the Ottawa-based, National Travel and Tourism Coalition (NTTC), in 2002, Canada ranked eighth in the world in terms of attracting global tourists, but in 2009, the country plummeted to the 15th spot, overtaken by nations such as Turkey, Malaysia and Mexico.
The respected brand, compared to international bookings disconnect, has garnered serious attention as hoteliers continue to struggle with depressed rates in the post-recession era, fighting competitors across the country for diminishing tourist dollars. According to many industry pundits, this status quo can’t continue. “We have to start first with the premise that the United Nations has pegged travel and tourism as a one-trillion dollar export business by the end of 2012. That’s a business sector that is far outpacing other economic growth,” says David Goldstein, CEO, of the Ottawa-based, Travel Industry Association of Canada (TIAC). “If we want to get our share, we’re going to have to change some of the competitive imbalances that exist in this country.”
Such competitive imbalances have formed the basis around which Canada’s tourism stakeholders are now pressuring the federal government. Gopal Rao, regional vice-president, Canada with IHG and chairman of TIAC, says the problem is a three-fold dilemma. “We feel, that while the Canada brand has great gravitas in the world, the impediments we have are structural in nature, and they are eroding our competitiveness.” associations are presenting a succinct battle plan. “We believe there are three areas we have to focus on — marketing, access and product or what we’re referring to as MAP,” says Rao.
A widely circulated and supported doctrine, the MAP plan compares Canada’s most glaring tourism deficiencies with its hard charging global competition. And, according to its writers, it starts with marketing, or rather, marketing dollars. “Since 2001, the [Canadian Tourism Commission’s] core funding has declined from nearly $100 million to an anticipated $71.0 million in 2012,” says Michelle McKenzie, president of the Vancouver- based, CTC. “This decrease in funding comes at a time when Canada faces increasing competition from existing and mature tourism markets and from new exotic market entrants such as Africa, Eastern Europe, South East Asia and Dubai.”
Far from being alone in the call for greater marketing dollars, McKenzie has a number of allies, including Tony Pollard, president of the Ottawa-based, Hotel Association of Canada (HAC). “We just don’t spend enough marketing ourselves as a destination,” Pollard starts. “You have countries like Greece and Ireland, which are essentially broke, spending $138 and $112 million annually on marketing. Canada, which emerged from the recession with a strong economy, spent $84 million last year, which puts us 20th in the world.” From his seat at TIAC, Rao sees the dearth of adequate funding as a fundamental flaw in Canada’s national tourism policies to date. “We see other countries really prioritizing and spending in terms of their tourism sectors, and Canada is just not competitive at all,” he says.
But, unfortunately for Canadians reliant on tourism dollars to put food on the table, the problem of sagging international visitor numbers isn’t one that can be cured with a brilliant and expensive global ad campaign. As Rao noted earlier, there’s a broader systemic problem.
According to the World Economic Forum’s Travel and Tourism Competitiveness Report, Canada ranks 125th in the world in terms of air travel competitiveness. For the most part, the report measures the average cost of air travel into a country, including fees, tariffs and taxes. Now, while it’s important to note that according to this measure, some of the best countries in the world are Libya, Bahrain and Iran — not exactly a list of the world’s most attractive tourist destinations — it’s also clear to see Canada has room to improve to catch more competitive hotspots like Spain (31), Italy (37) or Norway (45).
From his office in Ottawa, Pollard says Canada’s ranking on the list is troubling and points to some serious fundamental flaws. “The government treats our airports like toll booths. As a result, we just don’t have the planes landing here that we could,” Pollard adds, citing a recent decision by Air France to land in Seattle as opposed to Vancouver.
And, despite the changing travel and tourism landscape, that decision is not isolated. “Canada is increasingly a fly-to, and not a drive-to destination,” says TIAC’s Goldstein, pointing out the emerging importance of the BRIC nations (Brazil, Russia, India and China) in Canada’s tourism future. “We have to wrestle to the ground the club sandwich of fees, levies and taxes that exist in our country. If we can’t get those in check, then you’re asking our marketing people to fight this with one hand tied behind their back,” he says.
To complicate matters, access to Canada is not just a global affordability problem to be solved by government trimming the fat from its “club-sandwich” of fees — or, as Goldstein puts it, by having a little less bacon or deciding to take out the tomato. It’s also a matter of improving visa accessibility. “We’ve created barriers, which are stopping tourists from choosing to come here,” says HAC’s Pollard.
“When Canadians travel abroad, we can typically get a visa for just about any country in the world in 24 or 48 hours. Our process — with our embassies abroad — is much more complicated. We realize security is a top priority, but most people coming here are doing so because it’s the best place in the world.”
David Ogilvie, vice-president, Sales and Marketing at Toronto-based, Starwood Hotels Canada and chair of Toronto Tourism, says many of our woes can and will be solved with a more contentious approach to tourism. “Travellers want to come here, and they see it advertised,” he starts. “But it has to be easier or has to be relatively easy to get here. When it gets as easy as or easier to come to Canada than it is to the States, then I’m confident we’ll see our ranking change very quickly. I’m also confident those policies will change more quickly than we may think. On the visa issue, in particular, we have a strong enough voice that I think we’ll see some action.”
The CTC’s McKenzie hopes that’s true. “We can be the best marketers in the world, and inspire millions of potential travellers to choose Canada, but if they can’t get an airline seat or easily apply for a visa, then our efforts are largely in vain. Building awareness of Canada as a tourism destination makes sense when there’s an efficient visa process and sufficient air supply to meet the increasing demand.”
When it comes to individual hoteliers, industry leaders such as Rao and Pollard say it’s up to hoteliers to collectively show the budgetary policy decision-makers how changes could benefit the government. “If we were ranked in the top 10, in terms of tourist arrivals, we’d have somewhere in the neighbourhood of 5.7 million more visitors, adding $2 billion to the economy, creating 47,000 jobs,” says Pollard. “That’s music to the ears of any government official.”
Of course, greater investment in tourism infrastructure will also translate into more jobs and increased tax revenue. That’s why industry leaders are pressing government officials to offer a Canadian funding solution for some of the country’s most pressing travel infrastructure concerns — the final “product” piece of the plan. According to NTTC’s tourism white paper, Looking to 2020, The Future of Travel and Tourism in Canada, there is a long global list of potential best practices. While many of these boil down to funding, some innovative solutions are recommended, such as the establishment of a Canadian Tourism Investment Bank, similar to the European Investment Bank. “As envisaged by the NTTC, a travel and tourism infrastructure bank would finance a broad range of major projects, including transportation systems and convention centres,” according to the report. “Importantly, the bank could also serve the capital projects of small- and medium-sized tourism enterprises.” What’s more, the coalition says that due to more flexible loan policies in the U.S. —which have the effect of making airports and other major hubs de facto municipalities for tax and loan purposes — “the creation of such a bank would allow the Canadian travel and tourism industry to compete more effectively with the U.S.”
The white paper also notes, that while substantial infrastructure is vital at big airports, it also trickles down to help smaller destinations and attractions, too. “Investments in major infrastructure works facilitate travel around Canada and make the overall travel experience more enjoyable,” it states. “For business travellers, good infrastructure reduces time costs and boosts productivity. For leisure travellers, the ability to move around a region with less effort increases the amount of time travellers have to spend on leisure activities and helps spread the economic benefits of increased visitation to more communities.”
Despite the challenges ahead, Ogilvie, Pollard, Rao, Goldstein and McKenzie are decidedly upbeat. “The Conference Board of Canada forecasts the demand for tourism goods and services in Canada will rise from $130 billion in 2005 to $220 billion in 2025,” says McKenzie. “By 2013, increases in the number of people aged 25 to 64 are expected to create a population of some 1.2-billion people in the CTC’s core source markets, a seven-per-cent increase over 2007 levels.”
And, according to the CTC president, it’s not just a matter of simple demographics either. “Markets such as China, India and Brazil as well as South-East Asian, Eastern European and Latin American countries, are becoming important outbound markets, backed by growing middle classes on the one hand and liberalizing policies promoting mobility on the other,” she says. “For example, according to UNWTO [the United Nations World Travel Organization] figures, Chinese tourists spent a total of $42 billion worldwide in 2007. China is expected to become the fourth largest source of tourists in the world by 2020 and generate as many as 100- million outbound tourists annually.”
Will a sizeable chunk of those new globetrotters choose Canada? Those in the travel and hospitality business certainly hope so, and the powers that be are doing what they can to sell them on the idea. But, as TIAC’s Goldstein says, “You can have all the smart marketing in the world, but if it’s too expensive, or too much of a hassle to get here, then people won’t; it’s as simple as that.”
While Canada’s 15th place ranking in terms of foreign visitors has commanded a lot of attention, there is also significant concern when it comes to domestic tourism problems. According to Tony Pollard, president of the Hotel Association of Canada, which produces the 2011 Travel Intentions Survey, 21 per cent of Canadians drove to U.S. airports for cheaper flights, up from 18 per cent the previous year. “This has the potential for almost one third of “Canadian travellers spending money on foreign airline tickets and taking flights outside of Canada. The dollar at par and high costs for Canadian airports and travel means Canadian air carriers are at a distinct disadvantage and cannot offer the prices to match those in the United States,” notes Pollard. “This growing trend has serious consequences for the Canadian travel industry and needs to be addressed by the reduction of airport fees, travel security costs and airline surcharges.” In fact, the numbers aren’t even close. an informal look at airfares in May, via popular travel site Expedia.ca, revealed that the cheapest return ticket from Toronto to Phoenix would be $725.27 (including $122.29 in taxes), whereas a similar flight from Detroit would cost a Canadian willing to drive, just $322.22 (including $42.22 in taxes and fees).