Submit Press release  · eTN Team ·  Advertising  ·  eTN Awards  - Worldtourism Events    


R.O.A.R.: The impending crisis in the Canadian tourism industry

Bob Fisher, Travelosophy  Jan 07, 2009

I am loathe to begin in the "if it bleeds it leads" mode, but this time, it may be appropriate, especially since the media release from the Tourism Industry Association of Canada (TIAC) leads with the phrase "on the brink of crisis."

So stay calm folks. Don't panic. Hmmm ... if anyone actually said that to me, I think the first thing I might do is get a tad excited. I might not panic, but my level of "concern" would likely be at or above "level orange." However, the first question I would ask is, "Are we in a crisis or not?" What's this "on the brink" business? How can we be just a little bit pregnant?

There is probably a lesson here for any travel and tourism destination around the world. So I'll begin with the big picture — starting with the world.

According to the United Nations World Tourism Organization (UNWTO) Barometer, the travel and tourism industry worldwide is in very good shape. As a matter of fact, in 2007 international tourist "arrivals" (the number of visitors to destinations outside their home countries) grew by an estimated six per cent. This is a new record; nearly 900 million travelers. The UNWTO points out that this is very significant because the 800 million mark was reached only two years earlier, and the figure represents nearly 52 million more arrivals than in 2006. Furthermore, world tourism had a fourth consecutive year of growth in 2007, above and beyond the long-term forecast of 4.1 percent.

So who's getting all this business? I'll get to that in a moment; but first we must remember that travel and tourism is an industry that has (as the TIAC points out) a direct impact on national, regional, and local economies. The guy selling hot dogs outside the museum in beautiful downtown Canada depends on foreign visitors. I have heard more than once that the travel and tourism industry is the largest on the planet; but have often wondered if that stat was accurate. However, if you take into consideration every business that profits in some way from what Professor John Adams of University College, London has termed the global "hypermobility" (brought about by societal changes in the latter part of the 20th century) then it makes sense. Air travel of course is a major factor.

In the hypermobile 21st century, however, it isn't all good news. More people may be going more places, but the polarization of rich and poor is increasing; destinations everywhere (and the communities within them) are facing dramatic (often serious) social and environmental changes. And the infrastructures that support travel and tourism are not necessarily moving ahead at the same rate.

So who is getting all the travel business? Well, not Canada. This may surprise you but of all the travel and tourism regions defined by the UNWTO, the Middle East is in the lead and is emerging as a strong (not the strongest) tourism destination. Of the 52 million arrivals estimated by the UNWTO for 2007, Europe got 19 million; Asia and the Pacific 17 million; but only six million for the Americas! The Middle East, by the way, got five million.

So what's Canada doing wrong? Well maybe nothing. After all, who wouldn't want to visit Canada? C'mon! It's a clean, safe country, with great destinations. What world-class destination can beat Banff National Park ... or Montréal's Festival international de jazz? And besides, Canadians are just so darn nice. Like one of our national symbols, the beaver (castor canadensis), we are industrious, clean-living, non-confrontational, fully adapted to the wild, and excellent house-builders. We also have excellent dental hygiene and mind our own business. But on the other hand, maybe it's just a whole new ball game and we have gotten rather too complacent about Canada as a preferred destination.

That seems to be an underlying theme in the TIAC media release. According to it, "The Canadian tourism industry is on the precipice of an unprecedented decline...." and this could have "a massive impact on the 1.6 million Canadians whose jobs depend on this sector." In the release, Randy Williams, President and CEO of TIAC, points to "structural burdens on our industry." While calling on governments at all levels in Canada to implement urgent action, he does concede that there are economic factors that governments cannot control. The main two at the moment are (a) fuel prices and (b) a strong Canadian dollar.

Sheesh! Most of the world is dealing with high gasoline prices; but after so many years of a weak Canadian dollar, we finally reach par with the U.S. buck and we end up shooting ourselves in the foot because we are no longer a cheap and accessible destination for Americans — our best customers — who, by the way, are also trolling big time for tourist dollars/euros/yen/whatever by implementing patriotic "Buy American" tourism marketing campaigns.

The TIAC media release goes on to identify our home-grown governments as the bad guys, declaring that "Governments have traditionally neglected the industry, and have tended to regard tourism as a source of taxation dollars." According to TIAC, tourism is an "export industry" that contributes $20 billion annually to government tax revenues. And get this. TIAC says that when it comes to our tourism export products, we have ended up with a deficit in 2007 of $10.3 billion! I have some difficulty getting my head around this because even though I can see how Canadian tourism is an export product, the customers have to come here to get it. It's not as if they can pop down to the local megamall or convenience store and pick up some Canadiana.

And even though TIAC is urging Canadian governments and the whole Canadian travel and tourism industry itself to get with the new global marketing realities, once again they point out that geopolitics raises its ugly head.

In the media release (under the bolded subhead Access to Canada), they point out, "One example of competing on an even playing field is the lack of agreement on Approved Destination Status with China, the fastest growing outbound market in the world." This too is ironic given that according to the latest Canadian census, Chinese has become the third most used language in Canada.

So, what to do? Well TIAC is calling for the following:
Product Animation.
By this they mean better marketing, or in their words, "... we need to ensure that there are persuasive and compelling reasons to visit our country... and that the products that we currently offer are world-class ... [and] must be enhanced continually to meet changing market trends....

Better Access to Canada.
The main issue here is the "unsustainable cost burden" facing the air travel sector, i.e. all those additional taxes and fuel surcharges added to your airline ticket. TIAC is also calling for Open Skies/bilateral agreements with key countries that represent our best markets. They also think our governments (led I assume by the federal government) should get its act together and get us properly designated for the emerging leisure market in China. (The US and even Trinidad and Tobago have such status.)

New Tourism Products.
This also surprises me. What do we need more product for when we have so much sitting on the shelf. Well according to TIAC, we need "an investment climate conducive to public/private partnerships in the development of new tourism products ... to enable Canada to begin to compete with the new tourism products and services in emerging and rival destinations. I sure hope that doesn't mean more casinos or theme parks.

A National Tourism Strategy.
TIAC has already got the ball rolling in this regard within its own organization, and it has identified key themes and issues such as: sustainable tourism; carefully defining and differentiating between pleasure/leisure travel, business travel, and personal travel; aboriginal tourism; adventure tourism; agritourism; cultural and heritage tourism; ecotourism; learning and enrichment travel; nature-based travel; sport tourism; wellness tourism; wine/culinary tourism; winter tourism; spa tourism. Winter tourism? You bet! And Québec of course has been doing this very well for a long time. Mon pays, ce n'est pas un pays, c'est l'hiver!

Get the Americans!
Now TIAC has not specifically said this, but the Statistics Canada website tells me (surprise, surprise) that the United States of America is our biggest customer. With reference to our kissing cousins to the south, I need to draw your attention to the following stat from TIAC's Report on Canada's Tourism Competitiveness:
"Eighty-six percent of non-resident travel to Canada in 2006 was by visitors from the United States. However, compared to 2000, US visitation to Canada in 2007 has dropped 41 percent. Canada's travel deficit with the US has ballooned to $7.1 billion in 2007."

And apparently, because we now have a stronger dollar, Canadians are heading south of the border again in record numbers. This is, in part, because the US dollar has been devalued against other currencies around the world. And that means that visitors from outside North America are getting a lot more bang for their buck in the US.

You can't win!
So why can't non-North Americans get a bit of that bang north of the 49th parallel? January in Canada can be nice. You don't have to eat citrus all the time!

My fellow Canadians ... what shall we do to build a better "learning and enrichment travel" market. Suggestions please?

R.O.A.R.: The impending crisis in the Canadian tourism industry
Photograph by Nelson Alcantara

Premium Partners