What are the Competitive Challenges for Calgary and Canada's Tourism Sector?
Canada is a great country, rich in natural resources, pristine beauty, abundant wildlife and cultural diversity. We are seen by the world as a safe and clean destination with welcoming people. In fact, in many surveys, people from around the world have Canada on the top of their “hope to visit one day” list. Additionally, in FutureBrand’s Country Index, which measures the strength of a nation’s brand, Canada finished first in 2010 and 2011 and was placed second in 2009 and 2012 – four years running as one of the top two country brands in the world.
At one time, and as recent as 2002, Canada’s international tourism arrivals was 7th in the world – Canada today sits 18th! The USA market for Canada has dropped by 55% since 2000. Mexican visitation to Canada has dropped from 53,000 visitors in 2008 to 23,000 visitors in 2011. Canada’s travel deficit (dollars spent by Canadians outside the country versus dollars spent by international visitors in Canada) has inflated to $16 billion, a six fold increase in a decade. Canada’s visitor economy is growing at half the rate of international growth. And over five million Canadians cross the border each year to depart from a USA airport rather than a closer Canadian airport – a national disgrace!
So why are Canada’s tourism results a contradiction to the abundance we offer and our international brand positioning? The facts are, we have some critical competitive challenges we need to overcome in order to capitalize on the fourth-fastest growing export sector in the global economy. And in this competition, if Canada has a competitive issue, then every community in the country has a competitive issue.
There are a number of challenges, and because many of them can be overcome, each represents opportunities for us to grow travel and tourism. Here are the top five the industry agrees upon:
- Marketing Investment – Canada’s federal investment in marketing Canada to the world is going to be $58 million in 2014, half what it was a decade ago. Compare that to India ($294M), Ireland ($211M), Mexico ($153M), Australia ($147M) and Malaysia ($128M). Additionally, at the provincial and municipal levels, marketing investments are inconsistent and fractured amongst different stakeholders, diluting and duplicating messages and efforts.
- Cost of Air Travel – The cost structure of Canadian aviation downloads the cost of the system onto the individual traveler, with an assortment of taxes, fees and levies – including landing fees, security charges, navigation fees, airport rents, etc. – inflating the already significant base fees of an airline ticket. As a result, flying in and around Canada is comparatively amongst the most expensive anywhere.
- Travel Visa – Although improvements have been made in Mexico and Brazil, citizens of many countries find it to be too difficult and take too much time to receive a Canadian visa. The reason Mexican visitation dropped so significantly is that the Federal Government imposed a new visa requirement in 2009. Chinese visitation has grown dramatically in the last three years because of increased access through the Approved Destination Status agreement in 2009.
- Seasonality – Canada, like all Northern Hemisphere countries, experiences an annual migration each winter of its citizens looking for sun and sand opportunities, creating a travel deficit for their tourism economies. Skiing, snowmobiling, dog sledding and other winter products helps to mitigate this issue but Canada needs more product development offering experiences late fall, winter and early spring.
- Human Resources – Tourism labour demand is forecast to grow by 33% from 1.6 million jobs in 2010 to 2.14 million jobs in 2030, with more than 228,000 jobs in the tourism sector going unfilled across the country due to lack of workers. Even today tourism is handicapped with a lack of human resources depending on temporary foreign worker programs or suffering through poor customer service.
At Osborne Interim Management and Osborne Business Advisors, we can help owners and operators understand how these and other challenges can be overcome. Knowing the competitive obstacles affecting your global and national markets will help operators to better sell their tourism product or experience.