OTTAWA, ONTARIO — The Canadian Tourism Commission has come under unwanted and ignorant criticism this month. The truth is, any of us would be hard-pressed to find a government agency that manages to do more with less than the CTC. Its budget has been slashed by 20% to $58.5 million from the 2012 level of $72 million, a sum that had also been reduced from previous years. Yet, the Canadian tourism industry grew 4.2% in 2012, increasing its revenue to $81.9 billion. A $100-billion target has been set for 2015.
“We’re the little engine that could,” Michele McKenzie said on May 3 in Cape Breton while attending that Nova Scotia region’s annual tourism conference and she underscored that sentiment a week later at Rendez-vous Canada, a yearly gathering of Canada’s tourism and trade industry.
In the face of relentless competition and staggering budget cuts, the CTC has deployed a strategy that involves provincial and municipal tourism boards and agencies focusing on traditional markets like the United States. On the federal level, the CTC is pushing all of its efforts toward attracting consumers from Brazil, India, China and Australia — nations where revenue potential is immense. The economies of Brazil, India and China are going to continue to grow and their citizens are will travel farther afield, and Canada has an opportunity to ensure consistent travel from those populations. Australians are used to long flights and the ascent in value of their currency allows many of them to fulfill the dream of venturing to Canada.
“The CTC deserves full credit for the work they’ve done. They are punching well above their weight, given where competitors have invested and in the face of enormous challenges,” said David Goldstein, president of the Tourism Industry Association of Canada, which advocates for travel-related businesses across the country. Goldstein is a straight talker and a pragmatist not shy about criticizing government. His praise is hard won and meaningful. “Every single one of Canada’s competitors is increasing its spending on tourism, and we are going in exactly the opposite direction. The State of New York has now upped its tourism budget to $68 million, which means it is spending more than Canada.”
Goldstein’s main criticism is with the cost of air travel, saying the federal government should be working to reduce airfare costs and revamp its aviation cost structure, an area where the nation ranks 136th in the world. He suggests eliminating the value-added tax (VAT) that is charged on airfares, a strategy that has worked for other nations, or re-distributing that tax to tourism agencies. He also wants to see improved air access for emerging markets. None of those issues fall under the CTC’s umbrella.
(My feeling? If you reduced airfare costs in Canada by only 15% it would reverse the trend of Canadians using airports in US border cities. Last year, 5 million Canadians flew from across the border, equating to $2.3 billion and 70 fully booked flights lost to the US. Those lower airfares would also entice many more visitors to the nation. The reason this cost reduction doesn’t happen is likely because one government agency would lose a lot of revenue from the lower airfares, even though there would be improvement in many other aspects of the economy.)
Goldstein and McKenzie were among a contingent of speakers who commented about the successes, challenges and shortcomings of the nation’s tourism industry in Ottawa. The dichotomy of Canada’s tourism business was made clear through the presenters:
GOOD: The nation ranks first in reputation of travellers
BAD: It ranks 18th in number of visitors
GOOD: Its brand is so strong that it has been copied by numerous other nations, including the United States’ Brand USA campaign
BAD: The budget cuts limit the amount of innovation the CTC can undertake
GOOD: Double-digit growth in visitors is occurring from markets such as China, India and Brazil
BAD: Traditional markets, including Germany and the United Kingdom, have seen drops in travel in 2011 and 2012.