Canadian Tourism Commission CEO Michele McKenzie announced last month she would be stepping down after a difficult decade at the helm of the national tourism marketing body. Statistics tell the tale: from 2000 to 2010, Canada’s share of global international arrivals decreased from 2.9% to 1.7%. Our share of revenues fell from 2.3% to 1.7%.
A sharp decline in U.S. visitors and flat traveller numbers from overseas have left tourism operators ever more dependent on the domestic market. Canadians themselves accounted for 80% of spending in 2012, up from 68% a decade earlier, a recent Scotiabank report found. The report blamed the Canadian dollar’s appreciation, which eroded price competitiveness, “as well as the rapid growth in emerging markets as a tourist destination.”
That has left Canada with a wide and growing tourism deficit. Though the sector accounts for only 2% of the economy, it employs almost 600,000 people. And in the eyes of critics, it is getting even less competitive. “The cost of the product we’re selling continues to rise. Our airports, for instance, are used as a cost centre rather than as an economic engine,” laments John Winter, CEO of the B.C. Chamber of Commerce.
It’s unfair to saddle the CTC with responsibility for the decline. Indeed, the Crown corporation has had some small successes that point the way to the industry’s future. Under McKenzie’s watch it launched “Canada. Keep Exploring,” a “country branding” exercise that moved away from “moose, Mounties and mountains brochures” to screaming young zip-liners wearing helmet cameras and posting their adventures on social media.
The campaign was a hit with young, affluent travellers. It won the coveted FutureBrand No. 1 country ranking in 2010 and 2011. In 2012, travel to Canada by the under-25 age group increased by almost one-quarter.
Another growth node lies in emerging markets. Though the Harper government has been maligned for paring the CTC’s budget to $58 million a year—less than that of New York City—it did negotiate Approved Destination Status with China prior to the 2010 Olympics. The effect was instantaneous; China went from the sixth- to the third-largest overseas inbound market by revenues. Canada welcomed 273,300 overnight Chinese travellers in 2012 who injected $486 million into the economy. Marketing dollars are being redirected to India and Brazil too.
Restoring Canadian tourism to its 1990s heyday is probably an impossible task. But just stopping the slide will require more such investments in targeted marketing.