Canadian lessons for downunder tourism

By Greg Ansley

CANBERRA - In Queenstown this week, Doug Fyfe could reflect that the view is not much different from the opposite ends of the earth.

More than mountains and lake will be familiar to Mr Fyfe, the president of the Canadian Tourism Commission, as he prepares to speak to antipodean industry leaders at the Tourism Industry Association's annual conference.

He will also be at home with the challenges: how, for example, to package a product and market it successfully in a world of increasingly sophisticated and cut-throat competition, without killing it in the process.

And for both Canada and New Zealand, how do you deal with a much larger neighbour that is at once both biggest market and biggest rival?

Most basic of all: how do you convince people to travel to the furthest parts of the globe, when there is so much to see closer to home?

For the moment at least, Canada seems to be doing it right.

Last year tourism pumped almost $C47 billion ($58 billion) into the Canadian economy, up 6.7 per cent from last year with a big increase in travel from the neighbouring United States, and a smaller rise from Britain, helping to offset economy-related declines from the other key markets of Japan, Germany and France.

Travel within Canada has also boomed, rising 27 per cent since 1992 and generating almost $C34 billion last year.

"As a destination we've done fairly well over the past few years and while a lot of that's got to do with economic performance, I guess you'd like to ascribe some of that to the marketing efforts you make," Mr Fyfe said.

In 1995 the Federal Government removed tourism as a branch of Industry Canada and set up the commission, a Crown corporation with a Government-industry board two-thirds dominated by the private sector.

The commission's business plan is built on market identification and targeting, and moving margins by attracting longer-staying, bigger-spending visitors, preferably spread beyond the existing summer peaks that stretch capacity while constraining investment.

It uses econometric modelling to construct a "travel potential index" to identify prospective targets, with the industry designing promotional programmes through in-market staff and tour operators.

"The Canadian industry has then to decide whether it can provide that product at that price and at that time," Mr Fyfe said.

"When you get a match, it's not rocket science or brain surgery to say, 'hey, do it, and if it doesn't work after a year, don't do it again'."

Canada's biggest market - and the biggest rival for domestic tourism - is the US, which sends 15 million visitors a year for stays of more than one night.

But while this represents 80 per cent of volume it accounts for about 56 per cent of value - despite a growing number of high-value tourists coming in from longer distances in the wake of open skies policies and new point-to-point connections.

Canada sees real potential in markets that provide just 20 per cent of numbers but 40 per cent of revenue.

"The really interesting markets are all those that deliver 50,000 to 60,000 visitors, or 100,000 to 150,000 and can jump up fairly substantially," Mr Fyfe said.

Canada's biggest constraint is the June-July-August peak that pushes vast volumes of tourists through facilities running against their capacities.

"You can't build a hotel that only runs through June, July and August. You really need to develop an entirely different product line, probably for a different consumer segment in the off-season. That calls for investment by the industry on a developmental basis, which is pretty tough."