TARGET MARKET: CANADA

MARKETING STRATEGIES FOR TOURISM DESTINATIONS

A COMPETITIVE ANALYSIS

Marketing Strategies For Tourism Destinations A Competitive Analysis Target Market - Canada

A report produced for European Travel Commission (ETC) by Tourism Development International Brussels, 2014

Marketing Strategies for Tourism Destinations. Target market: Canada

Published and printed by: European Travel Commission Rue du Marché aux Herbes, 61 1000 Brussels, Belgium Website: www.etc-corporate.org Email: [email protected]

This report was compiled and edited by: Tourism Development International on behalf of the European Travel Commission. The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the European Travel Commission concerning the legal status of any country, territory, city or area, or of its authorities or concerning the delimitations of its frontiers or boundaries. Cover photo: Toronto city skyline from the ferry travels to center island, Toronto, Canada; Copyright: erandamx Copyright © 2014 European Travel Commission. ISBN No: 978-92-95107-03-8

Marketing Strategies for Tourism Destinations. Target market: Canada

Contents Foreword i Introduction 1 a. Defining the Competitive Environment for Destination Europe 2 b. D estinations in the Global Market Place: a Comparative Analysis 2 Summary of Canada Market Study 10 1.

The Canadian Outbound Market 15 1.1. A Market of Solid Growth 15 1.2. Canadian Tourism to Europe 18 1.3. Characteristics of the Canadian Traveller 19 1.4. Drivers of Growth 21 1.5. Successful Destination Strategies 23

2.

Travel Destinations in the Canadian Outbound Market 24 2.1. Visa Regimes 24 2.2. Air Connections 25 2.3. Political, Economic and Socio-Cultural Links 29 2.4. Consumer Assessment (TripAdvisor) 31

3.

Profile of Europe’s Main Competitors in Canada 33 3.1. Destination Marketing Organisations 33 3.2. People’s Republic of China Tourism Sector 34 3.3. The Mexican Tourism Sector 39 3.4. The South African Tourism Sector 45 3.5. The United States Tourism Sector 51 3.6. United States Cities Tourism Sector 57 3.7. Conclusions 74

4.

Marketing Strategy and Activities of Mexican Tourist Board and Brand 76 USA in Canada 4.1. Mexican Tourist Board’s Marketing Strategy and Activities in Canada 76 4.2. Brand USA Marketing Strategy and Activities in Canada 78

5.

Key Factors in Destination Marketing in Canada 84 5.1. Market Perceptions 84 5.2. Marketing Performance and Opportunities 85

Appendices 89 Appendix 1 European and Competing Destinations WET TTCI and 90 Bloom Country Brand Rankings Appendix 2 Weekly City-to-City Flights from Main Canadian Centres 93 Appendix 3 TripAdvisor Ratings 97 Appendix 4 Bibliography and References 99

Marketing Strategies for Tourism Destinations. Target market: Canada

Acknowledgments This report was prepared by Peter Mac Nulty and Robert Cleverdon of Tourism Development International on commission to the European Travel Commission (ETC), and was carried out under the supervision of Ms Valeria Croce, Head, Research and Development Department at ETC. The report is part of a series of fact-finding reports on the tourism strategy developed by destinations competing with Europe in select long haul markets. The project was realised as part of the European Commission and ETC joint initiative “Destination Europe 2020”. We would like to acknowledge the support and contributions of the many ETC members, marketing organisations and tour operators associations who contributed to the realisation of this report. We also gratefully acknowledge the support of ETC partners, who committedly contributed to the realisation of this project. A special note of thanks to Mr Charlie Ballard, Director of Advertising Research at TripAdvisor, Mr Xu Jing, Regional Director for Asia and the Pacific at UNWTO, and Mr Daniel Velasco, Consultant at Amadeus Travel Intelligence Unit, for their contributions.

Marketing Strategies for Tourism Destinations. Target market: Canada

Foreword In an increasingly vibrant landscape, marked by new players, technological innovation and rapidly changing consumers, the need arises for European destinations to closely monitor others’ effort to win market shares in the global tourism market. This compilation of best practice examples in tourism and promotion strategies is meant to provide insights relevant to ETC and its member countries through a better understanding of the environment in which they operate. This series of reports provides insights into the strategic vision and the operational actions tourism destinations worldwide are developing to attract an increasing number of visitors from the most promising source markets. This fact-finding research offers a bird’s-eye view of the competitive environment, and a portrait of the tourism strategy and marketing activities of competing destinations. References to official documents and publicly available reports facilitate access to detailed information, for those interested in achieving a higher level of knowledge. For Europe’s strongest competitors, portraits are enriched with first-hand information gathered through personal interviews with NTOs marketing directors, representatives of the travel trade and experts. The common structure of reports facilitates cross-market comparisons. Key results are synthesised in a highly visual executive summary, conceived for dissemination to the public at large. We trust these reports will become for ETC and its members an important tool to identify key opportunities and challenges, and to strengthen their comparative advantage in the global tourism market. Executive Unit European Travel Commission

i

Marketing Strategies for Tourism Destinations. Target market: Canada

Introduction This report’s aim is to collect meaningful knowledge about the tourism strategy of destinations competing with destinations in Europe in select long haul markets. This study is part of a series of publications, which offer an overview of the environment, in which European tourism destinations operate, and a profile of the tourism strategy and marketing activities of competing destinations. A listing of official documents, publicly available reports and media features is provided in an appendix and through the footnotes to permit more detailed examination of the information presented and issues raised. Each report also provides first-hand information on a selection of competing destinations, gathered through interviews with NTOs’ marketing directors, travel trade and experts. This project focuses on countries competing with European destinations in high potential long haul markets, namely Brazil, Canada, China, Japan, Russia and the United States. In this analysis, Europe is defined as the 33 countries which are members of the European Travel Commission plus France, the Netherlands and the United Kingdom. The analysis followed a three step approach. The first step was to identify the key markets for Europe and the primary destinations competing with Europe in those markets. These markets are presented in Figure 1. The second step consisted of assessing strengths and weaknesses of destinations, which are significant competitors to Europe in the six target markets. The assessment has been based on the following indicators: • • • • • • • •

the World Economic Forum Travel and Tourism Competitive Index (WEF TTCI), travel trade interviews and expert opinion, visa regimes and other visitor entry requirements, air connectivity and capacity, price competitiveness, political, economic and socio-cultural links, destination tourism development policy, destination tourism marketing strategy.

The third step consisted of identifying those destinations which are the strongest competitors for Europe in each market, i.e. destinations which attract significant volumes of travellers and are actively investing in increasing their share in the market. A detailed profile of the organisations in charge of promoting inbound tourism to these destinations has been compiled. Information about the strongest competitors has been collected by the means of personal interviews as well as from secondary sources.

1

Defining the competitive environment for Destination Europe

Marketing Strategies for Tourism Destinations. Target market: Canada

a. Defining the Competitive Environment For Destination Europe Experts from the European Travel Commission (ETC) Executive Unit, Market Intelligence Committee and Operation Groups, as well as experts from Tourism Development International (TDI), were involved in a two-stage process to define the competitive environment, in which European destinations operate. In the initial stage, those long haul markets which show the best prospects for Europe as a tourism destination were identified. Based on a compound analysis of the relative importance of, and growth prospects for a large number of markets, six were identified as priorities for Destination Europe. The experts were then asked to list countries which are actively targeting those markets as tourism destinations. These competing destinations are defined as countries which are currently investing in tourism promotion and which already receive considerable volumes of tourists from the selected markets. The outcome of experts’ evaluation of the competitive environment is reported in Figure 1. Figure 1: Market: Destination Pairings Markets Brazil Canada China Japan Russia United States

Competitor 1

2

3

4

USA

Mexico

Australia

Russian Federation

5

6

7

USA /USA Mexico large cities

China

South Africa

USA

Australia

Russian Federation

Rep of Korea

Thailand

Malaysia

New Zealand

USA

Rep of Korea

Thailand

Malaysia

Egypt

China

Dubai

United States

Thailand

China

Brazil

Australia

USA large cities

South Africa

b. Destinations in the Tourism Global Market Place: a Comparative Analysis An overall assessment of the comparative resources and capabilities of the selected destinations was undertaken based on publicly available international indicators, which monitor aspects crucial to determine their strength and weaknesses as tourism destinations. Factors and policies conducive of travel and tourism development

The World Economic Forum Travel and Tourism Competitiveness Index (WEF TTCI) provides a broad assessment of a large number of characteristics and features that facilitate the development and functioning of tourism in a country. The survey assembles results for 79 pillars under three main “sub-indexes”: 1. Travel & Tourism Regulatory Framework, 2. Business Environment & Infrastructure, 3. Travel & Tourism Human, Cultural and Natural Resources.

2

Marketing Strategies for Tourism Destinations. Target market: Canada

These illustrate the relative success of destinations in creating conditions to attract investment in tourism development. Figure 2 shows the ranking of the 13 destinations according to each of the sub-indexes and relative to each other. The rankings in columns i to iv are based on a total of 140 countries worldwide included in the WEF TTCI survey. The rankings in column v are within the set of 13 competitor destinations. Figure 2: WEF TTCI Rankings of Competing Destinations, 2013 Country

Competitiveness Subindex Travel & Tourism Regulatory Framework

Travel & Tourism Business Environment & Infrastructure

Travel & Tourism Overall Human, Cultural Ranking & Natural Resources

Ranking within 13 Competing Destinations

(i)

(ii)

(iii)

(iv)

(v)

Australia

23

25

4

11

2

Brazil

82

76

12

51

10

China

71

63

13

45

9

Dubai (as UAE)

45

9

35

28

5

Egypt

86

77

84

85

13

Rep of Korea

38

17

20

25

4

Malaysia

55

41

17

34

6

Mexico

83

61

15

44

8

New Zealand

4

12

22

12

3

Russian Federation

92

46

58

63

11

South Africa

81

59

57

64

12

Thailand

76

44

23

43

7

United States

44

2

1

6

1

Source: TDI analysis of WEF TTCI report

At a country level, European destinations (both ETC member countries and other countries in Europe) occupy the top positions of the WEF ranking - see Figures 24 to 27 in Appendix 1. The leading five positions in the overall ranking are European i.e. Switzerland, Germany, Austria, Spain and the United Kingdom. A further three European countries are placed in the band of 6th to 15th (i.e. France, Sweden, the Netherlands), and 15 rank in the top quarter up to 35th place. Six of the 13 competing destinations examined in the study achieved a ranking in the top quarter of all destinations worldwide i.e. the United States 6th, Australia 11th, New Zealand 12th, Republic of Korea 25th, Dubai (based on the data for the UAE as a whole) 28th and Malaysia 34th.

3

Marketing Strategies for Tourism Destinations. Target market: Canada

Figure 3 shows the overall ranking position for four European countries (France, Italy, Spain and the United Kingdom), selected as benchmarks, and the 13 competing destinations. The comparative analysis of the resources and capabilities of the 13 destinations identified as competitors at sub-index level (see Appendix 1) suggests what follows: High ranking: United States, Australia and New Zealand. These countries show strengths in the following areas: • •

•

New Zealand in respect of its travel and tourism regulatory framework, the United States for the travel and tourism business environment and infrastructure, and for travel and tourism human, cultural and natural resources, Australia for travel and tourism human, cultural and natural resources.

The United States fares less well in respect of the travel and tourism regulatory framework, and lower rankings (though still in the top 25 globally) are recorded by Australia in respect of the business environment and infrastructure, and the regulatory framework, and by New Zealand for human, cultural and natural resources. Mid ranking: Republic of Korea, Dubai (UAE), Malaysia, Thailand, Mexico, China, Brazil. Six of these seven destinations, the exception being Dubai, score more highly than their overall ranking in respect of human, cultural and natural resources. The weaknesses for this group of destinations are in the regulatory framework (i.e. Mexico, Brazil, Thailand, China) and the business environment and infrastructure (i.e. Brazil, China, Mexico). Mid-to-low ranking: Russian Federation, South Africa. Both countries’ rankings are pulled down by their low assessment in respect of travel and tourism regulatory framework. In the case of South Africa, this is due to low performance on safety and security, and health and hygiene; while for the Russian Federation, the weaknesses are more widespread across four of the five pillars in the sub-index. Low ranking: Egypt. Its weak positioning reveals in each of the three sub-indexes suggests that this destinations doesn’t have an overall comparative advantage in respect to destinations in Europe, but may be attractive in specific markets and segments.

4

Marketing Strategies for Tourism Destinations. Target market: Canada

Figure 3: WEF TTCI Overall Rankings

Source: WEF-TTCI, 2013, 140 destinations

Another competitive edge for destinations is the value of their tourism offer. While the perceived value of tourism services is a subjective construct that varies across markets, segments and experiences, an assessment based on standardised indices can highlight destinations’ comparative advantages related to cost-related aspects. The WEF TTCI survey examines components that impact on price levels at a destination, including taxes levied on ticket sales, airport charges and fuel costs, as well as general taxation levels. The overall price competitiveness of destinations is derived from these five factors. The WEF TTCI also provides a hotel price index, as a proxy of price competitiveness from a consumer perspective. The WEF TTCI’s rank order in terms of overall travel and tourism price competitiveness and the hotel price index for destinations competing with Europe are shown in Figures 4 and 5. It found that Malaysia and Thailand are the most price competitive destinations, although the United States fares well on hotel prices; Australia is the least competitive destination in terms of prices. By comparison, all European destinations are in the lowest tercile (ranked 100th or lower), largely because of travel and fuel taxes. They are more competitive in respect of hotel prices, with Spain featuring 42nd and the United Kingdom 53rd while other European countries score less well, ranging from the Baltic states of Lithuania, Latvia and Estonia (all in the top 12 of hotel price competitiveness) to Switzerland, Serbia and France all ranked worse than 100th in respect of hotel prices. See details in Appendix 1.

5

The value of tourism products across destinations

Marketing Strategies for Tourism Destinations. Target market: Canada

Figure 4: Destination Travel & Tourism Price Competitiveness: 13 Primary Competitors to Europe

Source: WEF-TTCI, 2013, 140 destinations

Figure 5: Destination Travel & Hotel Price Competitiveness: 13 Primary Competitors to Europe

Source: WEF-TTCI, 2013

6

Marketing Strategies for Tourism Destinations. Target market: Canada

The rating of a country as a brand in the perception of prospective visitors is an important travel decision making criterion in respect of choice of destination. The impressions created in the minds of consumers in travel markets around the world are created through a large number of influences. The Bloom Consulting Group in its annual Country Brand Ranking1 identifies four variables as contributing to a destination’s image and thereby establishing its tourism brand rankings i.e. • • • •

tourism economic receipts and growth (a first indicator of a country’s appeal), the destination products and experiences researched online (measuring its online appeal), the country’s brand strategy (assessing the accuracy and effectiveness of its communication efforts), official website and social media performance.

The results of the 2013 Country Brand Ranking of 187 countries and territories are outlined in Figure 6. It shows that the United States has the strongest tourism brand followed by Thailand, Australia, China, Malaysia, the Republic of Korea and Mexico which all feature in the top 20 destinations. None of the 13 primary competitors to Europe across the six selected markets is ranked lower than 42nd (Brazil). Nine European countries are ranked in the leading 20 destinations, led by Spain, France, the United Kingdom and Italy. Full details for all European countries are presented in Appendix 1. Figure 6: Country Tourism Brand Ranking: Primary Competitors to Europe

Source: Bloom Country Brand Ranking Tourism Edition 2013

1 Bloom Consulting Country Brand Ranking Tourism Edition 2013. http://bloomconsulting.com/sites/default/files/files/Bloom_Consulting_Country_Brand_Ranking_ Tourism_2013.pdf 7

Country Brand Rankings

Marketing Strategies for Tourism Destinations. Target market: Canada

The competitive strength of any country as a tourism destination is a combination of many factors, some of which are fixed or otherwise factual while others are subject to the influence of both product developments and marketing and promotional activities. No destination is outstandingly strong or weak across all parameters. The strongest individual destination is the United States, rated as having the leading tourism brand and achieving 6th place in the global WEF TTCI survey of all tourism development factors (behind five European countries). The power of strong tourism industries combined with market-driven tourism product/experience development and well-targeted marketing is illustrated by comparing rankings on the WEF TTCI broad tourism development and facilitation survey (that does not take account of destination marketing) and the Bloom Consulting Group destination brand ranking (which features destination marketing elements as a key criterion). This is borne out particularly in the cases of Thailand, China, Malaysia, Mexico, Egypt, South Africa and the Russian Federation where weaknesses in either or both of the regulatory framework, and business environment and infrastructure, may be compensated for by price advantages and the appeal of the countries’ tourism product offering. Figure 7: Country Tourism Rankings Country

Bloom Country Brand Ranking

Overall WEF TTCI Ranking

1 6 8 10 15 18 19 22 25 28 30 38 42

6 43 11 45 34 25 44 85 28 64 63 12 51

2 3 4 5 7 11 14

4 2 7 5 26 3 1

Europe’s Competitors United States Thailand Australia China Malaysia Rep of Korea Mexico Egypt UAE - Dubai South Africa Russian Federation New Zealand Brazil European Benchmarks Spain Germany France United Kingdom Italy Austria Switzerland

Sources: WEF TTCI survey, and Bloom Country Brand Ranking Tourism Edition 2013

8

Marketing Strategies for Tourism Destinations. Target market: Canada

Information Note - Exchange Rates  The monetary values quoted in the report are taken from the sources referenced, including amounts stated in the source document in US dollars. In all cases, conversion has been made to Euros. The conversion rates used are the average rates across the year between the local currency (or US dollar where that is the currency stated in the source document) and the Euro for the year of the data. For future forecasts/targets, the rate between the local currency and the Euro as at June 2014 have been used.

9

Summary of Canada Market Study Marketing Strategies for Tourism Destinations. Target market: Canada

OUTBOUND TRAVEL PERFORMANCE AND PROSPECTS KEY DEMOGRAPHIC AND ECONOMIC DATA 2013 Population

35.4 mn GDP Data2 Current Prices

1.88 tn €1.37 tn

CAD

GDP per capita current Prices

CAD

53,539

€39,079

GDP PPP per capita

Int$

43,472 €32,201

CANADA’S PERFORMANCE IN INTERNATIONAL TOURISM Outbound travel

65.2 mn outbound trips in 2012

Canadians are among the highest spenders on international travel, ranked in

23 mn of which involved at least one night’s stay 85% of all trips and 72% of overnight trips are to the United States Outbound trips grew at the average annual rate of nearly 6%

between 2003 and 2012

by the UNWTO Canadians spending on international travel (excluding international transport)

In terms of international tourist arrivals, Canadians generated 35.4

7th place

CAD 37bn €26bn in 2013

million in 2013, a rise of 2.8% over 2012

Average annual growth over the decade from 2004 to 2013

having more than doubled in the past decade

was almost 6% a year

OUTBOUND DESTINATIONS VISITED BY CANADIAN RESIDENTS Next after the United States in terms of destinations visited by Canadians come Mexico, Cuba and the United Kingdom

Strong growth of nearby destinations

7% a year

9% a year

United States

Caribbean and Mexico

(2003 - 2013)

(2003 - 2013)

A near tripling in the level of Canadian visitation to China

12% average annual rise China (2003 - 2013)

A below average rise in visits to Europe, with the average annual rise in visits ranging between

3 - 5% Europe (2003 and 2013) and the average length of stay falling slightly

2 World Economic Outlook Database, April 2014, IMF 3 ETC Dashboard

10

Marketing Strategies for Tourism Destinations. Target market: Canada

GROWTH DRIVERS

Modest economic growth and gradual restoration of traveller confidence Big demographic boost through increasing numbers of seniors (65+) in the population with a high disposition to travel abroad Continued strong demand for VFR travel among Canadians travelling to their source countries

PURPOSE OF VISIT

GROWTH BARRIERS

Canada is a highly wired society, strongly influenced by digital marketing and social media

Record levels of household debt

Intensifying destination marketing and promotion, especially Brand USA, including effective use of digital technology which is serving to stimulate Canadians’ desire for overseas travel

Source: Statistics Canada.

65%

42%

72%

14%

38%

15%

Leisure/Pleasure

Leisure/Pleasure

Leisure/Pleasure

VFR

VFR

VFR

11%

13%

8%

10%

7%

5%

Business

Business

Other

USA

Europe

Other

Business

Other

Other Destinations

TRAVEL ARRANGEMENTS Canadians are primarily independent (FIT) travellers, preferring a customised itinerary compared to a packaged trip

OUTBOUND TRAVEL AND COMPETITIVE ENVIRONMENT Destination success in the Canadian tourism market comes from: 1. Extensive investment in, and highly effective use of, online/digital and mobile technology, online advertising and social media marketing, 2. Addressing traveller concerns (particularly among the over 65s) about prices, safety and ease of travel, 3. Offering a diversified tourism product/set of experiences, an especially important factor for the growing trend among Canadians for self-organised leisure group travel – mainly for 10 persons or less, 4. Creating the image in the market of an “aspirational destination”, one to visit in the short-term, particularly relevant to older travellers, 5. Demonstrating that the destination is a year-round place to visit with plenty to see and do throughout the year, an important consideration for older age groups who spread their travel across the year, and 6. Facilitating the ready availability of different components of the destination so that combined business and leisure trips can be created and undertaken, Europe’s primary competitors across all aspects of tourism according to the WEF TTCI are other industrialised nations e.g. United States, Australia, New Zealand, Republic of Korea, In terms of overall price competitiveness in travel and tourism, European destinations are perceived as among the world’s most costly, The 2013 Bloom Consulting Country Brand Ranking rates the United States as the leading tourism destination brand, while nine of the leading 20 tourism destination brands are European. 11

Marketing Strategies for Tourism Destinations. Target market: Canada

PRINCIPAL COMPETING DESTINATIONS

Four destinations are shortlisted as significant competing destinations to Europe in the Canadian market: China, Mexico, South Africa, and the United States, All four are making major efforts to support and increase the competitiveness of their travel and tourism industries by: 1. Stressing the authenticity of their natural and cultural heritage in developing brand images and positioning, 2. Giving the Canadian market priority status or regarding it as an opportunity market justifying marketing investment, 3. Seeking a market: product “matching” approach that provides high quality experiences in line with the needs and expectations of different market segments based on detailed research and analysis of such markets and segments. In the case of the United States, for example, this could be achieved by presenting destinations and attractions in a fresh way inviting Canadians to rediscover the country,

Four destinations are shortlisted as significant competing destinations to Europe in the Canadian market: China,

Mexico, South Africa, and the United States

4. Focussing on a number of common segments across competitors e.g. cultural heritage, business/MICE, education but with special attention in the United States to shopping and visits to the Canadian diaspora, 5. Paying special attention to attracting high-value/affluent tourists, 6. Showing a significant and continuing switch away from traditional advertising and promotional methods to electronic digital marketing systems and activities.

COMPETING DESTINATION ORGANISATIONS China, Mexico, South Africa and the United States are each seeking to develop the Canadian traveller market, through focussing in part on the resources and attractions for which they are renowned but increasingly in the case of Mexico and the United States by broadening prospective travellers’ awareness of the features over and above the iconic and well established, South Africa’s strength is its natural environment. Its marketing plans focus on protecting the country’s leadership in the wildlife and adventure segments, supported by hospitality, design/art and welcoming people in order to strengthen the “emotional connection”, China is still a first time visit for the bulk of Canadians so the iconic features of the country are stressed in that destination’s marketing efforts in the Canadian market, Focussing strongly on digital marketing and travel trade support activities, the Mexico Tourism Board is reinforcing Mexico’s position as a leading destination for Canadians while seeking to broaden the segments/interest groups attracted and assuaging concerns that older Canadians have about personal safety in Mexico, Brand USA’s marketing campaigns in Canada helped to generate over half a million incremental visits by Canadians, almost half of the overall incremental increase of 1.1 million international visitors to the United States during the period. These additional visitors generated US$611 million (EUR470 million) in receipts. Brand USA opened its first office in Canada in 2014. Its marketing efforts are focussed on maximising the impact of the “Rediscover America” campaign, The partnership approach is central to Brand USA’s marketing strategy and campaign components, giving a wide range of destination, travel trade and media partners the opportunity to piggyback on the organisation’s marketing and promotional campaigns, Brand USA has a rigorous system of monitoring, assessing and evaluating its activities. 12

The partnership approach is central to Brand USA’s marketing strategy and campaign components, giving a wide range of destination, travel trade and media partners the opportunity to piggyback on the organisation’s marketing and promotional campaigns

Marketing Strategies for Tourism Destinations. Target market: Canada

COMPARATIVE ASSESSMENT: EUROPE, THE UNITED STATES, MEXICO The United States and Europe are both seen as offering a wide range of attractions and facilities for prospective tourists and there is a wealth of Canadian travel experience to the two areas. Europe is an “aspirational” destination for Canadians and is well perceived by Canadians for its history, culture, gastronomy and scenic beauty. It is also regarded as an accessible destination and an easy place in which to travel because of its highly developed and efficient rail system, enabling the visitor to travel to multiple destinations within Europe and have a diversified set of tourism product experiences. These are strengths that can be exploited particularly in respect of the older traveller, and the self-organised small groups, Both Europe and the United States have significant VFR segments with Europe’s the stronger since it is from where a large section of the Canadian population emanate, Both Mexico and the United States have embarked on campaigns to attract the tourist interested in a combination of cultural and natural heritage, with Mexico seeking to establish an image in the Canadian market as a sophisticated and contemporary destination, offering more than winter sun, The United States and European destinations (i.e. Italy, France, Spain, the United Kingdom, Germany, Greece) are top of the list in terms of choice of overseas destinations Canadians would most like to visit, Though specific data are not available, trade respondents say that Europe is disadvantaged against the United States in Canada through a far smaller marketing budget i.e. Brand USA plus city and regional CVBs vs all European destinations combined.

13

Europe is an “aspirational” destination for Canadians and is well perceived by Canadians for its

history, culture, gastronomy and scenic beauty

Marketing Strategies for Tourism Destinations. Target market: Canada

14

Marketing Strategies for Tourism Destinations. Target market: Canada

The Canadian Outbound Travel Market

1

1.1 A Market of Solid Growth Canadian outbound travel rose by 5.3% in 2012 to a level of 65.2 million trips, with 85% being made across the border to the United States. Apart from a dip in 2009, there has been consistent growth since 2003, at an average annual rate of just under 6% overall, 5.5% for the United States and 7.3% for outbound travel to destinations other than the United States4.

Canadian outbound travel has recorded consistent growth since 2003

Figure 8: Canadians Outbound Travel, 2003 to 2012

 

Source: Government of Canada, Tourism Sector, Key Facts 2012

The growth was even more marked when day trips are eliminated. Canadians made 23 million outbound overnight trips in 2012, a 12% increase compared with the previous year, driven by the strength of the Canadian dollar, which at one point during the year was higher than the US dollar. Nonetheless, the majority of outbound travel continued to be to the United States, representing 72% of all outbound overnight trips in the year5. In terms of international tourist arrivals, Canadians generated 35.4 million in 2013, a rise of 2.8% over 2012. Average annual growth over the decade from 2004 to 2013 was almost 6% a year. There was growth in each year except for a fall in 2009 caused by the global financial and economic crisis. 4 Tourism Sector – Key Facts 2012 http://www.tourism.gc.ca/eic/site/034.nsf/ eng/00444.html 5 Euromonitor International http://www.euromonitor.com/tourism-flows-outbound-incanada/report 15

The majority of outbound travel continues to be to the US

Marketing Strategies for Tourism Destinations. Target market: Canada

Figure 9: Canadian Tourist Arrivals at International Destinations Year

Arrivals (mn)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

21.0 22.9 25.0 27.6 29.5 28.3 31.0 33.0 34.4 35.4

% growth over previous year 12.4 8.7 9.1 10.5 7.0 (4.3) 9.6 6.4 4.4 2.8

Source: ETC Dashboard

Outbound travel spending has more than doubled in the past decade

Canadians spending on international travel (excluding international transport) is estimated by the UNWTO at US$35.2 billion (CAD37 billion, EUR26 billion) in 2013, a rise of 3.2% in local currencies, current prices, over 20126. Outbound travel spending has more than doubled in the past decade. However, per capita expenditure has risen at a slower pace during this period, up from US$752 (EUR648) to US$1,086 (EUR840), at an average annual growth rate of 4% per annum in US dollar terms7 but at the lower rate of 3% at the converted Euro levels as a consequence of the decline in the value of the US dollar against the Euro over the 2003-2012 period. Canadians are among the highest spenders on international travel, ranked in 7th place by UNWTO after France (6th) and the UK (5th) and immediately ahead of Australia (8th), and Italy (9th)8. Figure 10: Top 10 Outbound Destinations Visited by Canadian Residents in 2012

1. United States of America

3. Cuba

5. Dominican Rep.

7. Italy

9. Mainland China

22.7mn

1.1mn

0.8mn

0.4mn

0.3mn

2. Mexico

4. United Kingdom

6. France

8. Germany

10. Spain

1.6mn

0.9mn

0.7mn

0.3mn

0.2mn

Source: Travel by Canadians to Foreign Countries (overnight visits), 2012

6 UNWTO World Tourism Barometer, Volume 12, Statistical Annex. August 2014 7 Canadian Outbound Travel Market Secondary Research. ETC. 2013 8 UNWTO World Tourism Barometer, Volume 12, Statistical Annex. August 2014 16

Marketing Strategies for Tourism Destinations. Target market: Canada

As noted, the great majority of Canadians’ outbound travel is to the United States. In 2012, 22.7 million overnight trips were made by Canadians to the United States with a total number of overnights of 194 million and spending of CAD17.5 billion (EUR13.6 billion). Next after the United States, come Mexico, Cuba and the United Kingdom. The average length of stay for all destinations is relatively high even for the neighbouring United States at 8.6 nights. For Caribbean destinations the average stay is 8 nights, slightly higher at over 10 nights for Mexico, while for Europe it ranges between 10 and 12 nights with only the Netherlands falling below this average at 7 nights.

Average length of stay is high at 8.6 nights

In the period since 2003, the notable changes in the composition and profile of the leading 15 destinations have been9:

Notable changes in the composition of leading destinations visited by Canadians

•

•

•

strong growth of nearby destinations with the United States recording a rise of close to 7% a year between 2003 and 2013, and the Caribbean and Mexico both faring well, with Cuba moving up from 5th to 3rd place with an average annual rise in visits of over 9%, Mexico consolidating its 2nd position with a similar rate of growth, and Jamaica’s entry into the leading 15 destinations at 11th place, a near tripling in the level of Canadian visitation to China, the near 12% average annual rise resulting in the destination moving up from 13th to 9th place, a below average rise in visits to Europe, with the average annual rise in visits ranging between 3 and 5% between 2003 and 2013, and the average length of stay falling slightly.

Figure 11: Outbound Canadian Residents Travel Growth Trends, 2003-2012

79%

+113%

+119%

+33%

+173%

United States

Mexico

Cuba

United KIngdom

Mainland China

+85%

+43%

+51%

+4%

+59%

Dominican Republic

France

Italy

Germany

Spain

Source: Travel by Canadians to Foreign Countries (overnight visits), 2003 and 2012

9 Travel by Canadians to Foreign Countries, Top 15 Countries Visited. http://www. statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/arts37j-eng.htm 17

Marketing Strategies for Tourism Destinations. Target market: Canada

1.2 Canadian Tourism to Europe Europe’s share of Canadian overnight trips has declined since 2000

Canadian visitor arrivals in Europe reached a record level in 2013 at 4.45 million, 6% up on the level in 2012. Over the past decade (2004-2013), an average rate of growth of 4.3% was recorded in Canadian arrivals in Europe. However, Europe’s share of Canadians overnight trips has declined from 45% in 2000 to 31% in 201210. As shown in Figure 12, the leading 15 destinations for Canadians’ overnight trips include 7 European destinations: the United Kingdom, France, Italy, Germany, Spain, the Netherlands and the Republic of Ireland. The leading European destination is the United Kingdom which attracted over 900,000 visits in 2012 with just under 11 million nights (i.e. an average stay of over 12 nights) and total spending of CAD1.1 billion (EUR0.9 billion). Figure 12: Travel by Canadians to Foreign Countries, Top 15 Countries Visited, 2012  Country visited

Overnight Visits (‘000)

Nights (‘000)

Spending in-country (CAD mn)

(EUR mn)

United States

22,710

194,413

17,490

13,558

Mexico

1,598

17,146

1,639

1,270

Cuba

1,082

8,947

748

580

908

10,955

1,056

819

 

United Kingdom Dominican Republic

766

6,704

674

522

France

729

9,068

942

730

Italy

375

3,897

480

372

Germany

345

3,501

311

241

Mainland China

314

6,445

521

404

Spain

245

2,615

284

220

Jamaica

243

2,189

248

192

Netherlands

223

1,579

158

122

Hong Kong

197

2,709

211

163

Republic Of Ireland

179

2,161

205

159

Australia

159

3,808

329

255

Source: Statistics Canada, Tourism and the Centre for Education Statistics

Canada was the 3rd largest nonEuropean market for tourist arrivals in Europe

Canada was the 3rd largest non-European market for tourist arrivals in Europe in 2013, after the United States and China. Over the past decade, an average annual rate of growth of 4.3% was recorded in Canadian travel to Europe11. Within Europe, Western Europe receives the largest number of Canadian tourists, with arrivals nearing 1.7 million in 2013, followed by Southern and Northern Europe with 1.3 million and 1.1 million Canadian tourist arrivals respectively. Central/Eastern Europe has the smallest share of the Canadian market, with 0.4 million Canadian tourist arrivals in 201312.

10 Canadian Outbound Travel Market Secondary Research. ETC. 2013 11 ETC Dashboard 12 European Tourism Portfolio Analysis: Market Share and Origin Market Growth. Tourism Economics. April 2014. ETC 18

Marketing Strategies for Tourism Destinations. Target market: Canada

Canadian trips to Europe are forecast to grow at an average annual rate of between 2 and 3% over the next five years. This will result in a continuation of the decline in Europe’s share of Canadian long haul travel i.e. down by 2.4 percentage points over the period to 2019, following a loss of 2.7 percentage points in the past decade to a present share of 40%13.

Europe’s share of Canadian long haul travel is set to continue to decline

1.3 Characteristics of the Canadian Traveller Population

35.4mn (April 2014)

14

.

The population of Canada is expected to continue to grow due to the high migration rates and the higher birth to death rate.  By 2030, the population will reach 40 million, an average annual rate of growth since 2013 of between 0.8 and 0.9%15.

The population of Canada is expected to continue to grow

Gross Domestic Product16:

CAD1.88

trillion

(EUR1.37 trillion) Current prices having grown at close to 4% a year in current terms (but by under 2% a year in constant CAD terms) over the preceding decade GDP Per Capita17: GDP per capita current prices

CAD53,539

(EUR39,079)

GDP PPP per capita

Int$43,472 (EUR32,201) Unemployment rate18:

7.0% and falling Inflation rate19:

1% and rising The majority (93%) of Canadian travellers to overseas destinations hail from the provinces of Ontario, British Columbia, Quebec and Alberta; for Europe, this proportion is even higher at 95%20. Canadians travel abroad round the year, but the largest proportion of overseas trips are made in the first quarter of the year when Canadians travel to warm climate destinations (predominantly to the Caribbean) to escape the harsh winter in their country. The favoured time to visit Europe is July to September, while the quietest quarter of the year is January to March21. 13 European Tourism in 2014: Trends and Prospects (Q1 2014). Tourism Economics. May 2014. ETC 14 Statistics Canada. http://www.statcan.gc.ca/start-debut-eng.html 15 Canada Population 2013. http://www.worldpopulationstatistics.com/canadapopulation-2013/ 16 World Economic Outlook Database. April 2014. IMF 17 Ibid 18 Ibid 19 Ibid 20 Canadian Outbound Travel Market Secondary Research. ETC. 2013 21 Ibid 19

Canadians travel abroad round the year

Marketing Strategies for Tourism Destinations. Target market: Canada

Nearly three out of every four Canadian outbound trips (including day trips) are by land, reflecting the fact that the United States is the dominant destination and has an extensive land border. The bulk of Canadians’ long haul travel (i.e. outside North America) is by air. Sea transport to all destinations accounts for only 199,000 (including to the United States)22. Two-thirds of all overnight outbound trips are for leisure/ pleasure purposes

Two-thirds of all overnight outbound trips undertaken by Canadians are for leisure/pleasure purposes and about one-tenth for business purposes. VFR is a strong component in visits to specific regions/countries since Canada has a large immigrant population23. For trips outside North America – the definition of long haul – pleasure purposes account for three-quarters, and VFR for 15%. However, for trips to Europe VFR travel is more marked – at 38% - as against pleasure at 42%, in consequence of the fact that the majority of Canadians have European origins. Business travel to Europe is higher than to other destinations. It is anticipated that holiday and VFR travel will continue to remain the primary drivers of outbound travel from Canada in the future. Combined business and pleasure travel is also likely to increase, as Canadians seek ways to cut costs and use their time away from home more effectively.

Websites are the key source of information for Canadians

The key sources of travel information and options consulted by Canadians are the websites of airlines, destination and hotel reservation websites etc. Newspapers and their websites are also a major source of information, equal in importance to television, and consulted twice as often as magazines, billboards and radio advertising24. The majority of Canadians are most influenced by friends, relatives or colleagues in their travel decision making; while over one-half of Canadians are influenced by traveller review websites in their decision making. Most Canadians make their travel bookings and arrangements online, relying less and less on traditional travel agents. Overall, only one-in-four Canadian trips are booked through the traditional travel agency route. Canadians are primarily independent (FIT) travellers, preferring a customised itinerary compared to a packaged trip. Few Canadians travel as part of a tour group. They tend to pre-arrange the different components of their holiday themselves25. Canadian holidaymakers usually travel abroad as a couple or in a group of three or more adults. There is an increasing tendency among business travellers to opt for blended trips taking along a friend or spouse on a work-related trip26.

22 International Travel by Mode of Transportation http://nats.sct.gob.mx/english/go-totables/table-10-country-total-international-passenger-travel/table-10-1-internationaltravel-by-mode-of-transportation/# 23 Ibid 24 Ibid 25 Ibid 26 Ibid 20

Marketing Strategies for Tourism Destinations. Target market: Canada

Apart from VFR trips, the most popular types of holidays among Canadians are beach holidays and city-centred holidays. Findings from a 2012 global survey reveal that 45% of Canadians prefer a beach vacation to all other types of vacations - far ahead of the global average (33%)27. In a non-beach resort destination like Germany, touring holidays dominate accounting for 39% of Canadian tourists’ trips, followed by city trips at 15%.

Beach and citycentred holidays are the most popular types of holidays among Canadians

Canadians also like going on ‘mainly for shopping’ trips or to enjoy the great outdoors by choosing camping holidays. Another important segment is the medical tourism segment, with reportedly about one million Canadians travelling annually outside the country in order to obtain a medical and/or dental service. The popularity of medical tourism is expected to grow as Canada’s population ages and waiting times for treatment in Canada grow28. Canadian visitors indulge in various types of activities when on holiday. History and heritage are a key attraction for the Canadian visitor who is more likely than the average visitor to go to museums, galleries and built heritage sites29.

History and heritage are a key attraction for the Canadian visitor

Canadian visitors enjoy exploring the scenery and going for a walk, and engaging in activities like golf while on holiday. General sightseeing, visiting castles/historical houses and visits to the theatre are some of the other popular activities of Canadian holidaymakers. 1.4 Drivers of Growth As a mature market, with Canadians making three times as many overseas trips per capita as Americans in 201230, the key to growth comes principally from economic and demographic factors.

Economic and demographic factors are driving growth

Canada’s recovery from the recession of 2008/9 has been steady and likely to continue in such a manner, with the average rate of growth in GDP of 2% a year between 2009 and 2013 modestly increased to between 2 and 3% over the next decade31. Traveller confidence is returning but is not back to the pre-recession level, being below the national level in Ontario, Quebec and the Atlantic Provinces and among the important over-55 age group; furthermore, household debt is running at record levels, also serving to dampen expenditure on discretionary items like leisure travel32.

Travel confidence is returning but is not back to pre-recession level

27 Expedia.ca’s 2012 Flip Flop Report http://press.expedia.ca/press-releases/ expediacas-2012-flip-flop-report-1719 28 Canadian Outbound Travel Market Secondary Research. ETC. 2013 29 Ibid 30 Outlook for Leisure Travel: Canada. David Redekop, The Conference Board of Canada. October 2013 Marketing Outlook Forum: A Global Perspective. Travel and Tourism Research Association 31 Canada Economic Forecasts 2014-2030 Outlook. http://www.tradingeconomics. com/canada/forecast 32 Outlook for Leisure Travel: Canada. David Redekop, The Conference Board of Canada. October 2013 Marketing Outlook Forum: A Global Perspective. Travel and Tourism Research Association 21

Marketing Strategies for Tourism Destinations. Target market: Canada

Outbound leisure travel is forecast to grow by 4.1% a year to 2017

Despite these barriers, outbound leisure travel is forecast to grow by 4.1% a year to 2017 reaching 32.1 million trips, with the split between United States and non-United States showing a slight rise in the United States share i.e. from 68:32 in 2012 to 69:31 by 201733. The principal influence on the growth of outbound leisure travel by Canadians is the fact that for the first time by 2017 the population will include more seniors (i.e. 65+) than children (i.e. under 14)34. While the over 65 age group shows a slightly greater tendency to take leisure trips to the United States than other destinations, the forecast that this age group will take 37% more trips in the period to 2021 as against the overall growth of 14% in Canadians’ outbound pleasure trips is positive for all destinations35. An average annual growth in Canadians’ leisure travel to Europe of 3.2% is forecast for the period to 201736, with older travellers comprising a major segment both because of the appeal to them of Europe’s main attractions - history, culture, gastronomy and scenic beauty – and their propensity to research their ancestry and family tree37.

Canada is a highly wired society

Canada is a highly wired society. With over 8 in 10 Canadians online, the vast majority being daily users, Canada is within the top quartile of countries globally. Canadians spend 45 hours per month online, almost double the global average38. Furthermore, this rapid rise in the use the internet can be partially attributed to increased use by those who are 65 years or older - up from 40% to 48% between 2010 and 201239 - the key segment behind the growth in Canadians’ overseas leisure travel in coming years.

Canadians are spending more and more time on social networking sites

Canadians are spending more and more time on social networking and entertainment sites, like YouTube (26% of Canadian internet users access YouTube40) and Facebook (19 million Canadian users41), which now account for the most popular content online. Canadians rank 2nd worldwide in terms of monthly hours of video viewing and number of videos per viewer. Twitter and LinkedIn are hugely popular as well. Canadian online adults (18-64 years of age) are increasingly using a smartphone to access the internet. Two-thirds of smartphone owners access the internet every day on their smartphone and most never leave home without it. Mobile search, video, app usage and social networking are prolific. Smartphones are critical shopping tools with 77% of users having researched a product or service on their device, and 27% of smartphone users having made a purchase on their phone. Mobile ads are noticed by 87% of smartphone users. Smartphones are also a critical component of traditional advertising as 51% have performed a search on their smartphone after seeing an offline ad. Destination marketers can, then, use mobile marketing to capitalise on the growth and capabilities of this medium42. 33 Ibid 34 Ibid 35 Ibid 36 Ibid 37 Canadian Outbound Travel Market Secondary Research. ETC. 2013 38 Ibid 39 Individual Internet Use and e-Commerce 2012. Statistics Canada. http://www. statcan.gc.ca/daily-quotidien/131028/dq131028a-eng.htm 40 YouTube Users www.tvb.ca/pages/YouTube_Users 41 Canadians are the most active Facebook users in the world. http://www. insidefacebook.com/2013/08/23/canadians-still-the-most-active-facebook-users-inthe-world/ 42 Canadian Outbound Travel Market Secondary Research. ETC. 2013 22

Marketing Strategies for Tourism Destinations. Target market: Canada

More and more Canadians are organising travel themselves by searching online and booking their own flights, hotels and cars online. The most popular websites in travel ranked by share of visits are Google Maps Canada, Google Maps, Expedia Canada, TripAdvisor Canada and Air Canada43.

Canadians are organising travel themselves online

A larger proportion of leisure travellers (73%) than business travellers (61%) make use of the exclusively to gather information when planning their trip. All travellers use search engines to get information, followed by hotel booking sites and hotel websites44. 1.5 Successful Destination Strategies Canada’s outbound market will be increasingly characterised by an older age profile, a growth of mixed business and pleasure trips, and a strong VFR segment. Any destination’s ability to attract an increasing share of the Canadian outbound market over the coming decade will require attention to be paid to: •

•

•

•

•

•

extensive investment in, and highly effective use of, online/digital and mobile technology, online advertising and social media marketing, since this represents an efficient and effective way of reaching the target segments, particularly the Baby Boomers and older age groups (i.e. those with the greatest prospects for growth). Whereas 54% of Canadians plan to take an activity or event tour in winter 2013/14, the corresponding figure for what the Conference Board of Canada Travel Intentions Survey of June 2013 terms “social techies”, was 61%45, concerns (particularly among the over 65s) about prices, safety and ease of travel – all of which can be addressed through digital technology, ability to offer a diversified tourism product/set of experiences, an especially important factor for the growing trend among Canadians for self-organised leisure group travel – mainly for 10 persons or less. This is a market of 1.7 million persons and 42% of Canadians say they are highly likely to take a group trip outside Canada in the next two years46, creating the image in the market of an “aspirational destination”, one to experience in the short-term, something that is particularly relevant for the older age group segments, demonstrating that the destination is a year-round place to visit with plenty to see and do throughout the year, an important consideration for older travellers who spread their travel across the year, typically avoiding the high seasons, facilitating the ready availability of different components of the destination so that combined business and leisure trips can be created and undertaken – again, predominantly, through online means.

43 Ibid 44 More Cross-Border Shopping for Less Expensive Airline Tickets. Latest Results From 2013 Canadian Travel Intentions Survey. http://www.hotelassociation.ca/reports/news%20releases/2013%20More%20CrossBorder%20Shopping%20for%20Less%20Expensive%20Airline%20Tickets.pdf 45 Outlook for Leisure Travel: Canada. David Redekop, The Conference Board of Canada. October 2013. Marketing Outlook Forum: A Global Perspective. Travel and Tourism Research Association 46 Ibid 23

Canada’s outbound market will be increasingly characterised by the older age profile

Marketing Strategies for Tourism Destinations. Target market: Canada

2

Travel Destinations in the Canadian Outbound Market Based on the investigations and research conducted into recent trends in Canadian visitor flows and the comparative assessment that introduces this report, a short list of four destinations was selected for further examination in respect of the Canadian market. The four – in alphabetical order – are: 1. 2. 3. 4.

China, Mexico, South Africa, United States/United States Large Cities.

The remainder of this chapter illustrates the positioning of these countries in the Canadian market as compared to Europe. The positioning is assessed on factors that facilitate tourism flows, such as visa regimes, transport routes, and the political, socio-economic and cultural links between Canada and each destination. This section is enriched by an analysis of TripAdvisor ratings on accommodation, attractions and eateries, presented in Appendix 3. While not representative of Canadian travellers, TripAdvisor ratings are used as a proxy for consumers’ appreciation of key aspects of a holiday experience across competing destinations. 2.1 Visa Regimes The detailed comparison of visitor entry requirements for the selected 13 destinations competing with Europe considered three elements: 1. Whether the destination imposes a visa requirement for entry to the country, 2. The documentation and other details demanded for issuance of a visa, 3. A qualitative assessment of the “hassle” factor involved in obtaining the visa. Among the four countries selected as prime competitors to Europe in the Canadian market, Canadian travellers require visa for entry to China whereas there is no such requirement for travel to Mexico, South Africa or Europe (i.e. both ETC and non-ETC member countries). The Chinese visa process makes travel more complicated compared to competitor destinations. Though there are exceptions for transit passengers and visa on arrival in certain instances, most Canadians, whatever their purpose of visit, require to obtain a visa in advance, typically taking four days processing, though an emergency application can be made at a higher charge. 24

Marketing Strategies for Tourism Destinations. Target market: Canada

Mexico and South Africa do not impose a visa requirement on Canadians unless staying for over 180 days (in the case of Mexico) or 90 days (for South Africa). A valid passport for the duration of the stay is the only requirement of Canadian travellers to the United States. Figure 13: Visa Requirements of Canadian Travellers in Key Destinations Destination

Yes/No

Requirements/Process

China

Y

Mexico

N

South Africa

N

United States ETC Members

N N

Tourist visa L: prearranged. Requirements: documents showing the itinerary including air ticket booking record (round trip) and proof of a hotel reservation, etc. or an invitation letter issued by a relevant entity or individual in China, containing information on: the applicant (full name, gender, date of birth, etc.), the planned visit (arrival and departure dates, place(s) to be visited, etc.), the inviting entity or individual (name, contact telephone number, address, official stamp, signature of the legal representative or the inviting individual). Single entry, 90 days visa CAD176.64 – 310.12 (EUR121 – 213) No visa required unless staying over 180 days. Advisable to have onward ticket. No visa required for stays of up to 90 days. Passports must be machine readable. Onward travel documentation required. Only passport required. No visa required for stays of up to 3 months in Schengen member countries. No visa required for visits to non-Schengen ETC members (Bulgaria, Croatia, Ireland, Romania, Serbia) nor to non-Schengen, non-ETC members e.g. the United Kingdom.

2.2 Air Connections The scheduled air capacity from the airports of Canada’s main metropolitan centres of Toronto, Montreal and Vancouver to the shortlisted destinations competing with Europe was monitored on ETC’s behalf by Amadeus. Two points in the year were examined – week 24 in 2013 (broadly corresponding to high season) and week 6 in 2014 (low season), though this can only be taken as an approximate measure given the difference in northern and southern hemisphere climates at the different times of the year. Data for two years were considered in order to provide an indication of the trend in capacity on the various routes i.e. June 2008/ June 2013, and February 2009/February 2014. The destination with the greatest frequencies for direct flights and capacities is New York, a short one-and-a-half hour flight from either Montreal or Toronto. The weekly capacity of direct flights from the two main eastern Canadian airports to New York is between 41 and 44 thousand on between 500 and 600 flights, depending on time of year. London is the next best-served destination with a combined capacity from the two eastern Canadian centres of between 14 and 20 thousand, the higher figure relating to June operations. Next in terms of seats 25

Marketing Strategies for Tourism Destinations. Target market: Canada

offered from Montreal and Toronto are: Paris (at similar levels to London in the European summer months but with less capacity in February), Miami (between 8 and 12 thousand weekly seats), Los Angeles (between 6 and 9 thousand) and Amsterdam (between 4 and 7 thousand). Mexico has relatively low scheduled seat capacity – between 2 and 4 thousand seats – since the bulk of Canadian leisure traffic is carried on charter operations. The pattern of scheduled air services from Vancouver is quite different from Montreal and Toronto

The pattern of scheduled air services from the Canadian western coastal city of Vancouver is quite different from that of Montreal and Toronto. The routes with the greatest capacity are: Los Angeles with a weekly capacity of over 9 thousand seats on between 70 and 80 flights on a flight of under 3 hours; the Chinese cities of Beijing and Shanghai with aggregate capacity of between 8 and 9 thousand seats a week on between 30 and 35 flights taking between 11 and a half and 13 hours; London with between 4 and 8 thousand seats on 40 flights taking over 9 hours; and New York with between 3 and 5 thousand seats on up to 28 flights with a journey time of over 5 hours. There are no direct scheduled air services between Canada and South Africa; none between Montreal and Beijing and Shanghai, nor in the winter months to Madrid and Rome though there are services in June; none between Vancouver and Miami, Madrid or Rome.

Flights from Canada to Europe show considerable seasonal variation

Flights from Canada to Europe show considerable seasonal variation between the winter month of February and the summer period of June. The most extreme example is services from the eastern cities of Montreal and Toronto to Rome. In February there is no service from Montreal while the seat capacity on 3 weekly flights in February 2014 was just 729; by contrast in June 2013, there were 9 flights to Rome from Montreal and 18 flights from Toronto offering a combined seat capacity of 6,800. The principal changes in capacity offered over the periods under review have been: Growth: •

• •

•

a rise of between two and three times in seats between Toronto and the two Chinese cities; and between one-and-a-half times and double on the routes from Vancouver, growth of between one-quarter and one-third on routes from the eastern Canadian cities to New York, capacity up by 40% on June flights between the eastern Canadian cities and Rome, but a halving of winter capacity to a level just one-tenth of that in the summer, small rises on routes from Montreal and Toronto to Miami and Los Angeles.

Stagnation/decline: • • •

a fall in capacity from all three Canadian airports to Mexico City of almost one-half, minimal or no growth in seats offered on the following routes: Vancouver – Los Angeles, decline in capacity on from Canadian cities to Amsterdam (between 7 and 15% depending on season), London (around 7%), and Paris (2%). 26

Marketing Strategies for Tourism Destinations. Target market: Canada

The analysis points to a comparative advantage of the United States and China in terms of air connections with Canada. Over the past five years, direct air capacity from Canada to both these competitors to Europe has expanded more significantly than to Europe. Figure 14: Changes in Weekly Direct Flight Seat Capacity from Canada (Montreal, Toronto and Vancouver Aggregated) to Selected Destinations, June 2008-June 2013 and February 2009-February 2014

Source: TDI calculations based on data supplied by Amadeus

Full details of flights, capacities and flight times for direct and connecting flights for a week in June 2008 and 2013, and a week in February 2009 and 2014 are shown in Appendix 2. NOTE: figures in front of break (/) relate to the first year in the time series i.e. June 2008, while those after the break are for the later year i.e. June 2013.

27

The analysis points to a comparative advantage of the US and China in terms of air connections with Canada

Marketing Strategies for Tourism Destinations. Target market: Canada

Figure 15: Direct Flights Capacity

     

 

Figure 15: Direct Flights Capacity

Vancouver  

Montreal   Toronto  

 



Source: TDI calculations based on data supplied by Amadeus 28

Marketing Strategies for Tourism Destinations. Target market: Canada

2.3 Political, Economic and Socio-Cultural Links Though Canada’s most important relationship, being the largest trading relationship in the world, is with the United States, it has traditionally maintained active relations with other nations, mostly through multilateral organisations such as the United Nations and regional organisations. In 1970 Canada became one of the first Western countries to recognise the People’s Republic of China. Relations have generally been stable since relations were established. China is currently Canada’s second largest trading partner and Canada is China’s 13th largest. In 2007 Canadian imports of Chinese products totalled CAD38.3 billion (EUR26 billion). Between 1998 and 2007, imports from China grew by almost 400%. Leading commodities in the trade between Canada and China include chemicals, metals, industrial and agricultural machinery and equipment, wood products, and fish products47.

China is currently Canada’s second largest trading partner

Canada has links with China being home to a large Chinese diaspora. Canadians of Chinese descent, including mixed Chinese and other ethnic origins, make up about four percent of the Canadian population, or about 1.3 million people as of 2006. Most of them are concentrated in the two provinces of Ontario (around Toronto with over half a million Chinese Canadians in the Greater Toronto Area) and British Columbia (around Vancouver with 400, 000 Chinese Canadians in Metro Vancouver). Prior to the negotiations around the North American Free Trade Agreement (NAFTA) which came into force in 1994, economic and political ties between Mexico and Canada were “weak.” However, with the establishment of NAFTA, the two countries have become much more important to each other. Both nations are members of the G-20 major economies, Organisation of American States (OAS), Organisation for Economic Cooperation and Development (OECD), and the United Nations (UN).

With the establishment of NAFTA, Mexico and Canada have become more important to each other

Twenty years after NAFTA, Mexico is the largest exporter and importer in Latin America, exporting more manufactured goods than all other Latin American countries combined. In 2012, Mexico was Canada’s fifth-largest export destination after the United States, China, the United Kingdom and Japan, and Canada’s third-largest source of imports after the United States and China. In 2013, twoway trade between the two nations amounted to US$30 billion (EUR22 billion)48. According to the National Household Survey in 2011, 96,055 Canadians indicated that they were of full or partial Mexican ancestry (0.3% of the country’s population); while estimates place the number of Canadian citizens either temporarily or permanently resident in Mexico at 50,00049. Following the 2003 visit to Canada by South African President Thabo Mbeki, the Joint Declaration of Intent was signed to strengthen relations between the two countries. Canada has assisted South Africa in the areas of development, the campaign against AIDS in South Africa and the strengthening of public services.

47 Canada-China Relations http://en.wikipedia.org/wiki/ Canada%E2%80%93People%27s_Republic_of_China_relations 48 Canada-Mexico Relations http://en.wikipedia.org/wiki/Canada%E2%80%93Mexico_ relations 49 Ibid 29

Joint declaration of intent signed to strengthen relations between Canada and South Africa

Marketing Strategies for Tourism Destinations. Target market: Canada

According to Statistics Canada, Canada’s bilateral merchandise trade with South Africa totalled over CAD1.1 billion (EUR0.8 billion) in 2013, consisting of more than CAD468 million (EUR342 million) in exports to, and more than CAD686 million (EUR501 million) in imports from, South Africa50. The number of South African-born people in Canada in 2008 was 38,31051. This does not include the number of children born to South African parents in Canada. Estimates of the total population with South African origins presently living in Canada vary widely with the range of 45,000 to 60,000 being the most commonly cited. The United States is Canada’s closest ally

The United States is Canada’s closest ally. The United States and Canada share two borders and their bilateral relationship is among the closest and most extensive in the world. It is reflected in the high volume of bilateral trade -- the equivalent of US$1.6 billion (close to EUR1.2 billion) a day in goods -- as well as in people-to-people contact. About 300,000 people cross between the countries every day by all modes of transport. In fields ranging from security and law enforcement to environmental protection to free trade, the two countries work closely on multiple levels from federal to local52. English-speaking Canadian immigrants easily integrate and assimilate into American culture and society as a result of the cultural similarities and in the vocabulary and accent in spoken English, while French-speaking Canadians, because of language, culture, and religion, tend to take longer to assimilate. According to United States Census estimates the number of Americans of Canadian ancestry was around 640,000 in 2000, a level which is estimated to have risen to in excess of 1,000,000 currently53. According to the Canada 2006 Census, a total of over 316,000 Canadians reported American as their ethnicity, fully or in part. There are also between 900,000 and 2 million Americans living in Canada, either as full-time and part-time residents54.

50 Canada-South Africa Relations http://www.canadainternational.gc.ca/southafricaafriquedusud/bilateral_relations_bilaterales/canada_sa-as.aspx?menu_ id=7&menu=L 51 How many South Africans live overseas. http://www.thesouthafrican.com/news/howmany-south-africans-live-overseas.htm 52 US-Canada Relations http://canada.usembassy.gov/canada-us-relations.html 53 Canadian American http://en.wikipedia.org/wiki/Canadian_American 54 American Canadian http://en.wikipedia.org/wiki/American_Canadian 30

Marketing Strategies for Tourism Destinations. Target market: Canada

2.4 Consumer Assessment (TripAdvisor) This section presents an analysis of ratings provided by TripAdvisor users from Canada on three elements of a visitor experience: attractions, accommodation and eateries. While not representative of Canadian visitors’ behaviour, TripAdvisor ratings allow for cross-destination comparisons on components of a holiday experience. The analysis covers the four destinations competing with Europe in Canada, and four European destinations used as benchmark in this study (France, Italy, Spain and United Kingdom). The results for European countries and competing destinations are presented in Appendix 3. Canadian TripAdvisor users are very satisfied with accommodation, giving an overall rating for the eight destinations of over 4.2, as against a rating of 4 for accommodation in their home country. Leading the way are South Africa with an average rating over 4.5 and Italy with close to 4.4. Mexico, the United Kingdom and Spain all match the average of 4.2. France and China are rated by Canadians at slightly below the average for the eight destinations but higher than accommodation in their own country. Only accommodation in the United States is rated below that of Canadian accommodation, and then only marginally at 4.02 as against 4.04. Average ratings for all destinations in Europe suggest that TripAdvisor users from Canada were in general satisfied with accommodation (just below 4.3). These visitors were most satisfied with the location, cleanliness and service (at or just below 4.5) of the accommodation they selected for their stay, while they tended to be slightly less positive when evaluating the quality of the rented room (4.1). Value and quality of sleep were averagely rated (at 4.25 and 4.27 respectively). While eateries score the lowest average of the three categories of service across the eight destinations – 4.17 – all destinations are rated above Canadians’ assessment of eateries in their own country. The highest rated destination for eateries is Mexico at just under 4.4., followed by South Africa at 4.3. Next in order come Italy, Spain, the United Kingdom, the United States, France and China, ranging from 4.2 to 4.0. The attractions category receives the highest ratings from Canadian TripAdvisor users, averaging 4.5 across the eight destinations, significantly above the 4.38 accorded by Canadians to attractions in their own country. The top-rated destination for attractions is South Africa at over 4.6, closely followed by Italy. Mexico, Spain and the United Kingdom all score over 4.5, slightly below the average for the eight destinations are France and the United States. Only China, despite a strong rating of 4.33, scored below Canadian attractions.

31

Marketing Strategies for Tourism Destinations. Target market: Canada

Figure 16: TripAdvisor Ratings of Tourism Services in Competing Destinations

TripAdvisor operates sites in 41 countries and 23 languages. TripAdvisor offers 150 million+ reviews and opinions on its site and receives 100+ user contributions a minute. TripAdvisor covers 810,000+ hotels, B&Bs and specialty lodgings, 2.2 million+ restaurants and 420,000+ attractions worldwide. As the world’s largest travel site, with nearly 260 million unique monthly visitors*, TripAdvisor has valuable, global insights regarding travel patterns and trends. TripAdvisor data, such as user traffic patterns and average review ratings, can provide relevant insights for local hospitality and other travel industry businesses. *Source: comScore Media Metric for TripAdvisor Sites, worldwide, Q1 2014.

32

Marketing Strategies for Tourism Destinations. Target market: Canada

Profile of Europe’s Main Competitors in Canada 3.1 Destination Marketing Organisations Within each competing destination, tourism authorities responsible for promoting their country as a tourism destination in Canada have been identified (Figure 17). Information about these organisations have been collected from existing sources and, whenever possible, through personal interviews. Figure 17: Listing of Competitor Destination DMOs and Tourism Representative Bodies Competitor Destination

Destination Marketing Organisations

China

China National Tourism Administration (CNTA) http://en.cnta.gov.cn/ China National Tourism Organization (CNTO) http://cnto.org Mexico Tourism Board http://www.visitmexico.com South African Tourism http://www.southafrica.net Brand USA http://www.thebrandusa.com/ USTOA – USA Tour Operators Association http://www.ustoa.com Los Angeles Tourism http://www.discoverlosangeles.com/tourism Greater Miami Convention & Visitors Bureau http://www.miamiandbeaches.com/ NYC & Company http://www.nycgo.com/

Mexico South Africa United States

USA – Los Angeles USA – Miami USA – New York Source: TDI

33

3

Marketing Strategies for Tourism Destinations. Target market: Canada

The People’s Republic of China Tourism Sector China received 56 million international tourist arrivals in 2013

China received 56 million international tourist arrivals in 2013, a decline of nearly 4% over 2012. Between 2005 and 2013, arrivals grew at the average annual rate of 2%, a period when it consolidated its 4th place in the international tourism destination rankings55. These figures include arrivals from the Special Administrative Regions of Hong Kong and Macau as well as from Taiwan, with the level of foreign tourists amounting to 20.8 million in 2013, a fall of 5.2% over the previous year. However, the average annual rise in foreign tourist arrivals (i.e. excluding those from the special administrative regions and Taiwan) between 2005 and 2013 was near to 5%, demonstrating the strength of demand.

Travel from Hong Kong and Macao accounts for over 80% of all visitors to China

Travel from Hong Kong and Macao to China accounts for over 80% of all visitors to China, and for over 62% of overnight international tourists. Travel from the United States and Western Europe makes up to 1.6% and 1.2% respectively of total arrivals, with increases over the period from 2008 to 2012. The United States is the fourth largest foreign market, with the number of arrivals having grown by 24% between 2009 and 2012, though a fall of 1.5% was recorded in 2013 to a level of 2.1 million.

The Republic of Korea and Japan are the leading markets for China

Excluding Hong Kong, Taiwan and Macao, the leading markets for China are the neighbouring countries of the Republic of Korea and Japan. The United States is the 4th most important source market for China, but ranks as the 2nd leading nonAsian market after the Russian Federation. United States tourist arrivals exceeded 2 million in 2013, a fall of 1.5% over 2012. Between 2006 and 2013, United States arrivals have risen by an average of just over 1%, around half the overall international tourist arrival level of around 2% since 200556.

Between 2005 and 2013 China’s tourism receipts rose by over 7% a year

International tourism receipts amounted to US$51.7 billion (EUR38.3 billion) in 2013, a rise of 3% over 201257. Between 2005 and 2013, China’s receipts rose by over 7% a year in US dollar terms (but by over 11% a year in local currency as a result of the fall in the value of the Chinese Yuan Renminbi over the period). China is placed 4th in the international tourism receipts table, as in respect of arrivals, after the United States, Spain and France.

55 UNWTO World Tourism Barometer. August2014. UNWTO. 56 China Tourism http://www.travelchinaguide.com/tourism/ 57 UNWTO World Tourism Barometer. August 2014. UNWTO 34

Marketing Strategies for Tourism Destinations. Target market: Canada

The direct contribution of Travel & Tourism to Chinese GDP in 2013 was CNY 1,487billion (EUR180 billion)58. This represents 2.6% of GDP. The World Travel and Tourism Council forecasts that the level of contribution will rise by 8.1% to over CNY1,600 billion (EUR193 billion) in 2014, and to CNY3,273 billion (EUR395 billion) by 2024, at constant 2013 prices, an average annual growth of 7.4%. The value of the direct contribution primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services (excluding commuter services), but it also includes the activities of the restaurant and leisure industries directly supported by tourists. Adding in indirect contributions, brings the total to CNY5,229 billion (EUR631 billion) in 2013 and a forecast level of CNY11,888 billion (EUR1,435 billion) by 2024, at 2013 values. Travel and tourism directly supported almost 23 million jobs in 2013, representing 3.0% of total employment, with a further 4 million jobs forecast to be added by 2024; while adding on jobs supported by the industry brings the 2013 level to almost 64 million, with a further 29 million anticipated by 202459. The China National Tourism Administration (CNTA) is responsible for tourism, directly affiliated to the State Council. Its main responsibilities are60: 1. Plan and coordinate the development of the tourism industry, prepare development policies, programmes and standards, draft up relevant laws and regulations and supervise the implementation, as well as guide regional tourism, 2. Establish and organise the implementation of market development strategies for domestic tourists, inbound tourism and outbound tourism, organise external publicity and significant promotional activities on the overall image of China’s tourism. Guide the work of China’s tourist institutions stationed abroad, 3. Organise the survey, planning, development and protection of tourism resources. Instruct the layout and development of key tourist regions, tourism destinations and tourist routes and guide the leisure vocation industry. Supervise the operation of tourist economy and take charge of tourist statistics and release of trade information. Coordinate and instruct the Holiday Tourism and the Red Tourism61, 4. Normalise the order of the tourist market, supervise and manage the service quality and maintain legal rights and interests of tourism consumers and operators. Normalise the operation and services of tourist enterprise and practitioners. Organise the drafting of standards on tourist regions, tourist services and tourist products, etc., and organise the implementation. Take charge of the overall coordination, supervision and management of tourist safety and emergency rescues. Guide the construction of the ideological infrastructure and the credibility system62 as well as operations of trade organisations, 58 Travel and Tourism Economic Impact 2014: China. World Travel and Tourism Council. http://www.wttc.org/focus/research-for-action/economic-impact-analysis/ country-reports/ 59 Ibid 60 CNTA In Brief http://en.cnta.gov.cn/about/Forms/AboutCnta/CNTAInBrief.shtml 61 Red tourism is a subset of tourism in the People’s Republic of China in which Chinese people visit locations with historical significance to Chinese Communism “to rekindle their long-lost sense of class struggle and proletarian principles.” 62 “Ideological infrastructure and credibility system” refers to the political economy and operating system of the tourism industry in China 35

Marketing Strategies for Tourism Destinations. Target market: Canada

5. Promote the international communication and cooperation of tourism and take charge of affairs relating to the cooperation with international tourists organisations. Establish policies on outbound tourism and border tourism and organise the implementation. Examine and approve foreign travel agencies established in China, examine the market access qualifications of foreign-invested travel agencies and travel agencies engaged in international tourism, examine and approve overseas (outbound) tourism and border tourism cases. Take charge of affairs on special tourism, 6. Establish policies on travel to Hong Kong, Macao & Taiwan and organise the implementation, guide the promotion of tourist markets in Hong Kong, Macao & Taiwan. Take charge of affairs on Mainland residents travelling to Hong Kong, Macao & Taiwan, examine and approve travel agencies of Hong Kong, Macao & Taiwan established in the Mainland, examine the market access qualifications of travel agencies with investments of Hong Kong, Macao & Taiwan, 7. Organise and instruct tourism education and training, stipulate the vocational qualification system and ranking system for tourism employees with relevant authorities and supervise the implementation, 8. Undertake other issues assigned by the State Council. China has embarked on a new era in tourism Roadmap for the restructuring of the current paid leave system

China has embarked on a new era in tourism in its national agenda following the release by the State Council of China of The Outline for National Tourism and Leisure (2013-2020)63, aimed at bringing about the complete redefinition of tourism development and management in the country, spark an increase in Chinese outbound tourism and promote a greater distribution of the economic, socio-cultural and environmental benefits of tourism. It presents a roadmap for restructuring the current paid leave system across China and outlines the technical, multi-sector aspects of creating a more productive environment for sustainable tourism development and management in the country. Its release comes four years after the tourism sector in China was acknowledged as a ´pillar´ industry of modern services, recognising its role as one of the major social and economic industries on the government´s agenda. The successful implementation of the Outline will lead to both a further boost to Chinese inbound tourism (and domestic tourism), and to Chinese outbound tourism around the world.

63 China’s New Landmark Strategy. http://asiapacific.unwto.org/en/news/201303-21/china-s-new-landmark-tourism-strategy-outline-national-tourism-andleisure-2013-2020 36

Marketing Strategies for Tourism Destinations. Target market: Canada

Among the tasks and measures contained in the Outline are64: • •

•

•

• • •

•

•

improvements and ready access to parks, museums etc., increased and improved infrastructure e.g. recreation belts and distinctive tourism villages, family inns and budget hotels, motels and camping facilities, ports for cruise ships and yachts, better protected parks and forests, increased disabled access, product development and activity e.g. encouragement of rural holidays close to cities, development of recreation and leisure activities such as cycling tourism, self-drive, sport and fitness tourism, medical and healthcare tourism, hot spring and snow tourism, cruise and yacht tourism, and focus on traditional culture, facilities for different market segments (such as seniors, women, children, people with disabilities, rural population) including urban leisure, city sightseeing, cultural recreation, popular science education, cultural performance, healthcare and fitness, shopping, practical and convenient information service system through signage, information points, website development, improved service quality standards through education, training and supervisory programmes, strong leadership and organisation involving clear guidance and liaison with local administrations on the development and management of their tourism sectors, to ensure that tourism and leisure development is fully incorporated into economic and social development plans at all levels, investment in public service infrastructure for tourism and leisure, and encouragement of private sector investment in facility and product development, strong supervision and regulation.

The China National Tourism Authority undertakes destination marketing through its network of China National Tourist Offices. The CNTO seeks to work closely with the travel trades in key generating markets through participation at exhibitions and fairs, and promotions.

CNTA undertakes destination marketing through its network of offices

To strengthen international cooperation in tourism, and to promote the recovery of inbound tourism, CNTA has undertaken a number of large-scale overseas promotional programmes, and organised the successful Sino-Russia Tourism Year in 201265, with the reciprocal Tourism Year taking place in the following year. The CNTO overseas offices are non-profit government organisations. Their mission is to develop and promote all aspects of tourism to China within their given territories. They are responsible for educating both the general public and the travel industry about China. The total CNTA budget in 2012 was CNY240.5 million (EUR38.5 million), drawn from central and local governments, funded in part by allocations from the Tourism Development Fund made up from the CNY20 (EUR2.4 ) charge on all outbound travellers.

64 Notice on the Publication of The Outline for National Tourism and Leisure (20132020) by the General Office of the State Council 65 OECD Tourism Trends and Policies 2014 37

CNTA budget in 2012 was CNY240.5 million (EUR38.5 million)

Marketing Strategies for Tourism Destinations. Target market: Canada

The focus of the CNTA destination marketing activities are travel trade shows, consumer shows, seminars, familiarisation trips and other ongoing promotions. The CNTO offices assist travel agents and tour operators in selling China by providing them with sales tools, including travel brochures, videos, displays, maps, magazine advertising and general information to the public. Buoyed by the success of the tourism exchange programmes with the Russian Federation over the past two years, the CNTA is expected to make stronger efforts to promote China as an ideal travel and tourism destination by launching a series of similar marketing activities66. Chinese tourism authorities have been slow to embrace Facebook, Twitter and YouTube

There is criticism in the Chinese media and travel trade of the China destination website. In the face of intense competition from neighbouring Asian countries, foreign travellers’ online searches for Chinese tourism destinations are increasing much more slowly than for its competitors e.g. the year-on-year growth of the search for Chinese destinations was only 7% in 2012, while the growth for India was 21% and Thailand was 19%67. Chinese tourism authorities have been slow to embrace Facebook, Twitter and YouTube. The imposition by the Chinese authorities of the Great Firewall and the ban on Western internet platforms has contributed to this situation. However, the designation of 2014 as the Year of Smart Travel suggest a possible intention to use social media more extensively. A constant in the CNTA’s marketing has been the naming of each year with a specific theme. Starting with “Friendly Sightseeing Year” in 1992, the past two years have been called respectively “China Ocean Tourism Year” and “Beautiful China”.

WTTC advised that China should promote the country as a whole

In launching the WTTC report68, President and CEO, Mr David Scowsill advised that China should promote the country as a whole, instead of a group of individual provinces69. The CNTO is actively promoting China in the 16 key markets where it maintains offices i.e. the United States, Canada, the United Kingdom, France, Germany, Italy, Spain, Switzerland, the Russian Federation, Singapore, India, Nepal, Australia, Republic of Korea, Japan, and Hong Kong. The CNTA operates 18 offices in 16 countries with double representation in the United States (Los Angeles and New York) and Japan (Osaka and Tokyo). Most of these are China National Tourist Offices but in Osaka it operates as the CNTA itself and in Hong Kong through Asia Tourism Exchange Centre.

66 Travel and tourism inbound in China http://www.euromonitor.com/tourism-flowsinbound-in-china/report 67 China lags behind in inbound tourism. July 2013. http://news.xinhuanet.com/ english/china/2013-07/27/c_132578913.htm 68 Travel and Tourism Economic Impact 2013: China. World Travel and Tourism Council. http://www.wttc.org/site_media/uploads/downloads/china2013.pdf 69 China must ramp up for inbound tourism China Daily USA March 2014 http://usa. chinadaily.com.cn/epaper/2014-03/19/content_17359504.htm 38

Marketing Strategies for Tourism Destinations. Target market: Canada

The Mexican Tourism Sector International tourist arrivals in Mexico reached 23.7 million in 2013, making it the 15th largest tourist receiving country70. Growth rates have not been strong in recent years – by 1.6% a year since 2007 – as the country has sought to counter the negative reports of the drug-related gang violence in parts of the country which has depressed visitor flows, particularly from Mexico’s dominant market of the United States which accounted for over 20 million arrivals in 2013 (of which over 6 million arrived by air, just under half at Mexico City airport). Mexico was ranked in 128th place on the safety and security factor in the WEF TTCI 2013 survey71.

Mexico’s dominant market is the United States

Receipts from international tourism reached US$13.8 billion (EUR10.6 billion) in 2012, having fallen from the previous peak of US$13.4 billion (EUR9.6 billion) in 2008 before recovering over the past two years – i.e. by 7.3% and 8.5% respectively in 2012 and 201372. Tourism’s ability to generate jobs (both direct and indirect), foreign currency receipts, and economic growth, as well as promoting regional development and productive chains, and contributing to improved living standards, makes it a national priority in Mexico. The direct contribution of Travel & Tourism to Mexico’s GDP in 2013 was MXN953 billion (EUR54 billion)73. This represents 5.9% of GDP. The World Travel and Tourism Council forecasts that the level of contribution would rise by 4.4% in 2014 and by 4.5% a year between 2014 and 2024 reaching MXN1,542 billion (EUR88 billion), 6.6% of GDP. Adding in indirect contributions, brings the total travel and tourism industry contribution to MXN2,143 billion (EUR122 billion) in 2013, a level that is forecast to rise by 4.2% in 2014 and by an average annual rate of 4.6% between 2014 to 2024 reaching MXN3,488 billion (EUR198 billion)74, almost 15% of the country’s GDP. Travel and tourism directly supported 3.2 million jobs in 2013, representing 6% of total employment, with a further million jobs forecast to be added by 2024; while adding on jobs supported by the industry brings the 2013 level to over 7 million with a forecast growth to 9 million by 2024, almost 16% of total employment in Mexico75.

70 71 72 73

UNWTO World Tourism Barometer. Volume 12, August 2014 WEF TTCI 2013 Report UNWTO World Tourism Barometer. Volume 12, August 2014 Travel and Tourism Economic Impact 2014: Mexico. World Travel and Tourism Council. http://www.wttc.org/focus/research-for-action/economic-impact-analysis/ country-reports/#mexico 74 Ibid 75 Ibid 39

Tourism is Mexico’s fourth largest source of export revenues

Marketing Strategies for Tourism Destinations. Target market: Canada

Tourism is administered by the Mexican Ministry of Tourism

The Ministry of Tourism is responsible for setting and implementing policy. The Tourism Cabinet (chaired by the President and comprising ministers and sectoral stakeholders) articulates plans, actions and budgets of federal agencies to achieve the objectives of the National Tourism Policy through working groups in order to optimise the use of public resources for the benefit of tourism. The General Tourism Law (2009) establishes the basis for coordination between federal, state and local authorities, and defines the roles and responsibilities of each. The head of the Ministry coordinates actions with the National Trust Fund for Tourism Development (FONATUR) and the Mexico Tourist Board, to promote tourism investment and products in order to increase tourist flows and spending76.

A fifteen year plan to make Mexico a world leader in tourism

The Ministry’s mission is to make Mexico a world leader in tourism by 2030 through a strategy comprising: • • • • •

recognition of tourism as key to economic development, encouragement of tourism businesses to be competitive both nationally and internationally, development of tourism that respects the natural, cultural and social environment, diversification of tourism products, development of new markets77.

The National Tourism Policy is based on the four principles of: • • • •

planning and sectoral transformation, innovation and competitiveness, development and promotion, sustainability and social benefit.

Among the programmes being implemented are: •

•

• •

Development and Improvement of Infrastructure to Foster and Promote Investments in the Tourism Sector – aimed at diversifying and improving the competitiveness of the country’s tourism offer through Integrally Planned Centres, to be included in FONATUR’s projects and programmes, Generation of Actions for the Development of Products – including culture, gastronomic, meetings, health and nautical, spread all over the country, Ecotourism and Rural Tourism – developing, supporting and promoting natural, sustainable and competitive products, Rutas de Mexico - presentation of ten tourist routes covering all 32 states in the country enabling visitors to experience the full range of Mexico’s natural and cultural heritage, featuring gastronomy, ecotourism, adventure, extreme sports, folk art, beach destinations, historical and archaeological sites78.

76 Ibid 77 Ibid 78 Ibid 40

Marketing Strategies for Tourism Destinations. Target market: Canada

The Mexico Tourism Board (MTB) was established in 1999 to be Mexico’s tourism promotion agency, bringing together the resources of federal and state governments, municipalities and private companies to promote Mexico’s tourism attractions and destinations nationally and internationally. Its role is to coordinate, design and develop the national and international strategies for tourism promotion for Mexico, as well as promote the numerous destinations and activities in the country.

MTB is responsible for promoting Mexico nationally and internationally

Its operations are divided into four programmes: • • • •

promotion of Mexico as a tourist destination, tourist orientation and emergency assistance equipment and services (provided in Mexico), tourism infrastructure projects, tourism product development support.

It has a workforce of 186 people spread across 53 administrative units. The mission of the MTB is the “promotion, both integrally and competitively, of Mexico, its products and destinations, in domestic and international markets, by means of joint efforts involving all stakeholders in tourism”79. Its vision is to be “a leading organisation in the promotion of tourism, encouraging participation and joint efforts by the various stakeholders in the industry”80. Marketing through partnership is, thus, central to both the MTB’s mission and vision statements, laying stress on encouraging participation and joint efforts involving all stakeholders in tourism. The MTB’s strategy has changed recently. In the past, it focussed largely on the mass market, with marketing efforts promoting first the Mexico Brand, then Mexico plus the destinations. Now the focus is on the individual destinations around the country. This is involving working closely with, and obtaining support and guidance from, commercial partners (e.g. supplying much of the marketing information), with tour operators gradually increasing their appeal to more affluent travellers willing to pay more for five star resorts and more amenities along with the convenience of a package holiday. “We want to be seen as a cultural super power to compete with the likes of China, India and Greece in terms of historical interest. This is in addition to our gastronomy and colonial architecture such as in San Miguel de Allende,” says chief executive Rodolfo Lopez Negrete Coppel, United Kingdom Mexican Tourism Board81.

79 Mexico Tourism Board Mission and Vision. http://www.cptm.com.mx/mision-y-vision 80 Ibid 81 Mexico Tourist Arrivals Nudge Close to 25 Million. TTG Digital http://www.ttgdigital. com/news/wtm-2013-mexico-tourist-arrivals-nudge-close-to-25-million/4689398. article 41

Marketing through partnership is central to MTB’s vision

Marketing Strategies for Tourism Destinations. Target market: Canada

In order to achieve its mission and vision, a range of strategies have been adopted for the MTB’s strategic and marketing plans, as follows82: Strategic Plan • • • • • •

Participative: involving industry and commercial partners, Continuity: ensuring consistency over time, Professionalism: focussed on efficiency and efficacy, Technological development: intensive use of technology, Results-based: measurable indicators of visitor satisfaction, Transparency: published information on strategies, measures and results.

Marketing Plan • • •

•

•

•

Tourism promotion budget is set at MXN732 million (EUR42 million) for 2014

Specialisation: concentration of marketing and promotional activities on most profitable markets and segments, Consistency: creating credibility of promotional messages, Joint efforts: encouragement and coordination of schemes to maximise the impact of all stakeholders promoting Mexico so as to achieve economies of scale and competitive advantages for everyone involved, Favourable image: generate public relations activities that communicate a positive image and compensate for negative perceptions of what Mexico has to offer in tourism, Stimulate demand: advertise in target markets, with continuous messages that identify Mexico as a country of many destinations and a range of tourism products that can satisfy a wide variety of consumer tastes, Diversified marketing: direct marketing and sales promotion campaigns that increase the channels of information and stimulate demand for the nation’s tourism products in the target markets.

2013 Budget Allocation for MTB’s 4 Broad Budgetary Programmes as per Progress Report for Approved Indicators for MTB for July-September 2013 were83: • •

• •

tourist orientation and assistance equipment and services: MXN260 million (EUR15 million), slightly reduced on the original budget, promotion of Mexico as a tourist destination: MXN2,701 million (EUR156 million), modified from MXN687 (EUR40 million) in the original budget, tourism infrastructure projects: MXN207 million (EUR12 million), half the original budget, tourism product development support: MXN1,500.0 million (EUR87 million), in line with the original budget.

For 2014, the tourism promotion budget has been set at MXN732 million (EUR42 million)84 but that level may change if the example of the previous year is followed. 82 Ibid 83 Federal Government of Mexico Transparency Fulfilment Portal: www.apartados. hacienda.gob.mx/metas_indicadores/2013/21/r21_ifaiafipar_trim.pdf 84 Federal Government of Mexico Transparency Fulfilment Portal http://www. apartados.hacienda.gob.mx/presupuesto/temas/pef/2014/temas/tomos/21/r21_w3j_ afpefe.pdf 42

Marketing Strategies for Tourism Destinations. Target market: Canada

MTB runs a full range of marketing and promotional activities including advertising, promotions, attendance at fairs (7 major ones in 2013), separate websites for trade and the public, brochures, familiarisation trips (though none were organised in the second half of 2013), consumer newsletter, social media (including Facebook, Google+, Instagram, LinkedIn, Pinterest, Twitter and YouTube). The “Mexico: Live it to believe it” campaign was launched in September 2013. It seeks to correct the perception revealed in research studies that Mexico is not as a sophisticated, modern or contemporary destinations as some of its competitors, thus putting off the upmarket tourist segments that Mexico is now seeking to attract. The concept is to generate excitement and present Mexico in a new light. The campaign seeks to: •

•

showcase Mexico’s diverse cultures, ecosystems, flavours, histories, innovations and one-of-a-kind destinations, hoping to bring forth the emotions and positive experiences of visitors, incorporate all media platforms including public relations, with a strong emphasis on digital channels in order to present Mexican destinations to a younger, more affluent traveller.

Multi-media marketing efforts present Mexico in a new light

To accomplish this, the first round of advertisements showcase four Mexican destinations: Mexico City, Yucatan, Los Cabos, and the new, ‘bundled’ destination of Puerto Vallarta and Nayarit, which have partnered to market themselves as a single “Grand Destination”. The ads have a “high end” quality to them: strong visual images, young stylish actors, and depict Mexico’s history, culture, fashion and sophistication so as to appeal to the target market. They are positioned to change existing perceptions. For example, for Mexico City, which is generally regarded by tourists as a business centre, the ad presents it as a vibrant, sophisticated city shown through the eyes of three stylish young women staying at a sleek contemporary hotel, and enjoying restaurants, cuisine, shopping, art and culture. In line with its strategic shift away from mass tourism, Mexico’s priority markets are targeting a younger, more affluent traveller and expanding its tried and true vacation market. It is also increasing its spend and actively pursuing the meetings and convention market and various niche markets, recognising the need to help publicise good companies that cater to these niche markets. The source markets being targeted by Mexico are: • • • • • •

United Kingdom, United States, Brazil, Argentina, Japan, Russia.

43

Youth market and affluent travellers are key segments

Marketing Strategies for Tourism Destinations. Target market: Canada

The segments within its target markets that Mexico is seeking to attract are: • • • • • • • • • • • • • • • •

adventure, cruise, culture, entertainment, golf, luxury, magical towns, Mayan world, medical tourism, meetings, nature, touring routes, sun and beach, sustainable, weddings, world heritage cities.

MTB has 22 overseas offices spread throughout North America (Atlanta, Chicago, Houston, Los Angeles, Miami, New York and Washington DC in the United States; and Montreal, Toronto and Vancouver in Canada), Europe (Berlin, Brussels, London, Madrid, Paris, Rome), Asia (Beijing, Seoul, Tokyo) and Latin America (Buenos Aires, Sao Paulo).

44

Marketing Strategies for Tourism Destinations. Target market: Canada

The South African Tourism Sector International tourist arrivals in South Africa in 2013 totalled 9.5 million, a rise of 3.8% over the previous year85. This makes South Africa the 30th largest tourist receiving country in terms of tourist arrivals. The increase in 2013 maintains the average annual rate of growth recorded between 2005 and 2013.

International tourist arrivals in South Africa totalled 9.5 million in 2013

International tourism receipts amounted to US$9.2 billion (EUR7 billion) in 201386. While this represents a fall of 8.7% in US dollar terms, the sharp fall of the South African rand between 2012 and 2013 – 17.7% and 21.6% respectively against the US$ and the Euro - translated into a rise of 8.7% in local currency. The principal source countries for South Africa are neighbouring African states while the outside Africa the leading markets are the United Kingdom (442,000 in 2013), the United States (349,000), Germany (304,000), and China (151,000)87. The World Travel and Tourism Council forecasts that the level of contribution would rise by 4.3% in 2014, and to ZAR158 billion (EUR16 billion) by 2024, at constant 2011 prices, an average annual growth of 4%. Direct and indirect contributions sum up to ZAR323 billion (EUR25 billion) in 2013 and a forecast level of ZAR478 billion (EU37 billion) by 2022, at 2013 values. Travel and tourism directly supported 645,000 jobs in 2013, representing nearly 5% of total employment, with a rise to 840,000 jobs predicted in 2024. Adding on jobs indirectly supported by the industry brings the 2013 total to over 1.4 million, with a further 3.8 million jobs forecast to be added by 2024, bringing the total employment generated by the tourism industry to 1.8 million in 2024, 10.8% of the Republic’s total employment88. The Department of Tourism is the government body responsible for the planning, management, administration and regulation of the tourism industry.

85 UNWTO World Tourism Barometer, Volume 12, Statistical Annex, August 2014 86 Ibid 87 http://www.southafrica.net/uploads/files/Tourists_Table_A_DEC2013_12052014_1. pdf 88 Ibid 45

The direct contribution of Travel & Tourism to South Africa GDP in 2013 was ZAR103 billion (EUR8 billion)

Marketing Strategies for Tourism Destinations. Target market: Canada

The Department of Tourism operates as a catalyst for tourism growth and development in South Africa. Its mission is stated89: “As a strategy focussed department, we are committed to creating a conducive environment for growing and developing tourism through: • • • • Goal is for South Africa to be a top 20 destination by 2020

innovation, strategic partnerships and collaboration, providing information and knowledge management services, strengthening institutional capacity”​.

The 2011 National Tourism Sector Strategy sets the goal of South Africa being a top 20 destination in the world by 2020. Its mission is to significantly grow a sustainable tourism economy with domestic, regional and international components, based on innovation and service excellence, meaningful participation and partnerships90. The strategy is premised on the values of mutual trust; accountability; respect for our culture and heritage; responsible tourism; transparency and integrity; service excellence; upholding the values of our Constitution; a commitment to transformation, and flexibility and adapting to change91. The National Tourism Sector Strategy92 has three broad themes, as follows: THEME 1: • to grow the tourism sector’s absolute contribution to the Tourism Growth economy, and the Economy • to provide excellent people development and decent

work within the tourism sector, • to increase domestic tourism’s contribution to the tourism economy, • to contribute to the regional tourism economy. THEME 2: An • to deliver a world-class visitor experience, Enhanced Visitor • to entrench a tourism culture among South Africans, Experience

• to position South Africa as a globally recognised tourism destination brand.

THEME 3: Sustainability and Good Governance

• to achieve transformation within the tourism sector, • to address the issue of geographic, seasonal and rural spread, • to promote ‘responsible tourism’ practices within the sector, • to unlock tourism economic development at a local government level.

89 http://www.tourism.gov.za/Pages/Home.aspx 90 National Tourism Sector Strategy 2011. http://www.tourism.gov.za/AboutNDT/ Publications/National%20Tourism%20Sector%20Strategy%20Executive%20 Summary.pdf 91 Ibid 92 Ibid 46

Marketing Strategies for Tourism Destinations. Target market: Canada

A series of Strategic Clusters and Thrusts are set out, each with strategic gaps identified and actions specified to address these gaps: CLUSTER 1: Policy, Strategy, Regulations, Governance, and Monitoring and Evaluation

• • • •

research, information and knowledge management, policy and legislative framework, collaborative partnerships, prioritising tourism at national, provincial and local government level.

CLUSTER 2: CLUSTER 2.1: Tourism Growth Tourism and Development Growth and Development – DEMAND

CLUSTER 2.2: Tourism

Growth and Development –

SUPPLY

• • • •

marketing and brand management, domestic tourism, regional tourism, business and events tourism.

• relevant capacity building, • niche-product development and rural tourism, • product information, • responsible tourism, • investment promotion, • quality assurance.

CLUSTER 3: People Development

• • • •

transformation, decent work, service excellence, community beneficiation.

CLUSTER 4: Enablers of Growth

• • • • •

general tourism awareness among South Africans, safety and security, international and regional airlift, ground transportation, domestic airlift.

South Africa Tourism (SAT) is the government agency responsible for international and domestic marketing of South Africa as well as for information management in consultation with provincial tourism authorities. It is under the National Ministry of Tourism and reports through its board to the Minister. The SAT board engages the Chief Executive Officer (CEO). SAT has five divisions as follows: • • • • •

finance, quality assurance, operations, human resources and research, Convention Bureau, marketing.

47

SAT is the agency responsible for international and domestic marketing

Marketing Strategies for Tourism Destinations. Target market: Canada

Marketing is the largest division. Under the Chief Marketing Officer there are ten departments for Africa, Asia and Australia, Europe and the United Kingdom, Americas, Southern Africa, global campaigns, watch-list markets, product, communications and e-marketing93. There are eleven non-executive board members most of whom are from the private sector, and two executive board members, the CEO and Chief Financial Officer. SAT operates a Forum for Business to drive private sector’s contribution to the implementation of national strategy. It also has a Government Forum, a Knowledge Group (covering research) and a Communications Forum. The Tourism Business Council of South Africa is a key private sector partner

A key private sector partner in marketing South African tourism is the Tourism Business Council of South Africa (TBCSA): TBCSA has initiated the Tourism Marketing South Africa (TOMSA) levy, which directly funds marketing initiatives, generally in partnership with SAT. SAT also has an ongoing partnership with the national carrier, South African Airways.

SAT’s mission is the development and implementation of a world-class international tourism marketing strategy

SAT’s mission is stated as the development and implementation of a world-class international tourism marketing strategy for South Africa. In pursuance of this mission, SAT will: • • • •

facilitate the strategic alignment of the provinces and industry in support of the global marketing of tourism to South Africa, remove all obstacles to tourism growth, build a tourist-friendly nation, ensure that tourism benefits all South Africa94.

SAT had an operating budget of ZAR912 million (EUR70 million) in 2013, of which ZAR759 million (EU59 million) was spent on international activities including marketing. In 2012 the overall budget was ZAR820.5 million (EUR79 million) and international and domestic marketing activity accounted for ZAR 772 million (EUR75 million). Note: the South African rand fell by a fifth against the Euro between 2012 and 2013. Tourism promotion is funded primarily by the TOMSA levy

Tourism promotion is funded primarily by the Tourism Marketing South Africa (TOMSA) levy. Since its inception in 1998, TOMSA has grown from collecting ZAR9.9 million in 1999 (EUR1.6 million) with less than 50 collectors, to collecting in excess of ZAR90 million (EUR9.8 million) in 2011. The marketing of destination South Africa has increased dramatically over the same period. Currently, the TOMSA levy is collected from four sectors namely accommodation, car rental, tour operator and travel agencies, who collect levy as follows: • • • •

accommodation – 1% of room rate, car rental – 1% of vehicle booking, travel agency – 1% of service fee, tour operator – R3 per tour booking.

93 South African Tourism Annual Report 2012/13 94 Ibid 48

Marketing Strategies for Tourism Destinations. Target market: Canada

Representative associations receive a 10% monthly commission of the TOMSA levies collected from members recruited by the associations. South Africa is described as ‘a world in one country’, and presents the visitor a breathtaking variety of scenery, from desert and lush forest, to soaring mountains and vast empty plains. Culturally diversity is also promoted and visitors are drawn to experience for themselves the post-apartheid ‘rainbow nation’. Others are attracted by the golden beaches, big game, and activities such as diving and snorkelling, or bird-watching. There is a national brand, Brand South Africa which aims to increase familiarity and knowledge of South Africa as a viable, world-class and profitable business destination in targeted international trade, investment and tourism markets. It supports SAT strategy.

South Africa is described as ‘a world in one country’

SAT’s marketing blueprint is actively focussed on improving conversion ratios by brand, increasing awareness and positivity that results in improved closure ratios in core markets. Marketing plans focus on protecting South Africa’s leadership in the wildlife and adventure segments, supported by hospitality, design/art and welcoming people. SAT aims to develop a stronger “emotional connection” with consumers.

Marketing plans focus on protecting South Africa’s leadership in the wildlife and adventure segments

SAT participates in major travel shows; coordinates advertising, public relations and direct mailing campaigns; and holds educational work sessions with the international partners of South Africa’s travel industry. Furthermore, the organisation is active in promoting South Africa as a destination for Business Events through its National Convention Bureau (launched in 2012). The global campaign is driven online with a 360º integrated portal on www.southafrica.net, where consumers learn more about the different experiences and benefits of a journey through South Africa. SAT communicates its brand message on National Geographic, CNN and SuperSport Africa, reaching over one billion consumers. Media reach gaps in the United Kingdom, Germany, India, China and Australia markets are complemented by global cinema buys, train wraps and outdoor activations, supplemented by in-country marketing activities through SAT’s representatives. To enhance global media campaigns, search engine optimisation (SEO), social media, online media, websites, mobi sites and online applications are used. Public relations and communications form an integral part of campaigns. In e-marketing SAT operates partnerships with leading online travel players such as TripAdvisor, WAYN.com and Expedia. These are supplemented by platforms such as Google Adwords, Lastminute.com, YouTube, Opodo, E-bookers, CNN, National Geographic and a number of others.

49

SAT operates partnerships with leading online travel planners

Marketing Strategies for Tourism Destinations. Target market: Canada

SAT currently markets the tourism destination with the following priorities: Core markets • France, • Germany, • Netherlands, • United Kingdom, • Australia, • China, • India, • Brazil, • United States, • Africa - Angola, Kenya, Mozambique, Nigeria, and Tanzania, being identified by SAT as representing the greatest potential, • Domestic.

Investment Market • Italy, • Russia, • Japan, • Republic of Korea, • Canada, • Africa - Botswana, DRC, Ghana, Lesotho, Uganda, Zimbabwe.

Tactical Markets • Switzerland, • Singapore, • Africa - Namibia, United Arab Emirates, Zambia, • Watch-list Markets, • Austria, • Belgium, • Denmark, • Finland, • Norway, • Spain.

SAT has eleven overseas country offices namely Amsterdam (Netherlands), Beijing (China), Frankfurt (Germany), London (United Kingdom), Milan (Italy), Mumbai (India), New York (United States), Paris (France), Sydney (Australia), Luanda (Angola) and Tokyo (Japan). A further two offices, Brazil and Nigeria, are in the process of being opened.

50

Marketing Strategies for Tourism Destinations. Target market: Canada

The United States Tourism Sector The United States is the second largest tourist receiving country in the world (after France) but the leading country for international tourism receipts – 14.5% of the world total in 2013.

USA is the leading country for international tourism receipts

It recorded 69.8 million arrivals in 2013. The average annual growth rate in international arrivals between 2009 and 2013 was 6%, though the 5% fall in the level of arrivals in 2009 over 2008 reduces the annual growth rate to 3.7% over the extended period of 2008 to 2013. Spending of tourists to, and within, the United States amounted to US$173 billion (EUR130 billion) in 2013, making it the leading country in terms of tourism receipts. The average annual growth between 2008 and 2013 was almost 10%95. The direct contribution of Travel & Tourism to the United States’ GDP in 2013 was USS450 billion (EUR333 billion)96. This represents 2.7% of GDP. The World Travel and Tourism Council forecasts a rise in the level of contribution of 3.5% in 2014 and a further 3.7% a year between 2014 and 2024 to a level of US$672 billion (EUR498 billion), 3% of GDP. Adding in indirect contributions, brings the total travel and tourism industry contribution to US$1,416 billion (EUR1,049 billion) in 2013, a level that is forecast to rise by 3.1% in 2014 and by an average annual rate of 3.5% between 2014 to 2024 reaching over US$2 trillion (EUR1.5 trillion)97, 9% of the country’s GDP. Travel and tourism directly supported 5.4 million jobs in 2013, representing 3.8% of total employment, with more than one million jobs additional jobs forecast to be added by 2024; while adding on jobs supported by the industry brings the 2013 level to over 14 million with a forecast growth to 17.6 million by 2024, 11% of total employment in the United States98. The United States is highly decentralised with respect to travel and tourism, with public authorities managing it at national, regional, state and local levels. It is not federally regulated as a distinct industry though parts of it – e.g. transport – are. The official source of statistics for tourism and the role of working for the enhancement of the competitive position of the country in travel and tourism rest with the National Travel and Tourism Office within the International Trade Administration of the United States Department of Commerce. 95 UNWTO Tourism Barometer, October 2010 and August 2014 96 Travel and Tourism Economic Impact 2014: United States. World Travel and Tourism Council http://www.wttc.org/focus/research-for-action/economic-impactanalysis/country-reports/#unitedstates 97 Ibid 98 Ibid 51

Tourism in the USA generates 14 million jobs

Marketing Strategies for Tourism Destinations. Target market: Canada

The process of policy deliberation at the Department of Commerce includes the United States Travel and Tourism Advisory Board (made up of appointed travel and tourism private sector representatives) and the Tourism Policy Council (an interagency committee whose function is to coordinate national policies and programmes relating to travel and tourism, recreation and national heritage resources that involve federal agencies). Task Force goal to attract 100 million international visitors a year by 2021

In January 2012, President Obama issued an Executive Order calling for a Task Force on Travel and Competitiveness charged with developing a National Travel and Tourism Strategy to be implemented through the Tourism Policy Council. The goals set are for 100 million international visitors spending US$250 billion (EUR185 billion) a year by 2021. The five key areas identified for the United States to address were: • • • • •

destination promotion, enabling and enhancing travel and tourism to the United States, providing world-class customer services and visitor experiences, coordinating across government, conducting research and measuring results.

The establishment of Brand USA addresses the first of the areas identified in the President’s Executive order - details of Brand USA are given in Chapter 4; while improvements to visitor entry arrangements are meeting the second issue e.g. new visa adjudicator positions have been established in key markets like China with expanded visa processing facilities so that 90% of applicants are interviewed within three weeks of applying99. Brand USA is the Corporation for Travel Promotion of the United States, a public-private marketing entity, created in 2010 which began operations in May 2011. It works in close partnership with the travel industry to maximise the economic and social benefits of travel in communities around the country. Its purpose is to promote travel to the United States from all over the world, and its mission is to stimulate increased international visitation to the United States, thereby growing the country’s share of the global travel market. Through its call-to-action, Discover America, Brand USA seeks to encourage and inspire travellers to explore the United States. The mission of Brand USA is to encourage increased international visitation to the United States and to grow America’s share of the global travel market. In doing so, the aim is to bring millions of new international visitors who spend billions of dollars to the United States, creating tens of thousands of new American jobs.

99 OECD Tourism Trends and Policies 2014. March 2014. OECD. http://www. keepeek.com/Digital-Asset-Management/oecd/industry-and-services/oecd-tourismtrends-and-policies-2014/united-states_tour-2014- 41-en#page5 52

Marketing Strategies for Tourism Destinations. Target market: Canada

The Corporation for Travel Promotion/Brand USA is a non-profit Corporation that generates its income on a matching funding principle. Up until the end of fiscal year 2014/15 (i.e. ending September 2015), US$10 out of every US$14 dollars charged for Electronic System for Travel Authorisation paid by international travellers coming to the United States from countries under the Visa Waiver Programme is made available to the Corporation – up to US$100 million, provided matching funds are forthcoming from travel and tourism sources. For the ESTA income to be continued beyond fiscal 2014/15, reauthorisation will be required from the United States Congress100.

Brand USA income is generated on a matching funding basis

Brand USA’s financial budget for the 2014 fiscal year is based on projected operating revenue of US$125 million (EUR93 billion), made up of three components:

Brand USA’s financial budget for 2014 is US$125 million (EUR93 million)

1. Travel fund proceeds (ESTA) US$100 million (EUR74 million), 2. Cash contributions from partners US$20 million (EUR15 million), 3. Sponsorship revenue US$5 million (EUR3.7 million). The deployment of these funds is shown in Figure 18. The bulk of the budget is used for activities undertaken with the organisation’s partners, with other major share being for consumer advertising. Figure 18: United States Budget Summary, 2014 Fiscal Year Component Partnership Services

US$ million

% of budget

52.7

42

Consumer Advertising

35.0

28

Global Partnerships

19.3

16

Operations

12.2

10

Marketing Research

3.0

2

Communications and Public Policy Total

2.7

2

124.8

100

Source: Brand USA

Research from Oxford Economics commissioned by Brand USA found that its activity had already led to an additional 1.1 million visitors to the United States in 2013 generating additional spending of US$3.4 billion (EUR2.5 billion). This represents a return on investment ratio of 47:1, with US$47 (EUR35) returning to United States businesses for every dollar spent on the marketing budget of US$72 million (EUR53 million). The arrivals increase amounted to a 2.3% increase over the growth that would have occurred without Brand USA’s activities101.

A return-oninvestment ratio of 47:1 has been achieved

Alarmed by research findings that found widespread perceptions of the United States as an “arrogant, unwelcoming and predictable nation”, the Brand USA theme became the catalyst for creating the necessary shift to that of “a beckoning land of boundless possibilities”.

Brand USA theme addresses negative perceptions of country

100 OECD Tourism Trends and Policies 2014. March 2014. http://www.keepeek.com/ Digital-Asset-Management/oecd/industry-and-services/oecd-tourism-trends-andpolicies-2014/united-states_tour-2014- 41-en#page4 101 The Return on Investment of Brand USA Marketing. 2013 Fiscal Year Analysis. http://thebrandusa.com/~/media/Files/Key%20Dox/2014/ROI%20Results/Brand%20 USA%20ROI%20FY2013%20Final.pdf 53

Marketing Strategies for Tourism Destinations. Target market: Canada

The brand strategy adopted is: “The United States of Awesome Possibilities Welcomes Everyone” The strategies being adopted as set out in Brand USA’s Marketing Plan FY 2013102 are as follows: • • • •

• • •

• •

•

The partnership approach is the essence of Brand USA’s campaigns

The partnership approach is the essence of Brand USA’s campaigns. Its focus is on linking with United States agencies and firms to assist in their penetration of overseas markets, using the following programmes: • • • •

Co-operative programmes to increase penetration in overseas markets

Relevance: Increase relevance of Brand USA as the nation’s DMO, Leverage/Alignment: Leverage and align the industry’s international marketing efforts, Return on Investment: Invest in programmes and allocate resources on markets and initiatives that will maximise results, Growth: Attract partners and stakeholder participation/support to generate cash and in-kind contributions that will fund the work of the organisation to fulfil its mandate, Collaborate: Collaborate on the development of programs with government and industry stakeholders, Co-op: Develop co-op opportunities that add, create, or amplify value to stakeholders, Content: Develop unique content that inspires engagement and promotes travel to the United States and which can be repurposed by destinations and travel brands, Digital: Enhance the content, functionality, and user experience on all digital platforms, Excellence: Build and organise a results-driven team and a culture that promotes inclusion and diversity, operates with integrity, and recognises and rewards performance, Awareness: Increase awareness of Brand USA as both a high-value brand and premier travel destination.

• •

•

Discover America Global Inspiration Guide – language specific guides featuring sponsored content, DiscoverAmerica.com – global website with a variety of programmes designed to drive traffic and referrals, media planning and buying – Brand USA works with each partner to determine which programmes can be maximised to extend its reach, Brand USA in-country multi-channel programmes – customised for each country to coincide with Brand USA consumer marketing campaigns using the channels that are most effective in driving prospective travellers to partners, customised in-country marketing initiatives – partners plans developed through Brand USA’s international representative offices, media and travel trade outreach – through the Brand USA Travel Trade Network, assistance is provided to partners to enable them to target and connect with international travel media, USA Discovery Program – online training tool to equip source market industry to sell travel to the United States,

102 Brand USA FY2013 Marketing Plan. February 2013. http://www.thebrandusa. com/~/media/Files/Key%20Dox/2013/021513%20Brand%20USA%20 Marketing%20P lan_February%202013.pdf 54

Marketing Strategies for Tourism Destinations. Target market: Canada

•

•

international tradeshows and missions – partners can participate on United States Pavilions at Trade shows and on sales mission (e.g. to Hong Kong and China in Fiscal 2014, and China scheduled for October 2014), in-kind support: promotion and contributions – e.g. inclusion of the Brand USA logo on partner advertising, website etc; provision of ad space to Brand USA; contribute airfare, accommodations etc to support Brand USA events and activities.

Brand USA is executing a dynamic marketing programme that includes both consumer and travel trade marketing efforts. The international consumer campaign is comprised of television, out of home, and print advertising, public relations, and social media/digital efforts. The business to business marketing effort includes trade shows and sales missions, tour operator and travel agent outreach, and educational campaigns about United States entry policies. As part of the business to business effort, Brand USA is establishing one of the largest networks of international representation firms to support its efforts internationally.

Marketing programme that includes both consumer and travel trade marketing efforts

Brand USA undertakes a fully integrated, multi-channel campaign—comprised of TV advertising, out of home, print, and social media—plus direct in-market marketing through a global network of representation firms established in key international markets. Country-specific Facebook and Twitter pages showcase targeted promotions and the Discover America.com is an information portal for trip-planning.

DiscoverAmerica. com information portal for trip planning

The key message in the campaign is to “Discover this land, like never before.” The second component of this central message is to spread the USA’s welcome to repeat visitors around the world, inviting travellers to visit the country again “as if for the first time”. Brand USA’s formula in the deployment of its resources for the consumer campaign follows the principle of maximising results, based on the evaluation of six key factors: • • • • • •

volume – numbers of visitors from each source market, value - the total revenue value of tourism from that country, growth – year-on-year increase both in arrivals and revenue, costs – media costs in the source markets, ease of entry – assessment of ease/difficulty of procedures i.e. visa system, waiting time, political climate, systems and facilities influencing travel decisions - Brand USA representation and website presence, role and use of social media, strength of trade/media support.

In 2013, Brand USA’s campaign was active in nine of the markets that drive the highest level of visitation to, and spend in, the United States: • • • • • •

Australia, Brazil, Canada, China, Germany, India, 55

Marketing Strategies for Tourism Destinations. Target market: Canada

• • •

Japan, Mexico, the United Kingdom.

In total, these markets generate 75% of all international inbound visits to, and spend in, the United States equivalent to 50 million visitors and US$80 billion (EUR59 billion) in spending. Every 1% increase in visitation from these markets results in 500,000 more international travellers and US$800 million (EUR590 million) extra revenue for the United States103. Brand USA’s campaign active in nine markets

In-market representation is considered to be vital, as it permits Brand USA to gain important market specific intelligence and to begin to establish strong relationships with the travel trade. In addition, prior to the consumer campaign launch, social media and website presence in the native language of the market are established.

103 http://www.thebrandusa.com/ 56

Marketing Strategies for Tourism Destinations. Target market: Canada

United States Cities Tourism Sector Total visitation to the city of Los Angeles and the surrounding metropolitan area reached a record level in 2013 of over 42 million. Of these, over 36 million were domestic travellers and 6 million were from foreign countries. Domestic arrivals rose by 2% in 2013 following a growth of 2.7% in 2012. Total international visitation set a record with 6.2 million visitors, a 2.6% percent increase over 2012. According to LATCB officials, tourists spent about US$16.5 billion (EUR12.7 billion), generated US$30.5 billion (EUR23.5 billion) in economic benefit, and supported 340,000 jobs in Los Angeles in 2012104. Chinese visitors are bigger spenders than visitors from all other international origins. According to federal statistics, Chinese tourists spend an average of US$2,652 (EUR1,960) on each visit compared to the average of US$1,209 (EUR890) from all other foreign countries105. Tourism is one of the key sectors in the development of the economy of the City and County of Los Angeles. Two of the objectives stated in the Los Angeles County Economic Development Corporation‘s Strategic Plan for Economic Development 2010-2014106 are: •

•

Tourism is one of the key sectors in the development of the economy of LA

create employment and business opportunities for local firms by supporting the development of international trade, tourism, and by promoting Los Angeles County as a destination for foreign direct investment, encourage and expand cultural and artistic amenities that celebrate our diversity and attract local and global patrons.

The LATCB is a private, non-profit business association whose primary mission is to market and promote Los Angeles as the premier site for leisure travel, meetings and conventions as the City’s official tourism marketing organisation. It has a variety of public and private representation – from hotels, attractions, airlines, airports and TV channels. The LATCB operates a structured partnership scheme with two tiers: Promotional Partners (Amex, Expedia, hotels.com, LA Live, Universal); and Strategic Partners (American Airlines, Amex, Amtrak, La Live, Metro, Universal, Wells Fargo).

104 42.2.million people visited Los Angeles in 2013. http://www.kcet.org/living/travel/ travel-news/422-million-people-visited-los-angeles-in-2013.html 105 http://hmghotelsblog.com/2013/05/21/los-angeles-tourism-2013-hospitalityindustry-statistics-new-construction/ 106 Los Angeles County Strategic Plan for Economic Development 2010-2014 http:// laedc.org/documents/LACountyStrategicPlanforED.pdf 57

LATCB is a private, non-profit business association

Marketing Strategies for Tourism Destinations. Target market: Canada

The mission of LATCB is to advance the prosperity of LA’s visitor economy

The mission of the LATCB is to advance the prosperity of L.A.’s visitor economy and the livelihoods that depend on it. This is achieved by sales and marketing to the principal segments of both the domestic and international travel trade and consumer. In particular, L.A. Tourism represents the L.A. destination to the meetings and convention industry nationwide; the international travel trade and traveller; the cruise passenger and cruise lines; the domestic leisure traveller; as well as the worldwide travel media107. Total funding for the financial year 2012-2013 was US$32.9million (EUR25 million), sourced from the City Tourism Occupancy Tax 39%, Tourism Marketing Tax 41%, Co-op & Sponsorships 9%, Los Angeles Airports 8%, and Membership Fees 4%108.

Marketing spend was US$22.7 million

Marketing spend in the year ending June 2013 was US$22.7million (EUR17.2 million)109. Brand Overview details given at the Los Angeles Tourism Market Outlook Forum110: Our Position:  Endless Entertainment The identity of Los Angeles - it’s interesting to look at what we are by looking at what we’re not: Los Angeles is NOT: • • • • • • •

one thing, playing it safe, nostalgia, monuments, standing still, one moment in time, Europe.

The focus for LATCB: • • • •

domestic travel is 85% of the visitors, however international travellers spend 92% more money, last year, LATCB focussed on top six feeder markets, which is 40% of total visitors, discoverlosangeles.com has been relaunched, dineLA grew into the largest restaurant week in America.

107 Los Angeles Tourism and Convention Board. http://www.discoverlosangeles.com/ tourism 108 LATCB Annual Report FY 12-13 http://www.discoverlosangeles.com/content/annualreport-fy-12-13 109 Ibid 110 Los Angeles Tourism Market Outlook Forum http://www.heilbrice.com/los-angelestourism-market-outlook-forum-don-skeoch-cmo-latcb/ 58

Marketing Strategies for Tourism Destinations. Target market: Canada

For 2014: • •

• •

a tighter focus on the international markets that matter, focussing on China, domestic markets, • continue “You think you know me”, • increase leisure opportunities with a focus on on-line travel agencies, • capitalise earned media opportunities, the “Culture of Tourism” for LA residents, research into tourism to drive strategic planning.

Measures of Success for LATCB: • •

increase room nights, increase web site visitation.

Target Markets: • • •

entertainment seekers across the socio-demographic spectrum based on the positioning of endless entertainment, arts and culture, including the culinary scene, arts and culture, LGBT (lesbian, gay, bisexual, transsexual).

The LATCB Brand Marketing team globally promotes the endless entertainment experience inherent in Los Angeles, highlighting its unique dining, shopping, entertainment and cultural offerings, and promoting stays at Tourism Marketing District (TMD) and member hotels. LATCB brand advertising and marketing programmes were supported by promotional partners (e.g. American Express, Universal Studios HollywoodSM, L.A. LIVE, Expedia.com and Hotels.com), and supported through strong earned media (Public Relations) and owned media (Social Media) tactics111.

The LATCB Brand Marketing team globally promotes the endless entertainment experience

In February 2013, LATCB launched its new domestic spring advertising campaign through a series of three TV commercials, titled “You Think You Know Me,” that ran in key domestic markets with a complementary digital campaign. The campaign featured the breadth and depth of activity LA, supported by LA-based celebrities who made cameos in the spots to illustrate that you never know what celebrity you might have a “chance encounter” with when in LA112.

New domestic advertising campaign was supported by LA based celebrities

The campaign was supported by national and key market publicity and included a hotel promotion, in conjunction with Expedia.com, hotels.com and Orbitz.com to drive hotel room nights. Its results included113: • • • • •

more than 60,000 room nights, gross bookings of nearly US$10.5 million (EUR7.8 million), overall room night increase results up to 61% in participating hotels, more than US$11 million (EUR8.1 million) in Earned Media, 6% increase in the intent to visit Los Angeles.

111 LATCB Annual Report FY 12-13 http://www.discoverlosangeles.com/content/annualreport-fy-12-13 112 Ibid 113 Ibid 59

Marketing Strategies for Tourism Destinations. Target market: Canada

Promotions - (by type, joint with private sector) included114: • •

Revamped website grew year-on-year traffic by 42%

dineLA Restaurant Week, with partner American Express, resulted in US$31 million in spending, Arts and Culture campaign, generated more than 26,000 hotel room nights, over 60 million earned and paid media impressions, and US$10.2 million (EUR7.6 million) in direct visitor spending.

DiscoverLosAngeles.com revamped website launched autumn 2012, grew yearon-year traffic by 42%. Features include: tips from local celebrities; map-based neighourhood guides; experience builder for custom itineraries; events calendar; 3D virtual tours of convention centre and LA Live; special offers. Social media: Facebook - first United States city tourist board to reach 1 million followers; Twitter - 54,000 followers; YouTube - 758,000 views; Pinterest - 35,000 followers, 54 boards, 1,515 pins. LATCB launched a year-long national LGBT advertising campaign with an emphasis on Southern California’s near-perfect weather and depth of cultural offerings, the top two reasons LGBT travellers choose a destination to visit. The campaign was supported with a robust microsite and a group press trip for top national LGBT media outlets115. Representation throughout the United States, marketing offices in Tokyo, London and Beijing, and some representation in Germany, Australia, Republic of Korea.

Greater Miami attracted 14.2 million overnight visitors in 2013 The domestic: international market split was even in 2013

Greater Miami and the Beaches attracted 14.2 million overnight visitors in 2013116, a rise of over 2% over the level of 2012. The domestic:international split was even in 2013, with 7.1 million from each source. Between 2009 and 2013, domestic visits increased by 3% a year, while the growth in overseas visitors grew at the faster annual rate of 5.7%, producing an overall rise in overnight visitation to the area of 4.5% over the period. The top domestic markets are: New York (one-in-four domestic visits in 2013), Chicago (6%), Philadephia (5.6%), Boston (4.3%), and Atlanta (3.9%). Neighbouring Mexico and Canada generate the largest numbers of international visitors in Los Angeles, at 1.7 million and 0.7 million respectively in 2012. China, however, is the biggest driver of overseas visitation recording rises in arrivals of 36% in 2012 followed by a further increase of more than 21% in 2013 with arrivals rising to 0.55 million. In 2013, visitors generated US$22.8 billion (EUR16.9 billion) in direct expenditures, though applying the conventional industry multiplier of 1.5, the direct and indirect impact of expenditures exceed US$34.2 billion (EUR25.3 billion) to the economy of Greater Miami, with around 30% of direct spending attributable to domestic visitors117. The average daily spending of domestic visitors in 2013 was US$239 (EUR177) which, over the average stay in the area of 4.63 nights, produces a total level of spending per visit made by United States residents of US$1,106 (EUR819)118. 114 Ibid 115 Ibid 116 Greater Miami and the Beaches 2013 Visitor Industry Overview http://www. miamiandbeaches.com/~/media/files/gmcvb/partners/research%20statistics/ annual_report_2013 117 Ibid 118 Ibid 60

Marketing Strategies for Tourism Destinations. Target market: Canada

Leisure and hospitality provided employment for 126,200 in Miami-Dade County in 2013, almost one-in-every eight persons employed outside the agricultural sector119. The City of Miami Tourism, Culture and Economic Development Department was established to centralise and unify the City’s tourism and cultural initiatives and programmes. The Department supports, maintains and develops programmes, which generate, satisfy and enhance the City’s cultural institutions and infrastructure, as well as the City’s cultural and tourist industries, while striving to provide year-round tourism activity that enhances both the visitor’s experience and the quality of life of the City’s residents120.  The Department also partners with the Miami Beach Visitor and Convention Authority (VCA) and the Greater Miami Convention and Visitors Bureau (GMCVB) to market and promote the City of Miami Beach as a destination. The GMCVB is a private, not-for-profit sales and marketing organisation. It is a private-public partnership with more than 1,000 private business members and four local governments. It is built on its relationships with private sector operators. Strategic partnerships are with American Airlines, American Express TRS Co. Inc., Bank of America, KPMG LLP, and Norwegian Cruise Line Ltd. 42 corporate sponsors are listed in the Miami Vacation Planner. The GMCVB has a focus on partnerships with airlines. The mission of the City of Miami’s Tourism, Culture and Economic Development Department is enriching the economic and cultural fabric of Miami Beach through the support of tourism, production, and entertainment by fostering events and cultural arts programming121.

GMCVB is a privatepublic partnership with more than 1,000 private business members

Mission is to enrich the economic and cultural fabric of Miami Beach

The mission of the GMCVB is to attract, encourage and induce all persons and organisations to visit Greater Miami and its Beaches for conventions, business and pleasure. To this end, it promotes all segments of the community as a preferred destination; and supports and encourages actions and programmes that enhance the desirability and attractiveness of Greater Miami and its Beaches for its visitors. The GMCVB is allocated 13% of tourism taxes US$24.4 million (EUR18.5 million) in 2012/13, with its total budget estimated at US$26.0 million (EUR19.7 million). The current brand positioning was born both of the necessity for evolution, and the fundamental need to become not just an experiential brand, but a relevant, participatory, brand122.

119 Greater Miami and the Beaches 2013 Visitor Industry Overview http://www. miamiandbeaches.com/~/media/files/gmcvb/partners/research%20statistics/ annual_report_2013 120 Tourism, Culture and Economic Development. http://www.miamibeachfl.gov/tcd/ 121 Ibid 122 Greater Miami Convention and Visitors Bureau Marketing Plan 2013/2014 http://www.miamiandbeaches.com/~/media/files/gmcvb/guides%20-%20pdfs/13-14mktng-plan 61

GMCVB’s total budget in 2012/2013 is estimated at US$26 million

Marketing Strategies for Tourism Destinations. Target market: Canada

The stated goals of GMCVB are to: •

• • • •

•

Objective is to develop a marketing programme that reflects Miami’s unique destination experience

The priority target is the sophisticated, well-educated consumer

implement strategic brand and tactical consumer advertising programmes, with an emphasis on integrated media programmes, outdoor media, and digital video, increase the performance and efficiency of the GMCVB’s co-operative advertising programmes to increase partner bookings, continue to evolve the GMCVB’s established digital properties, and test innovative platforms, engage and remarket to visitors and locals via mobile, digital and targeted social marketing, reinforce relationships through development of digital marketing resources that support key business-to-business audiences: partners, travel agents, tour operators and meeting planners, expand use of targeted marketing and analytics tools to optimise marketing programmes and identify opportunities for innovation.

A key objective is to develop an integrated marketing programme that reflects Miami’s unique destination experience in order to attract and engage visitors and local residents, and create affinity among our members and distribution partners. The primary target customer for Greater Miami is a sophisticated, well-educated consumer looking for the opportunity to experience Miami’s wide range of activities, • • • • •

ages 25 to 64, highly educated, above-average income, active lifestyle, summer and shoulder season travellers.

In the domestic market, the primary geographic targets include Chicago, Boston, Philadelphia, Washington, DC and Atlanta, with a heavy emphasis on the metropolitan New York market. New York is attracting international tourists from its traditionally strong markets in North America (i.e. Canada, Mexico) and Europe as well as from developing markets in Asia and Latin America, where it has expanded its tourism marketing efforts. Its leading international markets in 2012 were: Canada 1.1 million visitors, United Kingdom 1.0 million, Brazil 0.8 million, France 0.7 million, Germany and Australia both 0.6 million, China just over half a million. Marketing programmes are developed for separate segments

Marketing programmes are developed for separate segments i.e. Cultural Tourism & LGBT, Heritage Tourism, Boutique & Lifestyle Hotels / Film, Fashion & Entertainment; while campaigns are undertaken targeted at media, travel industry, convention sales and partnerships development.

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Marketing Strategies for Tourism Destinations. Target market: Canada

Goals - Advertising and Digital Marketing: to increase overnight visitors and attendant visitor resort, sales, food & beverage taxes, and jobs through optimum occupancy and highest possible room rates. This goal is supported by developing and implementing strategies and tactics that continue to develop and implement a brand image while targeting high-value consumers about the diversity of options and interests in fulfilling the visitor experience. There is a correlating priority goal of developing “year-round” tourism, taking advantage of not only the destination’s peak periods of success but continuing to develop and expand the shoulder and summer periods as well. •

•

•

•

•

Strategy 1: implement an Integrated Marketing Programme that reflects Miami’s unique destination experience in order to attract and engage visitors, local residents and meeting planners, and create affinity among our members and distribution partners, Strategy 2: continue to develop and implement programmes that convey Miami’s cosmopolitan, chic brand image. Educate high-value consumers about the diversity of the destination, Strategy 3: understand that branding or brand identity is the total sum of the words, images and associations that form the customer’s perception of the destination. The brand, therefore, is the conveyed personality of the visitor’s experience. It is the promise, the link, or the bridge between the customer and the visitor product, Strategy 4: recognise that the Marketing & Tourism Programme guides the development of the GMCVB’s array of communications efforts including advertising, direct mail fulfilment and promotions, website positioning, media publicity programs, exhibits, etc, Strategy 5: continue to support Miami’s tropical/cosmopolitan image, while further expanding the brand positioning with influential people, trendsetters and others who will present the status of a Miami vacation to potential visitors.

Goal: Continue to enhance and expand the GMCVB’s website and digital marketing programmes as outreach, fulfilment and sales and conversion tools. The GMCVB’s website should be a “central meeting place” for all inquiries about a vacation to Greater Miami and the Beaches. •

•

There is a priority to develop “year-round” tourism

Enhance and expand GMCVB’s website and digital marketing

Strategy 1: continue to update the GMCVB’s digital web properties in order to stimulate consideration of Miami as a vacation option, and increase visitation and usage of GMCVB member offerings, Strategy 2: enhance and expand digital marketing programmes in order to leverage the online medium’s reach, engagement and conversion potential.

The GMCVB has an extensive presence across all major social media channels: Facebook - 150,000 likes; Twitter – 89,000 followers; YouTube - most views on a video is 45,000; Pinterest - 1,932 followers, 21 boards; Flickr - hosting images of trade events, not consumer focussed; and Instagram - consumer facing, updating every couple of days.

63

GMCVB has an extensive presence across all major social media channels

Marketing Strategies for Tourism Destinations. Target market: Canada

Goals - Cultural Tourism and LGBT: •

•

•

•

•

•

•

•

• • •

Integration of heritage tourism into all programmes

work with the GMCVB Community Relations Committee to help secure state backing for a tour guide ordinance for Miami-Dade County and expand Heritage Tourism in areas such as Little Havana, Overtown, Little Haiti and others, in addition to Art Deco, promote the architectural aspects in the area’s architectural landmarks, and showcase Miami’s heritage by highlighting Village West, Little Havana, Little Haiti and Virginia Key including Miami Marine Stadium, implement a Cultural Tourism and Heritage travel programme including hosting and facilitating familiarisation tours, industry presentations and collateral support, further ongoing support of major festivals and events, supplemented by a targeted advertising effort that will showcase the Miami brand and the signature LGBT events in the community, with the support of City of Miami Beach officials, further promote the highly successful Gay Pride Miami Beach, and promote “Orgullo” — the newest Gay & Lesbian Hispanic Heritage Pride Event in Miami Beach, implement a targeted LGBT Travel programme including participation in trade shows, conferences and special events in partnership with the Miami-Dade Gay & Lesbian Chamber of Commerce and other key stakeholders, continue to strengthen the strategic alliance with the Miami Design Preservation League (MDPL) to help showcase and promote Miami’s Boutique & Lifestyle Hotels and the Art Deco District, assist in providing Gay and Lesbian sensitivity training for tourism industry employees and help the Miami-Dade Gay & Lesbian Chamber of Commerce develop its Flamingo Hospitality Programme, as a board member, continue to work with the Miami-Dade Gay & Lesbian Chamber of Commerce and its tourism/travel programmes, continue the expansion of Miami Museum Month to include more Miami museums and highlight Miami’s museum product, attract new conferences to the destination: The Sustainable & Authentic Florida Conference and DANCE/USA, and work for the success of Out Games 2017, the largest LGBT sporting event in the world.

Goals - Heritage Tourism: • •

• • • • •

integrate Heritage Tourism into all 10 monthly Miami Temptations Programmes, attend national tradeshows to obtain the latest information about Heritage Tourism and to learn how to develop strategies to market to the Cultural & Heritage Traveller, develop a new Heritage Neighbourhood/Cultural Guide that will showcase the diverse heritage neighbourhoods that Miami has to offer, develop relationships with community partners to expand the GMCVB’s role in each of the heritage neighbourhoods, distribute the Heritage Guide year-round through various visitors centres and relevant conferences, partner with Visitor Centres for Heritage Tourism integration, award partnership grants to small businesses in additional heritage neighbourhoods, 64

Marketing Strategies for Tourism Destinations. Target market: Canada

• • •

•

promote heritage and cultural related events via the “Miami Insider” e-newsletter and social media posts, expand the heritage neighbourhood sections within the new MiamiandBeaches.com, work with the Media Relations Division to develop press trips such as the “Highway to Heritage” Press Trip and the African American/Black Media Press Trip, continue to pitch the multicultural assets of the community and its heritage neighbourhoods to media from all markets, domestic and international.

Goals - Boutique & Lifestyle Hotels / Film - Fashion & Entertainment: •

•

•

• •

• •

•

•

•

•

continue to pitch the multicultural assets of the community and its heritage neighbourhoods to media from all markets, domestic and international, further expand the Boutique & Lifestyle Hotels/Film, Fashion & Entertainment programme, through specialty trade, partnerships and consumer lifestyle, focussing on film, fashion, entertainment, music, production, travel agents, design events, lifestyle consumers and the LGBT market, both nationally and internationally, work closely with several marketing divisions across the GMCVB to further expand a dedicated social and traditional media strategy for Boutique & Lifestyle Hotels, design and implement a Boutique & Lifestyle Hotels/Film, Fashion & Entertainment media plan to support sales and marketing efforts, attend both national and international trade shows, consumer shows and VIP functions to generate leads with travel agents and lifestyle/ urban consumers with primary interest in Miami Boutique & Lifestyle Hotels, develop sponsorships/partnerships and new opportunities with appropriate brands at several lifestyle events, partner with the Miami-Dade Office of Film & Entertainment, the City of Miami Beach Department of Tourism and Cultural Development and the City of Miami Mayor’s Office of Film, Arts & Entertainment to support the production industry, promote the destination to the local production market and key decision makers in the industry, as well as location scouts at the national and international levels, via the Miami in the Spotlight book, support Boutique & Lifestyle Hotels Press Trips, in addition to targeting lifestyle publications with continued emphasis on Miami Boutique & Lifestyle Hotels, develop partnerships at the national and international levels with events, festivals, and conferences specifically catering to the fashion, music, film, production, commercial, and design and architecture industries, further expand the alliance with the Miami Design Preservation League (MDPL) to help showcase and promote the Boutique & Lifestyle Hotels and the Art Deco District.

65

Marketing Strategies for Tourism Destinations. Target market: Canada

Influence press and consumer perceptions about Miami

Goals - Media Relations and Programmes: Influence press and consumer perceptions about Miami as an art-centric, heritage-rich, tropical and cosmopolitan destination of choice to the high-value customer through: placement of editorial stories in a variety of consumer and travel media outlets in core markets; and through experiential promotional consumer experiences and stunts. • • •

•

Increase meeting business

Strategy 1: expand our international Public Relations network, Strategy 2: create stronger and more relevant editorial calendars as dictated by market needs and nuances, Strategy 3: reach out to key consumer travel editors, contributing editors and freelance writers who represent major publications within our target markets, to reinforce the brand, Strategy 4: host production crews for strategic broadcast opportunities.

Goal: Promote Miami as the preferred venue for meetings, trade shows and public shows to increase meeting business. •

•

Strategy 1: direct a Press Release Programme promoting meeting facilities, development updates and new tourism products to targeted meeting planner publications, Strategy 2: provide advertorial content to trade publications.

Goal: Create experiential consumer marketing opportunities in key markets that resonate and encourage engagement with the Boutique & Lifestyle Hotel brand as well as the Miami and Beaches brand. •

Influence and educate travel planners

Strategy: continue to promote the Boutique & Lifestyle Hotel brand via a road tour and leverage strategic brand partnerships in order to benefit from non-competing brand equity. In addition, the GMCVB will focus on “owning” the event and having a larger share of voice through stronger social media integration.

Goal - Travel Industry Sales: Influence and educate travel planners and travel industry decision makers about Greater Miami as the destination of choice for their clients and successfully meet their sales objectives by providing comprehensive support. • • •

•

Strategy 1: expand the scope of services in the GMCVB’s representation network, Strategy 2: continue to strengthen partnerships with airlines, cruise lines and tour operators globally, Strategy 3: design and direct an annual International and Domestic Travel Industry Sales Programme which will interact with and support key travel planners and influencers in key and emerging markets, Strategy 4: create supporting programmes designed to target a variety of High-Value Customers (leisure and international groups) based on creating consumer and trade awareness and demand.

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Marketing Strategies for Tourism Destinations. Target market: Canada

Goal - Convention Sales and Services: Maintain long-term bookings of conventions and trade shows at the Miami Beach Convention Center (MBCC) and increase hotel meetings in 2014 and beyond. • •

•

•

Strategy 1: generate Miami Beach Convention Center leads by targeting cities in select geographic areas and businesses in key categories, Strategy 2: continue to generate excitement about new city developments by representing the destination at major trade shows and meetings, and by continuing the convention destination familiarisation review programme, sponsorships at industry functions, conducting small dinner destination events and taking showcase events on the road to tell the destination’s story with the new developments, Strategy 3: continue to target major multi-management and trade show companies which represent a significant number of organisations that can generate new business for the Convention Center and individual hotel properties, Strategy 4: advertise in key trade publications to position Greater Miami favourably, highlighting new developments that will draw attendees for trade shows, smaller meetings and conventions.

Goal: Continue to develop short-term business opportunities targeting corporate and association meeting planners with short-term meeting requirements. •

Strategy: maintain the staff in our sales department, with managers handling both small and large groups for continuity of service to the customer and best usage of sales staff.

Maintain longterm bookings of conventions and trade shows

Develop shortterm opportunities targeting corporate and association meeting planners

Goal: Maintain and confirm a defined number of annual long-term Miami Beach Convention Center bookings of conventions to generate a defined number of room nights for our hotel community. •

Strategy: maintain and strengthen relationships with annual trade show clients that have made the Miami Beach Convention Center their home, by soliciting their input to identify industry-wide trends and suggestions for increasing Miami’s attractiveness as a convention destination.

Goal: Produce new business through the Washington, DC remote office. •

•

Strategy 1: Washington, DC sales office to accomplish sales objectives through personal sales calls and telephone sales efforts, and to conduct extensive networking at Washington, DC industry events, Strategy 2: conduct small client dinners for 10-12 association and trade show clients in order to update them on hospitality developments in Greater Miami.

Goal: The Convention Sales Department will continue to develop strong communication with the destination’s hotels and other key business partners. •

Strategy: continue roundtable meetings with key hotels as well as other business partners to share ideas and discuss marketing opportunities, thereby keeping key business partners informed of the Bureau’s responsibilities to the community while discussing current and future goals.

67

Produce new business through the Washington, DC remote office

Develop strong communications with hotels and other business partners

Marketing Strategies for Tourism Destinations. Target market: Canada

Grow a base of GMCVB members/ partners to provide a base of services and marketing tools

Goal - Partnership Development: Establish and continue to grow a core base of GMCVB members/partners to provide visitors and convention attendees with a broad base of services and marketing tools. •

•

•

•

•

Strategy 1: create more actual and perceived value for members, particularly in the benefit training area. Continue to increase the quality and level of participation in the GMCVB through social media and member-to-member interaction with personalised outreach from the sales and support team for opportunities for members to showcase their brands and services, Strategy 2: pursue more, and maintain all current, Corporate Partner level members, as well as expand general membership by targeting previously untapped companies. Maximise Corporate Partner membership retention through personalised communications and invitations throughout the year, Strategy 3: continue to grow the visibility of the Medical Tourism Programme. Create more value and buy-in by existing partners. Increase the number of partners, Strategy 4: work closely with the GMCVB Temptations Programme team (i.e. cruising, romance, shopping, sports, museums, film, spa – August, Miami Spice – September, attractions. Miami Live events) to showcase the benefits of participation to new target members and existing partners while increasing the quality and depth of programmes, Strategy 5: expand the Miami Begins with Me Customer Service initiative, with re-energised training at MIA, PortMiami and with the Taxicab Advisory Group, and launch a new public awareness campaign to engage consumers to value the importance of tourism and always lend a helping hand or share a friendly smile with visitors.

The GMCVB maintains representation in California, New York, Washington DC, and Miami. It also runs 2 offices in Canada; 25 offices throughout Central America, South America, and the Caribbean; 10 throughout Europe, and has representation in Russia, India, and China. New York attracted over 54 million visitors in 2013

New York City attracted over 54 million visitors in 2013, maintaining the growth pattern since the formation in 2006 of the city’s marketing organisation, New York City & Co. Between 2006 and 2013, visitor numbers rose from under 44 million at an average annual rate of over 3%, despite a fall in 2009, since when growth has been at 4.5% a year. Domestic visitors accounted for just under 80% of the total in 2013, a 3 percentage point fall compared with 2006, as a faster growth in international tourist numbers than in domestic visits was recorded between 2006 and 2013123. New York is attracting international tourists from its traditionally strong markets in North America (i.e. Canada, Mexico) and Europe as well as from developing markets in Asia and Latin America, where it has expanded its tourism marketing efforts. Its leading international markets in 2012 were: Canada 1.1 million visitors, United Kingdom 1.0 million, Brazil 0.8 million, France 0.7 million, Germany and Australia both 0.6 million, China just over half a million.

123 NYC & Co 2013 Annual Summary http://www.nycgo.com/assets/files/ pdf/2013annualsummary.pdf 68

Marketing Strategies for Tourism Destinations. Target market: Canada

Since 2006, the City’s share of inbound overseas arrivals in the United States has increased from 28% to 33%. Each share point increase has generated an additional US$750 million (EUR570 million, taking the average exchange rate over the period) in direct spending and more than US$1 billion (EUR750 million yearly average) in economic impact annually. In total, since 2006 the economic impact of tourism has grown 42% to reach US$55.3 billion (EUR41 billion) in 2012124, and an estimated US$60 million (over EUR43 billion) in 2013.

The City’s share of inbound overseas arrivals in the US has increased to 33%

Direct tourist spending was just under US$39 billion (nearly EUR29 billion) across the City’s five boroughs in 2013, having grown from US$26 billion (EUR 20.5 billion) in 2006, at an average annual rate of 5.8% (in US dollar terms)125. Leisure and hospitality provided employment for over 350,000 in the five boroughs of New York City in 2013126. The tourism sector is strongly supported by the New York Mayor’s office and the economic development departments of the five boroughs. It is seen as a key component in the City’s economy:

Leisure and hospitality provided employment for over 350,000

“Diversifying our economy and making tourism a focus has resulted in record after record for our tourism industry, including employment, which continues to show growth and strength,” Deputy for Economic Development Mayor Robert K. Steel127. The various City government departments – City Planning, Economic Development, Small Business Services, Environmental Protection – each have policies and programmes to support the growth of tourism and recreation. As an example, The Department of Environmental Protection opened over 5,900 acres of Cityowned land across the watersheds for the first time for public recreation in 2013; and established new recreation opportunities on lands and reservoirs that were already open. It worked with its partners to: • • •

establish new hiking trails, create a rental boating programme at four reservoirs in the Catskills, allow state-licensed outdoor guides to lead hiking, fishing, and other tours on water supply lands for the first time128.

124 New York City Tourism: a Model for Success http://www.nycgo.com/assets/files/pdf/ New_York_City_Tourism_A_Model_for_Success_NYC_and_Company_2013.pdf 125 NYC & Co 2013 Annual Summary http://www.nycgo.com/assets/files/ pdf/2013annualsummary.pdf; NYC Statistics http://www.nycgo.com/articles/nycstatistics-page 126 Ibid 127 Mayor Bloomberg Announces New York City Will Reach a Record 54.3 Million Visitors in 2013 – Increase of Nearly 20 Million Additional Annual Visitors from 2002 http://www1.nyc.gov/office-of-the-mayor/news/393-13/mayor-bloomberg-new-yorkcity-will-reach-record-54-3-million-visitors-2013-#/0 128 Department of Environmental Protection Opened Nearly 6,000 Acres of Watershed Land for Recreation in 2013 and Added New Programs to Support the Catskills Tourism Industry http://www.nyc.gov/html/dep/html/press_releases/14-003pr.shtml#. VAm3ORbp9i0 69

Various government departments have policies to support the growth of tourism and recreation

Marketing Strategies for Tourism Destinations. Target market: Canada

New York City & Company (NYC & Co) is a public-private, membership-based organisation. It was formed in 2006, when the private sector and public sectors merged to create a single full service entity. Additionally, NYC and Company Foundation is a charitable and educational organisation that supports tourism to NYC by promoting arts, cultures and sports. There are 2,000 businesses on the membership roster

There are 2,000 businesses on the membership roster including hotels, restaurants, retailers, entertainment venues and cultural attractions in the hospitality and tourism industry. These sectors are split into 6 board committees: • • • • • •

NYC & Co is predicated entirely on its partnerships

arts & culture, dining, retail, trade shows, hotels, Broadway, entertainment & attractions.

NYC & Co is predicated entirely on its partnerships, which are at the core of every activity. The company has a department specifically for generating corporate partnerships and sponsorships http://www.nycandcompany.org/partnerships. This department offers partners access to services and media assets. Custom packages are developed that allow partners to avail of New York City assets, whether as part of a co-branded campaign, or using NYC & Co media for their own purposes. NYC & Co media include outdoor spaces (such as bus shelter advertising space, street pole banners), or space on NYC media group TV channel which reaches 7.3m households across 5 cable networks. All of the major campaigns have a supporting partner. These include Amex, OpenTable, Sony, Travelocity, Time Out New York, Syfy channel, QVC. There are also cross-promotion activities with partner cities such as London, Sao Paulo, Madrid and Seoul. Promotions are supported by deals with airline carriers.

Mission is to maximise travel and tourism, build economic prosperity, and spread the dynamic image of New York

NYC & Co’s budget in 2013 was US$36.8 million

The NYC & Co website states its mission as follows: NYC & Company is New York City’s official marketing, tourism and partnership organisation. Our mission is to maximise travel and tourism opportunities throughout the five boroughs, build economic prosperity and spread the dynamic image of New York City around the world. With an array of major communication channels— including nycgo.com, our digital kiosks, Official NYC Information Centers and publications—NYC & Company becomes the ultimate resource for visitors and residents to find everything they need about what to do and see in New York City129. NYC & Co’s budget in 2013 was US$36.8 million (EUR27 million), generated through eight different sources. Its City funds decreased by US$1 million (EUR0.7 million), or 7%, as a result of City budget reductions. The Company’s other sources of revenue increased by US$3.1 million (EUR2.2 million), or 15%, due primarily to its work with the National Football League to facilitate the City’s co-hosting of Super Bowl XLVIII. Increases were also realised in website advertising revenue and ticket sales as a result of traffic increases and improved site functionality, and in “Other Income” due to increased attraction ticket sales at the Company’s expanded Official NYC Information Center platform. 129 NYC The Official Guide http://www.nycgo.com/about-us/ 70

Marketing Strategies for Tourism Destinations. Target market: Canada

Figure 21: NYC & Co’s Revenues, 2012 and 2013 Source of Funds

2012

2013

S

%

S

%

New York City Funds

13.5

38.9

12.5

34.0

Sponsorships

6.9

19.9

8.8

23.9

Member Dues

4.5

13.0

4.7

12.8

Publications

2.3

6.6

2.5

6.8

Website

2.0

5.8

2.4

6.5

Other Income

3.3

9.5

4.2

11.4

Licensing

1.4

4.0

1.1

3.0

Other Grants

0.8

2.3

0.6

1.6

Total

34.7

100.0

36.8

100.0

Source: NYC & Co 2013 Annual Summary

New York City is fortunate in having nearly 100% global brand recognition but to reach 55m in 2015 they will be focussing on: • • • •

•

targeting emerging markets with large growth potential i.e. Brazil, India, China, targeting the youth, families, seniors and LGBT (lesbian, gay, bisexual, transgender) segments, five borough promotional strategy, aimed at ‘intrepid’ international traveller, repeat visitor, and local audience, power of culture. Since New York City’s cultural institutions draw almost half of the visitors to the City, supporting and promoting cultural assets is seen as key, heavy digital focus - all tools developed to emphasise core messages, while removing any barriers to booking.

Market positioning varies according to geographic market, with a focus on the City’s icons to entice first-time visitors from Asian and other growth markets, and the encouragement of repeat visitation from Europe using the slogan “live like a local”. NYC & Company, New York City’s marketing, tourism and partnership organisation, and 12 of its tourism industry member companies undertook a major trans-Canada sales promotion in June 2014 130. Member companies participating in the mission included hotels, attractions, retail, and cultural institutions and organisations offering diverse experiences. Canada is New York City’s number one international market, generating an estimated 1,100,000 visitors in 2013. A central theme for the mission was: “There is always a new experience awaiting Canadian visitors in New York City.”

130 NYC & Company travels across Canada on three-city sales mission to promote New York City to number one international market. http://www.nycandcompany.org/ press/nyc-company-travels-across-canada-on-three-city-sales-mission-to-promotene 71

New York City has nearly 100% global brand recognition

Market positioning varies according to geographic market

Marketing Strategies for Tourism Destinations. Target market: Canada

In the ‘Model for Success’ document131, the target groups are explained: •

•

•

•

•

NYC & Co develops a wide array of initiatives and promotional platforms

Neighbourhood tourism. Strong emphasis in moving visitors from Manhattan out to the 5 boroughs. Campaign called Neighborhood X Neighborhood launched in 2013, supporting local businesses and distributing tourism throughout the area. Repeat visitors are a strong component of this, having already seen the traditional spots, and with some previous knowledge, they are attracted to lesser known areas, Lesbian / Gay / Bisexual / Transexual (LGBT). Many products and campaigns developed to market to this audience. The Rainbow Pilgrimage celebrates the 40th anniversary of modern gay-rights movement. Following the legalisation of gay marriage in the city, NYC I Do focuses on LGBT looking to marry or honeymoon in the city, Youth. To attract the Youth Traveller, they launched NYC