Canadian tourism: an industry in crisis

In a letter to its members, Hotel Association of Canada (HAC) president, Tony Pollard says that “plain and simple,” Canada’s tourism industry is in crisis. HAC’s president points out that funding for the Canadian Tourism Commission (CTC) has declined from $100 million in 2001 to $72 million in 2012 and will drop further in 2013 to $58.5 million. Observes Pollard: “The cuts come when Canada faces increasing competition from international competitors including the new $200 million [Brand USA] program – $20 million of which is being spent in Canada.” The result, says HAC’s boss is that a decade ago, 35% of tourism revenue in Canada came from the international market; today it is down to only 20%. And due to its lack of funding, the CTC has been forced to exit many markets including Italy, the Netherlands, Spain, Switzerland and major cuts in Japan and the United States. “Quite simply,” Pollard says, “Canada is not keeping up globally.” In fact, Canada lags behind India, Ireland, Mexico, Australia, Malaysia, Las Vegas, South Africa, France, Korea New Zealand, Brazil, the Bahamas, Switzerland and Hawaii in terms of the funding it receives. “Dependence on the domestic market is a serious concern with limited growth potential available from our comparatively small population base,” Pollard said, before noting that: “Canada’s international tourism performance with respect to international arrivals has not kept pace with its competitors, yet tourism globally is expected to grow. New competition from emerging markets and increasingly well-resourced competitors, has contributed to Canada’s decline as a destination from 7th place in 2002 to 15th place in 2010.” Having identified tourism as a “strategic priority,” the federal government — which is targeting $100 billion in revenue from tourism — has invited the industry — HAC as well as TIAC — to options for long term sustainable funding for the CTC. To that end, HAC chair, Hank Stackhouse, TIAC president David Goldstein and Pollard met with the CTC Board to review possible funding options that included: a redirection of the GST on aviation charges to the CTC; a redirection of any surplus from Air Travel Security Charges to the CTC; or a visitor entry fee. “A sustainable and competitive CTC would move us to a position of strength over the next five years. It would allow us to take full advantage of immediate emerging markets and it would counter the Brand USA attack on Canada’s domestic market. It would generate 5.7 million additional visitors, create $8.2 billion in new export revenues, 64,000 additional jobs and establish tourism as a true export industry,” Pollard stated in his letter. And he continued: “Now consider the alternative of not securing sustainable funding. Our marketing reach would be reduced to its lowest levels. Partnership leveraged funds would be severely eroded. The CTC would have to further abandon key markets.” To close, Pollard said: “Canada cannot squander an opportunity to move to a position of strength. We cannot miss the open door of emerging markets and risk continued decline in our competitive positioning.” To that end, HAC has asked its members to contact their MPs and advocate for the importance of new sustained funding for the CTC and make it clear that the status quo isn’t an option.