As we begin 2008, I am wondering what you think the year ahead will bring. There are several challenging issues I am pondering but also some opportunities I am looking at.The Dollar. According to many economists and media pundits the high Canadian dollar is here to stay for a while. How high? Nobody knows. But high enough to be of continuing concern to exporters and tourism businesses (particularly those that have traditionally generated much of their revenue from foreign visitors).
US Elections. The American public may be distracted (and so it should) from their day-to-day by the Presidential elections next November. Judging from the primaries, it is shaping to be an interesting event. I have no data to indicate whether travel patterns are affected by presidential (and congressional) elections in the US, but logic would dictate that they do as people may want to put off some plans until they know who will be President and how the markets respond.
US Economy. This one together with the high loonie is the biggest challenge. Already many observers are using the R word and the US employment numbers released this past week are fueling the fears (as is the $100 barrel of oil). The subprime mortgage disaster is not over (losses of over $80 billion) and the US' deficits are still massive. So all in all not a pretty picture. This of course will affect Americans' confidence to spend and travel with the consequent impact on Canadian tourism.
Ah but not all is rotten in the state of Denmark. There are opportunities for those competitive businesses and tourism entrepreneurs who can focus on particular segments of the world's traveling public.
Mexico. Mexican inbound tourism to Canada is still growing at double digits. The numbers to October 2007 (218,000 visitors) surpassed those for all of 2006 (213,000). The trick with Mexico in '08 (in my opinion) is to focus marketing efforts on the segment of Mexican consumers that are least likely to be affected by economic downturns, namely the affluent (the top 20% of the Mexican population). The reason for this is, again, the US economy on which Mexico's own economy depends so much. The high loonie is a bit of a concern but should not affect visitations substantially as long as the right marketing with the right positioning is used.
Spain. While in absolute numbers Spanish visitors are nowhere near the Mexicans, growth rates are also in the double digits. And, as opposed to Mexico, there's virtually no marketing of Canada in Spain (save for Quebec and some organizations like Jonvie/Transat). The Spanish economy, while slowing down, is still quite healthy, so I anticipate growth to continue.
CANADA. For 2008, the strongest opportunity lies at home. While the loonie will encourage Canadians to travel abroad (and we've already seen a spike in travel to the US), I think that if DMO's and tourism businesses come up with the right marketing mix (advertising and pricing mostly) more Canadians will travel at home. I have seen the promotional efforts from various provinces targeting us Torontonians and their efforts have yielded good results. I think this year they should increase their efforts. It is unfortunate that as Canadians we don't see enough of our country. I have been in this country for 18 years, consider myself somewhat of a professional tourist and I've only experienced but a fraction of what this country has to offer. I cannot tell you how many "mainstream" Canadians I have met who have been to many places in Europe, the US or elsewhere, but have barely travelled within their own province or the province next door. A recent federal government survey indicated that almost 80% of Canadians are not aware of Quebec City's 400th Anniversary and the celebrations that go with it!!!! Thist is to me incredible and unacceptable. Naturally, I am aware of Canada's long history of regionalism and provincial jealousies, but that has to stop. We have the privilege of living in "the most highly regarded country on the planet" as indicated by the 2007 Globescan survey conducted in 27 countries on behalf of the BBC and quoted by Michael Adams in his book Unlikely Utopia. How we fail to promote its wonders to ourselves is mind boggling. Let's celebrate our good fortune and encourage ourselves to travel domestically. For the record, this year my family and I have chosen Quebec as our summer Holiday destination. (I will combine work and pleasure, of course, as I will be covering the 400th Anniversary celebrations). We will be in Quebec City July 4, 5 and 6. Prior to our getting there, we'll stay a night in the Eastern Townships and following our visit to Quebec City we'll go to Tadoussac and Lac St Jean. And in august, we'll spend our customary week at a cottage closer to home in Muskoka, Ontario (one of my favourite vacation trips).
In conclusion, there are challenges, but there are also opportunities. As we try to stay afloat in this environment let's remember that we do have a great product to promote. All we have to do is show it to the people.
In the coming days, I plan to approach some very experienced and knowledgeable Canadian tourism professionals to ask them what their outlook for this year may be. So stay tuned.
Happy traveling,
Jaime
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