Price, Proximity and Ease of entry - the drivers of tourism worldwide

A few days ago FutureBrand, the organization that ranks countries' brands, announced that Canada reached the top spot in the Country Brand Index. This prompted some lively discussion on Twitter and on the Canadian Tourism Professionals Group on LinkedIn regarding the value of such rankings in tourism performance. I believe that rankings of this type do not materially affect tourism performance one way or the other. While ranking at the top in the Country Brand Index is something to be proud of, just as being in the top 10 countries on the United Nations' Human Development Index is something to be proud of, the facts don't support the idea that any of these rankings help tourism performance. In general what drives tourism around the world (and domestically) is proximity, price and ease of entry.

Proximity - when you look at tourism on a global scale and see where destinations are actually getting their tourists from, you'll see that most of them travel from countries nearby - No #1 source of international tourists to Mexico is the US followed by Canada. No #1 source of international tourists to the US is Canada, followed by Mexico. No # 1 source for Spain is the UK followed by Germany and France. Most international tourism in Australia is generated by Oceania countries and East Asia (China, Hong Kong, Japan). China derives the biggest percentage of tourists from neighbouring Asian countries. But we don't have to go global to see this. We have always seen that domestic tourism is also driven by proximity (if you are tourism marketer you have known this for a long time). Most visitors to Muskoka, Ontario are from the Greater Toronto Area. Most visitors to Whistler are from the Greater Vancouver Area. Most visitors to Montreal (outside Quebec) are probably from Toronto, etc., etc.

Price - we can come up with the best and most creative campaigns to attract visitors to our destinations or attractions, whether these campaigns are digital, physical or singing telegrams, but unless the price points are affordable to our guests we will not grow the business (and in some cases won't survive). This is a bit of a cruel truism in business. Not only must the visitor see an attractive benefit per dollar, but he or she must be able to afford it. Currency wise, Canadians are rich at the moment vis a vis the US greenback and the Mexican peso. What do you think will happen this winter when Canadian winter destinations will be competing for Canadians travel plans if an all inclusive week in Mexico, Dominican, Cuba, etc., will cost them a fraction of what it would cost to spend that week in Tremblant or Whistler? We are in for a spike in our travel deficit this winter courtesy of the weakness in the US dollar and higher commodity prices. At the same time, the appreciation of the loonie is making our destinations more expensive than they already were 2 or 3 years ago. Skiers in the US may find that skiing at home will be more affordable than skiing in Canada. European skiers (those left who can afford to travel) will find European slopes much more affordable than Canadian moguls.

Ease of Entry - there are various reasons why most tourism industries around the world are sustained by domestic tourism. The biggest is ease of entry. People can move around their own country with the most ease (and of course there's significant VFR travel domestically). Speaking internationally, we have seen how important this driver of travel is by witnessing how it has affected the flow of US visitors to Canada since 9/11. Another case is the dramatic drop in Mexican visitors when Canada imposed visa restrictions on them last year. But ease on entry not only refers to visa and security issues, it also refers to airlift, airport fees, and other issues. Ease of entry is very much related to proximity and cost. 9/11 notwithstanding, it is still very easy for Canadians to enter the US and for Americans to enter Canada. And it's still very easy for both Americans and Canadians to enter Mexico. In North America, Mexico is a good example of a destination that competes very well with other destinations because of its proximity, its prices and its ease of entry. It is remarkable that with all of Mexico's image and security problems, its tourism industry has not seen a significant drop in American and Canadian tourists in the last 2 years, and according to the Mexican Tourism Ministry (Secretaría de Turismo de México) Canadian visitations have grown 38% since 2008!

In conclusion, look at your destination or tourism business and remind yourself where you get or can get most of your guests/customers. Sharpen your pencil and price your offerings so that they are attractive and affordable to your target community/tribe/market. Regarding Ease of Entry, you may not be able to do much about it, since you are where you are (on the other hand, make sure that the directions and maps on your website are correct - and definitely make sure that your place appears correctly on a Google Maps search).

Jaime Horwitz MBA