Finance Minister, the Hon. Jim Flaherty, tabled the Federal Government's budget 2012 and it's not very good for the 600,000+ Canadians that work in the tourism industry (investments in Quebec notwithstanding - more on that in my next post).
1 - according to the Tourism Industry Association of Canada - the CTC will see a small cut to it's budget this year, but a substantial cut of $14.2 million in 2013/2014. The CTC is underfunded as it is, so this does not bode well for Canada's tourism profile internationally. Without sustained and predictable funding, it is very difficult to plan long term for the benefit of the Canadian Tourism Industry.
2 - The Canadian dollar will continue to hover at parity with the US greenback for the foreseeable future and this is not good news for Canadian Tourism. With so many new destinations for travelers to choose from and weak US and European economies, a high dollar puts a lot of pressure on margins and many Canadian tourism businesses just can't compete on price.
3 - The Federal Budget raises duty free limits for cross-border travelers in effect giving the US tourism industry a big gift. Canadians returning from abroad can now spend $200 in a 24 hour period and $800 on a 48 hour trip without paying taxes on their purchases. Put that together with a high loonie and American cross-border marketing and you have a great incentive for Canadians to spend their money across the border, money they will not spend at Canadian tourism destinations.
What to do? Canadian tourism must continue to focus on differentiation and creative marketing. I anticipate a barrage of marketing messages targeting Canadians to encourage them to travel within Canada this year.
Comments? Advice? Rants?
