Frederic Gonzalo’s Blog

Is Canada as a destination ready for emerging markets?

With Rendez-Vous Canada (RVC) rolling into town these coming days, Quebec City is abuzz with more than 1,500 attendees ready to negotiate and contract tourism packages at the international level for 2012 and coming years. In attendance, international tour operators programming Canada as a destination in their travel brochures, Canadian Tourism Commission and its overseas delegates, provincial marketing offices (PMO) i.e. Travel Alberta, Tourisme Quebec.

Not to mention their overseas delegates, destination management offices (DMO) from most big Canadian cities, and a swarm of hotel representatives, attractions, restaurants, transportation companies, you name it: anybody who is anybody working in the Canadian tourism industry catering to international markets is attending this show, or ought to be!

Social media plays into the equation

If you can’t be in Quebec City for the event, which is taking place May 15 to 18, you can follow the hashtag #RVC11 on Twitter and catch some interesting tweets, mentions and comments. In fact, yesterday one of them caught my attention. It went as follows:

Tweet from the #RVC11 feed on Twitter

Indeed, that is a very good question. Is Canada as a destination ready to start doing business with emerging markets like India, China or Brazil? To me, the issue is not so much related to the quality of our infrastructures, nor is it a question of addressing cultural divides or overcoming language challenges.

Most parts of Canada are successful at welcoming folks from Germany, Japan, Mexico, South Korea or Italy, to name but a few. We know how to adapt to varying clienteles, and the tourism offering in this country is up to par on the international level – well, in most cases, anyway! (Yes, we do have some issues on the product front, but I shall discuss this matter another day)

The real issue, I believe, is two-fold:

  1. We still have lots of ground to cover in core markets, and
  2. How committed can we be with these emerging markets? In both cases, it basically boils down to a matter of how travel marketing dollars are allocated, and addressing whether or not we have the means to pursue both core and emerging markets.

The need to do a better job within core markets

For more than 35 years now, Canada has worked closely with a variety of countries to ensure its destination is showcased favorably in brochures and other tools to the travel trade, meeting planners, media and general public alike.

Oddly enough, while Americans represent a whopping volume of the international tourism coming to Canada (almost 90%), with close to 12 million trips per year, efforts in this market have been uneven throughout the years. In 2010, the Canadian Tourism Commission even announced it would no longer support the leisure market, leaving PMO and DMO to do the ground work.

Are all markets equal?

True enough, there were redundancies and overlapping efforts between these different bodies of the tourism industry, but are we that comfortable in the US market that we can afford to put less efforts into it? Certainly not.

Other core markets include the United Kingdom, France, Germany and Japan where marketing efforts have fortunately been more stable throughout the past decade, albeit working with decreasing budgets in an increasingly competitive market. For a sobering view at our tourism performance from international markets, check out the charts by Statistics Canada, and compare 2009 with 2000. It hurts!

Not only are we losing ground in most core markets, the truth of the matter is that Canada has been losing market shares in nearly every market when comparing to other destinations. Up and coming destinations in Eastern Europe, Dubai or in Southeast Asia, not to mention South Africa, China or Brazil – this country will host the soccer World Cup in 2014 and Summer Olympics in 2016 – are attracting all the buzz while Canada, well, we remain the friendly country that will always be there for that trip of a lifetime. Some day.

The 2010 Winter Olympics in Vancouver & Whistler certainly curbed the trend and helped gaining a wider audience, yielding greater media exposure and intent to travel. But the extra budgets that were allocated to the CTC have come and gone, and so we are back to square one with the need to compete on the international level with smaller budgets than ever.

How committed can we be with emerging markets?

Assuming we were doing a stellar job at getting Canada as a top-of-mind destination in most core markets, the next logical question would be: do we have extra marketing dollars we could or should spare to develop new and emerging markets that have potential to become core markets in years to come?

It is generally recognized that BRIC countries show a considerable potential: Brazil, Russia, India and China. Booming economy, sheer volume of people and nascent travel cultures that will bring them to seek overseas destinations. In particular China, ever since Canada finally obtained its Approved Destination Status (ADS) in 2010, mandatory to properly promote itself within the Chinese travel trade and to the Chinese consumer, it seems like China is the next golden goose.

What many forget to mention is that we were the last important Western country to obtain this status, which puts us far behind in the race. Many countries were getting ADS back in 2003 and 2004. I even recall going on a sales mission back in 2005 where it was supposedly “a matter of months” before we would obtain said status.

South America market not so much on the radar

Likewise, Brazil is not exactly a new market. I recall going down on sales missions back in 1999 and 2000, visiting both Brazil and Argentina, where the Canadian Tourism Commission had offices and representation. This market was once a booming one not only for summer trips to Canada, but also in winter time within the niche ski industry, whereby destinations like Whistler, Banff and Tremblant were faring well.

Canada as a destination could be seen attending trade shows like ABAV in Brazil, FITUR in Spain (which caters to South American travel trade as well) or ski shows in Argentina. The decision was made to abandon these markets in the past decade. So now we want to return? While I have no doubt for the market potential, my doubts reside in the reaction of the industry partners – we haven’t shown real engagement in the past, how will it be different this time around?

As for India, CTC also had representation in Delhi and Mumbai, back in 2005. The efforts were not deemed conclusive and so the CTC pulled out in 2006. So now we are returning? Is this a similar pattern? The factor of success, however, does not lie in the reaction from the travel trade partners and how quickly we can foster deep relationships and mutual engagement.

The key question is: do we have the marketing dollars to properly support building the hype for our destination in emerging markets? And more importantly, are these budgets incremental? That is, I can only hope we did not take away budgets away from core markets, or the US, in order to fund efforts in emerging markets.