Speeches and Presentations

Michele McKenzie Address to the Ottawa Chamber of Commerce, January 26, 2011

Michele McKenzie
President & CEO

Canadian Tourism Commission

Address to the Ottawa Chamber of Commerce

Ottawa, Ontario
January 26, 2011

  • The rapid growth of global travel marks tourism as an astonishing, economic and social phenomenon, of the past century. 25 million international arrivals worldwide in 1950. 935 million arrivals in 2010. 1.6 billion arrivals by the year 2020.  
  • Thank you for joining me today to talk about one of the most rapidly expanding sectors in the world—travel and tourism.
  • No surprise that this has become a high-stakes game—one in which countries are competing to win. Winning countries are the ones offering exotic experiences, a strong tourism brand, great infrastructure, and effective collaboration between government and tourism partners. The reward is greater revenues for those destinations that have it all together.
  • About 80% of Canada’s tourism revenue is generated from the domestic market. This is important revenue for businesses across our country. But the market is ultimately limited, and “selling to ourselves” does not generate new wealth for our economy.
  • The CTC’s vision has to be far afield; to take Canada’s tourism brand into global markets—export markets—where we can connect with high-yield travellers who stay longer and spend more.
  • We need to compete for more than our fair share of an ever-expanding pool of visitors.  Travellers spent over one trillion dollars on tourism globally in 2009.  That’s hard to imagine! Try three billion dollars a day.  Or two million dollars every minute.
  • That’s three billion dollars a day.  Or two million dollars every minute.
  • That’s why I’m here today, to talk about the high stakes of tourism, and what we’re doing about it. 
  • And sometimes, you’re handed a great opportunity.  The 2010 Winter Games was it.
  • I have to start by saying how amazing the Games were. Congratulations to all of you who played a role.
  • The Games changed us, don’t you think? They changed how we see ourselves; how we feel about our country
  • And I think you’d agree that the Games changed how the world sees Canada.
  • Right from the outset, we realized that the marketing opportunity for tourism was not about the event; there were other folks in place to worry about tickets sales and destination issues. We knew that our job was to market Canada—to use the Olympic platform to advance Canada’s tourism brand.
  • We’d already re-defined the brand with our tourism partners—because simply having a positive image as a country does not translate into a compelling reason to visit.  In the hearts and minds of travelers around the world, we needed to move Canada from “a place I want to go before I die”—to “a place I want to go now—a place where I can enjoy extra-ordinary experiences”. 
  • We also knew that this would be the first truly digital Games—that viewers would access event content in more ways than ever before. Using a media-focused Olympic strategy, Canada became the first country that sought to integrate great content about our tourism experiences into the coverage of the Games by international broadcasters. 
  • Our first goal was to get the three billion viewers—glued to their TV sets—daydreaming about a vacation in Canada.
  • International broadcasters were open to new and innovative partnerships. It was 2008/2009.  Their revenues were down and their production budgets strained. They were not in a position to shoot new material. And we certainly didn’t want them to rely on outdated video and stories from their archives. 
  • We offered them fresh content and new shots of Canada’s tourism experiences—from coast to coast to coast. They loved it—and they asked for more.
  • We became content providers. A few years ago, we would never have released unedited video. We’re marketers, and that would have felt like giving up control. But, in this case, we did our homework. We learned what the broadcasters needed; and we learned how to provide it to them, in the format they could best use. 
  • We provided the content. Broadcasters packaged it up as they wished. As a result, media told our story— and they told it better than we could have. It was a turning point in how we work with media.
  • These same broadcasters came to know us well. Now, when they are looking for new content to cover other major happenings in Canada, they know we can help them. We’ve had great carry-over in coverage of events like the Toronto International Film Festival, Montréal’s Formula 1 race and the G8/G20 Summits.
  • So—let’s take an example of what I mean by integrating content into broadcast coverage. The Torch Relay. We wanted to find a way to make the story of the relay relevant in our target markets around the world.
  • Because—as interesting a story as we Canadians thought the relay to be for media—or for potential customers sitting in Germany or Australia—it was just a story about a bunch of Canadians running around Canada. We asked for fifteen spots on the Torch Relay, for athletes and celebrities, from the international markets where the CTC invests.
  • VANOC thought it was risky after the global protests around the Beijing Games torch relay. Their plan was to keep the event entirely Canadian. We convinced them that this was a once-in-a-generation marketing opportunity. Here are a few examples of this program’s success:
  • We invited Akshay Kumar—Bollywood’s Brad Pitt—to carry the torch in Toronto. Of course, the Indian media followed him here. Akshay gushed about what a great city Toronto is—and about how much he loves Canada. Media coverage back in India reached an audience of 70 million, amplified with stunning shots of Canada provided by CTC and our partners.   
  • Sportscaster Mary Carillo carried the torch on a thrilling dogsled ride in Iqaluit. This was broadcast on NBC, with her message that you, too, could enjoy this unique experience in Canada.  And while she was North, we invited her Polar Bear watching—with her camera crew, of course. When NBC played her polar bear segment during their Olympic Broadcast, there was so much interest that the websites of adventure operators crashed!
  • So, this example demonstrates how the media-focused approach served us well in the run up to the Games—of course, it served us well through the Games as well.
  • In the end, we surpassed our own targets to influence global media exposure, and to generate awareness of Canada as a “must-see-now” vacation destination.   

So what happens when the Games are over?

  • Well, as marketers, the day the Games ended was the day our hard work began. It’s easy to get the world’s attention when you’re hosting the Olympics. What’s hard is to sustain that momentum after the Games end. We shifted to a tactical mode, where converting that interest, and closing the sale, became our focus.
  • One powerful legacy of the Games is that the world now sees our country differently. In November, FutureBrand ranked Canada the Number One country brand in the world, bumping the US from top spot.
  • We want to ensure that tourism is the long-term beneficiary of this new awareness; we want to transform travel dreams into bookings.
  • We measure success—not by how many people travel to Canada from abroad—but by whether or not our marketing actions directly influenced their travel decision.
  • Initial results indicate that our post-Games marketing campaigns increased visitor arrivals in our core markets.
  •  Here are a few highlights:
  • In 2010, 290,000 British travellers were inspired by Canada’s marketing campaigns to book flights here—almost twice the 2009 numbers and three times more than in 2008.
  • And, over 70,000 Australians shifted from considering a trip to Canada, to making a firm booking in 2010—that’s twice the 2009 numbers.
  • These are early results. We want to sustain this momentum – to see bigger and better results for 2011 and beyond. Great partnerships, bold strategies, calculated risks and innovative marketing will deliver these.

 

Let’s turn to another great opportunity, A.D.S. with China.

  • Because, as I’m sure you know, the success of the Winter Games wasn’t the only “game changer” for Canada in 2010.
  • Last June, China officially granted Approved Destination Status to Canada. Officially, this meant we could now receive group tours from China. But what was of most interest to the CTC, was that the designation allowed us—for the first time—permission to market Canada in China. It meant we could finally compete on an equal footing with other countries for our share of the world’s largest outbound tourism market.
  • China says it will deliver 100 million international travellers by 2020.  
  • This growth has the potential to generate an additional $300 million dollars a year in tourism revenues for Canada, by 2015. 
  • This year, the CTC begins direct-to-consumer advertising in China. We’re launching a brand-awareness campaign, to position Canada as a destination of choice, for high-spending Chinese travellers.
  • With tour operators in China and suppliers in Canada, we’ll showcase high-quality, vacation experiences.
  • To start, we’ll focus on promoting well-known tourism icons.  Later, once Chinese travellers feel a certain comfort level, we’ll introduce them to experiences a little more off the beaten track.
  • In this new market as elsewhere, Canada is a leading destination for the meetings, convention, and incentive travel. This is a very importantopportunity here in Ottawa, as we are about to celebrate the opening of your amazing, new , state-of-the-art convention centre. 
  • This time next year, we expect significant growth from the China market linked to additional air capacity, our advertising and promotional campaigns, and partner support. 

 

In spite of these great opportunities, there remain a few challenges—some areas that require further attention.

  • As you know, we can be the best marketers in the world, and inspire millions of potential travellers to choose Canada. But if they can’t get an airline seat or easily apply for a visa—then our efforts are largely in vain. Building awareness of Canada as a tourism destination makes sense when there’s an efficient visa process, and sufficient air capacity, to meet the increasing demand that’s created.

Visas are a growing area of interest for all of us in the tourism industry, as they are required from emerging markets like India, Brazil and China.  More and more, countries are viewing the visa process through a competitive lens.

  • Feedback from the travel trade tells CTC that Canada’s visa process is more onerous than that of some of our key competitors. Let’s look at Brazil.
  • Brazilians who want to visit the US must make an appointment to visit the US embassy. This means they may have to wait. But they are not required to surrender their passport while waiting, and they can expect to receive a visa the day of their appointment. In addition, US visas are often issued for a ten-year period and are transferrable to a new passport. That’s a great strategy.
  • In Brazil, there’s a general expectation that Canada’s visa process will be similar to the US.

When travellers learn that Canada’s process involves more uncertainty, they too often choose the US over Canada as a destination.  

  • From January to October 2010, close to a million Brazilians travelled to the US; only 68,000 travelled to Canada. So, while arrivals to Canada were up almost 30%, Brazil’s enormous potential as a tourism source market for Canada remains limited, due—at least in part—to this impediment.
  • What’s more, the new US Corporation for Travel Promotion (their version of the CTC) views the broad visa issue as a priority, and is working on a visa waiver for Brazil. What effect could this have? Well, the US implemented a visa waiver for South Korean travellers in late 2008. In 2010, arrivals from Korea to Canada were up 24%—great results.  But—arrivals to the US were up 52%—double Canada’s performance.

Another issue we hear about is air access.

  • Of the 11 countries around the world in which CTC conducts marketing campaigns, Canada has Open Skies Agreements with two—the US and South Korea—and liberalized air agreements with four others: the UK, France, Germany and Japan. 
  • Compare this with the 96 Open Skies Agreements the US has negotiated. It’s easy to see that there’s room to improve.
  • For example: Brazilians are a high-spend consumer group that is eager to travel.  Yet there is only one non-stop daily route between Brazil and Canada—and seats command a premium price for convenience. And with no non-stop flights to western Canada, they often opt ski resorts in Aspen and Vale over Whistler or Banff.
  • But achieving a policy environment that allows for more flights is only half the picture. The role of marketing is to build demand—to help ensure that as new flights come on, there is strong demand for the seats.
  • Right now—for the first time in a long time—we have increased air capacity between Canada and Japan—close to 400,000 seats this year. If we want to capitalize on this opportunity, we need to work together to fill those seats.

 

So, let me wrap up.

  • In the afterglow of the Olympic Games, the CTC has upped our game to build on increased awareness, and we are competing to win.
  • And, we have a lot going for us in Canada.
  • When economies recover, travel demand rebounds.
  • There is increased awareness among governments about the impact of policy decisions on tourism.
  • There is increased capacity on the advocacy front—helping to identify innovative solutions to the challenges I mentioned earlier.
  • We’re prudently optimistic about the industry’s outlook and prospects in 2011. The figures coming in from our key markets seem to bear that out. There have been notable gains in inbound travel to Canada, especially from Japan, Brazil and China. Our core markets of France, Germany and Australia have a new lease on life, too, with numbers up across the board.
  • That’s great news for Canada. We are better positioned now, than ever before, to compete for an increased share of the growing market of international travelers. Our awareness has never been higher. Our tourism brand has evolved into a force to be reckoned with.
  • There is growing commitment to the need for alignment in our marketing models and in our policy frameworks.  And, most important of all, our industry provides tourism experiences the world craves. Our message resonates. Together we are competing to win.