Speeches and Presentations

Remarks by Michele McKenzie, Standing Senate Committee on Foreign Affairs and International Trade March 3, 2011.

Michele McKenzie
President and CEO
the Canadian Tourism Commission
at the Standing Senate Committee on Foreign Affairs and International Trade

March 3, 2011

Chair, Honourable Senators:

Thank you for inviting the Canadian Tourism Commission here today to contribute to your special study on political and economic developments in Brazil, and related to our mandate - tourism development.

I’m appreciative of Senators welcoming me by video conference, although my preference would always be to meet with you in person.

The CTC is Canada’s national tourism marketing organization.

Right now, CTC has international marketing initiatives in 11 countries. We are a Crown Corporation that operates within a highly competitive and commercial environment. 

We are results driven.

Tourism Marketing is our business line; increased wealth for the Canadian economy our objective.

CTC has developed a very strong international tourism brand, Canada.Keep Exploring, and it’s through this brand that we market Canada to travellers.

Our international tourism brand is resonating with consumers; it is recognized as strong contributor to Canada receiving the number One country brand in 2010;  and we have private and public partners standing with us behind this brand to promote Canada internationally.

A strong tourism brand is a pre-requisite to compete for travellers.

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  

No surprise then, 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 -    three billion dollars a day - or two million dollars every minute.

CTC’s leadership and partnership are very much sought after in international markets where the Canada tourism brand holds the greatest impact. 

In 2011 we will be focusing our efforts and available investments in markets where Canada’s tourism brand leads, and yields the highest return on investment.  This strategy includes the developing market of Brazil, seen as a priority international market by the Government of Canada and supported with special funding to CTC under the Economic Action Plan.

In 2011 CTC will be competing against all the other destinations to increase demand for travel to Canada.

Last fall, CTC led a market development team to Brazil. We had partner and industry representatives from Alberta, Ontario, Quebec, Via Rail, and tour operators who have been working in Brazil for several years.

The program was very successful in terms of confirming the potential of the market for our partners, and showing Canada’s commitment to developing our tourism relationship with Brazil.

The mission also gave us an opportunity to listen first-hand to the travel trade’s perspective, as they gave us on the ground feedback about some of the challenges they face in selling Canada.

Brazil does have enormous potential, perhaps on a par with China and India. The population is 200 million, and we were told by Canadian Embassy officials there that it has a faster growing middle class than India and China.

Their economy is strong and their GDP is greater than ours; they are the world's 8th largest economy.

The point made to all of us on that market development mission was that this is not a developing economy; rather it is developed and growing.

A sizeable number of Brazilians are wealthy, already travel a lot and are a good potential market for Canada. They make up 20% of the population, or 40 million people.

There is also an emerging middle class that is a staggering 100 million people. This group represents huge potential for travel. They generally speak English, they are young, want to be connected, and travel is beginning to be important to them. They are categorized for our marketing purposes as "free spirits" which makes them an ideal market for Canadian travel product.
 
It may be interesting for Senators to note that Canada is the number one choice for students wishing to learn English and/or obtain an education outside of Brazil.  During our visit, we were told that 17,000 student visas had been issued by Canada’s embassy in Brazil as of November.

There are over 7 million outbound travellers from Brazil each year.

Over a million travelled to the USA in 2010, while only 70,000 travelled to Canada.

Why?

While the market has enormous tourism potential for Canada, the travel trade and consumers tell us there are two challenges; one is air access, and the other is visas.

Our role is to create demand for Canada as a tourism destination.  And our intention is to inform this committee with market insights, and not to discuss policy as that is not our role.

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. 

Canada has already negotiated air agreements with 50 countries and we are all well aware of the potential benefits for tourism under such agreements.

Brazilians are a high-spend consumer group eager to travel. 

At the present time there is one non-stop daily route between Brazil and Canada—and seats command a premium price.  With no non-stop flights to western Canada, they often pick ski resorts in Aspen and Vale over Whistler or Banff.

There are 4 million Brazilians who possess US visas already we’re told.

The tour operators and agents we are working with in Brazil have the ability to identify these travellers, presenting the opportunity for a targeted marketing campaign to entice them to Canada as well. 

More and more countries are viewing the visa process through a competitive lens.

Brazilians who want to visit the U.S. 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, U.S. 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 from consumers that Canada’s visa process will be similar to the U.S. When travellers learn that Canada’s process involves more uncertainty, they too often choose the U.S. over Canada as a destination. 

From January to October 2010, close to a million Brazilians travelled to the U.S.; 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 could certainly grow.

The new U.S. Corporation for Travel Promotion (their version of the CTC) views the broad visa issue as a priority, and we understand will be working with their government to have introduced a visa waiver for Brazil.

Our travel trade sees visas through a competitive lens  –  an arduous process -  or long delays, can sway a traveller to walk away from one destination and pick another. 

As mentioned at the outset, CTC believes the Brazil market has outstanding potential for Canada.

Brazilian arrivals to Canada are already up 30% over 2009.

There’s no question that short-term stimulus has provided Canada with great potential for long-term growth of Canada’s tourism sector.

There is considerable untapped opportunity and CTC will continue to market Canada aggressively as a premier travel destination to Brazilians and we look forward to years of progressive growth and development in this market.

Honourable Senators, in the interest of your time and the important work of this committee I would be pleased to answer your questions.