Canada’s tourism industry is struggling to compete as the global travel business undergoes unprecedented change, according to the "Passport to Growth" report.
While Canadian destinations such as the Rockies and Niagara Falls have not lost their allure, the tourism sector has gone unrecognized by both government and business in its potential to drive growth, says the report, compiled by Deloitte partners Ryan Brain, Tom Peter and Lorrie King, based on Statistics Canada numbers.
Although tourism employed 600,000 Canadians and represents about two per cent of national GDP, the industry is falling behind in attracting the globe’s emerging travellers.
Small share of global travel
Canada had 16 million international visitors in 2012, with the largest number from the U.S., Britain, France, Germany and Australia, according to the Canadian Tourism Association. A steep slide in U.S. visitors, in part because of the high Canadian dollar, has meant lower figures.
Canada sees only a small share of global international travel arrivals, which passed the one billion mark in 2012, having risen four per cent a year over the past 10 years.
Canada was one of the most popular international tourist destinations in 1970, second only to Italy. Now it’s No. 18, and behind countries like Ukraine and Saudi Arabia.
Among those travelling more are young people, who explore the world before settling into education and a career, and tourists over age 60, who have greater disposable income and more time to travel.
There has also been a 13 per cent a year jump in international departures from emerging economies such as China, Korea, Brazil and Mexico. Emerging economies are seeing the rise of middle-class people with enough income to travel.
New technology, new demographics
The Canadian industry needs to learn to tailor its products to these travellers to nab a share of tourism spending, which totalled $1.075 trillion US in 2012, the report said.
Deloitte also recommended boosting tourism as a means of boosting international trade, as travellers often become aware of business opportunities through meeting people face to face or acting on things they observe while on vacation.
“It’s clear that strengthening tourism would have a positive impact on Canadian companies and our overall economy,” says Deloitte partner Ryan Brain.
“What’s more, an increase in travellers to Canada could encourage Canadian companies to enter new markets internationally and experience greater competitive intensity, which we know results in periods of high productivity growth positively impacting the economy”
Deloitte analysis suggests a one per cent increase in tourists to Canada generates an $817-million increase in Canadian exports over the following two years.
High cost of air travel
The report recommends some government measures to improve tourism:- Introduce structural reforms to the air travel sector to reduce high base fares.
- Reform the process for issuing visas to reduce wait times and uncertainty.
Tourism organizations also need to be more innovative in reaching out to the new demographic who are travelling, and providing a product that will appeal to them.
They should be investing in their businesses, to retain good staff, improve their technology and enhance competitiveness, the Deloitte report said.
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