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Deputy Ministers Forum, November 2012
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Paul Nursey, CTC vice-president Strategy and Corporate Communications, looks at the economic outlook for the Canadian tourism industry in 2013 and beyond.

Paul Nursey, CTC vice-president Strategy and Corporate Communications, looks at the economic outlook for the Canadian tourism industry in 2013 and beyond.

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  • 1. Deputy Minister’s Forum, Nov 22, 2012Presentation byPaul Nursey, Vice President Strategy & Corporate Communications, CTC
  • 2. High LevelEconomic Outlook
  • 3. Four Big Drivers1. Modest growth in the United States2. Europe slowly working through its challenges3. Chinese transition and controlled real estate correction4. Emerging markets steady as she goes
  • 4. United States –Reasons for cautious optimism• 20 million unemployed but 3 million jobs vacant• US households de-leveraging comes to an end• Increased vitality and entrepreneurship• Corporate investment and hiring remains lower than expected
  • 5. Europe – Baseline European growth outlookweaker than “normal”• Growth is hard hit by austerity• German growth is stalling• Households re-calibrating modest consumption improvements
  • 6. China - Rapid urbanization coupled withstrong domestic consumption• Loss in manufacturing competitiveness• Controlled real-estate correction of 10-15% in major centres• Expected 8% GDP growth• Maturing distribution
  • 7. Emerging Markets –Continued vitality with risks• Rapidly growing middle class in Latin America and “secondary” Asian economies• 2013 will be a turning point in Latin America to rapid GDP growth• Increased propensity to travel
  • 8. 1. US “Fiscal Cliff” is not resolved stalling US recoveryFive Big 2. Chinese transition/correction is not handled smoothlyEconomic Risks 3. Emerging markets weakento Canada’s 4. Outbound travel erodesTourism Industry strong domestic performance 5. All research points to travelin 2013 remaining a priority for households
  • 9. Tourism presentsunprecedentedopportunity
  • 10. Tourism, a star performer of theslow recovery period Contributes 5% of the world’sThe 4th largest GDPexport categoryaccounting for Responsible for 1 in 12 jobs globally30% of worldexports of services Next 20 Years will be continued growth for the sector
  • 11. Arrivals to reach 1.8B by 2030 World International Tourist Arrivals, billions 1.8 billionSource: Tourism Towards 2030 / Global Overview, UNWTO
  • 12. Tourism Industry:Greater PolicyProfile Worldwide
  • 13. The 5 pillars of China’s A Canadian National Canada’s strategic 5 year Plan Economic Strategy for Asia sectors of focus• Increasing domestic • Appoint a Minister & • Infrastructure consumption create a Cabinet • Financial services• Modernizing rural Committee • Aerospace communities • Establish Asia Advisory Canada’s • Education• Modernizing the Council strategic industrial system • Enhance diplomatic sectors should • Tourism correspond• Improving regional activities with • Natural resources priorities development • Strengthen cultural & outlined in China’s 5• Improving resource educational ties year plan efficiency • Partner with key sectorsSource: A Canadian national economic strategy for Asia, Dominic Barton, Bruno Roy and Bruce Simpson, August 2012
  • 14. TourismGreaterRecognition of People ExportsLink Between NationTourism Brand Culture and GovernancePromotion & HeritageTrade Growth Investment and Immigration Source: The Nation Brand Hexagon, Simon Anholt, 2000
  • 15. Competition Brazil Britainis fierceBrand USA Australia 15
  • 16. Bolder IntegratedCompetitive Tourism Policy• UK announcing 10 M Pound Sterling investment in China & 150 new visa officers• Australia linking Air Passenger Movement charge to increased marketing in Asia
  • 17. But Canada is notfully capitalizing onthis opportunity
  • 18. Our eroding competitive Canada 2011-position 18th place UNWTO 1950 Global Ranking 1970 Global Ranking 1990 Global Ranking 2011 Global Ranking1 US Italy France France2 Canada Canada US US3 Italy France Spain China4 France Spain Italy Spain5 Switzerland US Hungary Italy6 Ireland Austria Austria Turkey7 Austria Germany UK UK8 Spain Switzerland Mexico Germany9 Germany 97% Yugoslavia 75% Germany 67% Malaysia 56%10 UK UK Canada Mexico11 Norway Hungary Switzerland Austria12 Argentina Czech Greece Russia13 Mexico Belgium Portugal Hong Kong14 Netherlands Bulgaria Malaysia Ukraine15 Denmark Romania Croatia ThailandOther 3% 25% 33% 44%Total 25 million 166 million 703 million 983 million
  • 19. Competitionis outperforming 1.2m potential travellers, 24.5% 1996 12.5% 2011 9.3% 2015 = a loss of $834m Brazil -2% in new export revenue*Growth of international arrivals , 2011 over 2000. UNWTO World Tourism Barometer, March 2012. 19
  • 20. Loss ofmarket shareis mainlydriven bydrop in USmarket 20
  • 21. By 2015, emerging economieswill receive more tourists thanadvanced Source: UNWTO
  • 22. Our domestic reliance may behurting the bottom line 2001 2011 Spend per trip**Domestic market…big growth $36.2b $63.7b = $300US market… $10.4b $7.2bhit bottomOverseas market…flat $7.5b $8.0b = $1,459Travel deficit…ballooned $2.1B $16.3b*US/overseas figures are export revenue (not receipts), therefore include air fares and same-day travel**Average spend per traveller from the CTC’s key markets (excluding the US) per overnight trip to Canada in 2011 (source: International Travel Survey 2011, Statistics Canada). 22
  • 23. And the domestic growth in outbound tourism spending since 2009market is at risk  7th fastest growth in outbound spending since 2009  Hotel book of business is weak for next 2-3 years  Starting to see ‘rust-out’ effect  Domestic business is much less profitable & less long term growth 23
  • 24. Tourism Marketing Budgets of Select Countries* India† $222And we are Mexico† South Africa† $171 $168being Australia† $164 Malaysia†severely France† $134 $112outpaced in UK† South Korea§ $88 $84our marketing New Zealand† $79investments Ireland‡ Switzerland§ $76 $75 Brazil§ $73* CTC research† Budget for 2012-2013 Canada‡ $61 $58M by 2014‡ Budget for 2013§ Budget for 2010 24
  • 25. Canadians are funding themarketing of other Countries 25
  • 26. Emerging market growth is for long term gain International Overnight Trips (000’s) and… Canada’sOvernight Trips (,000s) biggest market: US arrivals down -24% since 2000Source: Statistics Canada, International Travel Survey, FinalNote: *Statistics Canada preliminary estimates
  • 27. Key Policy Themes:Investment, Air andVisa Operations
  • 28. Accommodation Sector Investment2007–2011: 3 Iconic Resort Properties:• Loss of $11.9m in net income• Loss of 234 jobs• Loss of more than $124 M in investment capital• Loss of $2.5M in re-investment capital• Room revenues declined $70.6M
  • 29. Air Environment• Slower Air Bilateral Discussion Calendar. New Chief Air Negotiator• Tenor of conversation changing to competition• Leakage issue gaining traction• AC Low cost airline and WJ regional airline
  • 30. Visa Environment• Excellent working relationship with CIC. Tourism is on their agenda.• Resources are constrained.• Introduction of new VACs• Online application centres• Biometrics
  • 31. follow @CTCCCT
  • 32. Questions?Des questions?