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The Visitor Economy: The Next Frontier


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My keynote address delivered at the Nova Scotia Innovation Days, 29 April 2014. …

My keynote address delivered at the Nova Scotia Innovation Days, 29 April 2014.

The experience. It’s all a rage in marketing, product development, organizational change, but what does it really mean? For over a decade now we have heard that managing the experience is the next competitive battlefield and a choice for businesses to differentiate and add value. To succeed in the new Visitor Economy truly requires understanding your customers and potentially having the courage to change how you do business. Its an opportunity, a choice, and it applies to any type of business or organization.

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  • 1. TheVisitor Economy! TheNext Frontier Image (c):Planet for Kids Nova Scotia Innovation Days 29 April 2014 with Dr. Nancy Arsenault, Tourism Cafe Canada (c) Dr. Nancy Arsenault (2014). Thank-you Nova Scotia (ERDT & NSTA) for having me back! Louisbourg & Cape Breton Up With People GMIST Edgies!
  • 2. (c) Dr. Nancy Arsenault (2014). Text Image: We work in the best industry in the world! (c) Dr. Nancy Arsenault (2014). Full of Passionate People!
  • 3. (c) Dr. Nancy Arsenault (2014). And it doesn’t hurt that ... 16 million visitors 1.8 million visitors 614,000 jobs 24,000 jobs 157,000 businesses $800M income to NS families Enhances our reputation when visitors have an amazing experience!Enhances our reputation when visitors have an amazing experience! (c) Dr. Nancy Arsenault (2014). We are Revenue Positive to Government! An investment in tourism is an investment in a healthy economy. $84 Billion economic activity 21.3 B Tax benefits $2 Billion industry! $173M tax revenue
  • 4. (c) Dr. Nancy Arsenault (2014). Not to mention the Community Pride Text Tourism Business of the Year 2013 Widden Park Campground, Antigonish Community Service Award 2013 Delta Barrington & Halifax Hotel Staff Ambassador Award 2013 Fortress of Louisbourg Association (c) Dr. Nancy Arsenault (2014). But We Have Some Challenges ... but perhaps influence Those we can’t control
  • 5. (c) Dr. Nancy Arsenault (2014). But there’s a lot we can do! If we choose change! Many Canadian companies choose to do business in the same markets they’ve operated in for years … Working with familiar clients and markets is a comfortable option, and in the short-term, it may reduce risk … but over the long term, playing it safe can cause companies to loose their edge. Deloitte’s Passport To Growth (2013) (c) Dr. Nancy Arsenault (2014). Are We Our Biggest Enemy? Image:
  • 6. (c) Dr. Nancy Arsenault (2014). Your Neighbor isn’tYour Competitor 3 to 5 words are! Boutique, pet-friendly, accommodations, Halifax 18 Properties on Trip Advisor 18 on Pet Friendly Digs 34 on Expedia ...
  • 7. (c) Dr. Nancy Arsenault (2014). TwoVisitor Centres in One Small Town • I don’t understand why? • Do I have to visit both? • Will they be different? Tell me something new? Image: (c) Dr. Nancy Arsenault (2014). Sorry I can’t help you right now I’m filling out another grant application for funding. Image:
  • 8. (c) Dr. Nancy Arsenault (2014). The Race to the Bottom Think discount rather than adding value The Time is Now The economic and population challenges we now face in Nova Scotia, and dramatically so in our rural regions, demand new vision, innovative approaches, greater collaboration and a greater willingness to take on the risks associated with economic change and progress. Ray Ivany (2014). Now or Never
  • 9. (c) Dr. Nancy Arsenault (2014). Minister, Michael Samson Tourism is: • About people, the customer, their experience • A major economic driver - $2 billion! • Being recognized across all sectors of government as important • Government and industry making the right investments needed to grow. “Marketing will get them here, our hospitality and experience will bring them back.” In his address to the provincial Visitor Servicing team 25 Apr 2014 (c) Dr. Nancy Arsenault (2014). Yet the convincing others about the value of tourism is tough Everyones a traveller but few understand how our industry works ... even some in our industry! Image:
  • 10. (c) Dr. Nancy Arsenault (2014). Your CEO, Patrick Sullivan • We can’t keep doing the same as we have for the last 10 years • No silver bullet • Inspirational marketing • “Discover, Freedom, Engagement” • Increase the value, the revenue generated, the length of stay In his address to the provincial Visitor Servicing team 25 Apr 2014 (c) Dr. Nancy Arsenault (2014). Have we put ourselves in too many boxes? Marketing Visitor Services Product Development Training Research Stuff! Federal Regional Municipal Associations Provincial Business Tourism Hotels Restaurants Attractions Transportation DMOs
  • 11. (c) Dr. Nancy Arsenault (2014). And lost sight of the customer? Marketing Visitor Services Product Development Training Research Stuff! Federal Regional Municipal Provincial Business Tourism Hotels Restaurants Attractions Transportation DMOs (c) Dr. Nancy Arsenault (2014). Maybe it’s time to take a step back Look at the bigger picture ... and dream
  • 12. (c) Dr. Nancy Arsenault (2014). (c) Dr. Nancy Arsenault (2014).
  • 13. (c) Dr. Nancy Arsenault (2014). Walk boldly but carefully (c) Dr. Nancy Arsenault (2014). The E-Factor! • Visitor Excitement • Visitor Experience • Visitor Engagement • Visitor Economy The Visitor is in the Drivers Seat!
  • 14. (c) Dr. Nancy Arsenault (2014). An Opportunity to Truly Focus On Customer Experience Competing on Value Visitor Economy The next competitive battleground. 1.The Customer Experience
  • 15. (c) Dr. Nancy Arsenault (2014). A Great Customer Experience The visitor’s experience is the cumulative impact of all physical, emotional and practical encounters guests & prospects have with companies and the destination.
  • 16. It’s travel that’s • authentic, • memorable • engages the senses, • is inherently personal and • connects on physical, emotional, spiritual, intellectual, or social level. Source: Nancy Arsenault (2004) Experiential Travel Free Wheeling Adventures “Seeing the sights is no longer enough. More than ever people are travelling their passions.” Joe Diaz, Afar Magazine Investing in stories over infrastructure is: Everyone has a story to tell ... more engaging ... more personal ... authentically yours ... make connections ... flexible/dynamic AND ... quicker to market ... attracts media ... can charge more ... builds HR capacity ... less expensive
  • 17. (c) Dr. Nancy Arsenault (2014). But it begins with really knowing theVISITOR Then focusing your thinking, investment approach and product development and promotional activities through the eyes of the traveller. 2. Compete onValue Engage the Senses Local Flavor Authentic Connect with Chefs, Farmers Vintners
  • 18. (c) Dr. Nancy Arsenault (2014). Canada MUST Compete onValue “Value is the immunization factor. When there is no difference in value people buy on price alone. ” Competing on value allows you to create a ‘be different’ strategy that your competitors will have difficulty copying.” Roy Osing (2009). Be Different or Be Dead. (c) Dr. Nancy Arsenault (2014). We’ve known this for a long time ... Beggars Banquet, Louisbourg Canada must develop niche products and services tailor-made to match the unique characteristics of its diverse regions. Deloitte’s Destination Canada: Are We Doing Enough (2007) Solider for a Day, Halifax Citadel
  • 19. Edible Canada Connecting with what people really want ... the chef & conversation! Edible Canada,Vancouver, BC Food ingredients (Commodities) Culinary Artisan Store (Goods) Restaurant Dining (Service) Market Price Premium Price $40, $80, $120 & $750 Competitive Positioning Pricing & Profits LowVolume HighYield HighVolume LowYield Greater Differentiation, Emotion, & Engagement No to Low Differentiation, Emotion, & Engagement Experiences! Mains $24 - $33 Most $3 - $50
  • 20. Group Size 2 to 8 People Cost $40 pp Cultural Explorers Foodies ! Group Size 8 to 12 People Cost $750 pp Targeting Niche market foodies who want to experience the west coast by kayak
  • 21. 3. TheVisitor Economy Broader than the Tourism Economy Tourism(Economy What’s(the(Difference? Value Creation Visitor(Economy Tourism(as(one(element(of( sustainable(communi:es For businesses For Visitors For communities Sustainable(Tourism For businesses For Visitors For destinations
  • 22. What’s(the(Difference? Value Creation Visitor(Economy Tourism(as(one(element(of( sustainable(communi:es For businesses For Visitors For communities/ government For destinations WOW guests, earn a living, successful business Memorable Experiences Healthy Economy Deliver on the brand promise Encompasses everything that attracts visitors to a destination and makes a place special, distinctive and is capable of engendering pride and interest in a place worth experiencing. The(Visitor(Economy
  • 23. Partner(Differently! Visitor(Economy Stimulus Investment Pot Tourism(as(one(element(of( sustainable(communi:es Municipal Affairs Tourism Environment Fisheries and Oceans Product / Experience/ Industry/Community Development Marketing Research Managing&the&Visitor&Ecomony It&is&a&con3nuous&process&of&researching,&inves3ng&in&product&&& people&development,&and&marke3ng&the&tourism&poten3al&of&an&area& in&ways&that&provides&value&to&visitors,&businesses&and&communi2es. Value Creation For businesses For Visitors For communities For destinations
  • 24. Truly Customer Centric (c) Nancy Arsenault (2011). Inspired by ChrisVoss (2003) Continual Innovation & Investment TheVisitor Investment Cycle Lead with the Visitor not the Function Change Management Manage the Visitor Lifecycle Generate a desire to return or recommend Design memorable, engaging visitor experiences Value Creation Research Increased visitation, spend, length of stay, profit, brand strength Establish relationships Know your customer & markets Product & People Development Deliver on the product and destination experience Invest in the destination experience Promote, advertise, drive sales Is Tourism at Risk? Yes If we don’t embrace the opportunity to invest differently.
  • 25. A Tale of Change Driven by Reality Synergy Louisbourg CHOOSING to Raise the Bar on Value and Collaborating to Compete
  • 26. 1. Know their Visitor 1. Research • Knowing Louisbourg’s visitor AND Cape Breton’s • CanadianTourism Commission Authentic Experiencer Cultural Explorer Cultural History Buff Engaging Learning Connecting Unique Differentiator 2. Invest Strategically 1.Collaboration: Synergy Louisbourg, DCBA, ECBC 2.People: GMIST Experiential Travel Training (Multi Partners) 3.Community: STEP Program (ACOA) 4.Product Development by Businesses: • Layering engagement • Personalizing the offers • Collaborating to compete as a community
  • 27. 3. Marketing - broader than just promotions • Place - Louisbourg, not just the Fortress • Product - Layer the Community Experiences • Price - Differentiated options • People - Build community capacity • Promotions - Individual, partnered, destination marketing Growing Steadily Cannonier for a Day Playing Hookey Louisbourg Rocks etc.
  • 28. “It’s kind of exciting . We didn’t realize that people would respond to this so positively and like these intimate ways of experiencing the Fortress rather than just walking around and bumping into costumed stuff and watching a demonstration.” •Provided focus for reorganizing the time without increasing human resources •Improved shoulder season experience for guests •New model for revenue generating programs. •More choice and opportunities for visitors to experience the site. Lester Marchand Visitor Experience Manager Fortress of LouisbourgKey Benefits of Making the Shift FOCUS ON: $39.95/pp 1/2 hour dressing 2 hours dining
  • 29. (c)Tourism Cafe Canada & Earth Rhythms (2014). Market Price Premium Price Greater Differentiation, Emotion, & Engagement No to Low Differentiation, Emotion, & Engagement Land, Building, Tent (Commodities) Restaurant Dining (Service) Rooms, RV site (Goods) LowVolume HighYield HighVolume LowYield Competitive Position Pricing & Profits Point ofView Suites, NS & Beggars Banquet (Experience) Aligning with the Primary Demand Generator ... Becoming a Primary Demand Generator
  • 30. (c) Dr. Nancy Arsenault (2014). Your Nova Scotia Tourism Strategy “The creative challenge is to connect emotionally with potential first-time visitors.” “With government and the tourism industry working together to focus on the visitor, and Nova Scotians as our ambassadors, we have the elements of tourism
  • 31. It Takes Courage Cuz’ same ol just isn’t cutting it (c) Dr. Nancy Arsenault (2014). What if to get more visitors and $$
  • 32. (c) Dr. Nancy Arsenault (2014). All of us! Government + Private Sector + Not-for Profits (c) Dr. Nancy Arsenault (2014). RevisitYour Business Model Business Model Generation by Osterwalder & Pigneur 2009
  • 33. (c) Dr. Nancy Arsenault (2014). What if we challenged how we currently do business Supply Approach 8 Provincial VICs Call Centres 57 Regional VICs Provide Info Only 20 - 43% stop at a VIC Still A lot of people! 360,000 to 774,000 people! (c) Dr. Nancy Arsenault (2014). What if we put the Customer First How would it change the conversation aboutVisitor Servicing? A Customer Centric Approach Who is the customer What type of SERVICES do they need? Where could they get it? Enhanced research needed General Information Locals Know Insights Make a Reservation Website, Print, Facebook, TripAdvisor, YouTube, Travel Agent ... VIC, Tourism Business, Gas Station, Kiosk, Travelling Van, Community Ambassadors ... How can we add to the visitor experience? Physical & Emotional? Direct, Booking Engine, Bookmark a URL Washroom, Charging Station, Print Info ... What do we stop doing so we can do new things = Conversation Spaces! How will we measure the ROI & ROE?
  • 34. (c) Dr. Nancy Arsenault (2014). Invest in Desired Outcomes Not Just Project Goal: New Revenue Generating Visitor Experiences Operator A = $10K + Operator B = $10K + Operator C = $10K (c) Dr. Nancy Arsenault (2014). Shift from Funding to Investing ROI & ROE Set NEW metrics of Success Amend Program Criteria Eliminate March Madness
  • 35. (c) Dr. Nancy Arsenault (2014). Prioritize Infrastructure $ Truly Unique Infrastructure Or Prioritize funding for those those that have: Infrastructure + Activity + People/Programs with multiple revenue streams Direct or Partnered Newark Ohio (c) Dr. Nancy Arsenault (2014). Visitor Services toVisitor Concierges ... trained and hired to be an active, sales force ... create info feedback loops WITH industry ... plan itineraries AND direct book with operators Woodlands Texas Boise Idaho Tofino, BC
  • 36. (c) Dr. Nancy Arsenault (2014). Let Go of Control: Collaboration to Compete Co-Innovate Co-Create Co-Author Co-Design Revenue Share Staff Share Shared Risk (c) Dr. Nancy Arsenault (2014). Helping Businesses Use Research KNOW YOUR VISITORS! Graphic:
  • 37. (c) Dr. Nancy Arsenault (2014). And Understand ALL Sales Channels #1: Direct to Consumer (No commissions) #2: Indirect to Consumer (Commissions or net rates) Tour Operator (Travel Trade) Intermediary (Expedia, ...) Customer Bookings Packaged Independent Travel Bookings Group Tour Bookings Packaging Partner Travel Agent Invest in the 7 Ps! They are all Important! Image: You can’t drive new business with old products and services!
  • 38. $2 billion $$ 3 billion 2 million happy visitors 3 million happy visitors Nancy Arsenault Managing Partner & “Experience Gal” T: 250.589.2087 Thank-you!