Canada s Travel and Tourism Industry
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2 Canada s Travel and Tourism Industry The NRTT represents the full value chain of Canada's $82 billion travel and tourism sector TRAVELERS Air Cruise Lines Train Auto Lodging Food Retail Leisure Outdoor Busines Resort s s Conventions Touring Agriculture Pensions Education Outside Goods and Services Employment + Sales + Taxes + Wages Local Goods and Services 2
3 Committed to Travel Economy Growth Canada s spectacular beauty attracts visitors from across the globe to every region of our country. These visitors create jobs and sustain local economies. Our Government will continue to work with industry partners to promote Canada as a top destination for tourism. Speech from the Throne, 2 nd Session 41 st Parliament, October 17,
4 Shared Objectives Grow export revenues and diversity the Canadian economy Drive the broader prosperity agenda creating private sector investment opportunities in Canada & jobs in every region of the country 4
5 Canada Europe Free Trade Agreement Travel between countries is a precursor to trade and investment. Canada is engaged in Free trade agreements with over 60 countries, and Air Transport Agreements with 65 countries. Canada will not enjoy the full economic benefits of these agreements until public policy impediments concerning aviation cost structure are addressed. 5
6 An Unparalleled Economic Opportunity Tourism is the world s 4th fastest growing industry 1 billion international travellers $1 trillion in revenues 4% growth globally per year Tourism s footprint in Canada alone: $84.8 B in economic activity $17.3 B in export revenue (#1 service export sector) $9.6 B in federal government revenue 614,600 jobs Canada is performing well domestically but falling behind internationally continued barrier deductions will improve Canada s competitive advantage 6
7 Visitor Mix Key To Growth Incremental Growth Additional Visitors Average Room Rate Average Room Nights Generated p.p. Total Add l Room Nights Generated Additional Hotel Revenue (Canada) 4% 652,000 $ * 3.5 ** 2,282,000 $294M 4% incremental growth would drive over $3B in valuations for the accommodation sector alone. *2011 Average (rounded). Source: Hotels Association of Canada. **Source: Estimates from TIAC and HLT Advisory 97
8 International Visitation - A Long Climb Back International Tourist Arrivals (Top 20 Countries in millions) Rank France 77.0 France (2010) 77.1 France Spain 52.3 U.S U.S. (2011) U.S China 57.6 China Italy 39.8 Spain 56.7 Spain China 36.8 Italy 46.1 Italy U.K Turkey 29.3 Turkey Canada 20.1 U.K. (2010) 28.3 Germany Mexico 19.7 Germany 28.4 U.K Austria 18.6 Malaysia 24.7 Russian Fed Germany 18.0 Austria 23.0 Malaysia Hong Kong 16.6 Russian Fed Austria Hungary 15.9 Mexico 22.7 Hong Kong Greece 14.2 Hong Kong 22.3 Mexico Poland 14.0 Ukraine 21.4 Ukraine Malaysia 13.3 Thailand 19.1 Thailand Turkey 12.8 Saudi Arabia 17.3 Canada Portugal 11.6 Greece 16.4 Greece Thailand 10.9 Canada 16.0 Source: Poland UN World Tourism Organization Ukraine 10.5 Poland 13.4 Saudi Arabia Netherlands 9.6 Macau 12.9 Macao (China) 13.6 In 2012, Canada improved to 16 th in international arrivals (from 18 th ) Despite this modest improvement, we re still short of 2002 levels by about 3.8 million visitors 8
9 Competitiveness Challenges : Policy Measures MARKETING ACCESS PRODUCT & PEOPLE A competitively funded marketing effort that drives alignment and can balance key and emerging markets including US. A modern aviation and visitor facilitation structure enabling the mobility economy. Addressing infrastructure, programming and labour market issues. 9
10 Competitive Challenge Marketing : Investment & Alignment Major competitors have increased international tourism marketing investments i.e. Brand USA into Canada Timing is right to re-evaluate approach to the US market 10
11 Connecting America: A Partnership For Prosperity Connecting America is an industry sponsored proposal for a new three-year coordinated, targeted and measurable tourism marketing co-investment initiative to re-energize the US consumer, utilizing existing air and ground access: Proposed 3 year federal marketing investment of $35M/yr matched 1:1 by Provincial, Local and Private sector investment Generating $210M in federal tax revenue alone Providing or sustaining over 6,000 direct jobs 11
12 Connecting America Visitor Impact Quebec British Columbia Converted Travellers (,000s) Converted Travellers (,000s) Tourism Receipts ($M) $70 $150 Tourism Receipts ($M) $130 $210 Alberta Ontario Converted Travellers (,000s) Converted Travellers (,000s) Tourism Receipts ($M) $105 $35 Tourism Receipts ($M) $230 $520 Atlantic Saskatchewan - Manitoba Converted Travellers (,000s) Converted Travellers (,000s) Tourism Receipts ($M) $5 $35 Tourism Receipts ($M) $10 $30 12
13 Connecting America - Economic Impact CANADA S TOURISM POTENTIAL YEAR 1 YEAR 2 YEAR 3 TOTAL Converted Travellers (,000s) ,360 2,650 Tourism Receipts ($M) ,560 Federal Government Revenue ($M) Jobs Supported 1,900 3,700 6,
14 Conservatives Agree iii) We support the reduction or elimination of federal government fees, levies, taxes and rents, hidden and otherwise, associated with Canada s national transportation system Transportation Principles, Policy Declaration of Conservative Party of Canada
15 Competitiveness Challenge: Aviation Canada is a fly-to destination, but our cost structure is a barrier to success Canada is ranked 5 th with regards to access, but 136 th based on aviation cost structure* Increasing competition requires: Aviation cost structure (Transport & Finance) Passenger Facilitation (CIC & CBSA) Air Access Agreements (Transport & Trade) *Source: World Economic Forum Travel and Tourism Competitiveness Report 15
16 Competitive Challenge Facilitation: Visa and Border Issues Significant progress made - more to do! Current Recommendations: Reducing red tape using technology (ETA) leading to Visa Waiver for markets like Mexico & Brazil Optimizing Existing Security Infrastructure (Beyond the Borders) Reinvest in Visa Processing 16
17 Conservatives Agree vii) refrain from using the term resident or residence in temporary, student and visitor visas to ensure greater certainty for those temporarily visiting Canada.`` Entry Applications, Permits and Landing fees. Policy Declaration of Conservative Party of Canada
18 Recommendations to Achieve 4% Annual Growth 1. Partner with the travel and tourism industry in Connecting America, an unprecedented strategically-aligned marketing initiative to drive US leisure demand for tourism vacation product across Canada 2. Reduce the government-imposed aviation cost burden in order to maximize economic benefits for Canadians of international Open Skies and Free Trade agreements. 3. Modernize our visitor visa system by differentiating between travellers and residents Increase on line processing of traveller visa applications from key source markets; Build on our information-sharing and security partnership with the US to establish a reciprocal trusted-traveller visa waiver system for travellers from key markets; Grant visa waiver status for Brazil and Mexico leisure and business travellers. 18
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