Evidence of meeting #47 for Industry, Science and Technology in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was travel.
A recording is available from Parliament.
President and Chief Executive Officer, Canadian Airports Council
That's a good idea. Thank you.
President and Chief Executive Officer, Tourism Industry Association of Canada
I agree 100%.
Chairperson of the Board of Directors and the Executive Committee, Canadian Tourism Commission
I think that's a complete answer. Thank you.
Conservative
Bloc
Robert Vincent Bloc Shefford, QC
I have a second question. If we continue in the same direction, what do you think will happen in future years because of gas prices? What direct impact will those gas prices have on your industry in the summer? People say that they will be spending more time at home, travel less, and spend less. What direct impact could that have on the tourism industry? We've focused a lot on airlines, but the domestic tourism industry must not be forgotten. It will be directly affected during the summer if gas prices keep going up.
What are your predictions?
President and Chief Executive Officer, Tourism Industry Association of Canada
Obviously we don't have any scientific way of knowing what the direct impact will be. Fuel prices are changing by the day. The response we're hearing from our industry is not positive. Air Canada's announcement of less capacity in itself will cut travel.
Increased cost has an effect on tourism. We've seen it in the past. Fuel prices, plus our Canadian dollar, plus the slowing U.S. economy--those three factors alone are going to hurt our industry tremendously. We had projected minimal growth again this year, earlier on, six months or so ago. Obviously that's at risk. We may see negative growth this summer and by the end of the year, certainly with domestic tourism and travel to Canada. We're hopeful that we'll see maybe a maintaining of past numbers for this year, but that might be optimistic.
Bloc
Robert Vincent Bloc Shefford, QC
Why is the government taking so long in opening its doors to China? We have a trade deficit with China, but we can't open the doors to them so that their citizens come spend their money here.
Why is the government dragging its feet on this? In your view, what should we do to wake the government up and shake it into doing something tangible?
President and Chief Executive Officer, Canadian Airports Council
That is a difficult question.
In fact, this is something we have been trying to achieve for several years now. However, it may be time for our Prime Minister to do something. But I don't know whether there is any particular way of reaching that goal. Two or three former governments have tried to deal with the issue, and so far, nothing has been achieved. It's a political and diplomatic issue. It is time for our Prime Minister to state his position.
Conservative
The Chair Conservative James Rajotte
We have a brief time.
Mr. Williams, do you want to comment briefly?
President and Chief Executive Officer, Tourism Industry Association of Canada
Obviously that's another very important question. We need open skies agreements with a number of countries. As Jim said earlier, we only have five open skies agreements. We need them with the European Union. That is under way now. We need that desperately. After 1995 when the Canada-U.S. open skies agreement was signed, there was an immediate impact on our industry in Canada. We need to see that with China, South America, and Europe. That's desperately needed. It's in our report as well.
Conservative
Conservative
Colin Carrie Conservative Oshawa, ON
Thank you very much, Mr. Chair.
We hear a lot about the volume of U.S. travellers going down, but the level of tourism revenue seems to be increasing. I was wondering if you could explain the discrepancy. Is the reduction of volume reflective of the U.S. tourists or cross-border shoppers? I was wondering if you talked to CTC with that question--and maybe TIAC, to follow-up.
Chairperson of the Board of Directors and the Executive Committee, Canadian Tourism Commission
Michele can answer that.
President and Chief Executive Officer, Canadian Tourism Commission
Yes, the U.S. numbers you see have been going down quite dramatically. The greatest decrease is in the day travellers who have been coming across the border historically. That number has dropped quite dramatically, about 40% over the last five or six years. The number of air travellers coming in from the U.S. to Canada, on the other hand, has remained flat or is just about even with where it has been. So while the numbers overall in the U.S. have been going down, what's been affected primarily is closest to the border and primarily the day traffic, followed by border car traffic. Air travel from the U.S. is still pretty healthy.
So when you look at the overall numbers in terms of what's happening with international travel to Canada, travel to Canada is increasing from seven of the nine countries we market in. It's decreased from the U.S. and Japan. But with the U.S. it's important to note that in the areas that are specific targets of our marketing, which is primarily the air traveller, that performance has been relatively good. What has been driving growth in terms of revenue in Canada for tourism is the fact that the domestic market has been very strong and last year alone grew by 6.6%
Conservative
Colin Carrie Conservative Oshawa, ON
Very good.
I wanted to ask a question about the market, because it seems that here in North America and Europe it's a mature market for tourism. We have this potential in Asia, and it's really an untapped market. There are new opportunities there.
I was wondering what TIAC is doing to enhance the industry's performance in these other markets. Are you developing partnerships with our own provinces or elsewhere? What are you doing for product development research and marketing in these new markets?
President and Chief Executive Officer, Tourism Industry Association of Canada
The realm of marketing and research is within the Canadian Tourism Commission's purview, so I defer that question to Michele and Steve.
President and Chief Executive Officer, Canadian Tourism Commission
We're focused on a number of markets in Asia-Pacific, specifically China, Japan, South Korea, and Australia. We've been doing ongoing research to determine how best to attract visitors from those markets, and we've been doing very well out of the markets of South Korea and Australia in particular. We've been experiencing growth there of over 10% last year. We talked a little about China already in terms of what's happening to our growth rate there, and we're struggling, as I said, in Japan.
One of our biggest challenges out of the Asia-Pacific market is air access. It's one thing for a marketing organization to create demand, but we have to have the supply to fill that demand if someone has the idea that they do indeed want to come to Canada. We have seen some air capacity increases out of China, but our capacity is more strained in markets like Japan and South Korea. We've had a little increase out of Australia.
So to the extent that we've been able to have increased air capacity, we've been able to succeed in attracting more visitors.
The other market that is a very strong growth market for Canada in terms of tourism is Mexico. It's leading the pack, with growth rates close to 20% year over year.
Conservative
The Chair Conservative James Rajotte
Mr. Jones, did you want to respond?
There's about a minute left.
Christopher Jones Vice-President, Public Affairs, Tourism Industry Association of Canada
I'd like to point out that Canada is up against a number of other destinations in the world that have made a very serious commitment to attracting international visitors. I'm thinking, for example, of Dubai, which has made massive investments in its tourism and travel infrastructure. We're also up against a number of exotic new destinations around the world that are increasingly attempting to attract the middle classes of emerging countries, who are beginning to travel for the first time and who now have some discretionary income.
I think it's important to underscore that for the modest investments we're trying to make to the park systems, the museums, and so on, we're up against countries that in some cases are equipped with significant financial resources.
Conservative
Colin Carrie Conservative Oshawa, ON
You mentioned strategic investments, but you really didn't give a lot of examples. This government feels tourism is so important that they actually appointed a secretary of state for small business and tourism. I was wondering, are you are prepared to work with the industry and the government to advance a national tourism strategy and to give us input?
President and Chief Executive Officer, Tourism Industry Association of Canada
We found the Secretary of State for Small Business and Tourism to be very helpful, accommodating, and accessible. She has shown a willingness to work with us. In our report we haven't been prescriptive in terms of what those strategic investments would be yet. Obviously it takes a public and private sector consultation process to go through that exercise.
Conservative