Posted by: Bob Fisher | October 3, 2012

Watching the Elephant Next Door

Recession Strategies for the Travel and Tourism Industry

There are many advantages to having the United States as a neighbour, on the other side of what used to be called “the world’s longest undefended border.” One of the advantages is somewhat like the childhood game of follow the leader. While pursuing our own national programs and policies, we always keep a close eye on how the largest economy on the continent copes with the latest global crisis — in this case the worldwide recession.

As Pierre Elliott Trudeau, Canada’s most famous former prime minister, said to the Washington Press Club in 1969, “Living next to you is in some ways like sleeping with an elephant. No matter how friendly and even-tempered is the beast, if I can call it that, one is affected by every twitch and grunt.”

And whether we Canadians adopt a “wait and see what the Americans will do” strategy, or whether we just get on with our own business as best we can, the continental and new global reality is that all our “affairs of state” are interconnected and interdependent, especially in the travel and tourism industry.

Because the United States is Canada’s biggest travel market, we Canadians, like any nation, strive to enhance our marketability vis à vis our biggest customer, while at the same time remaining proactive in developing new markets outside the North American continent, because in the era of globalization there is whole new economic model out there.

This is especially true for the travel and tourism industry in these very troubling global economic times.

A generic comparative study

Although I am comparing how Canada and the United States conduct their respective (and very reciprocal) travel businesses, there are many generic lessons in this case study. The lessons of history must not be forgotten, but at the same time, as the U.S. Travel Association has articulated, innovation and renewal are critical survival strategies. And herein I think lies a lesson for travel journalists because as the principal storytellers in the travel and tourism business, we work in a highly collaborative and synergistic mode with our destination partners — and with our fellow travel journalists .

This is also why the Canada-U.S. case study is significant. Although Canada is geographically more or less as large as the United States (9,629,091 km² for the U.S. and 9,984,670 km² for Canada); it is population size that is the critical economic factor in terms of what our two nations have to win — or lose.

The population of the United States is currently estimated at 303,824,640, whereas the population of Canada is only 33,212,696. And this is where the principle of economies of scale is important. In terms of inbound tourism revenues, the more “product” you have to offer and the greater resources you have to get that product to market, the lower your marketing costs will be, and the greater your (global) market share.

And whereas Canada has depended to a great extent on the American market for the bulk of its tourism revenues, for the first time the United States is having to make a concerted effort to look beyond its borders as well as reinvesting in its domestic markets.

No matter what the industry — and travel and tourism is still considered the largest industry on the planet — how any nation keeps that industry alive and flourishing depends on many factors. As we have seen, the global economic situation has resulted in a travel and tourism industry that has become even more interconnected and interdependent.

But changing demographics (Canada and the United States are both “aging” societies) play an important role as well. Travel trends reflect new realities. Sustainable tourism is becoming an increasing priority in nations that recognize that their natural resources are finite but also the main reason why travellers choose to travel there.

In addition other previously unforeseen factors such as the emergence of new technologies like the Internet play a role. The relatively new electronic virtual communities can go a long way to creating a more level playing field in this business; Boise, Idaho can now compete with Boston, Massachusetts for the tourism “dollar.”

Travel journalism is generally supposed to be above and beyond politics, however, whether we like it or not, history and politics have always played a role in the travel and tourism industry. Emerging nations who have achieved a laudable degree of self-sufficiency, are consequently in a much better position to develop very viable travel and tourism industry. They therefore become competitors to traditional markets. This new reality is not lost on the renewed U.S. Travel Association.

And when there is a new Administration in Washington — the U.S. Travel Association has referred to it as “The New Washington” — this national travel and tourism body sees the change in national government as both a new opportunity and a challenge.

Strategies and bold statements

Roger Dow, President and CEO of the U.S. Travel Association, recently conducted a “transamerica” conference call of major players in the travel and tourism industry in the U.S. During his national appeal, he made some gloomy predictions, but at the same time he made some bold statements that certainly give food for thought to anyone in the travel and tourism industry anywhere in the world.

His overall theme was the same as that of Barack Obama — it’s all about change. But he also spoke clearly about the “real and perceived barriers to travel in today’s economic environment.” And as travel journalists, we are very much in the business of communicating realities while at the same time enhancing travellers’ perceptions of a destination through the mind’s eye. In this regard we strive to correct erroneous “impressions” about a destination and ultimately to eliminate attitudinal barriers to travel. We are therefore critical players in the growth of our global industry and it is incumbent on us to make governments and other national bodies fully aware of this fact.

Positioning and reorganization

By positioning or re-positioning itself in the nation’s capital of Washington D.C., the U.S. Travel Association has redoubled its efforts to make the travel and tourism industry a major player in the economy of the entire nation.

For example, Roger Dow points out that his association is making decision-makers in Washington aware that the travel industry provides 7.7 million jobs in the United States. A statement that I found especially significant was the following: “Washington simply plays too significant a role in the travel process and business of our industry for us to be anything short of aggressive, assertive and committed for the long-haul.” In short, the Association has re-positioned itself by “[firmly establishing] travel and our industry as Obama’s economic and diplomatic allies.”

The Association has also developed a vigorous strategy to encourage more business, meetings, and convention travel by educating Chief Executive Officers about the bottom-line value and positive return on investment of business travel. Also, the association has created an Economic Advisory Panel of prominent business scholars from around the U.S. who are studying and communicating to policymakers in governments at all levels, to the general public, and to the business world itself the competitive advantage of maintaining travel during difficult economic times. And one of its key modes of broadcasting this message is through the recently launched DiscoverAmerica.com, the official travel and tourism website of the United States.

Now a lot of nations have had official national websites for quite some time, but in the United States where states, cities, and regions have their own official websites (one has to understand American history and how this nation evolved to a great extent as a decentralized democracy in which regional differences deepened when the national government began expanding), creating a central virtual “port of entry” for travellers is a novelty for Americans.

There is also more evidence of a significant geopolitical shift as the U.S. Travel Association launches new efforts in what they refer to as “the potent markets of India, South Korea, and China.” And because the renewed marketing strategies emphasize both international and inland visitors, there is also a domestic version of the site. Working both sides of the travel marketplace, Americans are also encouraging their compatriots to travel more within their own country.

Above all the U.S. Travel Association is stating loud and clear that “We are a valuable resource and asset — not a collapsing industry in need of a bailout…”, and this is the universal principle and practice that we as travel journalists can also embrace.

Travel Matters: the fundamental message

There was a touch of the Wild West to the theme of the 4th Annual Travel Leadership Summit organized by the U.S. Travel Association from in which the rallying cry was “Stand Up for Travel!”

In the information and registration webpage for this national event, you will find this statement:

“The travel business is in a crisis. The recession is taking its toll, but the problem is much larger due to recent mis-characterizations by political leaders and the media about meetings and events travel. The industry has lost billions of dollars in cancellations, and communities across the United States have lost jobs…. The U.S. Travel Association is fighting back — turning the rhetoric around and focusing on the economic impact of travel…. Join hundreds of travel colleagues this fall in Washington to alert Congress about the recovery role that travel can play in our nation’s economy.”

I’m quite sure that, as usual, Canadians are watching what’s happening “south of the border,” feeling the twitch, and hearing the elephant grunt.

For more information on the new world of travel American-style, see the following:

Travel Green

The Power of Travel

See also…

The Impending Crisis in the Canadian Tourism Industry.

From the U.S. Travel Association website

(a) 1 out of every 8 jobs in the United States is linked to travel and tourism.

(b) In a recent survey, 87 percent of Americans say that encouraging people to travel recreationally within the U.S. could improve the country’s economy.

(c) Business travel accounts for $39 billion in tax revenue — federal, state, and local.

Tom Brokaw of NBC News Explains Canada to Americans

See this very popular YouTube video by clicking here.

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Responses

  1. That was really adventurous to travel like this. I really enjoyed reading your blog. I will surely bookmark this. I would like to read more of your post. So, Keep on posting!!


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