As an incentive destination, how does Canada rate?
BY ALLAN LYNCH
French philosopher Voltaire dismissed Canada as “a few acres of snow.” Two centuries later, the Canadian Tourism Commission addressed this perception with the launch of Brand Canada, to move our tourism promotion beyond the clichéd ‘three Ms’ of moose, mountains and Mounties, to highlight the dynamic experiences available here.
Dynamic is an apt description for Canada’s incentive sector. Not only are destinations dynamic, so are clients, many of whom are anxious to harness the world for their programs. Just as the Canadian economy didn’t suffer the recessionary hits experienced in America and internationally, neither has our incentive sector suffered. In a world of tricky business headlines, Canada’s incentive sector, like much of its overall economy, has held steady. In an informal survey of incentive houses, destinations and properties, M+IT has found that the business is there.
Bernie Koth, co-president and partner at Toronto’s Wynford Group, whose company does 50 to 60 incentive programs per year, says his clients are still spending the same. Jamie Keating, general manager of Halifax’s Fraser & Hoyt Incentives, says, “the trend for our clients is ‘full steam ahead.’ All of our clients retained or increased their budgets year over year. Any cutbacks we’ve seen have been very limited and/or short-lived.” In Red Deer, Alta., Cascadia Motivation president Robert Thorsteinson says, “after the 2008 economic crisis, we saw a cancellation of a group of clients, who were nervous and felt incentives were a cost—or that the optics were poor. Beginning in mid-2010, we saw firms return to using incentives as a logical tool to help grow loyalty and sales. Cascadia Motivation has been in business for 28 years. [This year] is projected to be our third largest year in history [and] 2013 and 2014 look very promising.”
Client concerns and cancellations only modestly affected Canadian destinations. While most destinations report level, steady business, a few faced hiccups. Over three years, Montreal experienced a 10 per cent to 15 per cent drop, directly due to the shaky economies of American and European clients, who have been forced to pull back temporarily. Not surprisingly, Whistler, B.C., experienced a small post-Olympic hangover, which is moving to the recovery stage, according to Tourism Whistler’s senior conference sales manager Cassandra Zerebeski. The changes to its group business are shorter booking times, a dropped night, and, sometimes, arranged activities replaced by gift cards, so attendees can manage their own schedule.
Krista Cameron, Destination St. John’s sales director, says corporate business (inclusive of incentives) doubled in 2010, from 2009, and maintained that growth in 2011. Cameron says much of this growth came because of the economic downturn. “In 2009, clients called with initial plans to go to southern destinations, but due to cost and/or perception, they were now looking in Canada for unique destination experiences.”
Newfoundland wasn’t—and isn’t—seen as a frivolous destination, yet was far enough off the main business-travel circuit to pique participant interest. It offers quasi-exotic experiences like iceberg- and whale-watching; geological wonders like Table Mountain, in Gros Morne National Park; the world’s first UNESCO World Heritage Site, at the Viking settlement at L’anse aux Meadows; and rollicking nightlife on well-known George Street, in St. John’s.
The trends at Fairmont mountain resorts like Banff Springs, Chateau Lake Louise, Jasper Park Lodge and Chateau Whistler, according to Jasper Park Lodge’s director of sales and marketing Uwe Walter, are almost contradictory. On the one hand, clients are returning to higher-end incentives. On the other, the resorts find themselves somewhat in competition with low-cost sun destinations in the Southern U.S. and Caribbean. The upside is that Canadians love the mountains, as reflected in how much business they book there: Jasper Park Lodge gets 92 per cent of its incentive and group business from Canadians; Chateau Lake Louise draws 80 per cent, while the Chateau Whistler and the Banff Springs earn 55 per cent of their incentive and groups business domestically.
Those are excellent numbers, considering that most Canadian incentives opt to leave the country. Not surprising, since Mark Crawford, Tourism Toronto account director, corporate international, says, “for the most part, 80 per cent of incentives around the world leave their country and go somewhere relatively far away, to have an exotic experience.”
The reasons Canadians aren’t opting for ‘stay-incentives’ range from the NIMBY (Not In My Backyard) effect—which Jan Zwolak, Maritz’s senior manager, meetings and incentives, says is less motivating—to climate. With most programs scheduled for March-April-May, our weather is too unpredictable.
Recently returned from a U.S. marketplace for “pre-qualified incentive planners who use destinations outside the U.S.,” Cameron says a study released at this event found “for global incentives, Canada is number four in popularity as a country, after the Caribbean/Bermuda, Europe and Mexico. The poll actually matched what their results had shown over the previous year’s polling. And they said the factors for choosing the destination, when it comes to incentives, [were, in order]: accommodation quality, airlift accessibility, reputation of destination and security.”
When it comes to accommodations, Cameron says, “it’s perception, and brand. I have had several clients say they’re looking for luxury brands only, due to perception, while others avoid luxury brands for the same reason.”
Toronto understands this snobbery. The rash of new five-star hotels in its marketplace has helped the city’s image internationally and placed Toronto on the radar for a number of clients who overlooked the city before, says Crawford. “The branding of the city with the new luxury hotels has been good. The new Ritz-Carlton, the Trump, the Shangri-La and Four Seasons—even prior to them being built, their global sales offices around the world were, and are, telling the story and getting the anticipation level pretty high. It raises the level of interest in the city for that type of group.”
He agrees with Maritz’s Zwolak, who would like to see a mega-luxury hotel in Canada. “Some clients have interest in five-star hotels with significant bedroom inventory for the larger groups, but the boutique style has the feel of exclusivity,” says Crawford. However, that’s not stopping Toronto from landing large incentives. The city beat out Dubai to welcome, this October, a four-night, 1,000-person incentive from a U.K.-based law firm. And in 2014, the city is welcoming a five-night, 5,000-person incentive from Asia. Crawford says Toronto won the business because of the ability to include Niagara Falls as part of the bid and the city’s extensive air connections, among other reasons.
Perversely, our incentive industry may be stronger because Revenue Canada’s changing tax laws regarding acceptable business expenses nudged the country towards evolution. That, and listening to client needs. While the American market continued to embrace so-called “pure incentives,” as if recreating an episode of Mad Men, we moved forward in developing working incentives, where some element of education or meeting was incorporated into the program. Conversely, according to Zwolak, many meetings now feature components of an incentive. While her clients don’t do many domestic incentives, they do use Canada extensively for sales meetings and conferences. “We have a great offering here, we still use Canada a lot for meetings, and our meetings have changed a lot, in that there are incentive elements to them,” like an awards gala, leisure time and motivational facets.
So in typically quiet, Canadian fashion, our DMCs, incentive houses, destinations and properties once again were ahead of the curve. We didn’t need a major economic upheaval like that experienced in the rest of the world to see where the business should be and how to remodel it to remain valid, vital—and dynamic.
—Allan Lynch is a freelance writer based in New Minas, N.S.
Improving the Electronic Offer
The automated RFPs washing over the industry, while seemingly convenient for the issuers, are frustrating suppliers, because there’s no flexibility or opportunity to negotiate.
Jasper Park Lodge director of sales and marketing Uwe Walter is alarmed by automated RFPs for the same program being sent to the Canadian Rockies, Quebec, Arizona and Hawaii. “There are totally different destinations. The most challenging thing for us in the mountain resorts is to bring the emotional portion of the experience across, because if meeting planner or third-party just look at their Excel spreadsheets, it’s not giving anything about the experience.”
To overcome barriers which prevent speaking to, let alone meeting, client decision makers, Walter says this indirect sales approach means “our sellers need to prepare the person who is going to be the messenger really well” on all factors, like the destination attributes, which contribute to the wow factor.
“From our end, we’re trying to invent new things to make our electronic offer more attractive, so we can at least send out a link with personalized video messages and destination videos, to make sure” all key business factors are addressed.