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Crisis? What Crisis?

 
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September 25, 2012 posted by Don Douloff


Will Europe’s economically challenged countries keep attracting and maintaining bookings from Canadian planners?

BY ADAM PLETSCH

It seems every day brings another new story about the situation in Europe, with dire warnings of either impending economic malaise; a bank—or banking system—on the verge of collapse; labour strife or political turmoil.

The serious trouble started three years ago, when Ireland’s economy took a severe blow due to a collapse in housing prices and unemployment, and then experienced a financial meltdown. The government, which has propped up many of the country’s indebted banks, had run up a huge deficit that crippled the Irish economy.

Ireland was saved by the European Union, the International Monetary Fund and three nations: the United Kingdom, Denmark and Sweden, in the form of a €67.5-billion bailout agreement in late November, 2010.

Ireland might have been the first true European economic casualty of the latest global recession, but Spain, Portugal and, to a lesser extent, France and Italy have seen their share of recent woes. Of course, the most worrisome example of a country in serious economic and political trouble is Greece.

These examples of political strife, fragile economics, bank failures and wildcat strikes are seen as causes for concern, and rightly so. But just how are they affecting tourism and incentive travel there?

EUROPEAN CHALLENGES
Dr. Peter Williams, director, Centre for Tourism Policy and Research, at Simon Fraser University, in Burnaby, B.C., returned from the 1st Biannual Forum: Advances in Destination Management, in St. Gallen, Switzerland, in June, where attendees were discussing European destinations and the challenges they face.

Williams says attendees expressed much concern about the financial uncertainty looming over many countries and destinations and the impact it would have on trip planning and purchasing decisions. For example, on their minds was uncertainty about “what currencies will be in play, what currency exchange rates are associated with them, how financial circumstances will affect the solvency of the businesses that are providing services for them, and what risks planners working with these destinations might incur when making decisions two or more years out.”

Such concerns are making high-end travellers “very nervous” about where they plan to go, he says.

Asked whether there was a sense that European countries are being taken off the lists of incentive planners and their clients, Williams says yes, citing Greece in particular, but adding similar concerns were expressed about dealing with other countries such as Spain and Portugal.

Williams says the level of unease among attendees at the forum, who hailed from around the world, but were primarily European, surprised him.

HIGH AND DRY
“I was surprised, first of all, how desperate the situation was rapidly becoming for some vulnerable destinations. They really expressed a lot of concern that Europe would become a two-tier region, with dramatically different financial makeups, and some ‘debt ridden’ countries and their travel businesses going bankrupt, leaving travel operators high and dry.” Negative press certainly does its part to create uncertainty around particular destinations as well.

But are these problems, or impending problems, negatively influencing planners of incentive programs in Canada?

The answer is yes, but not to the degree you might expect.

Kelly MacDonald, manager, industry relations, Fraser & Hoyt Incentives, of Halifax, recently proposed Greece, France and Spain, all for incentive programs. She had clients visit Italy and Greece last year and Spain three years ago.

MacDonald says if there is client interest in a location, or if a client has had a great past experience there, Fraser & Hoyt will propose it.

“We would take more precautions. For the program we did in Greece a few years ago, there was unrest, and it was in the first wave of their economic woes. We certainly looked into more insurance [since attendees were participating in a running event] and kept the client aware of updates and things as we went.”

STRONG INTEREST
Cass Bayley, CMP, CMM, principal at the Bayley Group, in Hensall, Ont., says she, too, has clients showing strong interest in these countries. Her firm currently has Greece and France on the books and another client waiting until end of summer to see how Greece looks for 2013.

Bayley says it’s not business as usual, but it’s not a time for panic, either. “We work closely with the regional tourism and destination management companies to produce a thorough presentation that will give the client a full story of what they can expect.”

One expectation might be increased flexibility on dates, better availability and better pricing levels for attractions and accommodations, such as hotels and resorts, which may not have been possibilities before.

Canadian planners and representatives are “very savvy” about seeking out the best opportunities for their Canadian clients, according to Vlad Haltigin, CITE, who is Producer, Dreams & Memories, at PDM(i), based in Oakville, Ont.

Haltigin says when a marketplace suffers a setback, a good planner knows it is time to explore the opportunities there. However, he does warn that while these particular European countries are willing to negotiate, incentive planners shouldn’t go looking for cheap deals. “They’re looking for a fair return for the services that they’re offering,” he says.

PROTECT CASH FLOW
“People are very, very welcoming in these countries, without fail, and they realize how important it is to attract people to come and visit,” explains Haltigin. Wise organizations in these countries are also selling their services to North American firms in U.S. dollars to protect their own cash flow and business stability, he adds.

In Portugal, Alexandra Baltazar, manager of the Lisbon Convention Bureau, finds that bringing buyers over to visit is the most effective of the area’s several marketing initiatives. The bureau sponsors, organizes and escorts about 40 to 50 North American buyers per year in Lisbon on four-day programs.

Meanwhile, Maria da Graça Luís, technical adviser of the regional minister of culture, tourism and transports, for the Madeira Islands, highlights the location’s proximity to North America, safety, and the breadth of its accommodations. Helena Gonçalves, executive director of the Porto Convention Bureau, highlights Porto and Northern Portugal’s stable political situation, nightlife and culture.

Spain, for its part, counts itself as a country where, among other advantages, good bargains can be had. José Manuel de Juan, director of the Embassy of Spain’s Tourism Section, based in Toronto, says due to the financial crisis, there are fewer Spanish firms organizing events, which provides external planners with better access.

“Because of the reduction in local business, venues and hotels that are usually difficult to book may have more availability, and some hotels have interesting deals. But the international demand is still strong, so do not expect enormous bargains,” he adds.

He notes that, according to the International Congress and Convention Association (ICAA), Spain ranked third in the number of international conventions/congresses hosted last year, behind the U.S. and Germany—the same as in 2010.

MARKETING ENGINES
Since tourism is such a critical factor in the health of a country’s GDP, during tougher economic times, countries must ensure their marketing engines stay in high gear.

As an example, smart tourism organizations make sure to maintain their presence at key industry trade shows.

Haltigin says they must also keep executing “targeted and multi-dimensional” marketing programs to key clients, using a combination of direct print and some selective TV advertising, social media and Internet promotion. “They need to create discussion and buzz about their destination, and they need to focus on the major market opportunities worldwide. Maintaining visibility by exhibiting at major U.S. and Canadian trade and association shows, such as IMEX America, AIBTM, and IncentiveWorks, definitely provides continuity and focus for their respective offerings.”

Good, targeted marketing programs can be effective in assuaging the fears of many incentive-travel planners and clients, but some are still swayed by negative press, whether it’s deserved or not.

On that front, certainly the global media eye has been focused most intently on Greece.

According to the U.K.-based event industry portal Meetpie.com, at IMEX, in May, George Angelis, director of the Athens Convention Bureau, said 2011’s incoming tourism numbers were down approximately 7 per cent, and that “meetings and events certainly took a hit during the height of the disturbances.” Still, he says Greece is seeing renewed interest for 2014 and beyond.

Steve Vassiliades, president and CEO of Andy’s Tours S.A., a destination management company based in Athens, says the situation for visitors to Greece is not as bad as has been portrayed in the media. “The destination still has a very good tourism infrastructure and can provide exceptional services, as well as the security and peace of mind a planner needs to feel comfortable.”

He admits it has been a “tough two years,” which has certainly affected the meetings, incentives, conferences, and exhibitions (MICE) business. And he says planners are more reluctant to include Greece as a preferred destination.

CHANGING PERCEPTIONS
Since it is increasingly difficult to change perceptions, “our efforts are geared [directly on] providing planners with more facts and through personal contact,” says Vassiliades. Suppliers of services in Greece participate in various road shows and trade-specific events, to make sure everybody knows Greece’s MICE product is still strong and—now more than ever—price-competitive.

Fraser & Hoyt’s MacDonald says in such a situation, this kind of policy is highly recommended, and warns the worst thing a destination can do is remain quiet when receiving bad press.

For example, violence reported in Mexico tends to tarnish the entire country’s image, even though it can be isolated drug-related incidents in a border city, hundreds of miles away from the resorts of, say, Cancun and other tourist-friendly areas. For the country affected, direct communication and marketing pieces, press releases, travel advisories, etc., should explain that tourist destinations are unaffected, and it’s business as usual.

Awareness is critical, she says. “‘Let’s just let it simmer’ is not a good approach. Lack of awareness is the worst thing.”

And while countries such as Greece might be struggling to change perceptions today, it is doubtful their current problems will permanently blemish their reputations, argues Haltigin. Greece is still seen as a prime location, as are other European gems such as France, Ireland, Spain, Italy and Portugal.

There is a successful precedent. Ireland, in terrible shape before its bailout in late 2010, has done a lot to right itself economically. According to Williams, at the Advances in Destination Management forum in Switzerland, in June, Ireland didn’t show up on people’s radar as a destination of concern.

“There was a general sense that Ireland had its act together and was biting the bullet, continuing on with its activities, perhaps on a smaller scale from a tourism point of view. It’s pretty accessible and there’s some notion of responsibility on the part of the government and banking institutions to try and fix things.”

So it might take a long and gradual clawing-back in order to reach earlier high levels of success—but it can happen. And this will ease both client concerns and the ability of incentive planners to start from a cleaner slate, and with all the relevant facts at hand.

–Adam Pletsch is a writer and editor living in Toronto.

 

Labour Strife and Best-Laid Plans
Anyone who books travel in Europe knows that there’s always the possiblity that things will go wrong.

As an example, labour stoppages can happen— and when they do, they will almost certainly unravel whatever elegant plan you thought you had in place.

But for Nicola Kastner, CMP, CMM, director, incentive services, Pareto, it couldn’t have come at a more awkward time. In April, she and 10 colleagues were running an incentive program for a client, in Rome, with three back-to-back groups, when a general labour strike hit, affecting almost every service worker supporting their program.

Not only that, it was a transition day when 400 people were arriving and 400 more were leaving.

Kastner and her team had less than a day and a half of warning.

She says they worked feverishly with their hotel and destination management company on a contingency plan. The hotel also brought in contract workers, while the management team jumped in to help.

Some hotel staff that had worked with the team on the first arrival day came back to help, says Kastner. “They said, ‘forget the strike, we’re not going to leave these people high and dry.’”

Somehow, they overcame the odds and came through the crisis relatively unscathed.

“A lot of our participants said they couldn’t tell the difference, but I can tell you, it was a 31-hour, no-sleep marathon,” she says.

Still, Kastner, who has experienced a strike previously in Italy, says she does not plan to drop Rome from her list of destinations any time soon.

“Truthfully, it speaks to the need to use local ground suppliers and reputable partners in destinations that have the right contacts and know the right people,” she explains. “The downstream implications of this were quite extensive, but our DMC and hotel were able to react very, very quickly and put a plan in place that made it seem less [serious].”

But the 11 Canadians who were there will remember for the rest of their careers, says Kastner, “because it had the potential to be an absolute disaster and it was stressful in the lead-up, but it worked out okay.”





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