Travel Currents: February 2013
Canada and the USA: Competitors or Strategic Allies
Are Canada and the United States rivals or allies in the competitive tourism marketplace? Michele McKenzie of the Canadian Tourism Commission (CTC) and Christopher Thompson of Brand USA examined the relationship between these two countries and their respective tourism marketing organizations at the Canadian Tourism Marketing Summit held in Toronto, February 5-6.
At the heart of the difference between the CTC and Brand USA is a huge disparity in budgets due to different funding models. CTC is tax-funded, meaning the federal government establishes the corporation’s budget from its tax revenues, versus Brand USA, which is visitor funded – funding comes from visitors from the 37 countries that require a visa to enter the U.S. This fee is paid every two years when visitors renew their visa.
This reliance on government funding means that the CTC’s budget has been reduced from $100 million in 2001 to $58.5 million for 2013. Brand USA operates with a $200 million budget, $20 million of which is allocated for marketing in Canada. This puts the two countries in competition as Canadians travelling in Canada are a key market. In fact, Michele pointed out that now Canadian destinations are seeing the threat of Brand USA – the first time a destination with similar experiences has been seen as a bigger threat than sunny, tropical beach destinations.
If the CTC and Brand USA are targeting some of the same travellers, can the two countries work together to target travellers from international destinations? Both Michele and Christopher agreed that joint branding of North America is not a likely tactic, but there are ways to work together to benefit both countries. An example is the Brazilian market – a country that may soon no longer need a visa to travel to the U.S. Canada would benefit from this change as our limited air access would mean that Brazilians could more easily access Canada from a gateway U.S. city.
Other examples of possible cooperation include working with international tour operators to package both countries together as a trip-of-a-lifetime. Also, collaborating on research, sharing media trip or FAM costs, and collaborating on a presence at certain tradeshows would offer cost savings to both organizations.
Both Michele and Christopher agreed that collaboration is necessary, as North America is predicted to have the slowest future tourism growth of all continents.
