FOCUSING ON THE GOAL
y the time you read this, the first round of discussions with the tourism industry on implementation of the recommendations in the Tourism Competitiveness Study will have been held. There has been vigorous debate within the industry over the creation of new tourism regions, and as I listen to many of the comments, I am reminded of a quote I used to present to my students.
“Would you tell me please, which way I ought to go from here” Alice asks the Cheshire cat in Lewis Carrol’s children’s classic Alice’s Adventure in Wonderland. “That depends a good deal on where you want to get to” answers the cat.
The Competitiveness Study, though short on detail in many areas, states very clearly where we want to get to – Ontario will aim to double tourism receipts by 2020. The report then goes on to outline four things that need to be done to get there.
Change how government and industry work together to develop tourism and foster economic growth.
Set new standards for success to become more internationally competitive.
Maximize the impact of private and public tourism investments on new and revitalized product across Ontario.
Reach out to consumers before they get here and once they arrive so that we can welcome more tourists to Ontario destinations and experiences.
Almost all of the discussion to date has focused on whether we should create new regional Destination Marketing and Management Organizations (DMMOs) or keep our existing organizations unchanged. Nobody seems to have any idea what it means to move from marketing organizations to marketing and management organizations.
The provincial budget significantly changed one key idea in the study report – the use of destination marketing fees to fund new initiatives. In its place, the government announced that the new Harmonized Sales Tax would increase the provincial portion of the sales tax on accommodations from 5% to 8%, but would now use this money in place of a DMF to fund the proposed new regional DMMOs.
The budget has stated that $40 million in revenue from this tax change will go to fund the new DMMOs. Many industry estimates, including estimates in the competitiveness study suggest that the new revenue would be much higher – more like $100 million to $125 million. Regardless of which figure you choose, there seems to be considerable industry consensus that all of the new revenue from the increased taxation on tourism should be spent to support tourism.
Will spending this new money on creating and funding regional DMMOs get us to where we want to go? As I examine the Competitiveness Study and think about the comments I have heard from the industry, I don’t sense any strong feeling that more regional marketing will solve our problems.
The strongest and most consistent themes I see in the study are around the need for increased investment and updated tourism products. This is also what I hear from individual operators.
Are there other areas that we could invest this new found tax revenue that would provide a greater return? I have heard repeated calls from the industry for a return to investment support programs like some of those provided by the Northern Ontario Development Corporation in the past. Should government consider loan guarantee programs to help operators with upgraded facilities or expansions? If we are going to consider marketing support, should some of those dollars be placed directly in the hands of operators to help them with their individual marketing efforts? The tough economic times have forced many businesses to reduce their marketing expenses at a time when they need to expand them. Perhaps a return of direct marketing support programs would be appropriate.
I’m sure I have just scratched the surface with these suggestions, and these may not even be the right ideas. What I believe absolutely is the right idea, however, is to measure any proposal against the outcome – doubling tourism revenue by 2020. We need to look at this outcome and the Competitiveness Study as a whole.
Creating more effective regional structures is one important step toward our overall goal. We said in our submission to the review, which is quoted in the report that “We need to move beyond viewing Ontario as a single destination and create structures to provide a variety of regional and experience-based destinations within the province.” But focusing on this task in isolation from the rest of the study does not help us to make clear decisions around how to allocate our limited resources so that we have the best chance possible of reaching the goal we have set.
The government has suggested using the new revenue from the increase in the tourism sales tax for tourism, and that is a good idea. However, we need to look at how we can spend that money to get the greatest return for the industry, and ultimately the province. It is unlikely that this kind of new money can be found to implement other recommendations in the study, so we need to make sure we make the right decisions on where to invest in the industry.
The Competitiveness Study has given us something very useful – a goal. We now know where we want to go and can measure our success. If we don’t we will be doomed to follow the rest of the Cheshire cat’s advice. “I don’t much care where--” said Alice. “Then it doesn’t matter which way you go,” said the Cat. “--so long as I get SOMEWHERE,” Alice added as an explanation. “Oh, you’re sure to do that,” said the Cat, “if you only walk long enough.”
This article was taken from pages 5 & 6 of NOTO's "The Outfitter" publication, Spring 2009 Issue