Tourism transformation

Blake
Blake Doyle
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If you look at any sector over a long or medium-term time horizon, you can get a real sense for trends affecting participants of that sector. A recent review of trends in tourism suggests there is a siege underway for those in the industry.

When most people think of the core economic sectors for the P.E.I. economy, they would think of agriculture, fisheries and tourism. While remaining a key pillar of the economy, tourism has been under great pressure combating a relentless assault of increased global product competition and a shrinking of regional traveler investment.

Creative operators have been able to adapt to these changes, but many have not been able to respond to the rapid pace of changing conditions.

The last decade has been a period of great transformation. The only certainty for the sector is that the next decade will continue to witness great change and our operators will continue to be challenged to adapt.

In 2003, the total revenue from tourism accommodations was $79 million, in 2010 this has grown by only five per cent to $83.2 million. In 2003, there were 144 full service restaurants generating $82 million in revenue, by 2010 this number had shrank to 116 operators and $68 million. The taxable revenue from gift shops was $19 million in 2000; a decade later in 2011 the revenue was $13 million. These are not encouraging trends.

Clearly, we need to think differently about our tourism product. The market is not responding to what we can currently offer. We need to be more adaptive.

Tourism benefits are consolidating in our province and more needs to be done to push the benefit out from the center.

Government can play a role, proper inducements and investment will steer the sector. The absence of policy influence will result in the continued erosion of a once vital sector of our economy.

In October, Price Waterhouse Coopers LLP (PWC) released a draft tourism revitalization plan for the state of Virginia. Virginia is a state with great tourism assets but has a challenge differentiating against neighbouring states with larger tourism budgets and long established tourismdestination status.

The issue for Virginia is how to differentiate when surrounded by better established near competitors with more marketing clout. PWC suggests developing attractions for the “creative class” and appeal to the interests of it’s nearest largest markets (like New York).

When I consider P.E.I.’s positioning, and overlaying Richard Florida’s research from his book “Rise of the Creative Class”, I question if we can position for this market as well. We have dynamic cultural activities, a vibrant food service industry and a tension-reducing variety of scenery. We possess all the necessary attributes to institute a creative class attraction plan. Perhaps there is more we could be doing.

Richard Florida’s creative class is essentially an emerging element of society who is technologically savvy, artistically engaged and open minded to different cultures and perspectives. In many growth cities this group of mid-career professionals are driving culture and driving economies.

The PWC study recommended five competitive factors for the state of Virginia: products, partnerships, pillars (infrastructure), policies and promotions. Aside from the alliteration, these are reasonably simple elements, equally applicable to the Island framework.

I also have to question if the tourism messaging could be used for greater purpose. If we were to market and attract this creative class to spend their money as visitors, could our product not also be used to market our location as a residency alternative? Can our meager tourism budget be applied with two purposes, to bring visitors but also market to those who may consider a residency change?

It is clear the tourism economy is shrinking. The marketing capabilities of the province are minimal and will also be declining over budgets to come. Recasting our existing attributes of culture, scenery and pace may hold appeal to an increasing segment of wealth creators across North America.

 

Blake Doyle is The Guardian's small business columnist. He can be reached at blake@islandrecruiting.com.

 

 

Organizations: Price Waterhouse Coopers

Geographic location: P.E.I., Virginia, New York Florida

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