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Year of the Tourist

China will produce 100 million outbound tourists by 2020. What is Alberta doing to make sure they come here?

May 1, 2011

by Annalise Klingbeil

Last May, Lynn Li had a whirlwind, four-day tour of Alberta. As her flight prepared to touch down in Vancouver, she snapped a photo of the blue sky that loomed large outside the tiny airplane window, securing a souvenir that most Canadians take for granted. “When we travel, blue skies and fresh air is something different,” says Li. From Vancouver, she flew to Calgary, bussed to Banff and enjoyed guided tours of Lake Louise, the Banff townsite, Minnewanka Lake and the Columbia Icefields. Li is the client relations director at Dragon Trail, a travel technology and digital marketing company that helps international clients connect to Chinese consumers. She came to Canada on a business trip and was so impressed by Banff’s sustainable tourism, the shopping at CrossIron Mills and, yes, the clear blue skies, that she hopes to one day bring her family to visit Canada.

OH, CANADA!: Lynn Li’s trip to Canada was an unqualified success. Alberta Tourism officials are hoping for many more like it

Trips like Li’s used to be the exclusive provenance of government officials, industry representatives, international students and others with the status needed to obtain clearance from the Chinese government to travel to Canada. But just a month after Li finished her brief trip to British Columbia and Alberta, Canada received Approved Destination Status (ADS) from China. In so doing, the Chinese government flung open the doors to the largest pool of potential tourists in human history: China’s burgeoning middle class.

The country’s middle class isn’t just growing in size but in affluence as well, and they want to spend some of that wealth on international travel. “Travel is the dream of everyone,” Li says from her office in Beijing. “The people here in China are wealthier now. More and more Chinese can afford a trip. They want to see what’s happening outside their world.” As a result, tourists like Li may represent the biggest opportunity in the history of Alberta’s tourism industry. “It has been decades since we’ve faced a phenomenon and a great opportunity like this,” says Bruce Okabe, the CEO of Travel Alberta. Okabe says the potential of the emerging Chinese market is reminiscent of the influx of Japanese tourists that flooded the province in the 1970s and transformed the town of Banff.

China’s decision to open up travel to Canada couldn’t have come at a better time for the industry, given that its growth trajectory has flattened out in recent years. Okabe says the numbers of visitors to Alberta from traditional bread-and-butter markets like Germany, the U.K. and the United States have dropped during the past four years, a decrease he attributes to the weak global economy and increasingly robust Canadian dollar. But Okabe isn’t counting on ADS to solve all of the industry’s problems. According to a recent report from the China Tourism Association, of the 57 million outbound trips taken by mainland Chinese citizens in 2010, 98 per cent ended somewhere in Asia, with 71 per cent of those trips destined for either Macao or Hong Kong. Approved Destination Status (ADS), in other words, isn’t going to guarantee a flood of Chinese tourists. “This is not the silver bullet or the saviour of tourism post-recession,” he says. “This is going to be hard work.”

China granted Canada ADS on June 24, 2010, but that official announcement was preceded by negotiations that began in December 2009. ADS allows Chinese travel agents to advertise and organize group tours of Canada, while Canada can now market itself as a vacation destination directly to Chinese consumers. But if it’s a new market for tourism operators, it’s not a wide-open one. More than 100 other countries and territories already have ADS, and Canadian operators must compete with them for the estimated 100 million outbound travellers that China is expected to produce by 2020.

“Chinese outbound tourists will change the face of the hospitality and tourism industry as we know it,” says Pierre Gervois, CEO of Shanghai-based marketing company China Elite Focus. “In 10 years time, Chinese tourists will probably be number one in North America.” A Conference Board of Canada survey shows that by 2015, ADS is expected to boost the yearly rate of travel to Canada from China by up to 50 per cent. Derek Galpin, the Canadian Tourism Commission’s (CTC) managing director for China and India, has worked in China since 2004 building awareness of Canada in preparation for the ADS designation. “What normally happens when a country gets ADS is they then open a national tourism office and then start promoting the country,” says Galpin, on the telephone from India. Canada had an office in Beijing for five years before ADS was designated, meaning the necessary preparations have already been made.

As far as the Chinese traveller is concerned, Canada is already something of a known commodity. “Canada is already a very familiar name to all of the Chinese,” says Li. But if they know about Canada, they know less about the provinces and cities in it. Li, for example, knew about Canada’s other major cities, but had only heard of Calgary because a friend had recently moved there. “Places like Vancouver, Montreal and Toronto, all the Chinese know these places very well,” she says. If cities like Edmonton and Calgary need to work on building their visibility with the Chinese tourist, provinces like Alberta have even more work to do. After all, most international tourists are less concerned with what province they’re visiting and more focused on the country itself.

How, then, does Alberta stand out from provinces like British Columbia, Ontario and Quebec and their more recognizable cities? It wasn’t going to be by waiting patiently, and so in May 2010, while Canada awaited formal approval of ADS, Travel Alberta took the bold step of placing an in-market representative in the CTC offices in Beijing. “She is Travel Alberta in China,” says Okabe of Maria Yang, who is the organization’s market development director for China. Alberta was the first (and as of mid-March, the only) province to have a representative working at the CTC’s offices. “We’re well ahead of the game and well ahead of other provinces,” Okabe says.

Having an in-market representative may put Alberta ahead of other provinces from the outset, but it doesn’t eliminate the prospect of competition. When the inaugural group of Chinese tourists landed in Vancouver in mid-August, just six week after ADS was announced, the more than 300 tourists split into groups and visited destinations in B.C. and Alberta or Ontario and Quebec. Those four provinces are where Galpin says this emerging market most wants to go, with the French flavour of Quebec, the raw power of Niagara Falls and Western Canada’s majestic Rocky Mountains considered Canadian must-sees.

Okabe acknowledges that British Columbia and Ontario are “very significant Canadian competitors” for Alberta, but it’s the relationship with its western neighbour that is both the most interesting and the most important. “We absolutely need British Columbia

in order to be successful here in Alberta,” says Okabe. Alberta is heavily dependent on B.C.’s tourism infrastructure, and it must co-operate with the province if it wants to market itself as part of one western Canadian destination. Still, if the two provinces need each other to attract Chinese tourism dollars, they’re also competing over how they’re divided. “I guess it’s co-opetition,” Okabe says.

Staying out of its western neighbour’s shadow is going to be a challenge for Alberta’s tourism industry. Yes, British Columbia played host to the 2010 Winter Olympics, but that once-in-a-lifetime promotional opportunity is only one of the advantages it enjoys when it comes to attracting potential Chinese tourists. The province also boasts a more tourism-oriented economy and is home to one of North America’s largest Chinese communities. There’s also the not-insignificant fact that Vancouver and Toronto are the only two Canadian cities with direct flights from China. That needs to change, Okabe says, if Alberta is to compete on a level playing field with British Columbia. “The single biggest thing that can grow tourism is direct flights from destinations like China, Japan and others,” he says. Okabe says a direct flight from China to Calgary or Edmonton is absolutely critical to tourism in the province, and he remains hopeful that it will happen soon. “It’s a little bit outside of our sphere of influence,” he says, noting that it’s up to airlines to evaluate demand and decide where they fly.

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