Reinventing Caribbean Tourism. David Redekop Principal Research Associate The Conference Board of Canada

Transcription

1 1 Reinventing Caribbean Tourism David Redekop Principal Research Associate The Conference Board of Canada

2 2 Talking Points Caribbean has had phenomenal success how do we continue that success? Caribbean faces three major challenges: Deeper penetration of the Canadian market Investing for the future Respond to market changes

3 3 Caribbean Challenge Spread the Love Investing for the future Respond to Market Changes

4 4 Spectacular Success Growth Q1 pure pleasure visits Total visits grew by 97% Europe +30%; Asia 43%; Central A. 53%; South America 44% Caribbean +215%

5 5 Great Winter 2007/08 (Canadian arrivals Nov. 07 April 08) 602, ,878 #'s below country are % growth in Canadian arrivals during winter 2007/08 9,936 13,067 14,303 19,103 39,133 80, ,177 Antigua (+42%) Bermuda (+4%) Cayman (+21%) St. Lucia (+44%) Barbados (+9%) Bahamas (+22%) Jamaica (+26%) DR (+13%) Cuba (+27%) Source: Respective governments

6 6 Caribbean: Arrivals concentrated in Big 3 (% share of 2007 Canadian arrivals) "Other 22" 22% "Big 3" 78% 1. Cuba 2. DR 3. Jamaica Source: Caribbean Tourism Organization; Excludes Cancun & Belize

7 Visits to Big 3 grew 3.5 times faster % change in Q1 pure pleasure visits from Canada 2008 vs Cuba DR Jamaica 7

8 Spreading the Love Limits to Growth for Big 3 Diversifies Caribbean product making it less vulnerable to market swings Increases penetration rate; attracts broader market. Enables Caribbean to better compete with other world regions: Discover Asia Now ; Visit Europe etc. 8

9 9 Caribbean has competition

10 Spain targeting Winter Travellers 10

11 Portugal also targets 11 Winter Travellers

12 Caribbean: Visits have grown impressively ( 000s of Canadian visits by year to Caribbean) 12 3,000 2, % +32% 2,436 2,000 1,833 1,500 1,336 1, Source: Caribbean Tourism Organization; Forecast, Conference Board of Canada. Caribbean excludes Cancun & Belize

13 13 CARIBBEAN IS LARGER THAN THE SUM OF ITS PARTS!

14 14 Caribbean Challenge Spread the Love Investing for the future Respond to Market Changes

15 15 Caribbean competes with Asia, Europe, Mexico for capital investment as well as travellers

16 16 Hilton Hotels adding 300 hotels to the 47 it operates in Asia over the next decade. Asia is the fastest growing region for Best Western Hotels which as 123 properties with goal of 200 hotels by Spain to invest 500 million Euro to update tatty hotels as it promotes Winter in Spain Las Vegas has proposals for additional 54 thousand rooms & 3.4 million sq. ft of convention space on the books.

17 17 Capital Investment in Tourism for Caribbean ranks near bottom US $ bn in capital investment in tourism by Source: WTTC

18 18 Annual Growth in Tourism Capital Investment Source: WTTC

19 Gov t has key role in attracting 19 investment Providing an attractive climate for investment Actively seek investment Simplify approval processes Competitive tax & other incentives Learn from each other & from abroad Barbados Tourism Development Act 2002 broadened investment incentives beyond accommodations; Has 90 day approval process by Tourism Minister

20 20 People biggest investment Tourism is a people business high labour value. The charm & character of a destination is expressed through locals & the people working in the industry. Word of Mouth & return visits dependent on the experience gained. Destinations require the respect of the population for the industry & its importance.

21 21 Local Support leads to Success Training of local people crucial. Most visible benefit local people progressing into key management positions. Recognition of industry s importance. Local support crucial to product diversification & market growth

22 22 Caribbean Challenge Spread the Love New Product Development Respond to Market Changes

23 Image of Caribbean as winter destination 23 Canadians planning int l trip winter 08/09. Source: CBoC August 2008; Sample 2,000 +/-2.1%

24 Showcasing the Caribbean Product Too often we sell it as if the product was like nice looking pasta 24

25 25 Package Travel Growth Peaking INDEPENDENT & EXPERIENTIAL TRAVEL GROWING

26 26 One Week All inclusive Package #1 Most important market for Caribbean/ Mexico? 1 week all inclusive hands down. In 10 years still the most important market from a volume & revenue perspective. Don t abandon this market; employs lots of people; brings in lots of visitors.

27 27 Growth in Package Travel Peaking Canadian time shares stays up 83% Hotels/resorts stays up 38% Fewer Canadian HH reported buying package in 2006 first decline since Agent packages sales up 5.3% in 2007 Caribbean/Mexico visits up 17.3% in 2007.

28 28 UK: Independent trips now 25,000 greater than package ( 000 of outbound air holiday trips) 20,000 15,000 62% package Package Independent 42% package 10,000 5, Ryanair launches first of four European routes followed in 1998 by a further 6 routes. EasyJet founded in 1995 sells it first online seat in Source: UK ONS

29 29 US: Slower growth in Package trips 17% growth in outbound package trips between 1999 and % increase in outbound leisure trips

30 30 Three reasons why package travel peaking

31 31 #1 High Penetration Penetration of Canadian market relatively high Florida 7% Cuba 3.4% DR 2.9% Mexico 5.8% Other Caribbean 3% % of Canadians that vacationed at least once in destination past 3 years. Source: PMB 2008 & CBoC calculations.

32 32 #2 Market has Changed Sun, sand and? Growing interest in more than typical sun/sand 1 week vacation. While still the bread & butter for package tour operators, data shows shift in the market. Destinations & operators already recognizing shift; devising strategies to adjust product offerings & to broaden market appeal

33 33 Gone baby gone % change in Canada s population between 2006 & 2016

34 34 UK & US children population growing % change in population by age Group 2006 & 2016

35 35 #3 Little Margin for Operators Capacity continues to outstrip demand. Jet fuel increased 70% in past year. Average package price up 2.5% this winter. Transat AT Revenues from N. America up 11.9% first 9 months # travellers up 18.3% during period. Margins fell to 3.6% from 5.6%

36 36 Cycle of no return Margins Hit

37 How operators/destinations responding Large operators pushing exclusive properties higher margins, compete on value no price Reducing distribution costs by moving package sales to Web Marketing themes, activities more aggressively such as group travel, weddings/honeymoons, cuisine, wellness/spas, history, golf, music, sports. 37

38 Internet best channel to broaden market appeal in Canada How destinations are selected Only 4% of outbound winter travellers looked for packaged deals with no destination in mind 51% of winter travellers started with a desired destination in mind! 35% started with specific activities or experiences in mind when selecting a destination 38

39 And they are going on line 85% of Canadians planning an outbound trip this winter have home internet access 83% will research their trip on line 62% plan to buy at least part of their outbound winter trip on line Destination Websites are your main channel to reach the Canadian traveller MediaAnalyzer 39

40 40 MediaAnalyzer PANEL Selection of subjects SCREENING WARM-UP Click-Training ATTENTIONTRACKING VISUAL TEST SURVEY Spain Bahamas Cuba Sandals Resort

41 Perception Heatmovie 41 Sandals Resort Heatmovie: Showing respondents attention Dark red = highest share of attention. Red = high share of attention. Light green = low share of attention. Dark green = lower share of attention. No color = very little or no attention. The flow of time is indicated by the progress bar at the bottom of the image.

42 Perception Scan Path 42 Scan Path: Aggregated over total sample Sandals Resort Single clicks of one respondent Inverted Heatmap: How respondents explore the image Results are based on the forced exposure time during the clicktest. 1 sec. 3 sec. 5 sec. 7 sec.

43 Viewing time and Heatmap 43 Sandals Resort Viewing time: The average time respondents spend on examining the respective region during the whole viewing time. Heatmap: Showing the accumulated attention (most attractive elements) of the total viewing time. Navigation 0.1 sec. Resort Logo 0.1 sec. Key visual 5.7 sec. Just Imagine Copy 0.1 sec. Search 0.2 sec.

44 Heatmovie Spain, 44 Bahamas, Cuba Heatmovie: Showing the distribution of respondents attention over time for the aggregate of that cells respondents. Spain Bahamas Cuba Dark red = highest share of attention. Red = high share of attention. Light green = low share of attention. Dark green = lower share of attention. No color = very little or no attention. The flow of time is indicated by the progress bar at the bottom of the image.

45 4. 45 Scan Path Spain Scan Path Heatmap Inverted Heatmap: How respondents explore the image Results are based on the forced exposure time during the clicktest. 1 sec. 3 sec. 5 sec. 7 sec.

46 46 Scan Path Bahamas Scan Path Heatmap Inverted Heatmap: How respondents explore the image Results are based on the forced exposure time during the clicktest. 1 sec. 3 sec. 5 sec. 7 sec.

47 47 Scan Path Cuba Scan Path Heatmap Inverted Heatmap: How respondents explore the image Results are based on the forced exposure time during the clicktest. 1 sec. 3 sec. 5 sec. 7 sec.

48 Perception %Attention Spain, Bahamas, Cuba Spain Bahamas Cuba Navigation - 0% Destination - 7% Navigation - 0% Destination - 18% Advertisement - 3% Destination - 4% Key visual - 68% Search - 1% Highlights - 3% Search - 1% Key visual - 46% Feedback - 4% Offer - 5% Weather - 1% Navigation left - 0% Navigation - 2% Key visual - 50% Welcome - 1% Weather - 2% This week-destination - 3% Plan a trip - 15% Announcem. - 0% Hotel - 12% Where? - 3% What? - 12% Plan - 4% Paradise - 3% Bahamas - 6% Out - 11% Key visual 2-9% Announcem. - 1% Navigation right - 1% 72% 53% 68% Results are based on the forced exposure time during the clicktest.

49 49 Caribbean Challenge Spread the Love Investing for the future Responding to Market Shifts

50 50 Thank you!!