B.C. Corporate Tours: Big Incentive

With its skiing in the morning and golfing in the afternoon, B.C. has lots of big incentives for corporate tour groups. But is the industry willing to ante up the marketing dollars needed to capture a piece of the growing international incentive-travel market?

It’s June, the ski season is over on the slopes above Whistler and summer has just started.

But the lack of snow isn’t dampening the spirits of 200 travel planners, business executives and assorted hangers-on who have come to see B.C.’s most famous resort basking in the long days of the northern summer. Whitewater rafting, fly fishing and eco-tourism adventures are just some of the activities on offer by day, while the Fairmont Chateau Whistler has pulled out all the stops for evening meals showcasing the best of the region’s cuisine. Representatives of some of the biggest Fortune 500 companies in the U.S. are here, including VPs from Bank of America and Coca-Cola, getting a taste of the good life, B.C.-style. Fairmont lured Maritz Inc., the St. Louis, Missouri-based travel company that’s among the largest providers in the U.S. of incentive tours – the all-expenses-paid packages companies use to encourage staff and reward their top performers – here for the so-called Maritz Summit. The conference aims to give participants a taste of what B.C. offers companies looking to reward their top performers. Months later, memories of the Fairmont are still strong with summit participants, and Maritz says it considers the Chateau Whistler a prime destination for any incentive tours it books for Whistler. But the buzz masks the fact that neither Whistler nor any other location in B.C. figures among the top incentive travel destinations. Maritz publishes a list every year of the top destinations for incentive travel – usually led by places with year-round sun such as Orlando, Florida; Phoenix, Arizona; and Cabo San Lucas on Mexico’s Baja Peninsula. Though B.C. – fabled for offering skiing and golfing on the same day in a spectacular setting – attracted its share of incentive tour groups in the late 1990s, its novelty wore off. With the collapse of the global tourist trade after 2001 and a tendency among U.S. travellers to stick close to home, visitors disappeared. In some parts of the province, tourist traffic dropped 40 per cent. Mary Rideout, director of sales for the Four Seasons Hotel in Vancouver, can’t pin an exact figure to the drop her property has seen, but she is unequivocal about the state of the incentive market today: “It’s not what it used to be…We have seen a huge drop in incentive travel.” This year, Rideout lost tour business to Europe and other destinations with more cachet than B.C., which she believes has slipped from the roster of appealing destinations. Meetings and incentive travel pumped $500 million into the B.C. economy last year but Rideout and other operators know from past experience that there’s plenty of room for growth. There are already signs B.C.’s share of the incentive travel market could rebound as early as 2008 – as long as marketing efforts accompany the province’s eagerness to attract new incentive business. Whistler has attracted everyone from Hollywood stars to the royal family, but neither destination appears to be top of mind when travel planners and their clients discuss exotic destinations for staff getaways. [pagebreak] With the Olympics just three and a half years away, some in the industry believe it’s time to raise the province’s profile, which is why Fairmont stepped up to host the Maritz conference. “B.C. has, for whatever reasons, been off the map for the incentive marketplace,” says John Williams, executive VP with Fairmont Hotels & Resorts Inc. “We need to get it back. It’s important because, like other groups, they don’t just spend money on a guest room, they spend money on outside attractions, they spend money on banquets. So the jobs they create in B.C. are considerably more than just the individual traveller coming up here.” Williams points to wine tours in the Okanagan, culinary tourism in the fertile Cowichan Valley and Alaska cruises among the recreational activities available from Vancouver. And conference facilities in Vancouver are ideal for the business meetings tour planners are increasingly incorporating into itineraries because of the tax benefits of doing so. “Vancouver-Whistler are great to do a two-tier program that has the meeting component in Vancouver [and] the incentive component up in Whistler,” observes Michele Saran, who oversees incentive sales development for the Canadian Tourism Commission in Chicago. Banff is currently the leading destination for incentive travel planners in Canada, says Saran, but Whistler is next. The resort’s international reputation and the coming of the Olympics will only help to further raise B.C.’s profile on the international stage, Saran adds. But relationships with planners and their clients are a fundamental part of ensuring the bookings happen. “[The salesperson] can’t just be a tour operator that deals with regular consumers,” she explains, noting that salespeople have to be able to market the destination as a complete experience that fits with a company’s fiscal responsibilities. Many companies have taken a keen look at the incentive travel budgets in recent years and want to make sure they’re getting the most from them, so the pitch has to address concerns related to that. “You have to be in front of them to do your regular sales pitches, you have to be present at the trade shows, you have to do familiarization programs and make sure clients feel comfortable with the destination before they go back and pitch it to their internal decision makers,” Saran says. Graeme Benn, Fairmont’s regional director of sales and marketing in the Pacific Northwest, believes those relationships have been a stumbling block for the B.C. tourism industry when it comes to attracting incentive travel. Rather than pitching the province to travel planners and waiting for the bookings to come in, Benn says relationships can help the province build a more consistent business. “We haven’t had those relationships in the past,” Benn says. “Once we have these relationships with these incentive companies like Maritz, and with these organizations, that’s when the growth really becomes exponential. It moves beyond procurement, and as a natural evolution we’ll find companies back on a regular basis to Vancouver.” [pagebreak] Unfortunately, the money to put toward building those relationships is scarce. Though Tourism BC describes itself as “a world leader in tourism marketing and development, responsible for promoting B.C. as a preferred travel destination to the world,” communications coordinator Bettina Wolff von Gudenberg says each of the provincial association’s local members are responsible for promoting their individual region to specific segments of the market. Since Vancouver captures the greatest share of the incentive business in the province, Wolff von Gudenberg refers questions concerning incentive travel to Dave Gazley, VP of marketing and convention sales at Tourism Vancouver. But Gazley says Tourism Vancouver has a limited budget to position Vancouver as a destination incentive travel planners such as Maritz should consider. He estimates that Tourism Vancouver spends no more than $2 million of its $10-million budget on incentive travel promotions. And that’s minuscule compared to marketing budgets in the hundreds of millions of dollars for destinations such as Las Vegas and Australia. It’s a war chest B.C. industry associations and tour operators can’t match. “We can’t compete with that,” Gazley says. “We’re out there competing with the big boys and we have to be very targeted in what we do, very strategic. We watch every dollar we spend.” Part of the reason for the limited cash and effort spent on capturing incentive tour business is that incentive travel is more difficult to research, identify and attract than conferences and annual meetings that occur on a regular basis. Though the tours themselves are lucrative to the local industry, the work required to get the business here is labour-intensive. Capturing the eye of potential buyers is where high-profile events such as the Olympics play a key role in elevating the region’s profile at minimal direct cost to local tourism associations. Rather than Tourism Vancouver reps making regular calls on potential incentive tour buyers, Gazley says an event such as the Olympics creates a buzz about the region that reaches potential tour participants and will create demand for the destination. “We may be able to present Vancouver to the travel management company, but to get to the end-user decision maker who is in a vice-president role somewhere within a corporation is very difficult. So for them to turn on their TV and see Vancouver, Whistler and the Olympics is a huge boost for the travel industry here in Vancouver,” he says. [pagebreak] Gazley believes a better understanding of the incentive tour market’s importance and character in B.C. would help tourism organizations market the region more efficiently and effectively. But the dollars aren’t there, something Tourism Vancouver director Emily Edwards, principal of Vancouver destination management company Destination Planners Inc., believes hampers international promotion efforts by staff at the Canadian Tourism Commission. “They need more funding. Right now they don’t focus on the corporate incentive side. They only focus on the leisure,” she says. “When you don’t have the Canadian Tourism Commission on board selling the incentive market, and they’re funded by the government, that’s a huge obstacle right there.” While leisure travel by individuals accounts for the largest number of the 4.9 million overseas tourists who came to the province last year, Edwards says convention business is second, after incentive travel. And, unlike other segments, incentive travel doesn’t take as hard a hit when economies go bad. Given the profile the Olympics are likely to bring the province, Edwards expects to see more local destination management companies, local consultants who coordinate programs for tour buyers, to enter the market. The number of key DMCs in B.C. has roughly doubled since the 1980s, from two or three to five, and Edwards expects the number to increase yet again between now and 2010. The boom-market mentality may be good for the short term, but the CTC’s Saran warns that no region or company should look to incentive travel as the panacea for its tourism woes. No matter how lucrative the business is, it has to be backed up with a top-quality offering. “Some people think that the incentive market is the answer to all their woes: ‘Oh, we’ll go after this because it’s a high-yield business.’ But it also has to be a high-end resort,” Saran says. For Paul Marchildon, a VP with Maritz Canada in Mississauga who attended the Whistler summit, the quality of B.C.’s product isn’t an issue. The province’s ability to get the word out is, however. He points to Quebec, where the provincial tourism agency works in concert with hoteliers to promote the province. This has given the province a profile higher than B.C.’s with incentive tour companies, Marchildon says, no matter how good B.C.’s product is. He would choose B.C. over Quebec every time, but the province could be doing more to help others feel the same way. “I’m not necessarily convinced that B.C. is doing the best job in telling the great story that it has,” he says. “B.C. is really ripe for growth and they should take every advantage they can to promote themselves.”