U.S. destinations luring Canadians

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The long-anemic Canadian dollar is today wielding greater buying power south of the border than it has in half a century, prompting U.S. destinations to accelerate efforts to lure Canadians and their increasingly valuable currency.

Because Canada is the largest single international source market for many U.S destinations, these efforts to capitalize on the strength of the "loonie," as Canada's dollar is popularly known, could portend sizable payoffs. More than just seeking to capitalize on the exchange rate to attract more Canadians, U.S. destinations also are looking to convert greater Canadian buying power into longer stays and increased spending, such as trading up to more expensive lodging and dining.

"We're going to fish when the fish are biting," declared Liz Bittner, executive director of TravelSouthUSA, which promotes travel and tourism for 12 Southern states. Bittner made that remark from Canada, where TravelSouthUSA earlier this month was a sponsor at the Toronto Gourmet and Wine Expo, which attracts 35,000 visitors annually. The marketing organization, which sent 25 participants to the expo, hosted an exhibit featuring celebrity Southern chefs who served up regional dishes such as bourbon-splashed sea scallops, hush puppies and cheese grits.  

"It's the first time we've attended the show, and we're doing it in a big way," said Bittner, who noted that "almost 5 million Canadians come to the Southern states every year. We anticipate more will be coming and staying longer [because of the exchange rate]."

TravelSouthUSA's research has revealed a particular interest in Southern cuisine among Canadians, leading to the development of the group's new Canadian-accented campaign, "Discover the Flavours of the South." The campaign is supported by a new Web site specifically targeted at Canadians, TravelSouthFlavours.com.

The combination of a strong loonie and the size of the Canadian market is prompting some destination marketing organizations to shift portions of their marketing budgets away from domestic and other international targets to bulk up their Canada campaigns.

"I will be looking at realigning some of our efforts, shifting some of our domestic dollars to Canada," said Rolando Aedo, senior vice president of marketing and tourism at the Greater Miami Convention and Visitors Bureau.

Aedo said he already had put in place a 10% increase in marketing expenditures for Canada this fiscal year, and he said he expected the increase to grow further via additional shifts in marketing dollars. Aedo sees those shifts as offering the prospect of an especially strong return on investment, given the size of the Canadian market. 

Like TravelSouthUSA's Bittner, Aedo visited Canada earlier this month, in his case to lead an outreach mission to the media, supported by an increased budget and "dramatically greater participation" by Miami-area representatives than in the past. Aedo said he believed the loonie's strength should help prompt Canadian visitors to increase their spending once they arrive.

Traditional spending patterns do indicate an opportunity for some U.S. destinations to capture more dollars per Canadian visitor. Aedo noted that even though Canada is No. 1 in the Miami area in terms of international visitor numbers, it is eclipsed by Brazil when it comes to total visitor spending. He sees the exchange rate, as well as economic and accessibility factors, as contributing to the potential for Canada to "pull ahead of Brazil in total expenditures."

To that end, part of Miami's message is to encourage Canadians to "more fully experience Miami and its environs," which could mean longer stays, more upscale accommodations and dining or taking greater advantage of additional shopping and cultural attractions.

Indeed, through the magic of the exchange rate, Canadians can keep their budgets constant in loonies yet spend significantly more U.S. dollars. An illustration of just how dramatically favorable the current exchange rate is to Canadians can be seen by analyzing comparable packages today vs. four or five years ago.

Marlie Morrison, director of marketing and sales at Walt Disney Parks & Resorts Canada, said a Disney package today compared with a similar one in 2002 represents a savings of 40% for Canadian visitors.

Disney has seen strong growth from Canada, which for the last two years has been the No. 1 international market for Disneyland and the No. 2 international market for Disney World, behind the U.K. She expects "exceptional" growth from Canada in the coming year, noting that Disney already is seeing strong advance bookings.

Disney has put several new initiatives in place to sharpen its focus on the Canadian market, including an increased marketing budget, a new microsite and newspaper ads that ran in major markets in September, the day after the loonie reached parity with the U.S. dollar.

The loonie's ascent has continued since September, trading as high as $1.07 to the U.S. dollar earlier this month.   

Disney cited an Angus Reid survey of more than 1,000 Canadians, conducted the same day that the loonie reached parity, which revealed that 49% of respondents were "more likely to now travel to the U.S." given the arrival of parity.

A courting we will go

Efforts on the part of U.S. destinations to tap a richer Canadian vein are wide-ranging and in some cases involve opening new tourism offices in Canada. NYC & Company, New York's marketing and tourism organization, last week announced the opening of a tourism office in Toronto represented by Vision Co.

Similarly, Las Vegas is gearing up to attract international visitors broadly, though Canada would appear to be garnering a greater share of the city's efforts. The Las Vegas Convention and Visitors Authority next month will open two Canada offices, in Toronto and Montreal, with Vox International as its representative. A third office, in British Columbia, is on tap for early next year.

Rafael Villanueva, director of international sales at the LVCVA, said that the city was benefitting from expanded airlift from Canada, in particular from Air Canada and WestJet. Las Vegas wanted "to fill those seats, so we decided to make a major move in Canada," said Villanueva.

Air service also is key to plans for increasing Canadian visitors to other destinations, though perhaps nowhere is the issue more critical than in Hawaii. Nonstop air service between Canada and Hawaii has dropped off significantly recently, attributed in large part to the demise of Harmony Airways earlier this year.

"The opportunity appears to be there [to attract more Canadian visitors]," said Jay Talwar, senior vice president of marketing at the Hawaii Visitors and Convention Bureau.

Talwar noted that outreach programs to wholesale partners and travel agents appeared to be stimulating demand, but he also cautioned that "lift is still something that needs to be there at a sufficient level to take advantage of it."

Destinations in the continental U.S., which typically rely on a mix of air and auto access, appear positioned to reap a Canadian bonanza in the months ahead, and spending on marketing is gearing up accordingly. Even smaller destinations, such as Myrtle Beach, S.C., are thinking big. Next month, the Greater Myrtle Beach Area Chamber of Commerce will launch an eight-week TV ad campaign in Canada. Ads will run daily on a variety of programs in Ontario and Quebec, said Brad Dean, president of the organization.

"This is the first time the chamber has ever aired TV advertising specifically targeting Canadians, other than national programs like the Travel Channel," Dean said. "We will also distribute nearly $3 million in insertions from January through February in 35 key Canadian newspapers."

That effort will be supplemented by outdoor, radio and online advertising. The goal is to roughly double Canada's visitor share, from 3% of Myrtle Beach's total in recent years to between 5% and 6%.  

To contact reporter Lester Craft, send e-mail to [email protected].

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