Quarterly Market Report

Transcription

1 Quarterly Market Report U.S. MC&IT Second Quarter 2009 Market Highlights # of outbound travellers previous quarter: 6,859,526 - % change from previous quarter last year: % # of visitors to Canada previous quarter: 2,220,554 - % change from previous quarter last year: % Comments / Other information: - Texas is weathering the economic storm better than most U.S. states. Additional market statistics available through Tourism Snapshot. Air Capacity - Airline traffic has shown signs of stabilization but there have been no signs of improvement. Corporate travel lags and international travel is particularly weak. - Capacity has been cut in hub cities as well as second-tier airports making it tougher for the planners to get people from city to city. - 85% of planners say they are already paying higher fares this year as reported by Meetings & Conventions Magazine. - Star Alliance this month said that it is expanding its convention plus program to offer organizers of cultural and sporting events discounts on airfare for meeting attendees. The airline alliance claims more than 20 members and requires a minimum of six months lead time. - United Airlines is adding a daily direct flight from Chicago to Regina, Saskatchewan. - WestJet is adding a second daily flight from Chicago to Quebec. 1

2 Economic / Political Environment GDP growth: -2.8% *approx. Quarter 2, 2009 forecasted economic growth: -1.7% *approx unemployment rate: 9.4% (May 2009) inflation: 0.7% *approx. May, 2009 consumer price index: 0.9% *approx. April, 2009 exchange rate: ( ) Comments / Other information - Major incentive houses have had significant layoffs in the last quarter. Virtually all non-revenue generating areas have been affected. Emerging Tourism Trends - Meetings are being cancelled due to the current economic environment. There are challenges with attrition, meetings being moved, postponed and replaced. Association groups are the only groups that appear to still be booked years in advance. - Educational institutions, associations, religious, medical, biotech, and pharmaceutical companies are still holding meetings. Corporate groups are averaging 5 to 12 months lead time on their meetings. - Airfare costs continue to be high despite the lower cost of oil in recent months. Many planners continue to make cuts in meeting budgets to accommodate the higher cost of air travel. - Many corporate groups are concerned that booking internationally may have a negative impact on their "image" and as a result have been scaling back on Canada as a destination. - The value of the GST rebate under the Foreign Convention and Incentive Tour Program is a very strong selling point for U.S. customers in the MC&IT area. Using this selling tool has enabled Canada to position itself well with domestic based meetings in the U.S. - The market is still a buyer's market with emphasis on short-term bookings 2 Quarterly Market Report

3 and negotiated cancellation clauses for meetings booked more than 12 months out. Clients are looking for flexibility with cancellations or the ability to grow blocks at the last minute. - Meetings are more serious, focused, and strategic and there is little room for leisure, with emphasis placed on ROI. Insurance/incentive clients are urging destinations to sell value not the experience - Meeting packages must now be loaded with value and benefits. Clients ask for F&B cost cutting and they have eliminated lavish receptions, and health options. Clients are concerned about being green but currently price is more important. - Budgets are being reduced dramatically for both meetings & incentives and there still is some concern about booking luxury brands. Clients are asking for hotels that do not have the word resort or spa attached to their names. - Clients particularly in the insurance sector, are very concerned about public perception. Some are opting not to put company logo on any signage. - Currently, they are also not referring to motivation programs as incentives. Corporations plan to host incentive programs in 2010 and beyond with emphasis on domestic and less glamorous locations. - Corporate meeting planning departments are being eliminated and the roles outsourced to third parties who are dramatically reducing their purchasing departments. - In the insurance sector there is significant uncertainty. There are many last minute programs with less than 2-3 week turnaround times. Incentive based programs are being eliminated with emphasis being placed on meetings related to training. - The lobbing efforts have started to produce positive results in reducing negative U.S. media coverage on the MC&IT industry. - PKF Consulting reported a 5.3% decline in occupancy coupled with a 2.7% reduction in room rate for the US hotel industry. Luxury brands are have also been facing challenging times. The Greenbrier has filed for bankruptcy and the Tropicana in Atlantic City is struggling to find a buyer - At the recent 2009 Spa & Resort Expo, cost cutting, staff cuts, renegotiation of leases and reduction of hours are the norm. U.S. MC&IT 3

4 - Social media communications are on the rise. However the reality is that meeting planners still prefer in-person networking. MC&IT International - International associations are trying to encourage membership from emerging international markets. This includes (BRIC) Brazil, Russia, India and China. - Currently international associations are trying to take greater control of running their meetings and relying less on local host committees. They are handling content of the meeting and taking a greater share of the profits from their meetings. - World Congresses generally meet every two years and do not return to the same section of the world after meeting there for 10 years. These meetings take approximately 5 years to complete the booking process. - International associations are focused on how to brand and market their associations to maintain growth and stability on an international level. Visual identity, added value, sponsorship alliances, and website content, are a necessity to staying profitable and valuable to their membership. - From a selling prospective need to be culturally aware of social norms and visible in the international marketplace. Relationships are key, and patience is incredibly important. Market Development Activities WEST: Number of in-market promotions (15) Number of industry events: (8) MPI & PCMA monthly meetings Number of coordinated special events: (8) Victoria Fam, Coordinate Sales calls for Vic Conference Ctr, Bay Area Client Events with Vancouver & Whistler (120 clients in 3-4 days), Pure Canada Promotion in SF Number of trade shows: (4) CALSAE convention Number of citywides: (5) 4 Quarterly Market Report

5 SOUTH: Number of in-market promotions: (4) Sponsored MPI AZ May Monthly meeting Number of industry events attended: (10) MPI 7 monthly meetings (DFW, Phoenix, Houston), SITE 1 education/networking event, 1 Canadian-American Chamber of Commerce networking event. Number of coordinated special events: (3) Number of trade shows: (3) Number of city-wides: (2) CENTRAL: Incentive/Insurance - CTC sponsored air for Fairmont Insurance advisory board in Banff April pax, CTC sponsored air for Quebec City FAM, CTC sponsored air for Four Seasons Whistler/Vancouver FAM June pax,ctc sponsored air for TBA post-ficp FAM to Banff June pax, CTC attended FICP Educational Forum in Colorado and hosted a luncheon in conjunction with our 5 strategic partners, CTC attended Fairmont Signature event for MC&IT accounts 150 pax at the Swissotel Chicago. Association - Cleveland Sales Mission April 20-22; Montreal Sales Mission April 27-30; Fairmont Week May 4-8; PCMA Leadership Conference June 6-9; Association Forum Association Week June 22-25; Destinations Showcase June EAST: Number of in-market promotions: (1) (Tourism Toronto s Client Event) Number of industry events attended: (6) (Springtime, PCMA Foundation) Dinner, DC Invitational, AMPS, PMPI, ASAE Invitational Forum) Number of Coordinated Special Events: (0) Number of trade shows: (3) Number of city-wides: (6) MC&IT INTERNATONAL Tradeshows: (2) this qtr ICCA (International Association of Convention & Congress, IMEX) In-market promotions: (2) SITE Membership sponsored, ICCA hosted reception Number of industry events attended:(3) SITE, ICCA, and Gala Dinner IMEX with three international customers Coordinated special events: (4) IMEX annual, SITE Partnership with sponsored reception at IMEX (new this year), IMEX Partnership Agreement with a variety of components to agreement, and FICP Educational Forum U.S. MC&IT 5

6 Total MC&IT Market Development Activities: Number of in market promotions: 21 Number of industry events: 29 Number of coordinated special events: 14 Number of trade shows: 15 Number of citywides: 10 Lead and Partner Revenue Report: MC&IT: (April 1 - June 19, 2009) Number of Leads (primary): 339 Association: 174 Incentive: 100 Corporate: 65 Primary Lead Potential Revenue: $272,424, CTC Revenue Summary CTC Cash Partner Cash Partner In- Kind Partner Third Party Partner Total 263, , , , $1,464, CTC Activities Trade Development MC&IT WEST: - Continue to distribute client survey in Oregon, Colorado & Washington markets. E-newsletter for MC&IT distributed to database in May. Updated 2009 FAM Calendar and distributed it to the team. - Attended a Tourism Victoria FAM in May 2009 with 5 clients from Southern California and 5 clients from Northern California. 2 leads resulted from this event. 6 Quarterly Market Report

7 - Sales missions with partners Tourism Whistler, Tourism Vancouver, Quebec City Tourism and Travel Alberta. Many of the clients we visited were pleased to meet with the partners as they are looking for unique and latest ideas and trends to sell to their clients. Best results on lead generation continues to be driven by local sales call efforts. - SITE So-Cal's (Southern California) May meeting had 190 in attendance the largest to date. The meeting focused on a state of the industry panel that had open forum questions from attendees. - John Ehlenfeldt currently is serving on the SITE SoCal Board of Directors. CENTRAL: - Transition of North American Insurance and Financial Market segments from Susan Frei to Michele Saran, Announcements have been sent to clients making them aware of the change. - Leisure & Corporate participated in the Pure Canada Event at the Time Warner building in New York City. - CTC conducted sales calls in Minneapolis and St. Paul with Destination Planners April 6-8. SOUTH: - CTC Atlanta participated in the second meeting of the SITE SE USA (South East) chapter in May. This is a new chapter that will draw membership from Georgia, North Carolina, South Carolina, Northern Florida, Alabama and Tennessee. Approx. 90 people attended the meeting. - CTC Atlanta organized (with CTC Dallas) the Capital Idea Edu-Fam of the Ottawa region including Gatineau April 29-May 3, There was one immediate RFP generated by the edu-fam. - Sandi Galloway was appointed to MPI DFW (Dallas Fort Worth) Chapter Board of Directors as 2009/2010 VP Leadership. - Sponsored MPI AZ (Arizona) May meeting with partners Tourisme Montreal, Tourism Vancouver & Tourism Whistler. Participated in MPI Houston trades show in May - Two in territory sales missions in AZ (Tourisme Montreal, Tourism Vancouver & Tourism Whistler) and Houston (Travel Alberta & the U.S. MC&IT 7

8 Rimrock Hotel). Received 1 lead immediately with 2 potential leads. - CTC edu-fam to Ottawa, April 30 - May 3 yielded 3 pieces of potential business. EAST: - New York Mix MPI Premier educational and networking event. PCMA Seminars/Round Table sessions on issues affecting association market. NYSAE luncheon discussion on not for profit future of associations. - Attended Luxury Marketing Association, Council of Protocol Executives Meeting Planner International & Society of Incentive Travel Meetings, and Media Marketplace. MC&IT International CTC Activities Trade Development - Sending RFP s out for one GSA (general sales agent) in-market for the UK & Europe to assist in developing a qualified database of European buyers for Canada. Sent RFP to nine potential candidates. - Visit Canada program has been enhanced to highlight major destinations that are interested in pursuing the international market. It is to include inbound airline tickets for sites, fams and bid proposal travel. - Continuing to work on creating visibility of CTC branding in the international marketplace. Creating and leveraging partnerships, with SITE International, MPI, IMEX, and Reed Exhibition for EIBTM, ASAE and the Leadership Center. - Two major MC&IT tradeshows underway for 2009-IMEX and EIBTM. - Preparing for EIBTM in Barcelona early December 2009 and working on enhancing the success of the tradeshow booth re-design from IMEX. Partners pleased with the open concept at IMEX. - The CTC joined an organization by the name of ICCA which offers a qualified international association and congress market database. - Inputting potential international buyers into the CTC s Epiphany CRM to begin creating a qualified European database. 8 Quarterly Market Report

9 - Working on the creation and logistics of the 9/08/09 (September 8, 2009) Live Canada Event in London. - Hired a local coordinator part time to assist with the international market. Pia Kirwan has been a great addition to the team. - Active on the Design Team of the FICP (Financial and Insurance Conference Planners) annual meeting scheduled for Toronto November Attended a Tourism Victoria FAM at the beginning of May 2009 with 5 clients from Southern California and 5 clients from Northern California. 2 leads resulted from this event. Consumer Development - Created a partnership with IMEX this year and Canada (CTC) appeared in the show daily with three full page color ads. - Received editorial coverage in the show daily at IMEX on two occasions throughout the show. - Media printed our press release on the CTC strategy directed at the international market. Competitive Environment - The Foreign Convention and Tour Incentive program that provides GST rebates for meetings and incentive business in Canada has received positive reaction from meeting planners that are considering Canada. It proves to be a competitive edge when up against European and U.S. destinations. - Asia s conventions and visitors bureaus are uniting to go after major group business. The new alliance includes 8 bureaus China, Hong Kong, Korea, Macau, Malaysia, Philippines, Singapore and Thailand. - Australia s Business Events Sydney (BESydney) is opening a North American office to actively target group business from the US and Canada. The office will be based in Montreal. - European destinations have become less popular due to costs and perception. Currently Europe is only used for very top tier incentives - Hotel chains and destinations are offering deals making it difficult for U.S. MC&IT 9

10 Canada s branded message to be heard. - Many meeting planner positions have been cut in 2009 making it difficult to meet with clients. - U.S. Corporations are choosing to stay domestic for most programs and are pulling out of incentive programs. - The cruise industry continues to be competitive by offering all inclusive pricing and highlighting meeting space they have available on board. - This competition is going to get more intense as more ships enter the market. Approximately 30 new vessels will be coming on line in next several years, some of which are mega ships with large meeting space potential. - The possibility of Canada opening up new routes to U.S. air carriers would make the air travel market to and from Canada more competitive. - Las Vegas is going after smaller pieces of business now that the market is struggling to fill available openings. MC&IT International - Unprecedented number of cancellations. Many clients are being cautious about booking anything. Organizations in all market segments are waiting for the economy to improve. Future Outlook - The economy should start showing signs of improvement by the end of 2009 and early 2010 as U.S. stimulus funding starts creating positive results. - The mortgage and housing industry continues to suffer into the 3rd quarter of 2009, with most analysists predicting it to continue into late According to the National Association of Business Economists, the economy will grow 1.2% during the 2 nd half of the year and unemployment will continue to climb to 9.8% by the end of the year. - Associations, annual meetings and conventions are moving forward in a cautious manner. Meetings scheduled for this year and 2010 are being re-negotiated with convention centers and hotels across Canada and the U.S. With the expectations of lower attendance. Additionally, with the 10 Quarterly Market Report

11 downturn in the economy lead development times have decreased significantly. - Associations are putting their request for proposals on hold for future years and it s expected this trend will continue through the end of the year. - Business development is challenged by current economic conditions. Corporate and incentives have taken a hit and will continue to lag. Lead development times have decreased as a result of current economic conditions. - For 2009 demand for leisure travel will out-pace demand for group travel. MC&IT International - International economic conditions are predicted to remain volatile until end of the year. Looking for some recovery by late Working and educating international buyers on Canada will hopefully yield an increase in booking activity in late 2009 early Major issue is the brand awareness in Europe, which will be the focus of CTC efforts. - Building and creating partnerships and alliances is key to successfully creating brand awareness. This will help in placing Canada at the top of the mind of decision makers from international associations, corporations and incentives who are thinking of booking future international meetings. - Enhanced tradeshow booths at IMEX and EIBTM will help Canada improve it s brand recognition. - The Live Canada 2009 event in London will focus on the corporate and incentive market while highlighting the association market. This event will create short term ROI on the international stimulus money used for the event. The short term ROI will build the case for longer term funding for the European Markets. There is great potential in the emerging BRIC markets and three markets of U.K., Germany and France that the CTC and MC&IT will be focusing on for the next 14 months. U.S. MC&IT 11