Welcome to Tourism Victoria’s 2015 Business Plan Launch!

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Victoria…It’s More than That

2015 Business Plan Overview

January 13, 2015

111 days to High Season

What is the plan?

Tourism Victoria Overview

Destination Marketing Framework

• Legislated provincially in British Columbia

• Enabled by accommodation sector, municipalities, and industry coming together

• Tourism is largely local small and medium sized businesses coming together under a common tourism brand

• Customers choose place first then businesses

• Competition is other destinations and other customer choices

Economic Catalyst

Source: Destination Promotion: An Engine of Economic Development, Oxford Economics, November 2014

Economic Catalyst

Source: Destination Promotion: An Engine of Economic Development, Oxford Economics, November 2014

2014 Overview

2014: Others Taking Notice

• 2014 B.C. Marketer of the Year, by BC Chapter of the American Marketing Association

• 2014 HSMAI Silver of Advertising Campaign Great Meetings

• 2014 HSMAI Bronze of Advertising Campaign Victoria Calling

• 2015 HSMAI Gold for Media and Public Relations campaign Find Christmas Here

What Are You Doing as an Encore?

Building the business day by day:

• Brick by brick

• Solid strategy

• Rock solid execution

2015 Principles

• Tourism industry recovery

• Focus on sustained growth, rate and diversification

• Disciplined about role vis-à-vis other destination marketing partners

• Align not duplicate

• Separate mature business from growth opportunities

• Keep punching above our weight as an organization

Sophisticated Board of Directors

• Evolving from a “Policy” to a “Strategy Focused” Board

• Deep experience and business acumen

• Community leaders and industry experts

• Provide deep support and independent oversight to management

Strong Executive Team

Four Key Functional Areas:

• President & CEO: Executive office, Board of Directors and Committees, Corporate Communications & Public Affairs, Research, Membership and Visitor Services

• CFO & VP Strategy Management: Accounting, Finance, IT, Human Resources and Strategy management (Balanced Scorecard management)

• Chief Marketing Officer: Marketing Communications including advertising, website, Content Marketing, travel/lifestyle Media and Public Relations

• Director of Sales: Meetings and Incentive sales, Leisure Travel sales and sports tourism

Funding Profile

Total 2015 Budget: $4.3 million

Disruptions in 2014

Need to Be Conservative in 2015

Effective Destination Marketing & Sales

Organization

Why We Exist

Mission

• We inspire the world to experience our destination

Why We Exist

Vision

• Tourism Victoria will be internationally recognized as a leader in sustainable tourism development, ensuring Greater Victoria remains one of the top destinations in the world

Why We Exist: Customer Recall

Source: Tourism Victoria Exit Survey, 2014

Why We Exist: Measured Results

39:1 2014 Campaign ROI

Source: Insignia Research

Stakeholders

Brand Promise

Victoria is where old-world tradition meets new-world experiences.

Our guests are rejuvenated by fresh ocean air and inspired by our warm, island welcome

and year-round natural beauty.

Strategic Objectives

• Grow Rate and Volume: Focus efforts to generate demand for the must-visit destination with an emphasis to drive revenue and growth

• Addressing Seasonality: Promote Greater Victoria as a year-round destination that includes building equity around shoulder and off-season opportunities

• Destination Management: Work with industry on select, but critical policy and supply side drivers of destination success

• Telling Tourism’s Story: Increase appreciation and support for Greater Victoria’s vibrant visitor economy

Strategy Map

Key Channels

Destination Marketing Foundations

Strategy-Focused Organization

Principles:

1. Translate the strategy into operational terms

2. Align the organization to the strategy

3. Make strategy everyone’s everyday job

4. Make strategy a continual process

5. Mobilize change through executive leadership

2015-2017 Strategy Development

Process

Getting Ready for 2015

• Organizational review

• Spoke with 300 members

• Survey of member priorities on leisure business

• Strategic retreat June 2015

• Objectives and priorities approved

• 2015 Plan approved by Committees and Board

• Balanced Scorecard to support

Environmental Scan

Environmental Scan

Purpose: Assesses the macro-environment the firm is operating in

• Sets context

• Helps to frame opportunity and risk

• Prudent step to help kick off a strategy cycle

Output - Strategic Issues: Key factors in the corporate plan that need to be addressed by the organization

PESTEL Framework

P - Political

E - Economic

S - Societal

T - Technological

E - Environmental

L - Legislative

Political

Public Policy Priority Worldwide

• G20 statement on the economic power of tourism

• Integrated approaches to tourism policy and marketing

• Strong work in understanding tourism policy

• President Obama recognizes tourism as the “star” of the US economic recovery

Disruption Affects Confidence

UN Report issued in June 2014: More than 50 million refugees

Fuel Price Risk

Source: Three reasons Iraq conflict isn't driving up gas prices (yet); Kathleen Pender, Published 3:03 pm, June 21, 2014

Canadian Federal Election in 2015

• Federal election with a return to balanced budgets will likely drive changes to Federal Tourism political landscape:

– New leadership at CTC

– New federal Minister likely

– More sophisticated positions on open skies

– Improved approach to visas

Municipal Elections in 2014

• Some key roles have changed

• Voters have spoken loud and clear on the amalgamation question

– Message, think regionally

• Strong support for Tourism and Tourism Victoria

Brand Portfolio

Economic

Recovery in Victoria Accelerated

2014: Year to Date 68.7% Through November 2014

Global Recovery Sustained if Not Spectacular

• Broad recovery

• US recovery is robust

• China’s hard landing never happened

Volatile Stock Markets

• Dow Jones trades well into record territory

• TSX hurt severely by falling oil prices

• Active IPO environment

• Flight to quality in equity market

• Significant retrenchment beneath the surface

Canada is a Strong Foundation

• Wealth has increased significantly

• Number of wealthy Canadians grew by 7.2% in 2013

Source: World Wealth Institute Report, June 2014

Rise of Asia is Undeniable

• Highly FIT and moving to overnights

Sources: China Contact and Boeing

Resilience of US Economy

• Remarkable structural recovery driven by entrepreneurship and innovation

Source: Outbound Travel Spending, January 2014

Pacific Northwest Region: Victoria Strategically Located

• Delta’s Asia hub is at Seattle Tacoma

• Air Canada is moving 787 capacity for Asia to Vancouver International Airport

• Victoria International Airport has intermodal connectivity to both global hubs

• Other intermodal options such as ferry

M&IT is Back: But Demand Tech

• Tech enhanced meetings

• Business is back

• Business has changed

• More corporate

• Association is mature

• We must adapt and innovate

• Need for sales innovation

2015 Economic Uncertainties

• There is always risk in the economic environment

• Falling fuel prices a double edged sword

• Falling Canadian dollar will support tourism exports

• Impact of potential interest rate rises on consumers

But US Dollar: Not a Panacea

Source: Tourism Victoria Exit Survey, 2014

Societal

Travel as a Basic Human Right

April 2014 - Major industry study written by Oxford Economics and commissioned by Amadeus, forecasts travel to grow by 5.4% annually over the next 10 years, outpacing global GDP

Travel as a Basic Human Right

Global travel industry set for decade of sustained growth according to new report from Amadeus

Demographic Challenges in Europe

Source: Is Recovery from the EU Banking Crisis Possible?, IMF 2011

Boomers, Gen Y and Gen Z

• Boomers are in peak travel years now

• Generation Y are placing travel as a lifestyle priority

• Generation Z may be the hardest working and most entrepreneurial generation yet

Technological

It’s All About Mobile

Source: The New Multi-screen World: Understanding Cross-Platform Consumer Behaviour, Google in partnership with Sterling Brands and Ipsos, 2012

Tourism Victoria’s first mobile advertising opportunity sold out in six weeks

Technology Driving Capacity

Aircraft and Cruise Capacity

Source: Shipsu

Environmental

Aviation Innovating to Be Clean

IATA has made Sustainability a Key Strategic Priority

Environment is a Differentiator

• Only 4% of Chinese cities reported clean air

Source: ChinaUSA Daily, March 2014

Impact of Weather

Source: Tourism Victoria Exit Survey, 2014

Legislative

The Rise of Privacy Legislation

• Canada and elsewhere

• E-mail, social marketing and Big Data analytics are all impacted

• Could have significant implications on marketers

• Expect this to be an ongoing trend

Our Consumer

Sustainable Competitive Advantage

Relaxation

Bull’s Eye Targets

• Extensive research and day in the life thinking applied to our five key consumers:

1. Meeting Planner

2. Tour Operator

3. Travel Agent

4. Journalist

5. Leisure Traveller

Bull’s Eye Targets

• Meeting Planner - Heather

Bull’s Eye Targets

• Tour Operator - Chris

Bull’s Eye Targets

• Travel Agent - Mary

Bull’s Eye Targets

• Journalist - Robert

Bull’s Eye Targets

2011 2015

• Leisure traveller - Lisa

Under5

5 to9

10 to14

15 to19

20 to24

25 to29

30 to34

35 to39

40 to44

45 to49

50 to54

55 to59

60 to64

65 to69

70 to74

75 to79

80 to84

85andover

Boomers 74M

X 70M

Y 99M

Z 40M

Greatest 33M

Geographic Markets

Why the US over Canada?

Source: Tourism Victoria Exit Survey, 2014

Target

• 38-years-old bull’s eye

• 69% No kids at home

• 49% women

• Best customer: First time, overnighters

Target

Source: Tourism Victoria Destination Brand Study, 2013

EQ Profile - Free Spirit

• Free Spirits are highly social and open-minded. Their enthusiasm for life extends to their outlook on travel. Experimental and adventurous, they indulge in high-end experiences that are shared with others

Source: CTC Explorer Quotient Research prepared by Environics Research Group

EQ Profile - Free Spirit

• Free Spirit’s preferred activities:

– Shopping, dining and other food-related activities

– Entertainment and performing arts

– Water-based outdoor activities

– Outdoor/nature sports & activities

– Festivals, events & spectator sports

EQ Profile - Free Spirit

• Free Spirit’s motivation and ambition:

– Social Mobility: Social advancement is desirable

– Need for Status Recognition: Desire to be held in high esteem by others

– Penchant for Risk: Desire to take risks to get what they want out of life

– Time Stress: Feeling there is never enough time to do everything they want

– Show off travel: Desire to visit well-known landmarks

What our Visitors Do

Source: Tourism Victoria Exit Survey, 2014

Destination Marketing Media Relations

Content Marketing

2015 Will be Successful IF

• We continue to solidify positioning shoulder/season, giving consumers year-round reasons to visit

• We continue to be integrated across all departments and aligned as a destination

• We continue to build great content and impactful creative that grows our following and keeps our consumer engaged

Marketing Calendar 2015

Halloween

Halloween Results

45% up for campaign

#VictoriaBOO Results

• 950 tweets with 550,000 impressions

• October 1 - Trending in Victoria, Vancouver and Shenzhen, China

Halloween Results

Occupancy 0.59%

RevPAR $5.39

100+ Halloween-themed hotel packages sold

Romance

Romance

Alignment

• Animating the city

Amazing Race Canada

Wanting Qu

High Performing Website

Desktop & Mobile

• 1.5 million sessions

• 3.28 pages per session

• 5 million page views

Strong Digital Platforms

29K 30K 39K

5K

100,000+

Integration of Efforts

• Aligning the destination in our messaging

Membership

• Warming up the market with editorial coverage

Media Relations

• Extending the direct invitation to consumers

Destination Marketing

• Building shelf space through the trade channel

Travel Trade

• Servicing the visitor when they get here and maximising sales of member product

Visitor Services

Meetings & Incentive Travel Travel Trade

Sport Tourism

Meetings & Incentive Travel

2015 Will be Successful IF

• We build awareness for Victoria as a meetings destination and differentiate it against competitors

• We drive shoulder season meetings business to the destination and create compression in the marketplace

• We secure a large industry conference where we can showcase our destination to greater potential clients and customers

• Mobilize VCON to strengthen collective messaging and reach

VCON

Victoria Conference Optimization Network

VCON Key Goals & Objectives

• Increase hotel room nights

• Develop a unifying, visible meetings identity

• Highlight the collaborative nature of the meetings sector in Greater Victoria

• Promote Victoria as a “one-stop” meetings and conference destination

Developing Identity

• Three “Take-to-Market” concepts were developed

• Messaging survey was administered to list of 25 clients

• Goal to determine if one of the messages clearly stood out as an authentic and believable message

• One that aligns to our targets client’s needs, wants and purchase plans

Identity Concepts

• Victoria: Your unique, boutique

meeting destination

• Victoria: Shhh…it’s our secret

• Victoria: A place that connects

people

VCON – Take to Market

Victoria: A place that connects people

VCON – Take to Market

Victoria is a meetings destination that

stimulates a deeper dimension of

networking

VCON – Take to Market

In Victoria,

great ideas will be born the way they

always have…

by accident

2015 Meetings Campaign

Connecting people, stimulating ideas

Video Book

Trade Show Booth

Connect and recharge

Capital Ideas Content Strategy

#CapitalIdeaYYJ

Content Marketing

Capital Ideas

Capital Ideas

VCON – Destination Sales Plan

• Shared Goal

– “Maximize meeting and conference opportunities for the region”

• Opportunity to build on strong foundations

– Collaboration Agreement

• Developed a synchronized sales plan

– Coordinate and communicate our sales activities to maximize coverage and opportunities

• Reviewed and communicated

M&IT 2015 Event Schedule

• Tete-a-Tete – January

• Incentive Canada - June

• Incentive Works – August

• IMEX – October

• CSAE- October

• PCMA Innovation - November

• Other:

– BEC Showcase Seattle

– BEC Showcase Dallas

– TT Corporate Meeting Planners Show

• Vancouver and Calgary

Travel Trade

2015 Will be Successful IF

• We better leverage partnerships and resources in key markets that will deliver growth

• We develop shoulder season itineraries and effectively sell member product opportunities

• We increase shelf space and distribution in key USA markets and drive high end FIT and group business

• We optimize the use of our CRM system and leverage to increase lead delivery to members

2014 China Trade Mission

2015 Travel Trade Strategy

2015 Travel Trade Strategy

• Developed utilizing:

– Member survey results

– Market analysis

– Discussions with key partners (DBC, CTC)

• Segment markets and prioritize

– Based on business opportunity for destination

– Allocate resources to grow in key markets

Member Survey

United States of America

• USA west coast a priority with members

Market Review - USA

Market Review – China

Market Review - International

Travel Trade Strategy

• Re-segment our international markets

• Re-profile investments to support segmentation

– Better align and focus our resources and efforts

– Ensure we are spending prudently in core and stable markets

– Provide adequate fuel to support key growth markets

• Streamline and synergize resources to grow business

• Better leverage partnerships with DBC and CTC

Market Segmentation

Market Segmentation

Travel Trade Strategy - Leads

2015 Travel Trade Shows

• USA

– Clipper Vacations Show

– Go -West

– USTOA

– Cruise 360

– Active America - China

• Canada

– CTC RVC 2015

– Canada’s West Marketplace

– CITAP

• Australia

– CTC Corroboree Australia

• Asia

– CTC Showcase China

Consortia – Western USA

Sports Tourism

• Sport Host partnership

• Priority:

– Shoulder Season

– High Profile Opportunities

Visitor Services Member Services

2015 Will Be Successful IF

• We grow Visitor Centre traffic to 300,000

• We grow Visitor Centre Sales to $1.5M

• We grow membership to 850 business listings

• We improve membership engagement

Visitor Centre

• Increased business focus

• Turned from a negative to a small profit business in line in 2014

• Renovation in 2014 customer experience

• More upside potential

• More innovation and training required

Vacation Guide Innovation

Vacation Guide Innovation

Festivals & Events

Develop a Bold Festivals/Events Strategy

• Best practices from other destinations

• Thoroughly researched

• Fill need periods

• True demand drivers

• Partner with City of Victoria and hotel community

• Different skill sets required

• Festivals/Events be able to stand on their own two feet

Refined Current Criteria

• Online and transparent for all to see

• Linked to measure hotel performance

• Not designed to increase the profitability of already profitable programs

• Shoulder and off-season given higher priority

• Decisions in February 2015

Finance Technology

Achieving Success

• Needs to be based on a solid foundation

• Financial - question activities and spends

• Does the activity / cost support the strategy

• Is there a better use of the resources

• Can we achieve the same goal more efficiently

• IT – holistic approach – not isolationist

Budget Highlights - 2015

Increase in sales and marketing

• Bidding for off-season meetings, route development, more campaigns, entering California

Decrease in overhead

• Labour, business travel, telecommunications, etc.

IT

• Cliché – “Leverage IT”

• not in departmental isolation but in alignment with Tourism Victoria’s strategy

• Streamline processes

• reduce overhead activities

• balanced with proper internal controls

• Reduce churn (unnecessary paperwork)

• Systems integration

• better knowledge, information and communication = better decisions

Monitoring Risk

• Financial - Foreign Exchange

• Up to 45% of all marketing expenses are US$

– 10% increase in US$ = $80,000 difference

• Up to 10% of operating expenses are US$

– 10% increase in US$ = $10,000 difference

• IT – Outside / Inside

• Outside – protect from malware, ransomware, viruses

• Inside – security, data backup, data integrity - disaster recovery

Summary

Tourism Panel Power of Tourism

Panel Participants

• Marsha Walden, President & CEO, Destination BC

• Ian Robertson, Executive Director, TIABC

• Jocelyn Jenkyns, General Manager, Victoria Conference Centre

• Dave Cowen, Chair, Tourism Victoria Board of Directors

• Bill Lewis, First Vice Chair, Tourism Victoria Board of Directors

• Moderator: Paul Nursey, President & CEO, Tourism Victoria