This past December, right before the Holidays, Air Canada announced the launch of Rouge, its new discount airline. Rouge will begin flying on July 1st, 2012, Canada Day, no less. With flights to Europe and the Caribbean starting at $949, Rouge is sure to have a good start. Given the strong Canadian dollar and the high prices to fly within Canada, we can expect an increase in outbound tourism come this summer. Good for Air Canada, bad for Canadian Tourism. Now, I'm not crticizing the airline for launching Rouge. I just want to state the facts. Air Canada is a business and its number one goal is to make money for its shareholders. Here I'm just stating facts. Another fact is the higher duty free thresholds that the current Canadian government established last year: For 24 hours, $200; for 48 hours or more, $800. Clearly this is good for Canadians travelling abroad, but it also incentivicez cross-border shopping. Canadians travelling on Rouge to Europe or the Caribbean next summer will be able to shop more duty free. Meanwhile, in Canada domestic travel will "appear" much more expensive than in previous years thereby compounding the problem.
What to do?
I reiterate that tourism is driven by the 3 Ps. Price, Proximity and Place (ease of entry). So target all travelers near your destination, starting domestically and expanding to near-the-border travelers. Follow that with those countries from where it's easiest to fly to and enter Canada (ie no visa required). As for the industry as a whole, we need to keep fighting to make tourism a national priority at the Cabinet table. Energy resources and commodities will not carry Canada's economy indefinitely. We are already reading reports that the US is indeed focused on developing their own energy resourcces further and even the price of Potash has come down due to increased buyer power from China and India. So let's continue to lobby for a strong Canadian Tourism industry with a well funded marketing body, whether it is the Canadian Tourism Commission in its present form or a different model. As it is now, we are being outspent by many destinations around the world. See this video interview with David Goldstein, President of the Tourism Industry Association of Canada.