Tourism and Parks

1. Tourism and Parks Presentation to the Tourism Industry Association of New Brunswick October 27, 2007

2. Presentation Outline • Setting the Stage – Tourism Industry Performance and Outlook • Looking Forward – Toward Self Sufficiency 2026 • Transforming the Economy – The Tourism Sector • Tourism and Parks Priorities • Investment in Strategic Infrastructure • New Approach to Product Development • Marketing for the Future • Conclusion / Question and Answer Period

3. Setting the Stage Tourism Industry Performance and Outlook

4. Tourism Industry Performance 2007 - Canada • Conference Board of Canada estimates an overall growth of 2.2% in overnight person-visits to Canada. • Domestic Travel increases within Canada are estimated at 3%. • U.S. visits to Canada in 2007 are estimated to have declined by 3.6%. • Growth in visits to Canada from other international markets is estimated at 4.7%.

5. Tourism Industry Outlook 2008 - Canada • The outlook for 2008 is for an overall increase in overnight person-visits to Canada in the 2.8% range. • This is largely attributable to further increases in domestic tourism (forecasting a 4% increase). • Further 5% decline is forecast for the U.S. market; slight recovery anticipated in 2009.

6. Tourism Industry Performance 2007 – N.B. • YTD, occupancy rates and room sales were up 2% and 5%, respectively, from 2006. • During the May-August tourism season, occupancy rates showed a 3.5% increase. • Provincial parks campsite occupancy rates showed a 7% increase in 2007 as compared to 2006. • Attraction attendance showed mixed results; overall, visitation to indicator attractionsdeclined by1.9%.

7. Tourism Industry Outlook 2008 - Region • Conference Board of Canada estimates provincial tourism growth in overnight person-visits in 2008 at: • New Brunswick: 2.1% • Nova Scotia: 1.8% • Prince Edward Island: 0.9% • Newfoundland 2.1%

8. Key Market Observations • International • United States • Québec • Other Domestic Markets

9. International Market Indicators & Observations • Direct air access capacity from France to Canada has increased around 30%, but overnight trips have increased only 3.8% (Jan-July 2007); France on-line travel market is expanding. • U. K and German arrivals into Canada have increased 4.4% (Jan-July 2007, vs. 2006). • New direct flight U.K. to N.B. but British travelers are sensitive to environment issues (‘travel sin’) and expect quality experiences. • German market remains sensitive to cancellation of the visitor GST rebate program; German travelers are tending to take more short-haul trips.

10. U.S. Market Indicators • Year-to-date, overnight border crossings by U.S. residents into New Brunswick have declined 2.6%. • U.S. and other international accommodation room sales declined by 7.5%. • Campsite nights sold to U.S. residents did not decrease significantly. • Attractions reported a 4.8% decline in U.S. visitation, (16% decline in New England visitors – other U.S. visitation levels remained unchanged from 2006). • New Brunswick is maintaining its share of trips from New England, but overall trips into Canada and the region from this market are declining.

11. U.S. Market Observations • Near-recession economic conditions in the U.S. are responsible for many Americans taking shorter trips closer to home and saving on accommodations. • WHTI impact estimates have been downgraded; expected to be most prominent in same-day border crossings into Ontario and British Columbia. • US is experiencing a demographic shift. • American travelers are moving to activity-based, last-minute trips planned on the internet, including niche and learning trips. • Global competition is drawing higher income Americans to distant destinations.

12. Québec Market Indicators • Provincial Park campsite occupancy by Québec residents increased marginally in 2007 relative to 2006. • Québec resident visitation to indicator attractions was down 3.7% overall in 2007 (vs. 2006), but up significantly in the Acadian Coastal Drive region (+9.5%). • Québec travel party inquiries at Provincial VICs were down marginally in 2007, relative to 2006. However, the Campbellton VIC saw almost 1,000 more Québec visitors in August of 2007 compared to 2006.

13. Québec Market Observations • Not all Québec beach-seekers are going to Old Orchard, Québec travelers who leave the province increasingly are traveling abroad. • Those interested in Old Orchard Beach are seeking , in addition to the beach, the combination of camping, shops, amusement, and food • Environics and the Conference Board of Canada are tracking increasing interest from Québec in soft adventure and trails / cycling / hiking. • Québec is leading Canadian surveys in their interest in sustainable and eco-friendly tourism.

14. Other Market Observations • The resident market performance has been strong in 2007, especially in Provincial Park campgrounds. • Regional and Ontario market visitation to New Brunswick increased marginally in 2007. • A segment of Ontario travellers who visit Québec may prefer bilingual experiences further east, if attractive driving itineraries on the way were available. • Western Canadians’ interest in camping and outdoors activities could be catered to by car/equipment rental packages in N.B.

15. Looking Forward “What got you here, won’t get you there” Marshall Goldsmith

16. Toward Self-Sufficiency 2026 • Release of Task Force Report (May 2007). • Analysis of recommendations by Deputy Ministers (In progress). • Response from the Province, including a comprehensive ‘road-map’ for transformational journey (Fall 2007).

17. Toward Self-Sufficiency 2026 • Recognition that the Province is at an important juncture. • Current window of opportunity to take action to put the Province on an upward path. • Public and private sector must work together to build a more confident, self-sufficient Province, and be bold in looking at new ways of doing things.

18. Toward Self-Sufficiency 2026 Four key thrusts: • Transforming the Economy • Transforming Human Resources • Transforming Government • Transforming Relationships

19. Transforming the Economy: The Tourism Sector • Positive effects in NB: • Spending exceeds $1 billion and impacts all regions, helping to build community pride. • Can help address two major employment challenges in predominantly rural areas: labour shedding by primary industries and the exodus of youth in search of work. • Provides a vehicle for preserving, revitalizing and providing educational exposure to our natural and cultural heritage. • Being a “green” industry, it can play a proactive role in the pursuit of a healthy lifestyle and sustaining our natural environment.

20. Transforming the Economy: The Tourism Sector Challenges: • Currency appreciation, expensive gasoline, air access and cost, U.S. border security. • Availability of labour and lack of training. • Increased competition in current markets. • New and competitively priced entrants in tourism business: Qatar, Vietnam, Cambodia, etc. • Changing consumer travel trends.

21. Transforming the Economy: Tourism and Parks Priorities: • Enhance the visitor experience through strategic infrastructure and new product development. • Develop a new marketing strategy based on new realities. • Implement a new consumer engagement strategy using online customer relationship management tools.

22. Investment in Strategic Infrastructure

23. Investment in Infrastructure • $100 Million Provincial fund dedicated to strategic tourism infrastructure. • Priorities include upgrading and/or expanding existing publicly owned infrastructure, development of a leading edge web site, establishment of an N.B. Gateway and improving the scenic drive signage program. • Projects in Northern N.B. will be linked to Tourism and Parks’ focus on Northern Development and the strategic priorities of the northern communities.

24. Investment in Infrastructure Next Steps: • Policy options to be presented to Government. • Funds to be available in April 2008. • Maintain existing funding structure • Submit proposal to the regional Enterprise Agency • Funding through the Regional Development Corporation.

25. New Approach to Product Development

26. Canadian Tourism Product Strategy • The Canadian Tourism Commission is tracking tremendous competition from a global travel marketplace. • Competitive fares, increased passport possession, and increased reliance on travel planning web sites mean travelers are as likely to go abroad as stay on their own continent. • Globally competitive, high-yield, unique tourism products are required to attract high-yield visitation. • Focus is on positioning Canada as more than a nature destination.

27. New Brunswick Tourism Product Strategy • Currently performing a ‘cluster analysis’ of data from the 2006 Travel Activities and Motivations Survey of U.S. and Canadian travelers. • Combinations of N.B. tourism products that serve as trip motivators for visitors will identify new product opportunities, including itineraries and packages. • Visitor segments, demographics, travel planning, and vacation considerations will all be reported in relation to these tourism product clusters.

28. New Brunswick Tourism Product Strategy • Linked to the new infrastructure investments • Focus on working with industry to create new products that are unique and authentic to N.B. • Aimed at private sector, particularly small and medium sized businesses. • Provide direction for tourism business start up, diversification and expansion. • Provide guidance to funding partners.

29. New Brunswick Tourism Product Strategy • In process of evaluating existing programs and exploring best practices from other jurisdictions. • Industry, partner and government input required. • Launch of new Tourism Product Strategy and new Tourism Development Guidelines in the New Year. • Aligned with new N.B. Growth Program • Targeted at small businesses • Objective is to financially stimulate targeted sectors of the economy

30. Marketing for the Future

31. Marketing For The Future • Need to adjust and innovate marketing strategy. • Increase funding to compete and take advantage of high potential developmental markets. • Respond to changing consumer trends and needs. • Consult with TIANB/Partners.

32. Strategic Approach For 2008 • Destination Image. • Improve our website and increase online marketing. • Adjust Intercept. • Improvement of scenic drive signage and promotion. • Adjust funding to respond to markets.

33. Destination Image • New Brunswick is fighting to win in one of the most competitive industries in the world. • New Brunswick must stand out in the marketplace. • Re-look at NB’s visual image to ensure a unique visual identity. • New Film and Photography.

34. Web-Online • Create a more consumer centric website. • Engage our consumers and build relationships with them. • Provide a world class travel planning experience. • Capture valuable profile information to assist with future product development and marketing efforts. • Utilize online to reach special interest markets.

35. Intercept • Evolve and improve program. • Research supports intercept as an opportunity. • Focus on improving visitation to attractions. • Engage local communities at grass roots levels.

36. Scenic Drive • Improve scenic drive signage and promotion.

37. Adjust Investment • Increase $ for Ontario and Quebec. • Expand fall and winter marketing initiatives. • Invest in high potential developmental markets; ex. U.K., Western Canada. • Increase media relations activities. • Increase N.B. product being promoted through traditional trade and on-line channels.

38. In Conclusion • The Province is at a critical juncture point, ready to seize opportunities to ensure we are on the road to self-sufficiency. • Tourism and Parks is prepared to be at the forefront of building a stronger N.B., through investments in strategic infrastructure, a strong product development focus, and a competitive, innovative marketing campaign. • Key to success will be moving forward in continued partnership with the tourism industry.

39. Question and Answer Period