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Tourism study calls for end to Sunset Country

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The recently-released Ontario Tourism Competitiveness Study, chaired by former Ontario finance minister Greg Sorbara, recommends the redrawing of travel regions across the province—folding Sunset Country into a massive region stretching from Sault Ste. Marie to the Manitoba border and leaving some wondering about the negative consequences of that.

Called “Discovering Ontario: A Report on the Future of Tourism,” the $4-million study outlines a 10-year plan with four strategies and 20 recommendations meant to see Ontario reach its potential as “one of the world’s preferred places to visit” and “double tourism receipts by 2020,” Sorbara wrote in his report.

Ontario’s tourism receipts equalled $22.1 billion in 2007.

One of the recommendations is that Ontario establish tourism regions “to better co-ordinate tourism marketing and management across the province,” so each region can work towards creating “a unique brand and a stellar experience within a provincial brand,” resulting in one Destination Marketing and Management Organization (DMMO) for each region.

But this would mean altering the current travel regions in the province, reducing them to 11.

Nine of these would be located in southern Ontario while the Sunset Country Travel Association would become part of a region known as Superior North—encompassing everything from Sault Ste. Marie to the Manitoba border.

“Certainly there are good elements in the report, like improved wayfinding, highway improvements, and training stuff,” said SCTA executive director Gerry Cariou.

“However, the report falls off badly, and was done in a vacuum, in the sense of really understanding what was going on with the brand identity of the Sunset Country travel region,” he added.

“All you have to do is open your Fort Frances phone book, and in terms of brand equity, there’s Sunset Country Ford, and you go in Kenora, you see the same thing. In Dryden, it’s Sunset Country this and Sunset Country that.

“I can tell you the impact of our marketing activities. The regional brand is well-known,” he added, even noting that Coca-Cola uses “Sunset Country knows real cola taste” on its billboards.

“That’s a pretty good indication when a multi-national corporation like that adopts your brand and associates its products with your region—there’s some equity there,” Cariou stressed, adding another example is Tim Hortons, which brands its coffee as “Sunset Country’s best coffee” in print advertising.

“What were the folks who did the report thinking, from a brand image equity, that they should just wipe it out?” he wondered. “Remember, there’s 35 years of marketing support and adoption by businesses like Sunset Country Ford, and others, of the brand.

“Why would you want to start over with some other unknown brand name like ‘Superior North.’

“Look at our area,” added Cariou. “We don’t have the same customer base, tourist base, as those other areas north of Lake Superior have—we are unique in that regard.

“You can’t create an area almost the size of Western Europe . . . and expect it to be an effective marketing zone,” he argued.

Sunset Country is the largest travel association in Ontario with 450 member businesses. It runs a suite of 26 websites which sees five million unique visitors annually. That equals, or comes close to, how much traffic Ontario Travel gets.

“Do you kill something that is benefitting the industry?

“Last year, we referred through our suite of websites 1.6 million visitors to our member businesses,” Cariou noted. “Computers don’t lie. These are counts . . . these are accurate numbers.

“Why they’re doing it, I am not sure,” he added. “It indicates that they didn’t listen to the people in our area because no one in our area would have said, ‘Dissolve Sunset Country and amalgamate us with an area that extends to Sault Ste. Marie.’”

The study was two years in the making, and consultations were held in Kenora, but Cariou said he and every other stakeholder who presented there did not get adequate time to make their cases.

“I got cut off after three minutes, as did every other presenter in Kenora,” he recalled. “Was it just for show? Sure, I gave them my notes, but I only got 25 percent of my presentation done, and then they said, ‘You’re cut off. Next. . . .’

“I have an issue with the notion this is the most consultative report ever produced, which is what’s coming out,” Cariou stressed. “I question the accuracy of that statement given how the consultations went.”

While the travel regions still are in the proposal stage, Cariou speculated that even if the province created “Superior North,” Sunset Country would continue to operate and represent its Kenora-Rainy River district-based membership.

“What they’ll do in the provincial marketing, if they go with the Superior North Western Europe-sized area, is they won’t acknowledge an area called Sunset Country,” he explained. “However, they won’t eliminate us, it will only eliminate the government acknowledgement of our area.

“We have an annual funding agreement with them where we perform services on their behalf for a fee. I am assuming if we don’t agree to play ball with them, that may be in jeopardy, and I use the word ‘may.’

“If it is, we will have to survive as an organization that is funded by its membership base,” Cariou said. “We’re large enough, we can do that—sure, we’ll maybe have to change some of the things we do, but that is certainly in the realm of possibility.

“We’ll continue to promote and propagate the brand,” he vowed. “If they create this Superior North region, those folks, whoever they may be, will be given a very rough ride by our organization in this area. It is essentially direct competition, and we’ll have to defend our position.

“It won’t done out of spite,” he stressed. “We help them in immense ways right now, and that will stop obviously if the funding agreement is done. It’s an ‘If you’re going to pull our funding, why would we help you’ type of thing.”

Jerry Fisher, president of the North Western Ontario Tourism Association (NWOTA), agreed there’s no reason to establish the travel regions and jeopardize what has been built up here.

“We feel the proposed Superior North marketing region 11 will disadvantage the tourism industry in the Sunset Country region,” he remarked. “Not only is Sunset Country one of the most unique regions on the planet, but visitor spending at our members’ businesses is 100 percent new money from the U.S.

“Because of infrastructure issues—the lack of infrastructure—it is very difficult to attract visitors from Ontario, let alone other regions,” Fisher noted.

“Our region will generate a majority of the revenue for Superior North yet the big question will be will we receive proportional marketing consideration from them?” he added.

“It is our belief that we need to be in control of the region’s marketing effort, which includes the Destination Marketing Fees collected if voted in, along with the government’s support, in order to compete with other world destinations.”

Fort Frances Chamber of Commerce president Cathy Emes called the idea of the vast Superior North tourism region “ridiculous.”

“Where’s the population? I rest my case,” she remarked. “What’s wrong with the travel areas we have now, like Sunset Country?”

But Sorbara said the study “makes a strong case for the creation of well-defined and well-managed tourism regions across the province.”

“We suggest 11 regions, but look forward to finalizing boundaries and numbers in concert with the industry,” he added. “Our research and consultations suggest that tourism regions and strengthened Destination Marketing and Management Organizations [DMMOs] within each region would be the best way to realize the potential of tourism throughout the province.

Sorbara noted the regional model would bring together stakeholders within a region to oversee the development of new products, as well as to identify and define unique experiences offered by the region.

“In partnership with the province, the DMMOs would market the region to potential visitors from across Ontario, Canada, and the world,” he remarked. “They would also provide a far better model for the industry to engage the provincial government on the financial, regulatory, product development, and marketing issues critical to the growth of the industry.”

Destination Marketing Fees

Sorbara’s report also proposes regularizing Destination Marketing Fees (DMFs)—which essentially is a fee on the room portion of a guest bill—across the province to help support expanded regional tourism marketing and management efforts.

It recommends legislation be introduced to bring statutory recognition and standardization to the wide variety of DMFs now voluntarily levied on accommodations across much of the province.

“A majority of the hotel rooms in Ontario already have a DMF applied—as do virtually all of our competing jurisdictions,” Sorbara said in his report. “The DMF has had a very positive impact on the industry in areas where it is used.

“In Ottawa we heard that, since 2004, when the DMF was introduced, hotel occupancy rates have risen with each year as a result of significantly increased marketing.

“We propose that, in each new tourism region that adopts a DMF, all tourism accommodations be required to levy the fee. The DMF proceeds would become an annual source of support for regional Destination Marketing and Management Organizations.

“Dollars would flow directly to the industry, not to any level of government,” he stressed.

“Such models are now common across the continent,” he continued. “We estimate that, when fully implemented, this initiative could result in almost $100 million in much-needed annual marketing support for tourism regions.

“Sustainable funding for marketing will have a significant impact on tourism.”

But Cariou said while DMFs are a proven way to generate marketing revenue, and many places, like Kenora, have a hotel tax, the decision to implement a DMF should be left up to individual camp and lodge operators—and not mandated by the government.

“I believe the report says there will be a vote by the tourist operators in a certain area . . . but that leads to a couple of questions: What happens if one part of the province votes for it, and, say, our area doesn’t?” he wondered. “They’re going to have one area funded that way, and another area that won’t be.

“The report doesn’t identify that.

“And should there be a DMF, you can look at it two ways,” Cariou continued. “Yes, it is an effective way to generate revenue for tourism marketing because everyone has to play.

“But if they keep Superior North area and use that, I know there would be lodges in the Fort area and Red Lake who don’t want to be sending their money to an area with the management and the people running it likely based in Thunder Bay or Sault Ste. Marie.

“When you have an area that large, who do you think will get the short end of the stick despite the fact we’ll probably provide more than 50 percent of the revenues of the DMF?”

Emes noted the local Chamber has discussed DMFs for some time, and more recently has been looking at partnering with the town and Rainy River Future Development Corp. to hire an intern to do a feasibility study on DMFs for Fort Frances.

While the status of that initiative is still “in the hinterland,” Emes felt a legislated DMF would be beneficial here.

“It would improve the amount of dollars to promote the area, and it would come from the people that are already coming to the area,” she noted. “Lots of cities and towns across Canada and the United States have this kind of thing. It’s just a tax on your hotel room, a tax in the restaurant—it’s small, but it goes back into promoting the area.

“It’s becoming a common thing.”

Fisher felt DMFs, in one form or another, are a necessity and, in fact, the Northwestern Ontario Destination Marketing Association has had a voluntary self-taxing fund in place for a couple of years.

“Destination Marketing Fees are the only way to compete with other regions of the world,” he stressed. “For example, a few years ago Baudette was raising over $150,000 to market their area. Those of us on the Canadian side of the border had to market our area with less than 10 percent of that.

“Ely, Mn. has the same thing—they raise close to $200,000 to market their area and Atikokan must compete with far less. Wisconsin Dells raises $7.5 mil and there are many other regions doing the same thing.

“The Ontario government can only do so much, yet we must have the ability to raise significant money to compete with other world destinations if we are to succeed,” Fisher remarked. “Travellers pay DMF wherever they travel and if the whole region is doing it, there is not a disadvantage to any one business.

Speaking more generally, Fisher agreed with Cariou that the report does have some excellent points, but the question remains: What will happen now?

He noted Sorbara’s report contains a number of recommendations NWOTA feels will help strengthen the tourism industry, like a stronger advocate for tourism (the Ministry of Tourism is seen as a weak ministry), a call for provincial effort to work with federal government on the border, legislated DMFs to set a standard that can be adopted by new DMMOs, and calls for modernized regulations, investment in infrastructure, and facilitated access to capital.

“The only problem with the government’s many good tourism reports, though, [is] most are sitting on the shelf collecting dust,” Fisher noted. “It is time to stop with good reports and put this one into action before it is too late.

“Another thing with most tourism reports is they say they were the results of public consultation when, in fact, much is not,” he charged. “Our OTMPC [Ontario Tourism Marketing Partnership Corp.] representatives are sworn [must sign an agreement] to silence and are not involved in the formulation of the marketing strategies for the region.

“Our OTMPC representatives need to be part of the team and not as surprised as we are when the results are published,” Fisher stressed. “OTMPC needs to be more transparent.”

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