Before engaging in a study of tourism, let’s have a closer look at what this term means.

Definition of Tourism

There are a number of ways tourism can be defined, and for this reason, the United Nations World Tourism Organization (UNWTO) embarked on a project from 2005 to 2007 to create a common glossary of terms for tourism. It defines tourism as follows:

Tourism is a social, cultural and economic phenomenon which entails the movement of people to countries or places outside their usual environment for personal or business/professional purposes. These people are called visitors (which may be either tourists or excursionists; residents or non-residents) and tourism has to do with their activities, some of which imply tourism expenditure (United Nations World Tourism Organization, 2008).

Using this definition, we can see that tourism is not just the movement of people for a number of purposes (whether business or pleasure), but the overall agglomeration of activities, services, and involved sectors that make up the unique tourist experience.

Tourism, Travel, and Hospitality: What are the Differences?

It is common to confuse the terms tourism, travel, and hospitality or to define them as the same thing. While tourism is the all-encompassing umbrella term for the activities and industry that create the tourist experience, the UNWTO (2020) defines travel as the activity of moving between different locations often for any purpose but more so for leisure and recreation (Hall & Page, 2006). On the other hand, hospitality can be defined as “the business of helping people to feel welcome and relaxed and to enjoy themselves” (Discover Hospitality, 2015, p. 3). Simply put, the hospitality industry is the combination of the accommodation and food and beverage groupings, collectively making up the largest segment of the industry (Go2HR, 2020). You’ll learn more about accommodations and F & B in Chapter 3 and Chapter 4, respectively.

Definition of Tourist and Excursionist

Building on the definition of tourism, a commonly accepted description of a tourist is “someone who travels at least 80 km from his or her home for at least 24 hours, for business or leisure or other reasons” (LinkBC, 2008, p.8). The United Nations World Tourism Organization (1995) helps us break down this definition further by stating tourists can be:

1. Domestic (residents of a given country travelling only within that country)
2. Inbound (non-residents travelling in a given country)
3. Outbound (residents of one country travelling in another country)

Excursionists on the other hand are considered same-day visitors (UNWTO, 2020). Sometimes referred to as “day trippers.” Understandably, not every visitor stays in a destination overnight. It is common for travellers to spend a few hours or less to do sightseeing, visit attractions, dine at a local restaurant, then leave at the end of the day.

The scope of tourism, therefore, is broad and encompasses a number of activities and sectors.

NAICS: The North American Industry Classification System

Given the sheer size of the tourism industry, it can be helpful to break it down into broad industry groups using a common classification system. The North American Industry Classification System (NAICS) was jointly created by the Canadian, US, and Mexican governments to ensure common analysis across all three countries (British Columbia Ministry of Jobs, Tourism and Skills Training, 2013a). The tourism-related groupings created using NAICS are (in alphabetical order):

1. Accommodation
2. Food and beverage services (commonly known as “F & B”)
3. Recreation and entertainment
4. Transportation
5. Travel services

These industry groups (also commonly known as sectors) are based on the similarity of the “labour processes and inputs” used for each (Government of Canada, 2013). For instance, the types of employees and resources required to run an accommodation business whether it be a hotel, motel, or even a campground are quite similar. All these businesses need staff to check in guests, provide housekeeping, employ maintenance workers, and provide a place for people to sleep. As such, they can be grouped together under the heading of accommodation. The same is true of the other four groupings, and the rest of this text explores these industry groups, and other aspects of tourism, in more detail.

Figure 1.1 Front desk personnel, working their hardest.

It is typical for the entire tourist experience to involve more than one sector. The combination of sectors that supply and distribute the needed tourism products, services, and activities within the tourism system is called the Tourism Supply Chain. Often, these chains of sectors and activities are dependent upon each other’s delivery of products and services. Let’s look at a simple example below that describes the involved and sometimes overlapping sectoral chains in the tourism experience:

Figure 1.2 The tourism supply chain. [Long Description]

Before we seek to understand the five tourism sectors in more detail, it’s important to have an overview of the history and impacts of tourism to date.

Long Descriptions

Figure 1.2 long description: Diagram showing the tourism supply chain. This includes the phases of travel and the sectors and activities involved during each phase.

There are three travel phases: pre-departure, during travel, and post-departure.

Pre-departure, tourists use the travel services and transportation sectors.

During travel, tourists use the travel services, accommodations, food and beverage, recreation and entertainment, and transportation sectors.

Post-departure, tourists use the transportation sector.

[Return to Figure 1.2]

Media Attributions

• Front Desk by Staying LEVEL is licensed under a CC BY-NC 4.0 Licence.

Origins of Tourism

Travel for leisure purposes has evolved from an experience reserved for very few people into something enjoyed by many. Historically, the ability to travel was exclusive and reserved for royalty and the upper classes. From ancient Roman times to the 17th century, young men of high standing were encouraged to travel through Europe on a “grand tour” (Chaney, 2000). Through the Middle Ages, many societies encouraged the practice of religious pilgrimage, as reflected in Chaucer’s Canterbury Tales and other literature. Prescribed even earlier, the Hajj or the annual pilgrimage to Mecca, has made travel for religious purposes become a default for every believer of Islam.

Figure 1.3 Hajj pilgrimage in Saudi Arabia.

The word hospitality predates the use of the word tourism, and first appeared in the 14th century. It is derived from the Latin hospes, which encompasses the words guest, host, and foreigner (Latdict, 2014). The word tourist appeared in print much later, in 1772 (Griffiths and Griffiths, 1772). William Theobald suggests that the word tour comes from Greek and Latin words for circle and turn, and that tourism and tourist represent the activities of circling away from home, and then returning (Theobald, 1998).

Tourism Becomes Business

Cox & Kings, the first known travel agency, was founded in 1758 when Richard Cox became official travel agent of the British Royal Armed Forces (Cox & Kings, 2014).  Almost 100 years later, in June 1841, Thomas Cook opened the first leisure travel agency, designed to help Britons improve their lives by seeing the world and participating in the temperance movement. In 1845, he ran his first commercial packaged tour, complete with cost-effective railway tickets and a printed guide (Thomas Cook, 2014).

The continued popularity of rail travel and the emergence of the automobile presented additional milestones in the development of tourism. In fact, a long journey taken by Karl Benz’s wife in 1886 served to kick off interest in auto travel and helped to publicize his budding car company, which would one day become Mercedes Benz (Auer, 2006). We take a closer look at the importance of car travel later in this chapter, and transportation within the tourism industry in Chapter 2.

Fast forward to 1952, the dawn of the jet age saw the first commercial air flights from London, England to Johannesburg, South Africa and Colombo, Sri Lanka (Flightglobal, 2002) that many also heralded as the start of the modern tourism industry. The 1950s also saw the creation of Club Méditérannée (Gyr, 2010) and similar club holiday destinations, the precursor of today’s all-inclusive resorts.

The decade that followed is considered to have been a significant period in tourism development, as more travel companies came onto the scene, increasing competition for customers and moving toward “mass tourism, introducing new destinations and modes of holidaying” (Gyr, 2010, p. 32).

Industry growth has been interrupted at several key points in history, including World War I, the Great Depression, and World War II. At the start of this century, global events thrust international travel into decline including the September 11, 2001 attack on the World Trade Center in New York City (known as 9/11), the war in Iraq, perceived threat of future terrorist attacks, and health scares including SARS, BSE (bovine spongiform encephalopathy), and the West Nile virus (Government of Canada, 2006). But perhaps one of the most debilitating crises that has severely impacted tourism is the more recent COVID-19 pandemic.

Figure 1.4 Cautious travel in the time of a pandemic.

At the turn of the twentieth century, the industry experienced a significant technological shift as increased internet use revolutionized the promotions and distributions of travel products and services. Through the 2000s, online travel bookings grew exponentially, and by 2018 global leader Expedia had expanded to include brands such as Hotels.com, Travelocity, Trivago, VRBO, Cheaptickets, and Expedia CruiseShip Centers, earning revenues of over $11.2 billion (Expedia Inc., 2013).

A more in-depth exploration of the impact of the online marketplace, and other trends in global tourism, is provided in Chapter 14.

Origins of Tourism in Canada

Tourism has long been a source of economic development for our country. Some argue that as early as 1534 the explorers of the day, such as Jacques Cartier, were Canada’s first tourists (Dawson, 2004), but most agree the major developments in Canada’s tourism industry followed milestones in the transportation sector: by rail, by car, and eventually, in the skies.

An accessible version of this activity is provided in the back matter of the book: Origins of Tourism in Canada Timeline

Railway Travel: The Ties That Bind

Figure 1.5 Canadian Pacific 4-4-0 A-2-m, No. 136.

The dawn of the railway age in Canada came midway through the 19th century. The first railway was launched in 1836 (Library and Archives Canada, n.d.), and by the onset of World War I in 1914, four railways dominated the Canadian landscape: Canadian Pacific Railway (CPR), Canadian Northern Railway (CNOR), the Grand Trunk Railway (GTR), and the Grand Trunk Pacific (GTP). Unfortunately, their rapid expansion soon brought the last three into near bankruptcy (Library and Archives Canada, n.d.).

In 1923, these three rail companies were amalgamated into the Canadian National Railway (CNR), and together with the CPR, these trans-continentals dominated the Canadian travel landscape until other forms of transportation became more popular. In 1978, with declining interest in rail travel, the CPR and CNR were forced to combine their passenger services to form VIA Rail (Library and Archives Canada, n.d.).

The Rise of the Automobile

The rising popularity of car travel was partially to blame for the decline in rail travel, although it took time to develop. When the first cross-country road trip took place in 1912, there were only 16 kilometres of paved road across Canada (MacEachern, 2012). Cars were initially considered a nuisance, and the National Parks Branch banned entry of automobiles, but later slowly began to embrace them. By the 1930s, some parks, such as Cape Breton Highlands National Park, were actually created to provide visitors with scenic drives (MacEachern, 2012).

It would take decades before a coast-to-coast highway was created, with the Trans-Canada Highway officially opening in Revelstoke in 1962. When it was fully completed in 1970, it was the longest national highway in the world, spanning one-fifth of the globe (MacEachern, 2012).

Early Tourism Promotion

As early as 1892, enterprising Canadians like the Brewsters became the country’s first tour operators, leading guests through areas such as Banff National Park (Brewster Travel Canada, 2014). Communities across Canada developed their own marketing strategies as transportation development took hold. For instance, the town of Maisonneuve in Quebec launched a campaign from 1907 to 1915 calling itself “Le Pittsburg du Canada.” By 1935, Quebec was spending $250,000 promoting tourism. Other provinces such as Ontario, New Brunswick, and Nova Scotia followed suit, also enjoying the benefits of establishing provincial tourism bureaus (Dawson, 2004).

National Airlines

Our national airline, Air Canada, was formed in 1937 as Trans-Canada Air Lines. In many ways, Air Canada was a world leader in passenger aviation, introducing the world’s first computerized reservations system in 1963 (Globe and Mail, 2014). Through the 1950s and 1960s, reduced airfares saw increased mass travel. Competitors including Canadian Pacific (which became Canadian Airlines in 1987) began to launch international flights during this time to Australia, Japan, and South America (Canadian Geographic, 2000). By 2000, Air Canada was facing financial peril and forced to restructure. A numbered company, owned in part by Air Canada, purchased 82% of Canadian Airline’s shares, with the result of Air Canada becoming the country’s only national airline (Canadian Geographic, 2000). The 2000s saw Air Canada experiencing a roller-coaster performance from verging near bankruptcy in 2002, to reorganizations and fleet modernizations up to 2007, and another downturn due to the global recession in 2008 (ACE Aviation, 2011; Air Canada, 2007; CBC News, 2009).  Air Canada experienced a number of transformations from interior and interior aircraft redesigns and further fleet upgrades from 2013 to 2017 (Air Canada, 2016).  Once a rival airline, Air Transat was subsequently taken over by Air Canada in 2019 (CBC News, 2019).  The near halt of the global tourism industry during the pandemic of COVID-19 in 2020 severely affected Air Canada, which posted a whopping $1 billion loss in its first quarter, cutting thousands of jobs, slashing 90% of its flight schedule, and foreseeing a tough and later rebound (Reynolds, 2020).

Parks and Protected Areas

A look at the evolution of tourism in Canada would be incomplete without a quick study of our national parks and protected areas. The official conservation of our natural spaces began around the same time as the railway boom, and in 1885 Banff was established as Canada’s first national park. By 1911, the Dominion Forest Reserves and Parks Act created the Dominion Parks Branch, the first of its kind in the world (Shoalts, 2011).

Figure 1.6 Moraine Lake in the Canadian Rockies.

The systemic conservation and celebration of Canada’s parks over the next century would help shape Canada’s identity, both at home and abroad. Through the 1930s, conservation officers and interpreters were hired to enhance visitor experiences. By 1970, the National Park System Plan divided Canada into 39 regions, with the goal of preserving each distinct ecosystem for future generations. In 1987, the country’s first national marine park was established in Ontario, and in the 20 years that followed, 10 new national parks and marine conservation areas were created (Shoalts, 2011).

The role of parks and protected areas in tourism is explored in greater detail in Chapter 5 (Recreation) and Chapter 10 (Environmental Stewardship).

Global Shock and Industry Decline

As with the global industry, Canada’s tourism industry was impacted by world events such as the Great Depression, the World Wars, socio-political turmoil, and global outbreak of disease.

Global events such as 9/11, the SARS outbreak, the wars in Afghanistan and Iraq, and the economic recession of 2008 took their toll on tourism receipts but have successfully seen short-term rebounds. However, nothing has been more impactful to the tourism industry as the corona virus of 2019 (COVID-19), which was first found in China in late 2019 and eventually declared as a pandemic by March 2020 as it spread globally.  Tourism was placed in a standstill as global travel restrictions were imposed to prevent the spread of infection. Aggravated with a nose dive of consumer confidence in travel, many tourism businesses and operators big and small were forced to close. The UNWTO predicted a 60% to 70% drop in tourist numbers, as well as a loss of a staggering USD 910 billion to USD 1.2 trillion in export revenues, and up to 120 million jobs put at risk (UNWTO, 2020b). According to the UNWTO (2020b), COVID-19 created the worst crisis in the history of global tourism since records began in 1950.

Figure 1.7 Travellers wearing face masks in Marina Bay, Singapore.

Tourism in Canada Prior to COVID-19

In 2018, tourism created $102 billion in total economic activity and 1.8 million jobs according to the Tourism Industry Association of Canada (2018a). Up to 2019, Canadian tourism reached its 3rd consecutive year of breaking records by welcoming 22.1 million inbound visitors (TIAC, 2020). Tourism is a major player in the workforce, where 1 in 11 jobs in the country is directly involved with travellers, as stated by TIAC (2018a).

The United States is Canada’s biggest tourism market, which we welcome more than all international travellers combined. Thanks to our immediate proximity, open borders, and ease of travel, we are actually both each other’s top market. As 68% of all inbound visitors to Canada in 2018, American travellers are also big spenders at $663 per trip and typically seek natural attractions, historical sites, and food and drink when they enter the country (TIAC, 2018b).

Aside from the United States, Canada continues to see strong visitation from the United Kingdom, France, Mexico, Brazil, and China. In 2018, we welcomed 6.9 million travellers (excluding the US), more that doubling since 2011 (Statistics Canada, 2019). Canadians travelling domestically accounted for 78% of tourism revenues in the country, though spend less at $244 per trip (TIAC, 2018c).

As organizations like TIAC work to confront barriers to travel, Destination Canada is active abroad, encouraging more visitors to explore our country. In Chapter 8, we’ll delve more into the challenges and triumphs of selling tourism at home and abroad.

The great news for British Columbia is that once in Canada, most international visitors tend to remain in the province they landed in, and BC is one of three provinces that receives the bulk of this traffic (Destination Canada, 2019). In fact, BC’s tourism industry is one of the healthiest in Canada today. Let’s have a look at how our provincial industry was established and where it stands now.

Media Attributions

• Canadian Pacific 4-4-0 A-2-m No 136 by Peter Broster is licensed under a CC BY 2.0 Licence.
• Moraine Lake, Canada by Matthew Fournier is licenced under the Unspash Licence.
• Marina Bay, Singapore by Victor He is licenced under the Unspash Licence.

Origins of Tourism in BC

As with the history of tourism in Canada, it is often stated that the first tourists to BC were explorers. In 1778, Captain James Cook touched down on Vancouver Island, followed by James Douglas in 1842, a British agent who had been sent to find new headquarters for the Hudson’s Bay Company, ultimately choosing Victoria. Through the 1860s, BC’s gold rush attracted prospectors from around the world, with towns and economies springing up along the trail (PricewaterhouseCoopers, 2009).

Railway Travel: Full Steam Ahead!

The development of BC’s tourism industry began in earnest in the late 1800s when the CPR built accommodation properties along its newly completed trans-Canada route, capturing revenues from overnight stays to help alleviate their increasing corporate debt. Following the 1886 construction of small lodges at stops in Field, Rogers Pass, and Fraser Canyon, the CPR opened the Hotel Vancouver in May 1887 (Dawson, 2004).

Figure 1.8 A CP freight train passing through the Canadian Rockies.

As opposed to Atlantic Canada, where tourism promotion centred around attracting hunters and fishermen for a temporary infusion of cash, tourism in British Columbia was seen as a way to lure farmers and settlers to stay in the new province. Industry associations began to form quickly: the Tourist Association of Victoria (TAV) in February 1902, and the Vancouver Tourist Association in June of the same year (Dawson, 2004).

Many of the campaigns struck by these and other organizations between 1890 and 1930 centred on the province’s natural assets, as people sought to escape modern convenience and enjoy the environment. A collaborative group called the Pacific Northwest Travel Association (BC, Washington, and Oregon) promoted “The Pacific Northwest: The World’s Greatest Out of Doors,” calling BC “The Switzerland of North America.” Promotions like these seemed to have had an effect: in 1928, over 370,000 tourists visited Victoria, spending over $3.5 million (Dawson, 2004).

The Great Depression and World War II

As the world’s economy was sent into peril during the Great Depression in the 1930s, tourism was seen as an economic solution. A newly renamed Greater Victoria Publicity Bureau developed strategies to promote tourism spending, with visitor revenues accounting for around 13.5% of BC’s income in 1930. By 1935, an organization known as the TTDA (Tourist Trade Development Association of Victoria and Vancouver Island) looked to create a more stable industry through strategies to increase visitors’ length of stay (Dawson, 2004).

In 1937, the provincial Bureau of Industrial and Tourist Development (BITD) was formed through special legislation with a goal of increasing tourist traffic. By 1938, the organization changed its name to the British Columbia Government Travel Bureau (BCGTB) and was granted a budget increase to $105,000. In 1939, Vancouver welcomed the King and Queen of England and celebrated the opening of the Lions Gate Bridge, activities that reportedly bolstered tourism numbers (Dawson, 2004).

The December 1941 Japanese attack on Pearl Harbor in Hawaii had negative repercussions for tourism in the Pacific Rim and was responsible for an era of decreased visitation to British Columbia, despite attempts by some to market the region as exciting. From 1939 to 1943, US visits to Vancouver dropped from over 307,000 to approximately 183,600. Just two years later, however, that number jumped to 369,250, as a result of campaigns like the 1943 initiative aimed at Americans that marketed BC as “comrades in war” (Dawson, 2004).

Post-War Rebound

We, with all due modesty, cannot help but claim that we are entering British Columbia’s half-century, and cannot help but observe that B.C. also stands for BOOM COUNTRY. —Phil Gagliardi, BC Minister of Highways, 1955 (Dawson, 2004, p.190)

A burst of post-war spending began in 1946, and although short-lived, was supported by steady government investment in marketing throughout the 1950s. As tourism grew in BC, however, so did competition for US dollars from Mexico, the Caribbean, and Europe. The decade that followed saw an emphasis on promoting BC’s history, its “Britishness,” and the commodification of Indigenous culture. The BCGTB began marketing efforts to extend the travel season, encouraging travel in September during prime fishing season. The bureau also promoted visitors to explore specific areas, including the Lower Fraser Valley, the Okanagan-Fraser Canyon Loop, and the Kamloops-Cariboo region (Dawson, 2004).

In 1954, Vancouver hosted the British Empire Games, investing in the construction of Empire Stadium. A few years later, an increased emphasis on events and convention business saw the Greater Vancouver Tourist Association change its name in 1962 to the Greater Vancouver Visitors and Convention Bureau (PricewaterhouseCoopers, 2009).

The ski industry was also on the rise: in 1961, the lodge and chairlift on Tod Mountain (now Sun Peaks) opened, and Whistler followed suit five years later (PricewaterhouseCoopers, 2009). Ski partners became pioneers of collaborative marketing in the province with the foundation of the Ski Marketing Advisory Committee (SMAC) supported by Tod Mountain and Big White, evolving into today’s Canada’s West Ski Area Association (Magnes, 2010). This pioneer spirit was evident across the ski sector: the entire sport of heliskiing was invented by Hans Gosmer of BC’s Canadian Mountain Holidays. The province also held the title of having 90% of the world’s heliskiing market share back in 2016 (McLeish, 2014).

The concept of collaboration extended throughout the province as innovative funding structures saw the cost of marketing programs shared between government and industry in BC. These programs were distributed through regional Destination Marketing Organizations (DMOs) and considered “the most constructive and forward looking plan of its kind in Canada” (Dawson 2004, p.194).

Tourism in BC continued to grow through the 1970s. In 1971, the Hotel Room Tax Act was introduced, allowing for a 5% tax to be collected on room nights with the funds collected to be put toward marketing and development. By 1978, construction had begun on Whistler Village, with Blackcomb Mountain opening two years later (PricewaterhouseCoopers, 2009). Funding programs in the late 1970s and early 1980s such as the Canada BC Tourism Agreement (CBCTA) and Travel Industry Development Subsidiary Agreement (TIDSA) allowed communities to invest in projects that would make them more attractive tourism destinations. In the mountain community of Kimberley, for instance, the following improvements were implemented through a $3.1 million forgivable loan: a new road to the ski resort, a covered tennis court, a mountain lodge, an alpine slide, and nine more holes for the golf course (e-Know, 2011).

Figure 1.9 Snowboarders on a chairlift in Whistler.

Around the same time, the “Super, Natural British Columbia” brand was introduced, and a formal bid was approved for Vancouver to host a fair then known as Transpo 86 (later Expo 86). Tourism in the province was about to truly take off.

Expo 86 and Beyond

By the time the world fair Expo 86 came to a close in October 1986, it had played host to 20 million guests. Infrastructure developments, including rapid rail (SkyTrain), airport improvements, a new trade and convention centre at Canada Place (with a cruise ship terminal), and hotel construction, had positioned the city and the province for further growth (PricewaterhouseCooopers, 2009). The construction and opening of the Coquihalla Highway through to 1990 enhanced the travel experience and reduced travel times to vast sections of the province (Magnes, 2010).

By 2000, Vancouver International Airport (YVR) was named number one in the world by the International Air Transport Association’s survey of international passengers. Five years later, the airport welcomed a record 16.4 million passengers (PricewaterhouseCoopers, 2009).

Going for Gold

Figure 1.10 The crowd at the Canada vs. Switzerland men’s hockey game during the Vancouver 2010 Winter Olympics.

In 2003, the International Olympic Committee named Vancouver/Whistler as the host city for the 2010 Olympic and Paralympic Winter Games. Infrastructure development followed, including the expansion of the Sea-to-Sky Highway, the creation of Vancouver Convention Centre West, and the construction of the Canada Line, a rapid transport line connecting the airport with the city’s downtown.

As BC prepared to host the Games, its international reputation continued to grow. Vancouver was voted “Best City in the Americas” by Condé Nast Traveller magazine three years in a row. Kelowna was named “Best Canadian Golf City” by Canada’s largest golf magazine, and BC was named the “Best Golf Destination in North America” by the International Association of Golf Tour Operators. Kamloops, known as Canada’s Tournament City, hosted over 100 sports tournaments that same year, and nearby Sun Peaks Resort was named the “Best Family Resort in North America” by the Great Skiing and Snowboarding Guide in 2008 (PricewaterhouseCoopers, 2009).

By the time the Vancouver 2010 Olympic and Paralympic Games took place, over 80 participating countries, 6,000 athletes, and 3 billion viewers put British Columbia on centre stage.

Tourism in BC Today

Building on the momentum generated by hosting the 2010 Winter Olympic Games, tourism in BC remains big business. In 2018, the industry generated $20.5 billion in revenue.

The provincial industry is made up of over 19,329 businesses, the majority of which are SMEs (small to medium enterprises), and together they employ approximately 161,500 people (Destination BC, 2018). It may surprise you to learn that in British Columbia, tourism provides the highest Gross Domestic Product, or the total revenues produced in a period of time, in 2018—more than mining, oil and gas, agriculture, and forestry (Destination BC, 2018).

One of the challenges for BC’s tourism industry, as long been argued, is fragmentation. Back in September 1933, an article in the Victoria Daily Times argued for more coordination across organizations in order to capitalize on what they saw as Canada’s “largest dividend payer” (Dawson, 2004). Today, more than 80 years later, you will often hear BC tourism professionals say the same thing.

On the other hand, some experts believe that the industry is simply a model of diversity, acknowledging that tourism is a compilation of a multitude of businesses, services, organizations, and communities. They see the ways in which these components are working together toward success, rather than focusing on friction between the groups.

Many communities are placing a renewed focus on educating the general public and other businesses about the value of tourism and the ways in which stakeholders work together. The following case study highlights this in more detail:

Take a Closer Look: Tourism Pays in Richmond, BC

The community of Richmond, BC, brings to life the far-reaching positive economic effects of tourism in action. Watch the short video called Tourism Pays to see what we mean!

A Vimeo element has been excluded from this version of the text. You can view it online here: https://opentextbc.ca/introtourism2e/?p=1489

Transcript for Tourism Pays in Richmond

[Upbeat Music]

Narrator (Dave): Hi, I’m Dave! Proud owner of a working blueberry farm and big-time supporter of promoting tourism. So why does a blueberry farmer care about tourism? Well, let me tell you a little story about John and Jane.

John and Jane: Hi!

Dave: They thought it would be nice to take a vacation. John had ideas, and Jane had ideas. But as they talked, they couldn’t decide where to go. They knew their perfect place was out there. They just had to find it. Jane flipped through magazines. John started noticing the vacation ads on TV. On his way to work, John saw billboards and heard radio ads.

[Muffled radio in the background.]

Dave: And once he got there, he talked to his friends about where they spent their vacations. Jane did some research on the internet, visiting different websites, to see which places had what they were looking for. After seeing all their options, John and Jane came to the same conclusion.

John and Jane: We found the Perfect Place!

Dave: They were so excited, they started to plan their trip right away. After booking their flights, John was eager to line up some things to do in the Perfect Place. So he visited the Perfect Place’s website, watched a video, checked out the hotels, bought tickets to a ball game, and signed up for the Perfect Place’s e-newsletter especially for visitors. John also downloaded the Perfect Place’s smartphone app so he could get information on the go. Jane liked the Perfect Place’s Facebook page and followed the Perfect Place on Twitter so she could get updates, ideas, and special deals.

[Beeping from Jane dialing the phone]

Dave: Jane also called the toll-free number and spoke to a nice lady who told her everything she needed to know about the Perfect Place. Jane also got the visitor’s guide, which helped her learn what theatre productions were in town, where to eat, and other things to do in the Perfect Place. So John and Jane had explored their options, booked their travel, and planned their vacation. They packed their bags and off they went. End of story, right?

Actually, this is where the real story begins. Because what do you think John and Jane do when they get to the Perfect Place? Guess what? They spend their money [ca-ching]. They spend their money on their rental car, in their hotel, seeing the attractions, enjoying outdoor activities, shopping, and dining out [glasses clink]. They’re happy they came to the Perfect Place.

John and Jane: Woohoo!

Dave: You know who else is happy? The hotel they stayed in, of course, and the bellman at the hotel, the workers at the local company that supplies his uniform, the stores they shop at, and the banks they use. And then there’s the restaurant where John and Jane ate dinner. And the waitress who served them their wine? She’s happy, too. So is the local vineyard who grew the grapes that made the wine, the people who bottled it, and the drivers who brought it into town. And the blueberry farmer who supplied the blueberries for the cobbler that the waitress served John and Jane for dessert.

That’s why someone like me cares about tourism in somewhere like the Perfect Place. Yes, I am a farmer, but I am also a business man, and I can draw a lot of conclusions form that story. I bet you can too. Tourism creates jobs. It brings in spending. And tourists pay taxes, which means locals pay less. But tourism in competitive, and without the marketing engine that drives it, John and Jane will take their money to some other destination, where it will benefit some other local economy. Let’s make sure our local economy grows. Let’s feed it, let’s nurture it, help it along, so it becomes strong, healthy, and delicious.

[Upbeat music]

Words on the screen: Thanks for visiting the Perfect Place. Thanks for visiting Richmond, British Columbia. Tourism in Richmond:

• Is the largest industry (retail, accommodations, attractions, transportation).
• Results in $650 million in economic output.
• Directly employs more than 7,400 people earning $220 million in wages.
• Contributes $250 million in non-accommodations spending.
• Brings in excess of 4 million person nights.
• Generates $135 million in taxes: $76 million federal, $44 million provincial, and $15 million municipal.
• Supported an 123% increase in the number of hotel rooms over the last 15 years.

Dave: Tourism is vital to us. Like beef to Alberta, like potash to Saskatchewan, or manufacturing to Ontario. Without marketing funding, many visitors will find the perfect place somewhere else. Tourism pays for everyone.

Words on the screen: Brought to you by Tourism Richmond.

Figure 1.11 The doorway to a boardroom in the Canadian Tourism College.

Throughout the rest of this textbook, you will have a chance to learn more about the history and current outlook for tourism in BC, with in-depth coverage of some of the triumphs and challenges we face as an industry. You will also learn about the Canadian and global contexts of the tourism industry’s development.

Media Attributions

• Red and White Train on Rail by Andy Holmes is licensed under the Unsplash Licence.
• Chairlift by Pamela Saunders is licensed under the Unsplash Licence.
• Switzerland vs. Canada by s.yume is licensed under a CC BY 2.0 Licence.
• CTC’s Boardroom by LinkBC is licensed under a CC BY 2.0 Licence.

Video Attributions

• “Tourism Pays” video and transcript by Tourism Richmond. All rights reserved.

As you can already see, the impacts of the global tourism industry today are impressive and far reaching. Let’s have a closer look at some of these outcomes.

Tourism Impacts

Tourism can generate positive or negative impacts under three main categories: economic, social, and environmental. These impacts are analyzed using data gathered by businesses, governments, and industry organizations.

Economic Impacts

According to the 2019 edition of the UNWTO International Tourism Highlights report, international tourist arrivals reached 1.4 billion, a 5% increase in 2018. UNWTO Secretary-General Zurab Pololikashvili stated that the sheer growth of the industry was driven by a strong global economy, surge of the travel-ready middle class from emerging economies, technological advances, and more affordable travel costs among others (UNWTO, 2019). At the same time, the UNWTO (2019) reported export earnings from tourism, or the sum of international tourism receipts and passenger transport, reached a staggering USD 1.7 trillion. This demonstrates that the industry is a major economic engine of growth and development.

Europe has traditionally been the region with the highest tourism dollar spending with USD 570 billion, followed by Asia and the Pacific (USD 435 billion), the Americas (USD 334 billion), Middle East (USD 73 billion), and Africa (USD 38 billion). Asia has shown to have the strongest growths in both arrivals (+7%) and spending (+7%). Africa equally shared a +7% growth in arrivals, suggesting a new interest in travelling to the continent.

What are the trends that are motivating people to travel? The six consumer travel trends, according to the UNWTO (2019) include:

• Travel “to change” or focusing on more authentic travel, transformation, and living like a local.
• Travel “to show” or capturing “instagramable” moments, experiences, and visiting selfie-worthy destinations.
• Pursuit of a healthy life or engaging into active travel that involves walking, wellness, and sports tourism.
• Rise of the “access” economy.
• Solo travel and multigenerational travel as a result of single households and an aging population.
• Rising awareness on travel with sustainable advocacies, thoughtful consideration about climate change impacts, and plastic-free travel.

Social Impacts

Because tourism experiences also involve human interaction, certain impacts may occur. Generally, social impacts in tourism are related to guest-to-host or host-to-guest influences and changes. Studies of these encounters often relate to the Social Exchange Theory, which describe how tourists and hosts’ behaviours change as a result of the perceived benefits and threats they create during interaction (Nunkoo, 2015).

Positive social impacts in tourism include learning about different cultures, increasing tolerance and inclusion through LGBTQ+ travel, increasing amenities (e.g., parks, recreation facilities), investment in arts and culture, celebration of Indigenous peoples, and community pride. When developed conscientiously, tourism can, and does, contribute to a positive quality of life for residents and a deeper learning and appreciation for tourists.

Figure 1.12 LGBTQ+ travel is gaining momentum.

Unfortunately, tourism also has its shortcomings and is culpable for some detrimental impacts. However, as identified by the United Nations Environment Programme (UNEP, 2003a), negative social impacts of tourism can include:

• Change or loss of indigenous identity and values
• Culture clashes
• Physical causes of social stress (increased demand for resources)
• Ethical issues (such as an increase in sex tourism or the exploitation of child workers)

Some of these issues are explored in further detail in Chapter 12, which examines the development of Indigenous tourism in British Columbia.

Environmental Impacts

Tourism relies on, and greatly impacts, the natural environment in which it operates. In many cases, the environment is an essential resource that outdoor recreation and ecotourism cannot exist without. Even though many areas of the world are conserved in the form of parks and protected areas, tourism development can still have severe negative impacts from misuse, overuse, and neglect. According to UNEP (2003b), these can include:

• Depletion of natural resources (water, forests, etc.)
• Pollution (air pollution, noise, sewage, waste and littering)
• Physical impacts (construction activities, marina development, trampling, loss of biodiversity)

The environmental impacts of tourism knows no boundaries and can reach outside local areas and have detrimental effects on the global ecosystem. One example is increased emissions from necessary tourism elements such as transportation. Air travel for instance, is a major contributor to climate change. Chapter 10 looks at the environmental impacts of tourism in more detail.

A overview of the negative and positive impacts:

Whether positive or negative, tourism is a force for change around the world that is capable of transforming the environment from micro- to macro-scales at a staggering rate.

Media Attributions

• Pride by Mercedes Mehling is licensed under an Unsplash Licence.

As we have seen in this chapter, tourism is a complex system that is built up of industry sectors including accommodation, recreation and entertainment, food and beverage services, transportation, and travel services. It encompasses domestic, inbound, and outbound travel for business, leisure, or other purposes. And because of this large scope, tourism development requires participation from all walks of life, including private business, governmental agencies, educational institutions, communities, and citizens.

Recognizing the diverse nature of the industry and the significant contributions tourism makes toward economic and social value for British Columbians is important. There remains a great deal of work to better educate members of the tourism industry, other sectors, and the public about the ways tourism contributes to our province.

Given this opportunity for greater awareness, it is hoped that students like you will help share this information as you learn more about the sector. So let’s begin our exploration in Chapter 2 with a closer look at a critical sector: transportation. Before you get started on Chapter 2 test some of your knowledge to-date by taking this short summary quiz.

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The transportation sector is vital to the success of our industry. Put simply, if we cannot move people from place to place — whether by air, sea, or land — we do not have an industry.

This chapter takes a broad approach, covering each segment of the transportation sector globally, nationally, and at home in British Columbia. Let’s start our review by taking a look at the airline industry.

According to the International Air Transport Association (IATA), in 2018, airlines transported more people than ever, 4.1 billion people across a network of 25,000 origin to destination (O-D) passenger journeys generating over 58 million jobs and $2.7 trillion in business activity (International Air Transport Association, 2019).

The first commercial (paid) passenger flight took place in Florida on New Year’s Day 1914 as a single person was transported across Tampa Bay (IATA 2014a). There have been a number of international aviation milestones since that flight, as illustrated in Table 2.1.

Rules and Regulations

Aviation is a highly regulated industry as it crosses many government jurisdictions. This section explores key airline regulations in more detail.

Open Skies

Figure 2.1 Open skies.

The term open skies refers to policies that allow national airlines to fly to, and above, other countries. These policies lift restrictions where countries have good relationships, freeing up the travel of passengers and goods.

Canada’s approach to open skies is the Blue Sky Policy, first implemented in 2006. The National Airlines Council of Canada (NACC) and Canadian Airports Council (CAC) support the Blue Sky Policy.

While opening up air transport agreements (ATAs) with other jurisdictions is important, the Canadian government does not provide blanket arrangements, instead, negotiating “when it is in Canada’s overall interest to do so” (Government of Canada, 2014a). Some suggest the government should be more liberal with air access so more competitors can enter the market, potentially attracting more visitors to the country (Fu, Oum, & Zhang (2010); Gill & Raynor, 2003).

Taxes and Fees

For years, the aviation industry has argued that the high level of taxes and fees are unsustainable for the sector. According to a 2012 Senate study on issues related to the Canadian airline industry, Canadian travellers are being grounded by airline fees, fuel surcharges, security taxes, airport improvement fees, and other additional costs. Airports are charged rental fees by the Canadian government ($4.8 billion from 1992 to 2004), which they pass on to the airlines, who in turn transfer the costs to travellers. Some think eliminating rental fees would make Canadian airports more competitive, and view rental and other fees as the reason 5 million Canadians went south of the border for flights in 2013, where passenger fees are 230% lower than in Canada (Hermiston & Steele, 2014).

Profitability

Running an airline is like having a baby: fun to conceive, but hell to deliver.
—C. E. Woolman, principal founder of Delta Air Lines (The Economist, 2011).

As the quote above suggested, airlines are faced with many challenges. In addition to operating in a strict regulatory environment, airlines yield extremely small profit margins. Passenger growth in 2017 was supported by a broad-based improvement in global economic conditions and by lower airfares, mainly earlier in the year. Lower fares have been a tailwind for passenger demand since late 2014 and have helped to drive the RPK/GDP multiplier above its long-term median level for three years in a row. In 2017 the industry accumulated $  billion worldwide in revenues, although global profit margins were just 1.5% (IATA, 2014a). To put that into perspective, while the average airline earned 1.5%, Amazon’s profit margins were almost 14 times that at 20.15% (YCharts, 2014).

Passenger Load Factor

Key to airline profitability is the passenger load factor, which relates how efficiently planes are being used. The load factor for a single flight can be determined by dividing the number of passengers by the number of seats. Demand grew faster than capacity, increasing the passenger load factor by 0.7 percentage points in 2019.

Figure 2.2 An Airbus 380-800 takes off.

Passenger load factors in the airline industry reached a high of 80.3% in 2019, which was attributed to increased volumes and strong capacity management in key sectors (IATA, 2104a). One way of increasing capacity is by using larger aircraft. For instance, the introduction of the Airbus A380 model has allowed up to 40% more capacity per flight, carrying up to 525 passengers in a three-class configuration, and up to 853 in a single-class configuration (Airbus, 2014). Some carriers are now retiring the A380 model from their fleet (Airbus, 2020).

Ultra Low-Cost Carriers

Another key factor in profitability is the airline’s business model. In 1971, Southwest Airlines became the first low-cost carrier (LCC), revolutionizing the industry. The LCC model involved charging for all extras such as reserved seating, baggage, and on-board service, and cutting costs by offering less legroom and using non-unionized workforces. Typically, an LCC has to run with 90% full planes to break even (Owram, 2014). The high-volume, lower-service system is what we have become used to today, but at the time it was introduced, it was groundbreaking. Over the past several years, the model is now called an Ultra Low Cost Carrier (ULCC) with extremely low costs and unbundled services. Examples of Canadian ultra low-cost carriers include Swoop and Flair.

Ancillary Revenues

The LCC and ULCC models, combined with tight margins, led to today’s climate where passengers are charged for value-added services such as meals, headsets, blankets, seat selection, and bag checking. These are known in the industry as ancillary revenues. Profits from these extras rose from $36 billion in 2012 to $42 billion in 2013, or more than $13 a passenger. An average net profit of only $3.39 per passenger was retained by airlines (IATA, 2014a).

As you can see, airlines must strive to maintain profitability, despite thin margins, in an environment with heavy government regulation. But at the same time, they must be responsible for the safety of their passengers.

Air Safety and Security

IATA encourages airlines to view safety from a number of points, including reducing operational risks such as plane crashes, by running safety audit programs. They also advocate for improved infrastructure such as runway upgrades and training for pilots and other crew. Finally, they strive to understand emerging safety issues, including the outsourcing of operations to third-party companies (IATA, 2014a).

In terms of security, coordination between programs such as the Interpol Stolen and Lost Travel Documents initiative and other databases is critical (IATA, 2014a). As reservations and management systems become increasingly computerized, cyber-security becomes a top concern for airlines, who must protect IT (information technology) because their databases contain information about flights and passengers’ personal information. Unruly passengers are also a cause of concern, with over 8,000 incidents reported worldwide every year (IATA, 2014a).

Now that we have a better sense of the complexities of the industry, let’s take a closer look at air travel in Canada and the regional air industry.

Canada’s Air Industry

Figure 2.3 An Air Canada Jazz plane readies for takeoff.

In 1937, Trans-Canada Air Lines (later to become Air Canada) was launched with two passenger planes and one mail plane. By the 1950s, Canadian Pacific Airlines (CP Air) entered the marketplace, and an economic boom led to more affordable tickets. Around this time CP Air (which became Canadian Airlines in 1987) launched flights to Australia, Japan, and South America (Canadian Geographic, 2000). In 2001, Canadian Airlines International was acquired by Air Canada (Aviation Safety Network, 2012).

In 1996, the marketplace changed drastically with the entry of an Alberta-based LCC called WestJet.  By 2014, WestJet had grown to become Canada’s second major airline with more than 9,700 staff flying to 88 destinations across domestic and international networks (WestJet, 2014).

As it grew, WestJet began to offer services such as premium economy class and a frequent-flyer program, launched a regional carrier, and introduced transatlantic flights with service to Dublin, Ireland, evolving away from the LCC model (Owram, 2014). With those changes, and in the absence of a true low-cost carrier, in 2014, some other companies, added ULCC such as Swoop in 2019 and Flair Airlines.

However, outside of Air Canada and WestJet, airlines in Canada have found it very challenging to survive, and some examples of LCC startups like Harmony Airways and Jetsgo have fallen by the wayside.

Challenges to Canada’s Air Industry

When looking at these failed airlines in Canada, three key challenges to success can be identified (Owram, 2014):

1. Canada’s large geographical size and sparse population mean relatively low demand for flights.
2. Canada’s higher taxes and fees compared with other jurisdictions (such as the United States) make pricing less competitive.
3. Canada’s two dominant airlines are able to price new entrants out of the market.

In addition to these factors, the European debt crisis, a slow US economic recovery, more cautious spending by Canadians, and fuel price increases led to a $900 million industry loss in 2011 (Conference Board of Canada, 2012) prior to the industry returning to profitability in 2013.

Take a Closer Look: One Size Doesn’t Fit All

In 2013, a special report to the Canadian Senate explored the concept that one size doesn’t fit all when it comes to competitiveness in the country’s airline industry. The report contains general observations about the industry as well as a number of recommendations to stakeholders, including airport managers. Read the report: “One Size Doesn’t Fit All: the Future Growth and Competitiveness of Canadian Air Travel” [PDF].

Today, the Canadian airline industry directly employs roughly 141,000 people and is worth $34.9 billion in gross domestic product. It supports 330 jobs for every 100,000 passengers and contributes over $12 billion to federal and provincial treasuries, including over $7 billion in taxes (Gill and Raynor, 2013). In 2019, Canadian airlines carried over 80 million passengers and are a critical component of Canada’s overall air transport and tourism sector and support over 630,000 jobs (NACC, 2019).

Let’s now turn our attention to the regional air market, focusing on British Columbia.

Regional Airlines

Transportation in BC has always been difficult: incomplete road systems and rugged terrain historically made travel between communities almost impossible. In 1927, a number of businessmen promised to change all that when they opened British Columbia Airways in Victoria with the purchase of a commercial airliner (Canadian Museum of Flight, 2014).

As commercial flying became more popular, and the province grew, regional airports started to spring up around BC as a means of delivering surveying equipment, forestry supplies, and workers. Many of these airports were legacies of Canada’s strategic position for the military. Fort Nelson’s airport, for instance, was established so the US Air Force could fuel aircraft bound for Russia in World War II (Northern Rockies Regional Airport, 2014).

In 1994, Transport Canada transferred all 150 airports under its control to local authorities under the National Airports Policy (NAP). This policy is considered to have been a turning point in the privatization of the airline industry in Canada. A 2004 study showed that after 10 years, 48% of these airports were not able to cover annual costs of operation, leading to concerns about the viability of small local airports in particular (InterVISTAS, 2005).

In 2012, the BC government released its aviation strategy, entitled Connecting with the World, which acknowledged the economic challenges for airports large and small. These range from Vancouver International Airport (YVR), which supports more than 61,000 jobs and creates more than $11 billion in economic activity each year, through to regional and local airports. The strategy outlined a framework to remove barriers to aviation growth including potentially eliminating the two-cent-per-litre International Aviation Fuel Tax (British Columbia Ministry of Transportation and Infrastructure, 2012).

Given a highly complex regulatory environment, razor-thin profit margins, and intense competition, the airline industry is constantly changing and evolving at global, national, and regional levels. But one thing is certain: air travel is here to stay.

On the other hand, the rail industry has been faced with significant declines since air travel became accessible to the masses. Let’s learn more about this sector.

Figure 2.4 Mount Stephen House on the Canadian Pacific Railway, in Field, B.C., 1909.

In Chapter 1, we looked at the historic significance of railways as they laid the foundation for the modern tourism industry. That’s because in many places, including Canada and British Columbia, trains were an unprecedented way to move people across vast expanses of land. With the Canadian Pacific company opening up hotels in major cities, BC’s hospitality sector was born and rail travel emerged.

Profitability

However, starting in the 1940s and 1950s, the passenger rail industry began to decline sharply. In 1945, Canadian railways carried 55.4 million passengers, but just 10 years later passenger traffic had dropped to 27.2 million. The creation of VIA Rail in 1977 as a Canadian Crown corporation was an attempt by the government to ensure rail travel did not disappear, but in the years since its founding, VIA has struggled, relying heavily on federal subsidies in order to continue operations.

Between 1989 and 1990, VIA lost over 45% of its ridership when it cut unprofitable routes, focusing on areas with better potential for revenue and passenger volumes. From there, annual ridership has stabilized at around 3.5 million to 4.0 million passengers per year, slowly increasing throughout the 1990s and 2000s (Dupuis, 2011).

Despite this slight recovery, there are a number of challenges for passenger rail in Canada, which will likely require continued government support to survive. Three key challenges to a successful passenger rail industry are:

1. Passenger rail must negotiate with freight for the right-of-use of tracks.
2. There is a limited potential of routes (with the highest volume existing in the Quebec-Windsor corridor).
3. Fixed-cost equipment is ageing out, requiring replacement or upgrading.

High-speed rail seems like an attractive option, but would be expensive to construct as existing tracks aren’t suitable for the reasons given above. It’s also unlikely to provide high enough returns to private investors (Dupuis, 2011). This means the Canadian government would have to invest heavily in a rapid rail project for it to proceed. As of 2020, no such investment was planned.

While the industry overall has been in a decline, touring companies like Rocky Mountaineer have found a financially successful model by shifting the focus from transportation to the sightseeing experience. The company has weathered financial storms by refusing to discount their luxury product, instead, focusing on unique experiences. The long planning cycle for scenic rail packages has helped the company stand their ground in terms of pricing (Cubbon, 2010). The product-experience is stratified into two “World-Class Service” guest experience choices, namely the Silver Leaf and the Gold Leaf for their three rail routes.

Rail Safety

In Canada, rail safety is governed by the Railway Safety Act, which ensures safe railway operation and amends other laws that relate to rail safety (Government of Canada, 2014b). The Act is overseen by the Minister of Transport. It covers grade crossings, mining and construction near railways, operating certifications, financial penalties for infractions, and safety management.

The Act was revised in late 2014 in response to the massive rail accident in July 2013 in Lac-Mégantic, Quebec. A runaway oil train exploded, killing 47 people, and subsequently MM&A Railway and three employees, including the train’s engineer, were charged with criminal negligence (CBC News, 2014).

In addition to freight management issues, a key rail safety concern is that of crossings. As recently as April 2014, Transport Canada had to issue orders for improved safety measures at crossings in suburban Ottawa after a signal malfunctioned in the area (CTV News, 2014a). According to Operation Lifesaver Canada (2014), in 2011, there were 169 crossing collisions across Canada, with 25 fatalities and 21 serious injuries. In general, however, Canada’s 73,000 kilometres of railway tracks safely transport both people and goods. And while railways in Canada, and elsewhere, are being forced to innovate, companies like Rocky Mountaineer (see Spotlight On above) give the industry glimmers of hope.

The rail industry shares some common history with the cruise sector. Let’s now turn our focus to the water and learn about the evolution of travel on the high seas.

Figure 2.5 A cruise ship at sunset at the Breakwater District (formerly named Ogden Point), Victoria.

Travel by water is as old as civilization itself. However, the industry as we know it began when Thomas Newcomen invented the steam engine in 1712. The first crossing of the Atlantic by steam engine took place in 1819 aboard the SS Savannah, landing in Liverpool, England, after 29 days at sea. Forty years later, White Star Lines began building ocean liners including the Olympic-class ships (the Olympic, Britannic, and Titanic), expanding on previously utilitarian models by adding luxurious amenities (Briggs, 2008).

A boom in passenger ship travel toward the end of the 1800s was aided by a growing influx of immigrants from Europe to America, while more affluent passengers travelled by steamship for pleasure or business. The industry grew over time but, like rail travel, began to decline after the arrival of airlines. Shipping companies were forced to change their business model from pure transportation to “an experience,” and the modern cruise industry was born.

The Cruise Sector

We’ve come a long way since the Olympic class of steamship. Today, the world’s largest cruise ship, MS Oasis of the Seas, has an outdoor park with 12,000 plants, an 82-foot zip wire, and a high-diving performance venue. It’s 20 storeys tall and can hold 5,606 passengers and a crew of up to 2,394 (Magrath, 2014). A crew on a cruise ship will include the captain, the chief officer (in charge of training and maintenance), staff captain, chief engineer, chief medical officer, and chief radio officer (communication, radar, and weather monitoring).

Cruising the World

According to CLIA, 30 million passengers were expected to travel worldwide on 63 member lines in 2019. Projections for 2020 were 32 million passengers expected to cruise (CLIA, 2020). Given increased demand, 24 new ships were expected in 2014–15, adding a total capacity of over 37,000 passengers.

Over 55% of the world’s cruise passengers are from North America, and the leading destinations (based on ship deployments), according to CLIA, are:

• The Caribbean (37%)
• The Mediterranean (19%)
• Northern Europe (11%)
• Australia/New Zealand (6%)
• Alaska (5%)
• Asia (4%)
• South America (3%)

River Cruising

While mass cruises to destinations like the Caribbean remain incredibly popular, river cruises are emerging as another strong segment of the industry. The key differences between river cruises and ocean cruises are (Hill, 2013):

1. River cruise ships are smaller (400 feet long by 40 feet wide on average) and can navigate narrow passages.
2. River cruises carry fewer passengers (about 10% of the average cruise, or 200 passengers total).
3. Beer, wine, and high-end cuisine are generally offered in the standard package.

The price point for river cruises is around the same as ocean trips, with the typical cost ranging from $2,000 to $4,000, depending on the itinerary, accommodations, and other amenities.

From 2008 to 2013, river cruises saw a 10% annual passenger increase. Europe leads the subcategory, while emerging destinations include a cruise route along China’s Yangtze River. As the on-board experience differs greatly from a larger cruise (no play areas, water parks, or on-board stage productions), the target demographic for river cruises is 50- to 70-year-olds. According to Torstein Hagen, founder and chairman of Viking, an international river cruising company, “with river cruises, a destination is the destination,” although many river cruises are themed around cultural or historical events (Hill, 2013).

Figure 2.6 Uniworld’s River Beatrice in Passau, Germany.

Cruising in Canada

According to a study completed for the North West & Canada Cruise Association (NWCCA) and its partners, in 2012, approximately 1,100 cruise ship calls were made at Canadian cruise ports generating slightly more than 2 million passenger arrivals throughout the six-month cruise season (BREA, 2013). The study found three key cruise itineraries in Canada:

1. Canada/New England
2. Quebec (between Montreal and Quebec City and US ports)
3. Alaska (either departing from, or using, Vancouver or another BC city as a port of call)

These generated $1.16 billion in direct spending. Cruising also generated almost 10,000 full- and part-time jobs paying $397 million in wages and salaries. The international cruise industry also generated an estimated $269 million in indirect business and income taxes in Canada, and the majority of this spending was in British Columbia (BREA, 2013).

Cruising in BC

BC’s rail history and cruise history are intertwined. As early as 1887, Canadian Pacific Railway began offering steamship passage to destinations such as Hawaii, Shanghai, Alaska, and Seattle. Ninety-nine years later, Vancouver’s Canada Place was built, with its cruise ship terminals, allowing the province to attract large ships and capture its share of the growing international cruise industry (Cruise BC, 2014).

This potential continues to grow as Nanaimo, Prince Rupert, Victoria, and Vancouver accounted for 57% of the Canadian cruise passenger traffic with 1.18 million passengers in 2012 (BREA, 2013).

Cruising isn’t the only way for visitors to experience the waters of BC. In fact, the vast majority of our water travel is done by ferry. Let’s take a closer look at this vital component of BC’s transportation infrastructure.

Ferries

Ferry service in British Columbia dates back to the mid-1800s when the Hudson’s Bay Company ran ships between Vancouver Island and the Mainland. Later, CP Rail and Black Ball ferries ran a private service, until 1958 when Premier W.A.C. Bennett announced the BC Ferry Authority would consolidate the ferries under a provincial mandate.

Figure 2.7 BC Ferries’ Spirit of Vancouver Island.

The MV Tsawwassen and the MV Sidney began regular service on June 15, 1960, and BC Ferries was officially launched with two terminals and around 200 employees. Today, there are 37 vessels, 47 destinations, and more than 5,000 employees in the summer peak season (BC Ferries, 2019). In late 2019, BC Ferries introduced the world’s most advanced electric battery hybrid ferries to serve inter-island routes.

BC isn’t the only destination where ferries make up part of the transportation experience. In 2011, Travel + Leisure Magazine profiled several notable ferry journeys in the article “World’s Most Beautiful Ferry Rides,” including:

• An 800-mile ferry voyage through Chile’s Patagonian fjords
• A three-mile trip from the Egyptian Spice Market to Istanbul, Turkey
• Urban ferry rides including Hong Kong’s Victoria Harbour, Australia’s Sydney Harbour, and New York City’s Staten Island Ferry

The article also featured the 15-hour trip from Port Hardy to Prince Rupert on British Columbia’s coast (Orcutt, 2011).

While cruising is often a pleasant and relaxing experience, there are a number of safety concerns for vessels of all types.

Cruise and Ferry Safety

One of the major concerns on cruise lines is disease outbreak, specifically the norovirus (a stomach flu), which can spread quickly on cruise ships as passengers are so close together. The US Centers for Disease Control’s (CDC) vessel sanitation program is designed to help the industry prevent and control the outset, and spreading, of these types of illnesses (Briggs, 2008).

Accidents are also a concern. In 2006, the BC Ferries vessel MV Queen of the North crashed and sank in the Inside Passage, leaving two passengers missing and presumed dead. The ship’s navigating officer was charged with criminal negligence causing their deaths (Keller, 2013). More recently, a “hard landing” at Duke Point terminal on Vancouver Island caused over $4 million in damage. BC Ferries launched a suit against a German engineering firm in late 2013, alleging a piece of equipment failed, making a smooth docking impossible. The Transportation Safety Board found that staff aboard the ship didn’t follow proper docking procedures, however, which contributed to the crash (Canadian Press, 2013).

We’ve covered the skies, the rails, and the seas. Now let’s round out our investigation of transportation in tourism by delving into travel on land.

This section explores issues directly relating to transportation today including fuel cost, labour, and environmental impacts. For more information on one of the biggest trends in tourism, online travel agencies (OTAs), and how online bookings impact the transportation sector, please see Chapter 7.

Fuel Cost

When it comes to moving people, fuel cost is critical. The cost of jet fuel is one of the single highest factors in airline profitability. In 2013, the average cost was around $125 per barrel, which was $5 less than the previous year (IATA, 2014a). Cruise ships consume a lower grade of diesel than do land vehicles, but they consume a lot of it. The QE2, for example, consumes roughly 380 tonnes of fuel every day if travelling at 28.5 knots (Briggs, 2008).

Labour

As in all tourism-related sectors, cyclical labour shortages can significantly impact the transportation industry. In the aviation sector, a forecast found that by 2032 the world’s airlines will need 460,000 additional pilots and 650,000 new maintenance technicians to service current and future aircraft. The drive to find employees also extends to the maritime sector, where the International Maritime Organization (IMO) launched a “Go to sea!” campaign to attract more workers to the field (PWC, 2012).

Environmental Impacts

In addition to fuel and labour costs, and regulations we’ve covered already, the transportation sector has a significant impact on the natural environment.

Air Impacts

According to the David Suzuki Foundation (2014), the aviation industry is responsible for 4% to 9% of climate change impacts, and greenhouse gas emissions from flights have risen 83% since 1990. Airline travel has a greater emissions impact than driving or taking the train per passenger kilometre, which caused a bishop in the UK to famously declare that “Making selfish choices such as flying on holiday [is] a symptom of sin” (Barrow, 2006).

Rail Impacts

Rail travel is widely regarded as one of the most environmentally friendly modes of transportation due to its low carbon dioxide emissions. Railways come under fire outside of the tourism realm, however, as freight shipping can produce hazards to resident health including an increased risk of developing cancer and noise pollution (The Impact Project, 2012).

Cruise Impacts

Cruise ships can generate significant pollution from black water (containing human waste), grey water (runoff from showers, dishwashers, sinks), bilge water (from the lowest compartment of the ship), solid waste (trash), and chemical waste (cleaners, solvents, oil). One ship can create almost a million litres of grey water, over 113,000 litres of black water, and over 140,000 litres of bilge water every day. Depending on the regulations in the operating areas, ships can simply dump this waste directly into the ocean. Ballast tanks, filled to keep the ship afloat, can be contaminated with species which are then transported to other areas, disrupting sensitive ecosystems (Briggs, 2008).

Land Impacts

A recent study found that the impact of travel on land is highly dependent on the number of passengers. Whereas travelling alone in a large SUV can have high emissions per person (as high as flying), increasing the number of passengers, and using a smaller vehicle, can bring the impact down to that of train travel (Science Daily, 2013).

For more information on the environmental impacts of the transportation sector, and how to mitigate these, read Chapter 10.

Weather

As you’ve learned, the transportation sector can have an effect on climate change, and changes in weather have a strong effect on transportation. According to Natural Resources Canada (2013), some of these include:

• More drastic freeze-thaw cycles, destroying pavement and causing ruts in asphalt
• Increased precipitation causing landslides, washing out roads, and derailing trains
• Effects and costs of additional de-icing chemicals deployed on aircraft and runways (over 50 million litres were used worldwide in 2013)
• Delayed flights and sailings due to increased storm activity
• Millions of dollars of infrastructure upgrades required as sea levels increase and flood structures (replacing or relocating bridges, tunnels, ports, docks, dykes, helipads and airports)

The threat of climate change could significantly impact sea-level airports such as YVR, and some 50 additional registered airports across Canada that sit at five metres or less above sea level (Natural Resources Canada, 2013).

For this reason, it’s important that the sector continue to press for innovations and greener transportation choices, if only to ensure future financial costs are kept at bay.

Figure 2.9 A flight grounded at Baltimore Airport due to severe weather.

While much of this text has placed significance on the emergence of the railways as critical to the development of our industry, BC’s roadways have also played an integral role. Our roads have evolved from First Nations trails, to Fur Trade and Gold Rush routes, to Wagon Roads and Trunk Roads — finally becoming the highway system we know today (British Columbia Ministry of Transportation and Highways, n.d.).

Today, land-based travel is achieved through a complex web of local transit, taxis, rentals, walking, and short-term sightseeing. This section briefly explores these options.

Scenic and Sightseeing Travel

It’s common for visitors to want to explore a community and appreciate the sights. We’ve already learned a little about the rail-based sightseeing company, Rocky Mountaineer. Many destinations also offer short-term, hop-on-hop-off bus and trolley tours. Others feature trams and trolleys. Outside of impromptu excursions, sightseeing tours are often put together by inbound tour operators. You can learn more about tour operators, and the sightseeing sector, in Chapter 7.

Transit and Destination Infrastructure

Vancouver’s Tourism Master Plan acknowledges the importance of transportation infrastructure for the tourism industry. Priorities for future development by the city include (Tourism Vancouver, 2013):

• Improving accessibility for people with disabilities
• Creating a transit loop between downtown attractions
• Supporting ferries in False Creek
• Providing late-night transit
• Investigating and implementing a public bike share
• Developing more transit options along the Broadway corridor
• Working with taxi companies to explore a strategic plan for taxi operations
• Enhancing walkability by implementing recommendations from the Pedestrian Safety Study and Action Plan

These action items were developed in consultation with industry stakeholders as well as residents, and reflect the interrelated elements that make up a destination’s transportation infrastructure.

Rentals and Taxis

Figure 2.8 A Lincoln Town Car in San Francisco.

Today, when travellers aren’t using their own cars, automobile travel is traditionally split between rental vehicles, taxis (including limousines), or ride sharing.

Rentals

In North America, there are three main brands that represent approximately 85% of the rental car business: Enterprise (includes National and Alamo), Hertz (includes Dollar and Thrifty), and Avis. One of the reasons that brands have consolidated over time is the high fixed cost of operation as vehicles are purchased, maintained, and disposed of. Fierce competition means prices are checked and updated thousands of times a day. The business is also highly seasonal, with high traffic in summer and spring, and so fleet management is critical for profitability. Rental companies tend to use enplanements (the numbers of passengers travelling by air), as a measurement of market trends that influence rental usage (DBRS, 2010).

Taxis

In BC, taxi licences are issued by the BC Passenger Transportation Board. In Vancouver, the right to operate a taxi is based on a permit system, and each permit costs the original holder $100. But because of the limited number of permits available, those who hold one are able to auction it off for over $800,000 and keep the profit. As a result, passengers in Vancouver paid an average of 73% more for the equivalent trip in Washington, D.C. Drivers from  areas outside the city depositing passengers in Vancouver are also not permitted to pick up fares on the return trip, having to drive across their boundaries (Proctor, 2014).

Ridesharing appslike Uber, which allow people to find a ride using their mobile phone, have emerged to exert influence on car travel in key destinations. In most major cities where ridesharing is available, these apps have rapidly undercut the taxi industry. In SanFransico for example, according to the city’s transit authority, per month, trips by taxi have plummeted from 1,424 in 2012 to 504 in 2014, even though taxi operators maintain a monopoly over rides from the airport (Kuittinen, 2014). In New York City, however, the price of medallions (similar to Vancouver’s taxi permits) continues to hover above $950,000. In large markets like Manhattan, passengers continue to hail cabs on the street at the moment, with e-hails (electronic taxi hails) at 0.17% of the market (Brustein & Winter, 2014). The City of Vancouver opted to force Uber to roll back after its initial release, and in 2014 placed the app on a six-month moratorium after pressure from taxi operators who cited threats to the values of their licences as well as safety and monitoring concerns (CTV News, 2014b). However, in January 2020, Uber and Lyft ride-hailing was launched in Vancouver. The Passenger Transportation Board announced on Jan. 23, 2020 that it had approved Uber’s application to operate in the Lower Mainland and Whistler, as soon as the company secures the appropriate insurance. Ride-hailing began in Vancouver shortly thereafter (Vancouver Sun, January 23, 2020). As well, the Passenger Transportation Board announced in early February 2020, that it had approved Kabu’s application to operate in the Lower Mainland, Whistler and the Greater Victoria area, as soon as the company secures the appropriate insurance. Kabu is based out of Richmond, B.C. and had been operating across the Greater Vancouver area since 2016 but paused operations in September 2019 when the company submitted its PTB application.

Uber is available in hundreds of cities internationally so you may already be familiar with the app, or may even already have it downloaded to your phone. Uber offers a variety of vehicles, with UberX being the most affordable, standard sedan option all the way up to Select which includes more stylish rides. As this and other examples illustrate, the transportation sector is vulnerable to regulatory, technological, operational, and business trends. Let’s look at these in more detail.

In essence, hospitality is made up of two services: the provision of overnight accommodation for people travelling away from home, and options for people dining outside their home. We refer to the accommodation and food and beverage services sectors together as the hospitality industry. This chapter explores the accommodation sector, and Chapter 4 details the food and beverage sector.

Figure 3.1 The view from a balcony at the Westin Bayshore hotel in downtown Vancouver.

In Canada, approximately 25% to 35% of visitor spending is attributed to accommodation, making it a substantial portion of travel expenditures.

There were 8,289 hotels, motels and resorts with a total of 460,688 rooms across Canada in 2019. Direct spending on overnight stays was $21.9 billion, and the year’s average occupancy rate was 65%.  Across the country the sector employed 309,800 people directly or indirectly on a full-time or part-time basis (Hotel Association of Canada, 2019). In 2018, Tourism HR Canada continued to project labour supply shortages in the tourism and hospitality sector and recommended a range of actions to help fill job vacancies and help the sector reach its full potential.

In order to understand this large and significant sector, we will explore the history and importance of hotels in Canada, and review the hotel types along with various ownership structures and operational considerations. To complete the chapter, we will identify accommodation alternatives and specific trends that are affecting the accommodation sector today.

The History of Hotels in Canada

As we learned in Chapter 2, travel in Europe, North America, and Australia developed with the establishment of railway networks and train travel in the mid-1800s. The history of Canada’s grand hotels is also the story of Canada’s ocean liners and railways. Until the use of personal cars became widespread in the 1920s and 1930s, and taxpayer-funded all-weather highways were created, railways were the only long-distance land transportation available in Canada.

Both of Canada’s railway companies established hotel divisions: Canadian Pacific Hotels and Canadian National Hotels (Canada History, 2013). The first hotels were small and included Glacier House in Glacier National Park, BC, and Mount Stephen House in Field, BC. The hotel business was firmly established when both companies recognized the business opportunity in the growth of tourism, and they soon became rivals, building grand hotels in select locations close to railway stops.

Figure 3.2 The Banff Springs Hotel today.

Banff Springs Hotel opened in 1888, and other hotels soon followed, including the Château Frontenac in Quebec City (1893), the Royal York in Toronto (1929), and the Hotel Vancouver (1939). These hotels remain in operation today and are landmarks in their destinations, functioning as accommodations and as local attractions due to their historic significance and outstanding architecture.

Through the 1950s and 1960s, an increase in motor traffic saw the rise of the motel. The word motel, used less commonly today, comes from the term “motorist’s hotel,” used to denote a hotel that provides ample parking and rooms that are easily accessible from the parking lot. Traditionally, these structures were designed with all the rooms facing the parking lot, and relied heavily on motor traffic from nearby highways (Diffen, 2015).

Today, there are a number of hotel types, which can be classified in multiple ways. Let’s explore these classifications in more detail.

Hotel Types

Hotels are typically referred to by hotel type or category. The type of hotel is determined primarily by the size and location of the building structure, and then according to the function, target market, service level, other amenities, and industry standards.

Classifications

Competitive set is a marketing term used to identify a group of hotels that include the competitors that a hotel guest is likely to consider as an alternative. These can be grouped by any of the classifications listed in Table 3.1, such as size, location, or amenities offered. There must be a minimum of three hotels to qualify as a competitive set.

Figure 3.3 A wedding on the rooftop of the Pan Pacific Hotel in Vancouver, adjacent to the Vancouver Convention Centre East, Canada Place.

Business hotels, airport hotels, budget hotels, boutique hotels, convention hotels, and casino hotels are some examples of differentiated hotel concepts and services designed to meet a specific market segment. As companies continue to innovate and compete to capture defined niche markets within each set, we can expect to see the continued expansion of specific concepts. For example, hotels found close to, or even within, convention facilities are a great match for meetings and events, as well as the SMERF market (social, military, educational, religious, and fraternal segment of the group travel market).  There are also some dynamic new brands in Canada including Hotel Zed located in Victoria and Kelowna, BC. The Hotel Zed concept brand message is ‘We are rebels against the ordinary’.  This brand is funky, colourful, playful and approachable.

Table 3.2 outlines the characteristics of specific hotel types that have evolved to match the needs of a particular traveller segment. As you can see, hotels adapt and diversify depending on the markets they want and need to attract and retain to stay in business.

Let’s now take a closer look at three types of hotel that have emerged to meet specific market needs: budget hotels, boutique hotels, and resorts.

Budget Hotels

The term budget hotel is challenging to define, however most budget properties typically have a standardized appearance and offer basic services with limited food and beverage facilities. Budget hotels were first developed in the United States and built along the interstate highway system. The first Holiday Inn opened in the United States in 1952; the first Quality Motel followed in 1963.

In Europe, Accor operates the predominant European-branded budget rooms. The Accor Economy brand includes: Breakfree, ibis, ibis Styles, ibis budget, greet, JO&JOE and hotelF1. These budget brands offer comfort, modern design, and breakfast on site; ibis Styles is all inclusive, with one price for room night, breakfast, and internet access (Accor, 2020).

The budget brands by Accor are an example of a shift toward the budget boutique hotel style. A relatively new category of hotel, budget boutique is a no-frills boutique experience that still provides style, comfort, and a unique atmosphere.

Boutique Hotels

Figure 3.4 A picture of a welcome gift and note for a returning guest at the Magnolia Hotel and Spa, posted online by the guest.

Canada currently has no industry standards to define boutique hotels, but these hotels generally share some common features. These include having less than 100 rooms and featuring a distinctive design style and on-site food and beverage options (Boutique Hotel Association, n.d.). As a reflection of the size of the hotel, a boutique hotel is typically intimate and has an easily identifiable atmosphere, such as classic, luxurious, quirky, or funky.

According to Bill Lewis, general manager for the Magnolia Hotel and Spa in Victoria “Boutique hotels are all about their smaller size, sense of style, and personalized nature.”  He further notes that “the individual style of boutique hotels really provides a differentiated experience than that of the larger branded properties which have seen considerable consolidation in the last number of years.  Our guests really appreciate this luxurious and intimate experience which our size and staffing levels allow us to achieve” (personal communication, 2020).

Resorts

A resort is a full-service hotel that provides access to or offers a range of recreation facilities and amenities. A resort is typically the primary provider of the guest experience and will generally have one signature amenity or attraction (Brey, 2009).

Examples of signature amenities include skiing and mountains, golf, beach and ocean, lakeside, casino and gaming, all inclusiveness, spa and wellness, marina, tennis, and waterpark. In addition, resorts also offer secondary experiences and a leisure or retreat-style environment.

Now that we understand the classifications of hotel types, let’s gain a deeper understanding of the various ownership structures in the industry.

Ownership Structures

There are several ownership models employed in the sector today, including independent, management contract, chains and franchise agreements, fractional ownership, and full ownership strata units. This section explains each of these in more detail and provides examples of each.

Independent

Figure 3.5 The exterior of the Wedgewood Hotel in downtown Vancouver.

An independent hotel is financed by one individual or a small group and is directly managed by its owners or third-party operators. The term independent refers to a management system that is free from outside control.

There are a number of very well-established independently branded hotels. These hotel companies have developed their own standards, support systems, policies and procedures, and best practices in all areas of the business. Independent hotels have the flexibility to customize or adjust their systems to position their property for success, and the location, product, service, experience, sales and marketing, and brand are all necessary for that success (Cabañas, 2014). An example of an independent hotel is the Wedgewood Hotel and Spa in Vancouver, founded by Eleni Skalbania, and currently co-owned by her youngest daughter, Elpie Markinakis Jackson (Wedgewood, 2020).

Management Contract

Another business model is a management contract. This is a service offered by a management company to manage a hotel or resort for its owners. Owners have two main options for the structure of a management contract. One is to enter into a separate franchise agreement to secure a brand and then engage an independent third-party hotel management company to manage the hotel. SilverBirch Hotels is an example of a hotel management company that manages independent hotels and hotels operating under different major franchise brands, such as Marriott International (SilverBirch Hotels, 2020).

Figure 3.6 The iconic Fairmont Empress Hotel, purchased in 2014 by Nat and Flora Bosa.

A slightly different option is for owners to select a single company to provide the brand and the expertise to manage the property. Four Seasons Hotels and Resorts and Fairmont Hotels and Resorts are companies that provide this option to owners. In 2014, the iconic Fairmont Empress hotel was purchased by Vancouver developer Nat Bosa and his wife Flora, who continued to retain Fairmont as the management company after the purchase (Meiszner, 2014).

Selecting a brand affiliation is one of the most significant decisions hotel owners must make (Crandell, Dickinson, & Kante, 2004). The brand affiliation selected will largely determine the cost of hotel development or conversion of an existing property to meet new brand standards. The affiliation will also determine a number of things about the ongoing operation including the level of services and amenities offered, cost of operation, marketing opportunities or restrictions, and the competitive position in the marketplace. For these reasons, owners typically consider several branding options before choosing to operate independently or selecting a brand affiliation.

Chains and Franchise Agreements

Figure 3.7 A room at the Coast Bastion Hotel in Nanaimo.

Another managerial and ownership structure is franchising. A hotel franchise enables individuals or investment companies (the franchisee) to build or purchase a hotel and then buy or lease a brand name to operate a business and become part of a chain of hotels using the franchisor’s hotel brand, image, goodwill, procedures, controls, marketing, and reservations systems (Rushmore, 2005).

A well-known franchise in BC is Coast Hotels. A franchisee with Coast Hotels becomes part of a network of properties that use a central reservations system with access to electronic distribution channels, regional and national marketing programs, central purchasing, and brand operating standards (Coast Hotels, 2020). A franchisee also receives training, support, and advice from the franchisor and must adhere to regular inspections, audits, and reporting requirements.

Selecting a franchise structure may reduce investment risk by enabling the franchisee to associate with an established hotel company. Franchise fees can be substantial and a franchisee must be willing to adhere to the contractual obligations with the franchisor (Migdal, n.d.; and Rushmore, 2005).  Franchise fees typically include an initial fee paid with the franchise application, and then continuing fees paid during the term of the agreement. These fees are sometimes a percentage of revenue but can be set at a fixed fee. Franchise fees generally range from 4% to 7% of gross rooms revenue (Crandell et al., 2004).

Fractional Ownership

In a fractional ownership model, developers finance hotel builds by selling units in one-eighth to one-quarter shares. This financing model was very popular in BC from the late 1990s to 2008 (Western Investor, 2012). Examples of fractional ownership include the Sun Peaks Ski Resort in Kamloops and the Penticton Lakeside Resort.

In this model, owners have an ownership interest, owning a ‘fraction’ of the unit they purchased.  Owners can place their unit in a rental pool. The investment return for owners is based on the term of the contract they have for their unit, the strata fees, and the hotel’s occupancy. Managing fractional ownership can be very time consuming for hotel owners or management companies as each hotel unit can have up to eight owners. If occupancy rates are too low, an owner may not be able to cover the monthly strata fees. For the hotel management company, attaining occupancy rate targets is necessary to ensure that the balance of revenue is sufficient to cover the hotel’s operating expenses.

Figure 3.8 The Sun Peaks Resort hotel.

Developers now anticipate that fractional ownership will not be used to finance new hotel builds in the future due to poor performance. There have been some high-profile collapses for hotel developers in BC, and between 2002 and 2012 fractional hotel owners experienced asset depreciation (Western Investor, 2012). It is uncertain how the market will perform.

Full Ownership Strata Units

Figure 3.9 The Rosewood Hotel Georgia, a restored historic hotel in downtown Vancouver.

In this financing model, hotel developers finance a new hotel build with the sale of full ownership strata units. The sale of the condominium units finances the hotel development. Examples include the Fairmont Pacific Rim and the Rosewood Hotel Georgia.

No matter what the ownership model, it’s critical for properties to offer a return on investment for owners. The next section looks at ways of measuring financial performance in the sector.

Financial Performance

According to hotel consultant Betsy McDonald from HVS International Hotel Consultancy, the “industry rule of thumb is that a hotel room must make $1 per night for every $1,000 it takes to build or buy. If the hotel costs $125,000 per [room], the room has to rent for $125 per night on average and you need 60% to 70% occupancy to break even” (McDonald, 2011).

Several terms and formulas are used to evaluate revenue management strategies and operational efficiency:

Occupancy is a term that refers to the percentage of all guest rooms in the hotel that are occupied at a given time.

Average daily rate (ADR) is a calculation that states the average guest room income per occupied room in a given time period. It is determined by dividing the total room revenue by the number of rooms sold.

Revenue per available room (RevPAR) is a calculation that combines both occupancy and ADR in one metric. It is calculated by multiplying a hotel’s ADR by its occupancy rate. It may also be calculated by dividing a hotel’s total room revenue by the total number of available rooms and the number of days in the period being measured.

Costs per occupied room (COPR) is a figure that states all the costs associated with making a room ready for a guest (linens, cleaning costs, guest amenities).

These terms and measurements allow hotel staff and management to track the success of the operation and to compare against competitors and regional averages.

Across all ownership models, most properties have operational aspects in common. But before we take a closer look at the roles within a typical hotel, let’s review an important part of the accommodations sector in Canada and BC: camping and recreational vehicle (RV) stays.

Figure 3.10 A group of campers enjoy the sky at dusk from their tents.

A significant portion of travel accommodation is also provided in campgrounds and recreational vehicles (RVs). As the Canadian and BC tourism brands are closely tied to the outdoors, and these are two options that immerse travellers in the outdoor experience, it is no surprise that these two types of accommodation are popular options.

In 2017, 2.1 million Canadian RV owners took an estimated 8.2 million trips by RV.  Canadians who rented RVs took an estimated 612,000 trips bringing the collective total number of RV trips in Canada to 8.8 million (Devehish, 2018).  In BC, economic activity associated with RVing generated approximately $3.3 billion.

According to the Camping and RVing British Columbia Coalition (CRVBCC, 2014), BC is home to 340 vehicle accessible campgrounds managed by the BC Society of Park Facility Operators.

Turning to camping, across the country there are approximately 3,000 independently owned and operated campgrounds welcomed guests for camping in both RVs and tents in Canada.  In BC there are over 1,500 campgrounds (Camping & RV in BC, 2020). Seven national parks within the province contain an additional 14 campgrounds, and the BC Recreation Sites and Trails Branch manages more than 1,200 backcountry sites including campgrounds and other facilities. Another 300 private RV parks and campgrounds play host to a mixture of longer-stay residents and overnight guests.  Destination British Columbia inspects and approves over 500 campgrounds across the province.

Chapter 5 provides more in-depth information about the importance of the recreation sector to BC. For now, let’s move our discussion forward by taking a closer look at the common organizational structure of many accommodation businesses.

The organizational structures of operations and the number of roles and levels of responsibility vary depending on the type and size of accommodation. They are also determined by ownership and the standards and procedures of the management company. In this section, we explore the organizational structure and roles that are typically in place in a full-service hotel with under 500 rooms. These can also apply to smaller properties and businesses such as campgrounds — although in these cases several roles might be fulfilled by the same person.

Guest Services

Figure 3.11 Vicky welcomes guests to the front desk of the Delta Burnaby Hotel.

Before we turn to examples of specific operational roles, let’s take a brief look at the importance of guest services, which will be covered in full in Chapter 9.

The accommodation sector provides much more than tangible products such as guest rooms, beds and meals; service is also crucial. Regardless of their role in the operation, all employees must do their part to ensure that each guest’s needs, preferences, and expectations are met and satisfied.

In some cases, such as in a luxury hotel, resort hotel, or an all-inclusive property, the guest services may represent a person’s entire vacation experience. In other cases, the service might be less significant, for example, in a budget airport hotel where location is the key driver, or a campground where guests primarily expect to take care of themselves.

In all cases, operators and employees must recognize and understand guest expectations and also what drives their satisfaction and loyalty. When the key drivers of guest satisfaction are understood, the hotel can ensure that service standards and business practices and policies support employees to deliver on these needs and that guest expectations are satisfied or exceeded.

General Manager and Director of Operations

In most properties, the general manager or hotel manager serves as the head executive. Division heads oversee various departments including managers, administrative staff, and line-level supervisors. The general manager’s role is to provide strategic leadership and planning to all departments so revenue is maximized, employee relations are strong, and guests are satisfied.

The director of operations is responsible for overseeing the food and beverage and rooms division. This role is also responsible for providing guidance to department heads to achieve their targets and for directing the day-to-day operations of their respective departments. The director of operations also assumes the responsibilities of the general manager when he or she is absent from the property.

Accounting

The controller is responsible for overall accounting and finance-related activities including accounts receivable, accounts payable, payroll, credit, systems management, cash management, food and beverage cost control, receiving, purchasing, food stores, yield management, capital planning, and budgeting.

Engineering and Maintenance

The chief engineer is the lead for the effective operation and maintenance of the property on a day-to-day basis, typically including general maintenance, heating, ventilation and air conditioning, kitchen maintenance, carpentry, and electrical and plumbing (Fairmont Hotels and Resorts, 2020). The chief engineer is also responsible for preventive maintenance and resource management programs.

Food and Beverage Division

Figure 3.12 A guest enjoys breakfast in her room at the Pan Pacific Hotel in Vancouver.

The food and beverage director is responsible for catering and events, in-room dining, and stand-alone restaurants and bars. The executive chef, the director of banquets, and the assistant managers responsible for each restaurant report to the director of food and beverage. The director assists with promotions and sales, the annual food and beverage budget, and all other aspects of food and beverage operations to continually improve service and maximize profitability.

Human Resources

The human resources department provides guidance and advice on a wide range of management-related practices including recruitment and selection, training and development, employee relations, rewards and recognition, performance management, diversity and inclusion and health and safety.

Rooms Division

Front Office

Reporting to the director of rooms, the front office manager, sometimes called the reception manager, controls the availability of rooms and the day-to-day functions of the front office. The front desk agent reports to the front office manager and works in the lobby or reception area to welcome the guests to the property, process arrivals and departures, coordinate room assignments and pre-arrivals, and respond to guest requests.

Housekeeping

Reporting to the director of rooms, the executive housekeeper manages and oversees housekeeping operations and staff including the housekeeping manager, supervisor, house persons, and room attendants. An executive housekeeper is responsible for implementing the operating procedures and standards. He or she also plans, coordinates, and schedules the housekeeping staff. Room audits and inspections are completed regularly to ensure standards are met (go2HR, 2020a).

Reporting to the housekeeping supervisor, room attendants complete the day-to-day task of cleaning rooms based on standard operating procedures and respond to guest requests. Reporting to the housekeeping supervisor, house persons clean public areas including hallways, the lobby, and public restrooms, and deliver laundry and linens to guest rooms.

Reservations

Large full-service hotels typically have a reservations department, and the reservations manager reports directly to the front office manager. The guest’s experience starts with the first interaction a guest has with a property, often during the reservation process. Reservations agents convert calls to sales by offering the guest the opportunity to not only make a room reservation but also book other amenities and activities.

Today, with online and website reservations available to guests, there is still a role for the reservations agent, as some guests prefer the one-to-one connection with another person. The extent to which the reservations agent position is resourced will vary depending on the hotel’s target market and business strategy.

Sales and Marketing

The sales and marketing director is responsible for establishing sales and marketing activities that maximize the hotel’s revenues. This is typically accomplished by increasing occupancy and revenue opportunities for the hotel’s accommodation, conference and catering space, leisure facilities, and food and beverage outlets. The sales and marketing manager is responsible for coordinating marketing and promotional activities and works closely with other hotel departments to ensure customers are satisfied with all aspects of their experience (go2HR, 2020b).

Catering and Conference Services

In larger full-service hotels with conference space, a hotel will have a dedicated catering and conference services department. The director of this department typically reports to the director of sales and marketing. The catering and conference services department coordinates all events held in the hotel or catered off-site. Catering and conference events and services range from small business meetings to high-profile conferences and weddings.

Figure 3.13 The culinary team at Café Pacifica in the Pan Pacific prepares food for a special event.

Now that we have a sense of the building blocks of a typical hotel operation, let’s look at some trends affecting the sector.

The accommodation sector is sensitive to shifting local, regional, and global economic, social, and political conditions. Businesses must be flexible to meet the needs of their different markets and evolving trends. These trends affect all hotel types, regions, and destinations differently. However, overall, hoteliers must respond to these trends in a business landscape that is increasingly competitive, particularly in markets where the supply base is growing faster than demand (Hotelier, 2018).  As the digital revolution continues to change the way we work and spend our free time, hoteliers are adapting to respond to what guests expect in their interactions with a hotel, from the booking experience right through to leaving guest reviews and sharing their experience with others.

The Sharing Economy: Airbnb

Airbnb began in 2008 when the founders rented their air mattresses to three visitors in San Francisco (Fast Company, 2012). In fact, the name Airbnb is derived from “air mattress bed and breakfast.” However, Airbnb is not only for couch surfers or budget-conscious travellers; it includes a wide range of spaces in locations all over the world. Since 2008, the Airbnb online marketplace has grown rapidly.  In 2014 Airbnb had more than 1 million listings worldwide and 30 million guests who used the service (Melloy, 2015). By 2019, Airbnb was widely considered the world’s largest lodging brand reporting over 7 million listings worldwide, in 100,000 cities, in over 220 countries (Airbnb, 2020).

Figure 3.14 Airbnb has transformed the short-term rental industry.

This and other innovations have changed the accommodation landscape as never before. Ten to 15 years ago online travel agents were a major innovation that changed the distribution and sale of rooms. But they still had to work with existing hotels, whereas Airbnb has enabled new entrants into the industry and thus increased supply.

On the supply side, Airbnb enables individuals to share their spare space for rent; on the demand side, consumers using Airbnb benefit from increased competition and more choice. In 2008, an unanswered question was to what extent Airbnb would impact the hospitality industry and tourism destinations. A study completed in 2014 in Austin, Texas, indicated that lower-end hotels, and hotels not catering to business travellers, were more vulnerable to increased competition from rentals enabled by firms like Airbnb than were hotels without these characteristics (Zervas, Preserpio, & Byers, 2015).

Airbnb is an example of a shift to the sharing economy, an economic model in which people rent beds, cars, boats, and other underutilized assets directly from each other, all coordinated via the internet (The Economist, 2013). Airbnb is the most prominent example of this model. It provides a platform for travellers and manages all aspects of the relationship using digital platforms that include the Airbnb app, mobile and website.

When hosts create an account, they set the price and write the descriptions to advertise the space to guests (Airbnb, 2020). At Airbnb, the host who rents out the space controls the price, the description of the space, and the guest experience. The host also makes the house rules and has full control over who books the space.  Airbnb provides the digital platforms for all aspects of the host and guest interaction and for these services charges hosts a 3.5% service fee. As well, both hosts and guests can rate each other and write reviews (Airbnb, 2020).

One criticism of Airbnb from the hospitality industry is that Airbnb does not follow the same operating regulations as those required for hotels.  Another comes from homeowners in apartment complexes who object to neighbours repeatedly renting out their homes to short-term Airbnb guests. Airbnb rentals have also created pressure on the rental housing marketing in popular tourism destinations leading to less long-term rental inventory and higher rental prices.

In February, 2018, the BC provincial government and Airbnb reached an agreement that Airbnb would collect municipal (MRDT) and provincial (PST) taxes, and remit these to the province generating a reported $42.9 million for 2018 (CBC, 2018).

Distribution and Online Travel Agents

Online travel agents (OTAs) are a valuable marketing and third-party distribution resource for hotels and play a significant role in online distribution (Inversini & Masiero, 2014).  In 2020, OTAs (for example, Expedia, Hotels.com, Kayak.com) had a 24% share of transient reservations in North American markets.

OTAs offer global distribution so that each hotel and chain can be available to anyone. Smaller independent hotels that do not have the global marketing and sales resources of a larger chain are able to gain exposure, sell rooms, and build their reputation through online guest ratings and reviews. OTAs also help hotels offer combined value and packaging options that are attractive to many consumers (for example, booking and search options for hotels, car rentals, air fare, attractions, and travel packages). Customized searches, travel guidance, and rewards points are also available when booking through an OTA. If a hotel or chain has an exceptional product and service, OTAs share guest ratings, which can increase the number of reservations and referrals.

The general industry guidance for hotels using OTAs is to ensure that this distribution channel is part of a broader sales strategy, coupled with sound customer relationship management practices.  Some large chains have also improved supplier direct bookings. In 2016, Hilton launched a loyalty program and a book direct campaign “Stop clicking around” (TravelClick, n.d.).  Commissions for OTAs are in the region of 15% and hoteliers will continue to advance their capabilities to offer online supplier direct bookings (TravelClick, n.d.). This will require investment in streamlined apps and improved mobile sites to simplify and improve the user experience and booking process (Berelowitz, 2018).

Table 3.3 provides an overview of some of the distribution channels that are available to hoteliers.

For more on marketing in the services sector, see Chapter 8.

Mobile Devices & Smart Technologies

Mobile devices have placed everything at our fingertips.  Guest are booking stays on their smart phones and the traditional touch points in hotels are changing.  Guests are looking for ‘frictionless’ check in and check out, digital locking systems and ‘smart’ automated energy saving devices. Smart technology can now not only improve guest experiences but also reduce operational costs.  For example, with smart reserved parking, hotels can use smart sensors and hotel apps to give guests the choice of reserving their parking space in advance of their arrival, reducing the cost of operating a manual parking inventory (Attala, 2019).

No longer seeking the same ‘touch points’ the hotel and lodging industry must continue to find ways to connect with their guests through mobile devices, touch screens, voice activated technologies and more.

Figure 3.15 A group of travellers on their mobile phones at baggage claim in an airport.

The accommodation sector, and the hotel sector in particular, encompasses multiple business models and employs hundreds of thousands of Canadians. A smaller, but important growing segment in BC is that of camping and RV accommodators.

As broader societal trends continue and morph, they will continue to impact the accommodations marketplace and consumer. Owners and operators must stay abreast of these trends, continually altering their business models and services to remain relevant and competitive.

Now that we have a better sense of the accommodation sector, let’s visit the other half of the hospitality industry: food and beverage services. Chapter 4 explores this in more detail.

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According to Statistics Canada, the food and beverage sector comprises “establishments primarily engaged in preparing meals, snacks and beverages, to customer order, for immediate consumption on and off the premises” (Government of Canada, 2012). This sector is commonly known to tourism professionals by its initials as F&B.

The food and beverage sector grew out of simple origins: as people travelled from their homes, going about their business, they often had a need or desire to eat or drink. Others were encouraged to meet this demand by supplying food and drink. As the interests of the public became more diverse, so too did the offerings of the food and beverage sector.

In 2014, Canadian food and beverage businesses accounted for 1.1 million employees and more than 88,000 locations across the country with an estimated $71 billion in sales, representing around 4% of the country’s overall economic activity. Many students are familiar with the sector through their workplace, because Canada’s restaurants provide one in every five youth jobs in the country — with 22% of Canadians starting their career in a restaurant or foodservice business. Furthermore, going out to a restaurant is the number one preferred activity for spending time with family and friends (Restaurants Canada, 2014a).

For a perspective on how sales are distributed across the country by province, and how different foodservice operations perform in terms of revenue (sales dollars collected from guests), look at Tables 4.1 and 4.2. A  key factor in the below results is the higher population base in Ontario and Quebec. Economic growth or decline also impacts results and vary from province to province year over year.

In terms of sales (Table 4.2), Ontario is the leader with almost $28 billion. Quebec, BC, and Alberta occupy the next three spots with revenues ranging from $9 billion to $13 billion, and the other provinces had sales of $2 billion apiece or less. Over the last five years, BC has shown greater growth in revenues along with third more units (restaurants) than neighbouring Alberta, leading to identical average sales per unit.

Foodservice sales in British Columbia rose by a solid 7.9% in 2018 over 2017. Alberta boasts the highest average unit volume at $838,666 per year, more than $100,000 over the national average due to greater disposable income and no provincial sales tax on meals. In BC, improved economic growth lifted total foodservice sales by a healthy 7.9% for the strongest annual growth since 2006 (Restaurants Canada, 2019). Since 2018 Alberta has seen a significant decline in its economy due to the energy sector collapse tied to the price of crude oil.

Table 4.2 below indicates the profit margins per province. Profit is the amount left when expenses (including corporate income tax) are subtracted from sales revenue. A higher profit margin means that a greater percentage of sales are retained by the business owner, and a lower percentage is lost to operating and other costs.

The provincial variations in total sales and profit margins are due to several factors including:

• The relative level of economic activity
• Minimum wage levels, which have increased in several provinces including Alberta and British Columbia
• Provincial sales taxes
• Cultural differences
• Weather
• Municipal taxes
• Percentage of the market held by chains versus independents
• Number of units (restaurants)
• The density of units relative to the local population
• Number of tourists or business travellers

Now that we have a sense of the relative performance of F&B operations by province, and some influences on success, let’s delve a little deeper into the sector.

Figure 4.1 The Keg at the Station is in a former train station in New Westminster, B.C.

While there are many ways to analyze the sector, in this chapter we take a market-based, business-operation approach based on the overall Canadian market share from the Restaurants Canada Market Review and Forecast (Restaurants Canada, 2019). The following sections explore the types of food service operations in Canada.

There are two key distinctions: commercial foodservice, which comprises operations whose primary business is food and beverage, and non-commercial foodservice establishments where food and beverages are served but are not the primary business.

Let’s start with the largest segment of F&B operations, the commercial sector.

Commercial Operators

Commercial operators make up the largest segment of F&B in Canada with just over 80% market share (Restaurants Canada, 2019). It is made up of quick-service restaurants, full-service restaurants, catering, and drinking establishments. Let’s look at each of these in more detail.

Quick-Service Restaurants

Formerly known as fast-food restaurants, quick-service restaurants, or QSRs, makeup 44.4% of total food sales in Canada (Restaurants Canada, 2019). This prominent portion of the food sector generally caters to both residents and visitors and is represented in areas that are conveniently accessed by both. Brands, chains, and franchises dominate the QSR landscape. While the sector has made steps to move away from the traditional fast-food image and style of service, it is still dominated by both fast food and food fast; in other words, food that is prepared and purchased quickly, and generally consumed quickly.

Convenience and familiarity are key in this sector. Examples of QSRs include:

• Drive-through locations
• Stand-alone locations
• Locations within retail stores
• Kiosk locations in shopping centres
• High-traffic areas, such as major highways or commuter routes

Full-Service Restaurants

With 44.2% of the market share (Restaurants Canada, 2019), full-service restaurants are perhaps the most fluid of the F&B operation types, adjusting and changing to the demands of the marketplace. Consumer expectations are higher here than with QSRs (Parsa, Lord, Putrevu, & Kreeger, 2015). The menus offered are varied, but in general, reflect the image of the restaurant or consumer’s desired experience. Major segments include fine dining, family/casual, ethnic, and upscale casual.

Figure 4.2 A rhubarb pavlova with local Pemberton strawberries is served at Araxi Restaurant + Bar, a fine dining establishment in Whistler.

Fine dining restaurants are characterized by highly trained chefs preparing complex food items, exquisitely presented. Meals are brought to the table by experienced servers with sound food and beverage knowledge in an upscale atmosphere. The concept of fine dining has evolved over the years.  It was once mandatory to have table linens, fine china, crystal stemware, and silver-plate cutlery in order to be referred to as a fine dining establishment. Service was often very formal and reserved with minimal personal interaction between guests and servers. The table was often embellished with fresh flowers and candles as well. Today the best restaurants focus on the quality of preparation, presentation, and flavor of the food utilizing the best and where possible local ingredients. Servers who are engaged, customer-centric, and well informed are sought after by the best restaurants.

In British Columbia, many of the finest restaurants feature wine lists heavily showcasing British Columbia food and wine. Tablescapes are kept simple, with excellent quality flatware and stemware and minimal fuss with centerpieces and generally no linen tablecloths.

In these businesses, the average cheque, which is the total sales divided by the number of guests served, is quite high (often reviewed with the cost symbols of three or four dollar signs- $ $ $ or $ $ $ $).

Bishop’s in Vancouver is one of BC’s best known and longest operating fine dining restaurants. Since opening in 1985, this 45-seat restaurant has served heads of state including Bill Clinton and Boris Yeltsin and has won awards including the Best of Vancouver. John Bishop was awarded the Governor General’s Award in 2010 (Georgia Straight, 2015).

Family/casual restaurants are characterized by being open for all three meal periods. These operations offer affordable menu items that span a variety of customer tastes. They also have the operational flexibility in menu and restaurant layout to welcome large groups of diners. An analysis of menus in family/casual restaurants reveals a high degree of operational techniques such as menu item cross-utilization, where a few key ingredients are repurposed in several ways. Service is often very casual and friendly. Both chain and independent restaurant operators flourish in this sector. Popular chain examples in BC include White Spot, Ricky’s All Day Grill, Boston Pizza, and The Old Spaghetti Factory. Independents include the Red Wagon Café in Vancouver, the Bon Voyage Restaurant near Prince George, and John’s Place in Victoria.

Figure 4.3 The interior of the Old Spaghetti Factory, a popular family chain, in Gastown, Vancouver. This location opened in 1970 and has stood the test of time.

Ethnic restaurants typically reflect the owner’s cultural identity. The growth and changing nature of this sector reflect the acceptance of various ethnic foods within our communities. Ethnic restaurants generally evolve along two routes: toward remaining authentic to the cuisine of the country of origin, or toward larger market acceptance through modifying menu items (Mak, Lumbers, Eves, & Chang, 2012).  Food is often the medium for this sense of belonging (Koc & Welsh, 2001; Laroche, Kim, Tomiuk, & Belisle, 2005). The authenticity of the experience often drives the customer’s decision.  The driving force behind these operations is the Chef’s background, their commitment to the quality of the product, innovative preparation mixed with exceptional technique, and knowledgeable service staff to bring it to the consumer.

Figure 4.4 The exterior of Vij’s, the flagship restaurant of Vikram Vij’s ethnic dining legacy.

Upscale casual restaurants emerged in the 1970s, evolving out of a change in social norms. Consumers began to want the experience of a fun social evening at a restaurant with good value (but not cheap), in contrast to the perceived stuffiness of fine dining at that time. These restaurants are typically dinner houses, but they may open for lunch or brunch depending on location. Examples in BC include the Keg, Earls, Cactus Club, Brown’s Social House, and Joey Restaurants. A closer examination of popular restaurant menus will show many items suitable for sharing amongst groups of people. Family style sharing platters that are passed back and forth between multiple diners. This adds to the desire for patrons to feel relaxed and comfortable while dining out with family or friends.

Catering and Banqueting

Catering makes up only 7.9% of the total share of F&B in Canada (Restaurants Canada, 2019) and comprises food served by catering companies at banquets and special events at a diverse set of venues. Note that banqueting pertains to catered food served on-premise, while catering typically refers to off-premise service. At a catered event, customers typically eat at the same time, as opposed to restaurant customers who are served individually or in small groups. The catering and banqueting experience has evolved tremendously to the point where guests who attend events expect restaurant-quality food and service. In keeping with this concept, the event planner will coordinate with the catering establishments that guests who attend the planned events have a choice of options for each course served. While surcharges may apply to meals because of the option choices the expectation is every bit as high from the customer.

Catering businesses (whether on-site or at special locations) are challenged by the episodic nature of events and the issues of food handling and food safety with large groups. Catering businesses include:

• Catering companies
• Conference centres
• Conference hotels
• Wedding venues
• Festival food coordinators

Figure 4.5 Dîner en Blanc Vancouver’s first event at Jack Poole Plaza.

While beverages make up part of almost every dining experience, some establishments are founded on beverage sales. Let’s look at these operations next.

Alcohol and Cannabis

With a 3.5% market share (Restaurants Canada, 2019), the drinking establishment sector comprises bars, wine bars, cabarets, nightclubs, and pubs.  In British Columbia, all businesses and premises selling alcohol must adhere to the BC Liquor Control and Licensing Act. At the time this chapter was written, significant changes were taking place in the regulations governing drinking establishments, but some general conditions have remained stable.

In BC, liquor licenses are divided into liquor primary and food primary. As the name suggests, a liquor primary license is needed to operate a business that is in the primary business of selling alcohol. Most pubs, nightclubs, and cabarets fall into this category. A food primary license is required for an operation whose primary business is serving food. Some operations, such as pubs, will hold a liquor primary license even though they serve a significant volume of food. In this case, the license allows for diverse patronage.

One noteworthy change to the licensing of pubs in BC is that children are permitted in them if they are accompanied and attended by responsible adults. While not universally adopted by pubs to date, this change in legislation is an example of the fluctuating social norms to which the sector must respond.

Figure 4.6 The Six Mile Pub in Victoria. Established in 1855, it is British Columbia’s oldest public house.

On October 17, 2018, the Cannabis Act was introduced as law in Canada. which meant it became legal to consume marijuana and to sell marijuana in Canada. The Cannabis Act is in place to regulate such activities. In the 2019 Chef Survey Results conducted by Restaurants Canada Cannabis/CBD infused drinks ranked #1 and Cannabis/CBD infused food ranked #2 as the items Chef’s felt would be the next big thing in the restaurant business (Restaurants Canada, 2019).

Together the commercial ventures of QSRs, full-service restaurants, catering functions, and drinking establishments make up just over 80% of the market share. Now let’s look at the other 20% of businesses, which fall under the non-commercial umbrella.

Non-Commercial

The following non-commercial entities earn just under 20% share of the foodservice earnings in Canada (Restaurants Canada, 2019b). While these make up a smaller share of the market, there are some advantages inherent in these business models. Non-commercial operations cater predominantly to consumers with limited selection or choice given their occupation or location. This type of consumer is often referred to as a captured patron. In a tourism capacity such as in airports or on cruise ships, the accepted price point for these patrons is often higher for a given product, increasing profit margins.

Institutional

Often run under a predetermined contract, this sector includes:

• Hospitals
• Universities, colleges, and other educational institutions
• Prisons and other detention facilities
• Corporate staff cafeterias
• Cruise ships
• Airports and other transportation terminals and operations

Accommodation Foodservice

These include hotel restaurants and bars, room service, and self-serve dining operations (such as a breakfast room).  Hotel restaurants are usually open to the public and reliant on this public patronage in addition to business from hotel guests. Collaborations between hotel chains and restaurant chains have seen the reliable pairing of hotels and restaurants, such as the combination of Sandman Hotels and Moxie’s Grill and Bar.

Vending and Automated Foodservices

While not generally viewed as part of the food and beverage sector, automated and vending services do account for significant sales for both small and large foodservice and accommodation providers. Vending machines are located in motels, hotels, transportation terminals, sporting venues, or just about any location that will allow for the opportunity for an impulse or convenient purchase.

Business Performance for Types of Food and Beverage Operators

Figure 4.7 Share of the market for different restaurant segments. [Long Description]

As mentioned, the commercial sector comprises the majority of dollars earned. Figure 4.9 illustrates the difference between the share of traffic and the share of dollars for each sub sector. We know that QSRs are much more economical and generally much busier than full-service restaurants. How do that traffic and low prices translate into market share for the different segments?

Figure 4.9 shows that QSRs attract two-thirds of all the traffic while earning less than half of the total dollars. Family/midscale and casual dining each attract half the dollars of QSR, but they do that from much lower shares of the traffic. Meanwhile, fine dining is patronized by less than 1% of the total restaurant traffic but earns 4.2% of the dollars. The growing force of convenience stores, department stores, and other retail establishments obtain a respectable 11.5% of traffic and 10.6% of the restaurant dollar.

As you can see, while QSRs attract the greatest number of guests, the ratio of dollars earned per transaction is significantly less than that of the fine-dining sector. This makes sense, of course, because the typical QSR earns relatively little per guest but attracts hundreds of customers, while a fine dining restaurant charges high prices and serves a select few guests each day.

Sales Per Segment

The sales revenues for the various segments are shown in Table 4.3. Note that QSRs and full-service restaurants are almost equal in their sales and almost completely dwarf the other commercial sectors of caterers and drinking places. It is also noteworthy that the commercial components have four times the sales volume of the non-commercial components.

Long Descriptions

Figure 4.7 long description: Bar graph displaying market share by restaurant segment. The data is described in the following table:

[Return to Figure 4.7]

Now that we’ve classified the sector based on business type and looked at relative performance, let’s look at F&B from another perspective: customer type. The first way to classify customers is to divide them into two key markets: residents and visitors.

The first of these, the resident group, can be further divided based on their purpose for visiting an F&B operator.  For one group, food or drink is the primary purpose for the visit. For example, think of a group of friends getting together at a local restaurant to experience their signature sandwich. For another group, food and drink is the secondary purpose, added spontaneously or as an ancillary activity. For example, think of time-crunched parents whisking their kids through a drive-through on their way from one after-school activity to the next. Here the food and beverage providers offer an expedient way to access a meal.

Figure 4.8 A visitor to Nanaimo eats a signature “Nanaimo bar” in front of a Nanaimo bar, the Jingle Pot Pub.

Foodservice providers also service the visitor market, which presents unique challenges as guests will bring with them the tastes and eating habits of their home country or region. Most establishments generally follow one of two directions. One is to cater completely to visitors from the day the doors open, with an operational and market focus on tourists. The other is to cater primarily to residents.

Sometimes a local foodservice provider can continue to cater to the resident market over time. In other cases, often because of financial pressures, the business shifts its focus away from the residents to better cater to visitors’ tastes. These changes, when they do occur, generally happen over time and can lead to questions of authenticity of the local offerings (Smart, 2003; Heroux, 2002; Mak, Lumbers, Eves, & Chang, 2012).

It is clear that the food and beverage sector must remain responsive to consumers’ needs and desires. This is made evident by the emergence of health-concious eating in North America over the last two decades. The influence of books such as Fast Food Nation (Schlosser, 2012) and documentaries such as Super Size Me have created mainstream awareness about what goes into our food and our bodies. As many developed nations, including Canada, struggle with health-care concerns including hypertension, diabetes, and obesity, food operators are taking note and developing new health-conscious menus. Programs like BC’s Informed Dining initiative are helping consumers understand their options (see the Spotlight On below).

This awareness, coupled with an increasing interest and desire for more authentic foods produced without using herbicides and pesticides, free of genetically modified ingredients, and even free of carbohydrates or gluten, has placed pressure on the sector to respond, and many have (Frash, DiPietro, & Smith, 2014). Consumers are more aware of the plight of farmers and producers from faraway places and the support for fair trade practices. At the same time, there is a heightened desire for more locally grown products, and a general awareness of nutrition and the quality of products that are harvested in season and closer to home.

Consumer consciousness regarding the source and distribution of food has created a movement that champions sustainable and locally grown foods. While this trend does have its extremes, it is founded on the premise that eating food that has been produced nearby leads to better food quality, sustainable food production processes, and increased enjoyment. This has led to a number of restaurants that incorporate these concepts in their menu planning and marketing.

In addition to this trend toward “conscious consumerism” (LinkBC, 2014, p.4), F&B professionals must be highly aware of the importance of special diets including gluten-free, low-carb, and other dietary restrictions (LinkBC, 2014).

All of these influences are continuously shaping the food and beverage sector. Before we explore additional trends and issues in the sector, let’s review the core considerations for profitability in foodservice operations.

Figure 4.9 Officials announce more funding for B.C. farmers’ markets, which have become increasingly popular due to changing consumer tastes.

Profitability

While many factors influence the profitability of foodservice operations, key considerations include type of business, location, cost control, and profit margin, sales and marketing strategies, and human resources management. We’ve already examined the different types of operations and their relative profit margins. Let’s look at the other profitability considerations in more detail.

Key statistics show that operating revenues grew by 31% nationally from 2012 to 2017. Conversely, operating expenses rose by 31%, during the same period. The average pre-tax profit in 2017 was $30,370 or 4.3% of operating revenue. By many industry standards, this is a dangerously low profit as a percentage of revenues. Any number of situations could easily erode this profit including rent increases, unexpected maintenance repairs, and increased taxes. The cost of goods and the minimum wage increases were contributing factors in impacting operating expenses in all regions of the country. Economic slowdowns in Alberta and Newfoundland, directly linked to the Energy Sector were major contributors to substandard growth in these two provinces.

Full-service restaurants remain the least profitable category of food service on average. Caterers remain the most profitable sector with a pre-tax profit margin of 7.2% nationally, despite having the highest labor costs as a percentage of operating revenue (Restaurants Canada, 2019).

Location

The selection of the correct location for a restaurant is often cited as the most critical factor in an operation’s success (or failure) in terms of profitability. Prior to opening, site analysis is required to determine the amount of traffic (foot traffic and vehicle traffic), proximity to competing businesses, visibility to patrons, accessibility, and presence (or absence) of desired patrons (Ontario Restaurant News, 1995).

Cost Control

According to Restaurants Canada, QSRs have the highest profit margin at 5.1%, while full-service restaurants have a margin of 3.5%. There will be significant variances from these percentages at individual locations even within the same brand (2014b).

A number of costs influence the profitability of a food and beverage operation. Key operating expenses in the restaurant business food cost are food cost, beverage cost beverage costs and payroll. These are commonly known as prime costs. Managing the prime costs primary costs.  to an appropriate and agreed upon level is critical to the success of any operation. Other expenses include property rental, utilities, maintenance costs, advertising, legal fees, insurance and depreciation of equipment assets. In addition to these big-ticket items, there is the cost of reusable products operating supplies such as cutlery, glassware, china, and linen in full-service restaurants. The percentages of expenses to revenue will vary greatly by sector, location, and province.

Given that most operations have both a service side (interacting directly with the consumer) and the production side (preparing food or drink to be consumed), the primary costs incurred during these activities often determine the feasibility or success of the operation. This is especially true as the main product (e.g., food and drink) is perishable; ordering the correct amount requires skill and experience. Managing your inventory once on site is of equal importance.

Sales and Marketing

The two principal considerations for sales and marketing in this sector are market share and revenue maximization. Most F&B operations are constrained by finite time and space, so management must constantly seek ways to increase revenue from the existing operation or increase the share of the available market. Examples of revenue maximization include upselling existing consumers (e.g., asking if they want fries with their meal; offering dessert, specialty drinks pre and post-dinner), and using outdoor or patio space (even using rain covers and heaters to extend the outdoor season). Examples of increasing market share in the fast-food sector include extending special offers to new, first-time customers through social media or targeted direct mail.

In today’s cluttered marketplace, being noticed is a constant goal for most companies. Converting that awareness into patronage is a challenge for most operators. Restaurant reviews have been a part of the food and beverage sector for a long time. With the increase of online reviews by customers at sites like Yelp, Urbanspoon, and TripAdvisor, and sharing of experiences via social media, operators are becoming increasingly aware of their web presence (Kwok & Yu, 2013). For this reason, all major food and beverage operators carefully monitor their online reputation and their social media presence.

The digital marketplace for food is creating a world of ways to drive incremental business while leveraging fixed costs and creating new ways for restaurateurs to think out of the box about their business.
—Dan Park, General Manager and Head of Uber Eats Canada (Restaurants Canada Food Service Facts 2019)

One of the keys to a strong reputation, both in-person and online, is the management of human resources.

Staffing and Human Resources

Figure 4.10 Winner of Top Chef Canada Matthew Stowe and patron at a new Cactus Club restaurant opening.

Appropriately staffing an food and beverage operation involves attracting the right people, hiring them, training them, and then assigning them to the right tasks for their skills and abilities. Many businesses operate outside the traditional work-week hours; indeed, some operate on a 24-hour schedule. Creating the right team, employing them in accordance with legal guidelines, and keeping up with the demands of the businesses are challenges that can be addressed by a well-thought-out and implemented human resources plan.

People who have long-lasting careers in the sector find the fluctuating conditions appealing; no two days are the same, and the fast-paced and energetic social environment can be motivating. Many positions provide meaningful rewards and compensation that can lead to long-term careers.

One topic of discussion in food and beverage human resources is that of gratuities (tipping). In Canada, restaurants are obligated to pay staff minimum wage, and gratuities are paid by the customer as an expression of their gratitude for service. This is not the model in countries like Australia, where service staff is paid a higher professional wage and prices are raised to accommodate this.

In British Columbia, tips are considered income for tax purposes but are not considered wages as they are not paid by the employer to the employee. A restaurant owner cannot use tips to cover business expenses (e.g., require an employee to use his or her tips to cover the cost of broken glassware). Employers are also not permitted to charge staff for the cost of diners who do not pay (known as a dine-and-dash). They can, however, require front-of-house staff pool their gratuities, or pay individually, to ensure back-of-house staff receives a percentage of the tips (British Columbia Ministry of Jobs, Tourism and Skills Training, n.d.). This is also commonly known as a tip-out.

The Ministry of Labour’s website explains what constitutes a tip pool: “A tip pool is a collection of employees’ tips that is redistributed among some or all of the employer’s employees. This includes tip outs, which are payments from one employee to other employees because it is required by their employer’s policy. An employer may withhold, make a deduction or require an employee to give them a portion of their tips and other gratuities if the amount that is collected will be redistributed as part of a tip pool.” However, employers are prohibited from sharing in the tip pool (Restaurants Canada, 2019).

There have been experiments with gratuity models in recent years. One example is a restaurant on Vancouver Island, which tried an all-inclusive pricing model upon opening in 2014 but reverted three months later to the traditional tipping model due to consumer demand and resistance to higher prices (Duffy, 2014). While many in the industry would prefer to operate with a no-tip policy, the consumers are not prepared to pay the higher menu price required to facilitate the process.

In addition to having to focus on the changing needs of guests and the specific challenges of their own businesses, food and beverage operators must deal with trends and issues that affect the entire industry. Let’s take a closer look at these.

Industry Influencers

• Plant-based diets, healthy options
• Sustainable practices
• Evolution of home delivery
• Government influence
• Health and safety
• The power of technology
• Changing venues

Plant-Based Diets, Healthy Options

Plant-based diets are neither trend nor fad, they are viable, sustainable dietary options based on environmental practices, well being, nutrition, and personal choice.

For a combination of environmental, ethical, and health reasons plant-based foods have surged in popularity in Canada. A study by Dalhousie University found that 6.4 million Canadians are following a diet that either limits animal products intake (often termed flexitarian), or eliminates it altogether (Restaurants Canada, 2019).

The desire for plant-based foods will continue to grow driven by concern for the environment. Further proof of this is the number of quick-service restaurants now featuring plant-based products on their menus.

Sustainable Practices

In hand with plant-based diets is the continued drive to reduce our impact on the environment, through recycling, composting, donating leftover food, or water and energy conservation. In a survey of Restaurants Canada’s members, 80% said that environmental practices are important to the success of their businesses.

When incorporating environmental practices into your business, the planet is only one of the beneficiaries. When we are talking about sustainability we’re essentially talking about reducing-energy, water, waste-which also means lower operating costs and keeping dollars in your pocket.
—Janine Windsor, President Leaders in Environmentally Accountable Foodservice (Restaurants Canada 2019 Food Service Facts)

Evolution of Home Delivery

The mention of home food delivery ten years ago would have been about pizza delivery and Asian food. Arguably the hottest trend in foodservice has nothing to do with ingredients or regional cuisine. Instead, it’s the explosive growth of in-home delivery. Consumers are demanding variety and selection and delivery apps give them access to their favourite restaurants at home.

Delivery foodservice sales by digital (online and mobile apps) or traditional telephone totalled more than $4.3 billion in 2018, a staggering 44% increase over 2017 (Restaurants Canada).

While the popularity and accessibility of home delivery from your favourite restaurant has grown tremendously not all operators are enthusiastic over this growth. Many say home delivery has impacted the number of guests in their restaurants, which makes sense. The main concern lies with the profitability, with the majority believing the profit margin is slight. Regardless operators will need to figure out how to make this work and give the consumer what they want.

Examples of home delivery options:

• Skip the Dishes
• Hello Fresh
• Chef’s Plate
• makegoodfood.ca

Government Influence

Each level of government affects the sector in different ways. The federal government and its agencies have influence through income tax rates, costs of employee benefits (e.g., employer share of Canada Pension Plan and Employment Insurance deductions), and support for specific agricultural producers such as Canadian dairy and poultry farmers, which can lead to an increase in the price of ingredients such as milk, cheese, butter, eggs, and chicken compared to US prices (Findlay, 2014; Chapman, 1994).

Provincial governments also impact the food and beverage sector, in particular with respect to employment standards; minimum wage; sales taxes (except Alberta); liquor, wine, and beer wholesale pricing (Smith, 2015); and corporate income tax rates.

Municipal governments have an ever-increasing impact through property and business taxes, non-smoking bylaws, zoning and bylaw restrictions, user fees, and operating hours restrictions.

Over time, the consequence of these government impacts has resulted in independent and chain operators alike joining forces to create a national restaurant and foodservice association now named Restaurants Canada (see Spotlight On above). At the provincial level, BC operators rely on the British Columbia Restaurant & Foodservices Association (BCRFA).

Health and Safety

Figure 4.11 A sign in a Starbucks location encouraging staff to wash their hands to prevent the spread of germs.

Food and beverage providers hold a distinct position within our society; they invite the public to consume their offerings, both on and off premises. In doing so, all food and beverage operators must adhere to standardized public safety regulations. Each province has regulations and legislation that apply in their jurisdiction. In BC, this is addressed by the FoodSafe and Serving It Right programs, and compliance with the Occupiers Liability Act. These regulations and legislation are enacted in the interest of public health and safety.

FoodSafe is the provincial food safety training program designed for the foodservice industry (FoodSafe, 2009). Serving It Right is a mandatory course that is completed through self-study and is required for anyone serving alcohol in a commercial setting. Its goal is to ensure that licensees, managers, and servers know their legal responsibilities and understand techniques to prevent over-service and related issues (go2HR, 2014).

In broad terms, BC’s Occupiers Liability Act covers the responsibilities of the occupier of a property to ensure the safety of visitors. Additional local health bylaws set standards of operation for health and safety under the direction of the medical officers of health. Public health inspectors regularly visit food and beverage operations to evaluate compliance. In some communities, these inspection results are posted online.

Collectively, the food and beverage industry in BC has an excellent reputation for ensuring the health and safety of its patrons, the general public, and its employees.

The Power of Technology

Technology continues to play an ever-increasing role in the sector. It is most noticeable in QSRs where many functions are automated in both the front of house and back of house. In the kitchen, temperature sensors and alarms determine when fries are ready and notify kitchen staff. Out front, remote printers or special screens ensure the kitchen is immediately notified when a server rings in a purchase. WiFi enables credit/debit card hand-held devices to be brought directly to the table to process transactions, saving steps back to the serving station.

Canadians are interacting with restaurants using their smartphones and tablets in a variety of ways. We are seeing more consumers use rewards and claim special deals and make reservations through an app or website (Restaurants Canada 2019).

• 58% are looking up directions/locations/hours of operation
• 34% used rewards/special deals
• 29% ordered items for pick-up
• 25% ordered items for delivery
• 19% made a reservation through an app/website

Other trends include automated services such as that offered by Open Table, which provides restaurants with an online real-time restaurant reservation system so customers can make reservations without speaking to anyone at the restaurant (Open Table, 2015). And now smartphone apps will tell customers what restaurants are nearby or where their favorite chain restaurant is located.

Changing Venues

The following trends related to the changing nature of food and beverage venues, including the emerging importance of the third space, and the increased mainstream presence of non-permanent locations such as street vendors and pop-up restaurants.

The Third Space

The third space is a concept that describes locations where customers congregate that are neither home (the first space) nor work or school (the second space). Many attribute the emergence of these spaces to the popularity of coffee shops such as Starbucks. In the third space, operators must create a comfortable venue for customers to “hang out” with comfortable seating, grab and go F&B options, WiFi, and a relaxed ambience. Providing these components has been shown as a way to increase traffic and customer loyalty (Mogelonski, 2014).

Taking It to the Street

Street food has always been a component of the foodservice industry in most big cities. These operations are often run by a single owner/operator or with minimal staff and serve hot food that can be eaten while standing. According to research firm IBISWorld, in 2011 the “street food business — which includes mobile food trucks and nonmechanized carts, is a $1 billion industry that has seen an 8.4 percent growth rate from 2007 to 2012” (Entrepreneur, 2011) with 78% of owners having no more than four employees.

Recently, in North America, where climate and weather allow, there has been a noticeable increase in both the number and type of street food vendors. In the city of Vancouver alone there are over 100 permitted food cart businesses, searchable by an app and sortable list — and the city uses the terms street food vendor, food cart, and food truck interchangeably (City of Vancouver, 2014).

Figure 4.12 Tacofino (closest), Pig on the Street, and Mom’s Grilled Cheese food trucks welcome crowds to their portable kitchens in downtown Vancouver.

Pop-up restaurants have also emerged, facilitated in part by the prevalent use of social media for marketing and location identification. Pop-ups are temporary restaurants with a known expiry date, which also tend to have the following in common (Knox, 2011):

• A well-known or up-and-coming chef at the helm
• An interesting, but stationary, location (a warehouse, a park, the more unusual the better)
• Staff who are adept at promotion and word-of-mouth
• Strong local foodie (food and beverage enthusiast) population-based in the area
• Involvement from local artists or musicians to add to the experience

As popular they are with consumers, the ways in which pop-ups deviate from restaurants has aggravated some critics, causing Bon Appétit magazine to declare that “pop-ups are not supposed to be restaurants,” and that “pop-up restaurants are over” (Duckor, 2013). Statements like these are further evidence that food and beverage services trends are dynamic and ever-changing.

The food and beverage sector is a vibrant and multifaceted part of our society. Michael Hurst, famous restaurateur and former chair of the US National Restaurant Association, championed the idea that all guests should be received with the statement “Glad you are here” (Tripp, 1992; Marshall 2001). That statement is the perfect embodiment of what F&B is to the hospitality industry — a mix of service providers who welcome guests with open arms and take care of their most basic needs, as well as their emotional well-being.

The social fabric of our country, its residents, and visitors will change over time, and so too will F&B. What will not change in spite of how we divide the segments — into tourists or locals — is that the sector is at its best when food and beverages are accompanied by a social element, extending from your dining companions to the front and back of the house.

So far, we have covered the transportation, accommodation, and food and beverage sectors. In the next two chapters, we’ll explore the recreation and entertainment sector, starting with recreation in Chapter 5.

References

British Columbia Ministry of Jobs, Tourism and Skills Training. (n.d.). Interpretation guidelines manual, Employment Standards Branch. Retrieved from: www.labour.gov.bc.ca/esb/igm/esa-part-1/igm-esa-s1-wages.htm#top

Chapman, Anthony. (1994). Reduction of tariffs on supply managed commodities under the GATT and the NAFTA, tarrification under the Uruguay Round. Retrieved from: http://publications.gc.ca/Collection-R/LoPBdP/BP/bp380-e.htm

City of Vancouver. (2014, June 30). Find a street food vendor. Retrieved from http://vancouver.ca/people-programs/find-a-food-truck-vendor.aspx

Duckor, M. (2013, June 27). Pop-up restaurants are over. Bon Appétit. Retrieved from www.bonappetit.com/restaurants-travel/article/pop-up-restaurants-are-over

Duffy, A. (2014, August 22). Vancouver Island restauranteur regretfully ends his no-tip policy. Vancouver Sun. Retrieved from www.vancouversun.com/news/metro/Vancouver+Island+restaurateur+regretfully+ends+policy/10140961/story.html

Entrepreneur. (2011, July 24). Food trucks 101: How to start a mobile food business. Retrieved from www.entrepreneur.com/article/220060

Findlay, M. (2014, May 12). Why your milk costs so much and what to do about it. Macleans. Retrieved from www.macleans.ca/economy/economicanalysis/why-your-milk-costs-so-much-in-canada/

FoodSafe. (2009). Welcome. Retrieved from www.foodsafe.ca

Frash, R. E., DiPietro, R., & Smith, W. (2014). Pay more for McLocal? Examining motivators for willingness to pay for local food in a chain restaurant setting. Journal of Hospitality Marketing & Management, 24(4), 411-434.

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go2HR. (2014). Serving-it-Right. Retrieved from www.servingitright.com

Government of Canada. (2012, June 14). NAICS 2012 – 722 – Food services and drinking places. Retrieved from: www23.statcan.gc.ca/imdb/p3VD.pl?Function=getVD&TVD=118464&CVD=118466&CPV=722&CST=01012012&CLV=2&MLV=5

Heroux, L. (2002). Restaurant marketing strategies in the United States and Canada: A comparative study. Journal of Foodservice Business Research, 5(4), 95-110.

Knox, J.  (2011, June 13). Ingredients for a successful pop-up restaurant. Restaurant Central.ca. Retrieved from http://restaurantcentral.ca/popuprestaurant.aspx

Koc, M., & Welsh, J. (2001). Food, foodways and immigrant experience. Toronto: Centre for Studies in Food Security.

Kwok, L., & Yu, B. (2013). Spreading social media messages on Facebook. An analysis of restaurant business-to-consumer communications. Cornell Hospitality Quarterly, 54(1), 84-94.

Laroche, M., Kim, C., Tomiuk, M. A., & Belisle, D. (2005). Similarities in Italian and Greek multidimensional ethnic identity: Some implications for food consumption. Canadian Journal of Administrative Sciences/Revue Canadienne des Sciences de l’Administration, 22(2), 143-167.

LinkBC. (2014, June). 2014 Roundtable Dialogue Cafe Report. [PDF] Retrieved from http://linkbc.ca/siteFiles/85/files/2014RoundtableDialogueCafeReport.pdf

Lynn, M., & Withiam, G. (2008). Tipping and its alternatives: Business considerations and directions for research. Journal of Services Marketing, 22(4), 328-336.

Mak, A. H., Lumbers, M., & Eves, A. (2012). Globalisation and food consumption in tourism. Annals of Tourism Research, 39(1), 171-196.

Mak, A. H., Lumbers, M., Eves, A., & Chang, R. C. (2012). Factors influencing tourist food consumption. International Journal of Hospitality Management, 31(3), 928-936.

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Mogelonski, L. (2014, January 3). Third spaces enrich guests’ lives. Hotel News Now. Retrieved from http://hotelnewsnow.com/Article/12908/Third-spaces-enrich-guests-lives-and-loyalty

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Restaurants Canada (2019a). Foodservice facts. Retrieved from https://www.restaurantscanada.org/en/Book-Store/Product/rvdsfpid/2013-foodservice-facts-7

Restaurants Canada, Statistics Canada, fsSTRATEGY Inc. and Pannell Kerr Forster. (2019). Sector sales and market shares for 2012/13. Retrieved from www.restaurantscanada.org/en/Research#crfaResearchReports

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Smart, J. (2003). Ethnic entrepreneurship, transmigration, and social integration: an ethnographic study of Chinese restaurant owners in rural western Canada. Urban Anthropology and Studies of Cultural Systems and World Economic Development, 311-342.

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Tripp, Griff. (1992). Personal knowledge.

In this chapter, we discuss the concept of recreation in tourism and hospitality. Recreation can be defined as the pursuit of leisure activities during one’s spare time (Tribe, 2011) and can include vastly different activities such as golfing, sport fishing, and rock climbing. Defining recreation as it pertains to tourism, however, is more challenging.

Figure 5.1 Climbers in Squamish, B.C.

Let’s start by exploring some recreation-based terms that are common in the tourism industry. Outdoor recreation can be defined as “outdoor activities that take place in a natural setting, as opposed to a highly cultivated or managed landscape such as a playing field or golf course” (Tourism BC, 2013, p. 47).  This term is typically applied to outdoor activities that individuals engage in and that are located close to their community. When these activities are further away, and people must travel some distance to participate in them, they are often described as adventure tourism.

According to the United Nations World Tourism Organization (UNWTO), adventure tourism is “a trip that includes at least two of the following three elements: physical activity, natural environment, and cultural immersion” (UNWTO, 2014, p.12).  Examples of adventure tourism in BC include river rafting, helicopter skiing, and rock climbing.

Adventure tourism can be “soft” or “hard.” Differentiating between the two is somewhat subjective, but is loosely based on the level of experience required, the level of fitness required, and the degree to which the participant is exposed to risk (UNWTO, 2014).  Examples of soft adventure include wildlife viewing or moderate hiking, whereas river rafting or outdoor rock climbing would usually be considered hard adventure.

Another term that is used, one that overlaps with the definitions of outdoor recreation and adventure tourism, is nature-based tourism, which refers to “those tourism experiences that are directly or indirectly dependent on the natural environment” (Tourism BC, 2005b, p.6).  This term is often used to describe activities that are closely connected to nature, such as whale watching, birding, or self-propelled travel such as hiking and kayaking. Nature-based tourism can be either hard or soft adventure tourism.

As you can see, there are challenges in classifying recreation in tourism. For instance, if people kayak near their home or community, it may be considered outdoor recreation. If they travel afar for that same activity, it likely is designated as adventure tourism. If the kayaking is done in protected, mild conditions, it would be considered soft adventure, but if done in a challenging and risky river descent, it may be classified as hard adventure. Generally, the further away from established infrastructure and medical assistance, the harder the adventure activity.

Of course, each of the above scenarios of kayaking could be considered nature-based tourism if it is strongly linked to the natural environment. Ultimately, categorization is based on a combination of several factors, including manner of engagement in the activity (risk exposure, experience requirement, group or solo activity), the distance travelled to access the activity, and the type of environment (proximity to nature, level of challenge involved) that that the activity occurs in.

A 2013 adventure tourism market study discovered that people who travel for adventure experiences tend to be well-educated, with 48% holding a four-year degree or higher credential. They value natural beauty and rank this as the highest factor when choosing a destination, and the most cited reasons for their travel are relaxation “relaxation, exploring new places, time with family, and learning about different cultures” (UNWTO, 2014, p.15).

Globally, it is estimated that the continents of Europe, North America, and South America account for 69% of adventure tourism, or US$263 billion in adventure travel spending. Adventure tourists tend to be seen as high-value visitors, with as much of 70% of their expenditures remaining in the communities visited (UNWTO, 2014).

The size, extent, and economic contribution of recreation, outdoor recreation, and adventure tourism in British Columbia is also substantial. The rest of this chapter explores the sector in the province in more detail.

Studies have shown that nearly all residents of BC partake in some kind of outdoor recreation activity during any given year. Approximately 85% of those participants indicate that these recreational activities were very important to them (Tourism BC, 2013).

It is estimated that there are approximately 2,200 outdoor/adventure tourism operators in BC. In 2001, this accounted for 21,000 jobs and $556 million in direct wages. The last sector-wide study in 2005 estimated that business revenues in outdoor adventure tourism accounted for approximately $854 million in annual business revenues (Tourism BC, 2013). Given the growth of adventure tourism over the last decade, it is likely these numbers have risen.

This section covers two key types of recreation and tourism, with a focus on British Columbia:

1. Land-based recreation and tourism
2. Water-based recreation and tourism

It’s not possible to detail all the recreational activities available in BC, but by the end of this section, you will have an understanding of some of the key unique activities available in the province.

Land-Based Recreation and Tourism

Golf Courses and Resorts

A 2009 economic impact study found that more than six million Canadians participate in the game of golf each year, making this sport the number one outdoor recreational activity in Canada based on participation. Golf also directly employs more than 155,000 people and contributes more than $11 billion directly to Canada’s gross domestic product. BC has over 300 golf course facilities, and with over $2 billion annually in direct economic activity, the golfing industry in the province is the fourth largest in Canada (Strategic Networks Inc., 2009).

Golf is a significant tourism attraction in BC; in 2007 the province was chosen as the “Best Golf Course Destination in North America” by the International Association of Golf Tour Operators (Destination BC, 2014c).  Part of the draw is the diverse environment; golfers can choose from lush coastal forests to desert environments, and many courses have a viewscape of mountains or the ocean.

A 2006 study by Destination Canada formally the Canadian Tourism Commission (CTC) detailed both demographic and economic factors related to the Canadian golf industry. Significant findings included that there were more than 3.4 million golf travellers in Canada annually, and that of those travellers, approximately 34% travelled to BC. In addition, the Canadian golf participation rate (for the total Canadian population) was 21.5%, which is among the highest golf participation rates of any country in the world. Golfing provides an opportunity to attract significant tourism revenue as the average golf traveller has a much higher than average income level, with up to 50% of all golf travellers earning $100,000 or more per annum (Tourism BC, 2009b).

Mountain Resorts and Nordic Centres

Resorts in British Columbia range from smaller eco-lodges to large ski areas. Mountain resorts and nordic centres are part of the larger resort tourism sector, which in 2004 was valued at $1.9 billion (Tourism BC, 2011c).

Mountain Resorts

BC’s many world-class facilities and high-quality snow conditions provide mass appeal for downhill skiing and snowboarding. Many of mountain resorts have diversified to offer summer operations, including mountain bike parks, hiking, and sight seeing. Mountain resorts in BC can be separated into two principal categories: destination resorts and regional resorts. Destination mountain resorts are often significantly larger and offer a greater range of amenities such as on mountain accommodation and food services; they are also generally marketed to out-of-area and international visitors. Examples of a destination resort would include Whistler Blackcomb Ski Resort. On the other hand, regional mountain resorts are usually smaller in size and capacity, have fewer amenities, and often cater more directly to the local community (Tourism BC, 2011c) such as Whitewater Ski Resort in the Kootenay Rockies.

The aggregate economic value of destination mountain resorts is significant; one study by Tourism BC found that 13 of these resorts were responsible for generating approximately 1.1 billion in revenue, or 8% of the total provincial tourism revenues in 2008. Additionally, they provided the equivalent of 14,267 full-time equivalent jobs (Tourism BC, 2011c). Furthermore, BC’s top mountain resorts have received many prestigious awards (Tourism BC, 2011c, p. 11):

• Whistler Blackcomb has consistently been named the #1 ski resort in North America.
• In 2009, Sun Peaks was named one of the “Top 20 Ski Resorts in North America” by 
Condé Nast Traveler.
• Big White Ski Resort was recognized in 2009 as a “Top 5 Family Resort” by the UK-based Sunday Times.

The publicity that these resorts receive has undoubtedly reflected positively on the rest of the BC tourism industry.

Nordic Centres

Nordic skiing, also commonly known as cross-country skiing, is a low-risk, low-impact winter sport popular across Canada. It differs from backcountry skiing in that participants ski on groomed trails typically maintained as part of an established facility (Cross Country BC, n.d.).

With more than 50 cross-country ski centres across BC, and a season that often exceeds that of downhill skiing (November to May in many areas), the sport attracts large numbers of local and inbound recreation enthusiasts. Trail networks have been developed in both stand-alone environments, as well as in partnership with large mountain resorts such as Silver Star in Vernon, Sun Peaks in Kamloops, Cypress Mountain above Vancouver, and Rossland in the Kootenays. Many of these trail networks offer both groomed and track-set trails, and many are lit for night skiing.

Backcountry Skiing and Snowboarding

Backcountry skiing and snowboarding (sometimes called split boarding) offers a recreational activity in a wilderness setting, away from any established mountain resorts, lifts, or trails. BC is regarded as a world-class destination for backcountry access, and has seen considerable and sustained growth in this sector (Porteus, 2013). The motivator for pursuing this activity for most people is primarily the lure of fresh, untracked snow in a beautiful mountain setting. Some backcountry skiers and snowboarders combine this activity with helicopter or snowcat skiing.

Helicopter skiing transports skiers and snowboarders by helicopter to the backcountry. It is typically a professionally guided activity, with packages ranging in duration from a single day to weeks. The skiing/snowboarding is often packaged with a luxury lodge accommodation, gourmet meals, and access to spa treatments.

Heliskiing was pioneered in Canada by Swiss mountain guide Hans Gmoser, who founded the company Canadian Mountain Holidays, which has grown to be the largest heliskiing company in the world (Canadian Mountain Holidays, n.d.).  Today, there are close to 20 helicopter skiing companies in BC, which represents the largest concentration of commercial operations in the world (HeliCat Canada, n.d.).

Snowcat skiing is alpine skiing accessed by travelling to the top of the ski area in a snowcat (an enclosed cab vehicle on tracks). As with heliskiing, this activity also has its commercial roots in BC. Snowcat skiing was pioneered in 1975 by Selkirk Wilderness Skiing as an alternative to both lift-serviced and helicopter-accessed riding and skiing (Selkirk Wilderness Skiing, n.d.).  It is typically a guided activity due to the avalanche risk associated with the terrain. As with heliskiing, snowcat skiers have the option of choosing single-day or multi-day vacation packages. During the winter of 2015, there were 11 established snowcat skiing operations in BC (HeliCat Canada, n.d.).

Guides for these operations are typically certified by either the Association of Canadian Mountain Guides (ACMG) or the Canadian Ski Guide Association (CSGA).  Both organizations assess the guides for their expertise in technical skills, avalanche forecasting, risk management and emergency response before issuing certification. The process is extensive and rigorous, taking much time and commitment for guides to become fully certified.

Off-Road Recreational Vehicles

An off-road recreational vehicle (ORV) is any vehicle designed to be driven off road that is not included within any other vehicle classification framework. This includes snowmobiles, all-terrain vehicles (ATVs), and dirt bikes (British Columbia Ministry of Forest, Lands and Natural Resource Operations, 2014). ORV use is recognized as a considerable contributor to the BC economy, owing primarily to recreational users, but also from tourist visits.

Recreational snowmobiling in BC is represented by the British Columbia Snowmobile Federation (BCSF). The BCSF’s mandate is to represent recreational snowmobile clubs through advocacy, education, and stewardship (BCSF, n.d.). Commercial snowmobiling is represented by the British Columbia Commercial Snowmobile Operators Association (BCCSOA), a group of snowmobile tour operators who have mobilized to support marketing, product development, and government advocacy initiatives (BCCSOA, n.d.).

ORV use has long been the subject of conflict between non-motorized and motorized recreational users of the wilderness. Non-motorized users claim that motorized users negatively impact the wilderness through noise pollution and environmental damage by degrading trails and scaring wildlife (Webster, 2013).  Recently, wilderness tourism operators who hold Crown land tenure to operate in remote areas have complained that ORVs negatively affect their visitors’ experiences. Some of these conflicts may now be mitigated through the implementation of the Off-Road Vehicle Act, which was passed in 2014.  This Act requires mandatory registration of ORVs, and includes elements that promote safety, enforcement of regulations, education, and outreach (British Columbia Ministry Forest, Lands and Natural Resource Operations, 2014).

Guest Ranchers and Hunting Outfitters

Guest and Dude Ranches

Guest ranches and dude ranches offer personal and home-like vacation experiences centered on horseback riding and an authentic ranch experience. These operators typically offer accommodation in a ranch-type environment, and include as part of the experience the opportunity to participate in ranch activities such as horse riding and cattle wrangling. Other services and activities may also be available, such as spa treatments, hiking, canoeing, and fishing (BC Guest Ranchers Association, n.d.).

A 2011 study of guest ranches by Tourism BC found that there were 57 operating ranches in the province. Most of these were small operations with one to five employees and serving fewer than 1,000 clients per year (Tourism BC, 2011a). There are also large operations such as the Hills Health Guest Ranch located near 100 Mile House, which can accommodate hundreds of guests at one time. The ranch features a full on-site spa and two dining rooms, and hosts a multitude of special events each year. Two other examples of unique guest ranch operations are the Siwash Lake Ranch in south-central BC, a “high-end” exclusive resort featuring executive-chef prepared meals, and the Echo Valley Ranch and Spa in the BC interior, offering an alternative therapy spa and gold-panning excursions.

Hunting Outfitters

Hunting is a traditional recreational activity in BC, and it is also one of the original tourism products in the province (GOABC, n.d.). BC is fortunate to have a vast amount of wilderness available for hunting activities.  The exact size of the hunting market is difficult to quantify, but in 2003, a study found that 5,000 non-resident hunting licences were sold in BC, contributing $46 million to the provincial economy (CTC, 2012).

Some people choose self-guided hunting activities, but to hunt certain species, a guide outfitter must be hired. Guide outfitters are licensed by the BC Government to provide commercial hunting services for non-residents. This commercial hunt service directly employs more than 2,000 BC residents and generates approximately $116 million in economic activity annually (GOABC, n.d.). Many of these outfitters are small family operations  based in rural areas; they are a source valuable economic activity in areas with limited resources (GOABC, n.d.).

Cycling

Cycling is a popular recreational activity in BC thanks to a variety of terrain, spectacular scenery, and favourable weather conditions, with approximately 44% of residents participating each year (Tourism BC, 2013). Cycling also attracts out-of-province visitors. One study from 2008 reported that out of 5.6 million Canadians who travelled to BC over a two-year period, almost one million (17%) had participated in a cycling activity (Tourism BC, 2009).

Cycling can be generalized into two styles: road cycling and mountain biking.

Road cycling appeals to those who want to travel on paved roads on bikes designed for travelling long distances efficiently and effectively. Road cycling may refer to racing, both recreational and professional, or cycle touring, where cyclists travel by bike on single- or multi-day trips. Given the multitude of rolling hills, mountain passes, and stunning vistas, BC is regarded as a premier cycle touring destination (Destination BC, 2014b).

Mountain biking generally involves riding on unpaved routes and trails either specially designed for biking or for multipurpose use. BC’s reputation as a prime mountain biking destination has grown because of the unique array of trails available, ranging from the steep, challenging routes of Vancouver’s North Shore, to the high alpine cross-country routes found in the South Chilcotin Mountains (Tourism BC, 2011b).

Over the years, mountain biking has grown from being a fringe activity to a mainstay of the tourism economy. In fact, the growth potential of mountain biking is so highly regarded that the BC Government now considers it as one of the top growth areas in the outdoor adventure sector (Tourism BC, 2011b).

Indeed, numerous mountain winter resorts such as Whistler Blackcomb, Silverstar, and Kicking Horse have developed mountain biking trail infrastructure and lift-accessed biking to provide off-season activities. World-class mountain biking races such as the BC Bike Race bring thousands of riders through small communities for mountain biking. The economic impact of these events is significant. Over the course of a single four-month season in the Sea-to-Sky Corridor in 2016 (including the communities of North Vancouver, Squamish, Whistler and Pemberton), the economic contribution of mountain biking to local economies was $70.6 million (Western Canada Mountain Bike Tourism Association, 2016).

Camping and Hiking

In 2012, over 19.3 million people visited BC provincial parks, including 16.8 million day visitors, many of whom used the parks for hiking and exploration in addition to picnics, swimming, and other outdoor activities. Of these visitors, 2.3 million were overnight campers, generating $15.5 million in user fees, with an average guest satisfaction rating of 82% (BC Parks, 2012). As discussed in Chapter 3, there are also a number of private camping providers in the province.

Wildlife Viewing

Given the diversity and richness of our natural environment, it is not surprising that there is a thriving wildlife viewing industry in BC. This includes whale, bird, and bear watching as well as travelling to view the northern lights or alpine flowers (CTC, 2007). One study conducted by the Destination BC established that within BC, approximately 37% of tourists took part in wildlife viewing while visiting. Significantly, for 13% of visitors, the primary motivation for their travel to BC was wildlife viewing (CTC, 2007).

Whale watching occurs along the coast of BC, with tours sometimes leaving from major urban centres, but more commonly from smaller communities such as Telegraph Cove on northern Vancouver Island. Tours are typically by boat, on vessels ranging from open, 10-passenger Zodiacs, to comfortable cabin cruisers with inside seating. The most commonly observed whale is the orca, one of the province’s most distinctive animals. Other whales like the humpback, minke, and Pacific grey are also frequently encountered. The province’s vast diversity of marine life is a key attraction of the tours; in addition to whale watching, a typical tour may encounter bald eagles, sea lions, porpoises, and a variety of sea birds (Destination BC, 2014,d).

Bear viewing — whether for black bears, grizzly bears, or the rare kermode bear — is also popular. Black bears are common across all regions of BC. Grizzly bears are more likely to be found in remote and mountainous regions; they have an estimated population in the province of approximately 16,000. Kermode bears, also called spirit bears, are a subspecies of black bears with a genetic trait that produces white fur instead of black. They are found primarily in the Great Bear Rainforest of the Central Coast, and figure prominently in the spiritual traditions of BC’s Coastal First Nations. The spirit bear is also BC’s official animal (Destination BC, 2014a).

Figure 5.2 A bear in Bute Inlet, B.C.

Tourism operators that offer bear viewing typically operate in remote regions of BC. They may utilize raised viewing areas or operate from a boat-based platform, and offer accommodation at night. The season is typically limited to May through October, with the highest chances of viewing success during the salmon spawning season in the fall.

Now that we’ve explored some of the key land-based tourism and recreational experiences in BC, let’s turn to the water.

Water-Based Recreation and Tourism

Water-based recreation and tourism in BC are extensive and varied. The coastline of more than 25,000 kilometres in length provides ideal opportunities for coastal recreation and tourism (BC Adventure, n.d.), as well as inland, fresh water-based activities on lakes and rivers. Activities include scuba diving, boat tours, sport fishing, paddle sports (sea kayaking, river kayaking, canoeing, sailing, stand up paddleboarding (SUP), and more. Following is an overview of a few core water-based activities offered by BC tourism operators, as well as a brief description of their economic contributions and related industry organizations.

Figure 5.3 Kayakers waiting near whitewater rapids.

Scuba Diving

BC waters offer scuba divers a rich diversity of marine life such as giant Pacific octopuses, wolf eels, sixgill sharks, soft corals, and cloud sponges. As well, a variety of dive sites are available, including marine parks, protected natural areas, sunken naval vessels, artificial reefs, historic wrecks, and even a submerged fuselage of a Boeing 737 airliner (Dive Industry Association of BC, n.d.).

A 2004 study conducted by the Dive Industry Association of BC found that the dive industry in BC consisted of 116 operators offering services to tourists and residents alike. The many segments of the industry include manufacturers, distributers, dive charters, dive shops, and instructional centres. The study estimated that gross revenues from this industry at $15 million, although this number failed to account for other indirect spending such as trip-related accommodation and transportation. It is likely that the actual economic value of this subsector is actually significantly larger (Ivanova, 2004).

Sport Fishing and Lodges

There is a long and rich history of sport fishing in BC. Anglers are drawn to the province’s tidal waters (for salmon and halibut) and to freshwater rivers and lakes (for trout, steelhead, and sturgeon). The annual rate of recreational participation is significant; a 2009 study estimated that there are nearly 600,000 anglers (either fresh or saltwater) in any given year in BC (Tourism BC, 2009). Furthermore, non-resident anglers contributed almost $6 million by way of licensing fees, and an additional $46 million in non-fishing expenditures to the economy of BC. The British Columbia Fishing Resorts and Outfitters Association (BCFROA) represents commercial freshwater resorts and outfitters and delivers advocacy, conservation, and marketing efforts on behalf of its members (BCFROA, n.d.).

Paddle Sports

River rafting, canoeing, sea kayaking, and standup paddle boarding (SUP) are common activities for both recreationists and tourists alike in BC.  Collectively, these sports fall under the paddle sports category, which encompasses any activity that takes place in small boats propelled by paddles (Education Scotland, n.d.).  Although all paddle sports are popular recreational activities, two of the more sizable and commercially productive paddle sports subsectors are river rafting and sea kayaking.

River rafting operators can be found on many rivers across BC. Product offerings may range from a three-hour adrenaline-fueled tour on the famous Fraser River to a 14-day wilderness exploration down the UNESCO World Heritage Tatshenshini-Alsek Rivers in northern BC.  These trips consist primarily of three types of rafting: paddle rafting, motorized rafting, and float trips (Destination BC, n.d.).

Commercial rafting in BC is represented by the British Columbia River Outfitters Association (BCROA), which acts as a regulatory and marketing organization for river rafting in the province. Guides are required to be certified at one of three levels: guide, senior guide, or trip leader.  Each river in BC that is commonly rafted has an extensive set of safety requirements called “provisions” listed by the BCROA. These provisions set out the minimum level of guide required, acceptable water levels ranges, and type of equipment needed for each river excursion (BCROA, n.d.).

Figure 5.4 A rafting trip with Canadian Outback Adventures and Events near Squamish, B.C.

A 2005 study conducted by Tourism BC identified 59 operators offering river rafting trips in the province. With an average of 5.5 employees, these operations are typically small in comparison to other industry subsectors. Collectively, however, they provided services to 216,000 customers and contributed almost $15 million in gross revenues to the BC economy in 2005. The same study also indicated that up to 75% of participants had travelled to join in the activity, indicating that they can predominantly be classified as adventure tourists (Tourism BC, 2007a).

Sea kayaking in BC has grown into a sizable recreational and commercial industry in recent years. The province is highly regarded internationally for its long coastline punctuated by many inlets and fjords. Kayaking trips may be as short as an afternoon harbour tour, or as long as a seven-day wilderness exploration to the remote regions of Vancouver Island. Noteworthy areas for sea kayakers include Pacific Rim National Park on western Vancouver Island, Johnstone Strait on northern Vancouver Island, and Gwaii Haanas National Park in Haida Gwaii.

A 2005 report entitled British Columbia’s Sea Kayaking Sector identified more than 114 operators offering rentals, instruction, day tours, or multi-day tours.  These operators reported gross revenues of approximately $14 million in 2005 (Tourism BC, 2005a). A 2013 ecotourism survey conducted by Raincoast Conservation reflected growth of the sea kayaking sector with half (49%) of operators having grown between 2008-2013 (Raincoast Conservation, 2015).

Small Ship Tours

British Columbia’s diverse and largely inaccessible coastline provides opportunities for boat-based tourism aboard small vessel, safari-like expeditions on the BC coast that are world-renowned for the wildlife, nature, and indigenous cultural experiences (Wilderness Tourism Association, n.d.).

Figure 5.5 Some small ship tour operators in B.C. provide safari-like experiences, like this zodiac tour off the San Juan Islands in Washington State.

The Small Ship Tour Operators Association of British Columbia (SSTOA) is comprised of seven 100% Canadian owned and operated, small-ship based travel companies that specialize in providing niche wilderness travel experiences for small groups of 6–24 passengers, along the British Columbia and Alaska coastline. In particular, they operate in the Vancouver Island, Haida Gwaii, and Great Bear Rainforest regions (Wilderness Tourism Association, n.d.). This is a relatively small industry with a higher price point and generally appealing to a different market than other previously mentioned activities and those who appreciate the comforts while exploring remote regions.

As shown throughout this chapter, recreation and adventure tourism play predominant roles in the tourism and hospitality industry in BC. However, there are challenges that impact the viability of this sector, as well as barriers that limit the growth. These topics are discussed briefly here.

Land and Water Use

Outdoor recreation and adventure tourism operators rely heavily on intact pristine environments and healthy ecosystems. The ‘use’ of British Columbia’s vast wilderness and access to these wilderness areas for tourism operators is an ongoing challenge. Some zones across the province are set aside for recreation, such as provincial and national parks. However, when it comes to conducting commercial operations in these same places, gaining access often involves an extensive permitting process that may impose restrictions on the type of activity, how the activity is carried out and the number of visitors allowed.

In addition, parks are generally limited to non-motorized activities, thus presenting barriers for tourism operators that seek to offer mechanized recreation. Operators using Crown land for commercial activities also require authorization from the provincial government; in some instances, priority may be given to resource extraction or development rather than outdoor operators. The permitting process can be onerous and time consuming, which for small operators, may be a barrier to growth (Wilderness Tourism Association, 2005).

Environmental issues are discussed in detail in Chapter 10.

Environmental Impacts

Figure 5.6 Prohibiting certain recreational activities can help protect sensitive environments. [Long Description]

Environmental impacts from climate change, deforestation, and resource extraction all have significant potential to affect this sector of the tourism economy. On a local scale, competition with resource extraction for wilderness areas is a vital issue; without reliable access to pristine wilderness, many operators are facing threats to their sustainability (Wilderness Tourism Association, 2005).  Indeed, conflicts with the oil and gas industry, forestry, and mining are constant management challenges for wilderness tourism operators. On a global scale, climate change threatens tourism in BC in many ways, including irregular and insufficient snowfall for winter operations, the pine beetle epidemic sweeping through the province’s forests, and climate-related stress impacting prime wildlife viewing of species such as whales and bears. Environmental issues are discussed in detail in Chapter 10.

Risk Management

Concerns over risk management and litigation are ongoing for any operator that offers activities with an element of risk, which is common in recreation and adventure tourism. When lawsuits in adventure tourism occur, they are often extensively publicized by the media, creating a perception of risky, dangerous, and irresponsible adventure operators. This can negatively affect the sector through rising insurance rates, increasing governmental regulation, challenging certification requirements, and permitting difficulties when interfacing with land management agencies.

With the popularity of backcountry skiing, snowboarding, snowmobiling, snowshoeing, and other winter sports on the rise in BC, the number of participants accessing backcountry areas is increasing (Mitsui, 2013). This is becoming a concern for long-time backcountry enthusiasts as well as safety monitors. As winter and summer backcountry equipment becomes more readily accessible, people are able to equip themselves without having received advanced safety training.

The increase of backcountry users will continue to expose users to possible dangerous situations. The best scenario is to ensure users receive proper training and education before they venture into the backcountry areas.

Other elements of risk and liability are discussed further in Chapter 11.

Long Descriptions

Figure 5.6 long description: Sign with pictograms with red slashes through them, banning various recreational activities. This sign proclaims:

• No alcoholic beverages
• No smoking
• No glass containers
• No dogs or pets
• No motor vehicles
• No littering
• No open fires
• No camping
• No diving
• No baseball
• No boat launching
• No vendors

[Return to Figure 5.6]

Despite some of the challenges faced by recreation, outdoor recreation, and adventure tourism, the industry as a whole remains an exciting, dynamic, and growing sector of the BC tourism economy. Employment opportunities abound, and the potential for economic contribution to the province, protection of wilderness areas, and diversification of rural economies away from resource extraction are exciting prospects. BC is uniquely positioned to maintain positive growth in this area, contingent upon government support to address the barriers and challenges listed above. Students looking to develop professionally in this field should strive to gain both hands-on experience in a specialized activity, and a strong tourism focused education; this combination will offer the best chance to open doors to a long-term career in this exciting industry.

Now that we understand the importance of recreation to the tourism industry, especially in BC, let’s explore Chapter 6, which looks at entertainment, the other half of this industry classification.

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Tourism BC. (2005b). Characteristics of commercial nature-based tourism industry in British Columbia [PDF]. Retrieved from:  http://www.destinationbc.ca/getattachment/Research/Research-by-Activity/Land-based/Economic_Impacts_of_Commercial_Nature-Based_Tourism_Report-sflb.pdf.aspx

Tourism BC. (2007a). British Columbia’s sea kayaking sector 2005. [PDF] Retrieved from: http://www.destinationbc.ca/getattachment/Research/Research-by-Activity/All-Research-by-Activity/British-Columbia-s-Sea-Kayakers-Report-(2005),-Dec/British_Columbia_s_Sea_Kayakers_Report_2005-sflb.pdf.aspx

Tourism BC. (2007b). Travel activities and motivations of Canadian residents: An overview. [PDF] Retrieved from: http://www.destinationbc.ca/getattachment/Research/Travel-Motivations-(TAMS)/Canadian-Travel-Motivations/Canadian_TAMS_Overview_Report.pdf.aspx

Tourism BC. (2009a). Fishing product overview. Retrieved from: http://www.destinationbc.ca/getattachment/Research/Research-by-Activity/Water-based/Fishing_Sector_Profile.pdf.aspx

Tourism BC. (2009b). Golf sector profile [PDF]. Retrieved from: http://www.destinationbc.ca/getattachment/Research/Research-by-Activity/Land-based/Golf_Sector_Profile.pdf.aspx

Tourism BC. (2009c). Wildlife viewing product overview. [PDF] Retrieved from: http://www.destinationbc.ca/getattachment/Research/Research-by-Activity/Land-based/Wildlife_Viewing_Sector_Profile.pdf.aspx

Tourism BC. (2011a). Guest ranchers business survey 2008/2009. [PDF] Retrieved from:  http://www.destinationbc.ca/getattachment/Research/Research-by-Activity/All-Research-by-Activity/Guest-Ranchers-Business-Survey-2008-2009,-January/GuestRanchersReport2008_2009.pdf.aspx

Tourism BC. (2011b). Mountain bike tourism guide. Retrieved from: http://www.destinationbc.ca/Research/Research-by-Activity/Land-based.aspx#.VIYqOr4irzI

Tourism BC. (2011c). The value of mountain resorts to the British Columbia economy. [PDF] Retrieved from: http://www.destinationbc.ca/getattachment/Research/Research-by-Activity/All-Research-by-Activity/Value-of-Mountain-Resorts-to-the-British-Columbia/Value_of_Mountain_Resort_Properties_Phase_One_June-2012.pdf.aspx

Tourism BC. (2013). 2009/2010 Outdoor recreation study. [PDF] Retrieved from: http://www.destinationbc.ca/getattachment/Research/Research-by-Activity/All-Research-by-Activity/Outdoor-Recreation-Study-2009-2010,-January-2013/Outdoor-Recreation-for-Distribution-14Jan13-FINAL-DRAFT-(2).pdf.aspx

Tribe, J. (2011). The economics of recreation, leisure, and tourism. 4th Edition. Oxford, England: Elsevier.

United Nations World Tourism Organization. (2014). Global report on adventure tourism. Retrieved from: http://affiliatemembers.unwto.org/publication/global-report-adventure-tourism

Webster, D. (2013). Adventure tourism operators and snowmobiles: Managing interactions. [PDF] Retrieved from: https://dspace.royalroads.ca/docs/bitstream/handle/10170/660/webster_donald.pdf?sequence=1

Western Canada Mountain Bike Tourism Association. (2016). Sea-to-sky mountain biking economic impact study. [PDF] Retrieved from:  http://www.mbta.ca/assets/pdfs/S2S_E_I_Study.pdf

Wilderness Tourism Association. (n.d.). Small Ship Tour Operators Initiative. Retrieved from: https://wilderness-tourism.bc.ca/projects/small-ship-tour-operators-initiative/

Wilderness Tourism Association. (2005). Characteristics of the commercial nature-based Tourism industry in British Columbia. [PDF] Retrieved from http://www.wilderness-tourism.bc.ca/docs/Commercial_Nature-Based%20Tourism.pdf

When travellers enter Canada, there is a good chance they will be asked at the border, “What is the nature of your trip?” Whether the answer is for business, leisure, or visiting friends and relatives, there’s a possibility that travellers will participate in some of the following activities (as listed in the Statistics Canada International Travel Survey):

• Attend a festival or fair, or other cultural events
• Visit a zoo, aquarium, botanical garden, historic site, national park, museum, or art gallery
• Watch sports or participate in gaming

These activities fall under the realm of entertainment as it relates to tourism. Documenting every activity that could be on a tourist’s to-do list would be nearly impossible, for what one traveler would find entertaining, another may not. This chapter focuses on the major components of arts, entertainment, and attractions, including motion pictures, video exhibitions, and wineries; all activities listed under the North American Industry Classification System we learned about in Chapter 1.

Festival and Major Events Canada (FAME) released a report in 2019 detailing the economic impacts of the 17 largest festivals and events in Quebec, which amounted to a whopping $378 million in tourist spending. Let’s take a closer look at this segment of the sector and its impact across Canada.

Figure 6.1 A labyrinth of light at the 2008 Winter Solstice Lantern Festival in Vancouver.

Festivals

The International Dictionary of Event Management defines a festival as a “public celebration that conveys, through a kaleidoscope of activities, certain meanings to participants and spectators” (Goldblatt, 2001, p. 78). Other definitions, including those used by the Ontario Trillium Foundation and the European Union, highlight accessibility to the general public and short duration as key elements that define a festival.

Search “festivals in Canada” online and over 900 million results will appear. To define these activities in the context of tourism, we need to consider two fundamental questions, “Who are these activities aimed at?” and “Why are they being celebrated?”

The broad nature of festivals has lead to the development of classification types. For instance, funding for the federal government’s Building Communities through Arts and Heritage Program is available under three categories, depending on the type of festival:

1. Local festivals funding is provided to local groups for recurring festivals that present the work of local artists, artisans, or historical performers.
2. Community anniversaries funding is provided to local groups for non-recurring local events and capital projects that commemorate an anniversary of 100 years (or greater, in increments of 25 years).
3. Legacy funding is provided to community-initiated capital projects that restore or transform event spaces and places. Eligible projects are those that commemorate a 100th anniversary (or greater, in increments of 25 years) of a significant local historical event or local historical personality.

Funds awarded in BC ranges from $2000 for the Nelson History Theatre Society’s Arts and Heritage Festival in 2012 (Government of Canada, 2014a) to $100,200 for the Vancouver International Film Festival in 2017 (Government of Canada, 2017). In 2017-2018, federal funding from the Canada Arts Presentation Fund, Canada Cultural Spaces Fund, and Canada Cultural Investment Fund resulted in $183 million in infrastructure and program development funds to support organizations that professionally present arts festivals or performing arts series (Government of Canada, 2019).

Festivals and events in BC celebrate theatre, dance, film, crafts, visual arts, and more. Just a few examples are Bard on the Beach, Vancouver International Improv Festival, Cornucopia, and the Cowichan Wine and Culinary Festival.

Figure 6.2 Guests at Cornucopia, Whistler’s celebration of food and wine.

Events

An event is a happening at a given place and time, usually of some importance, celebrating or commemorating a special occasion. To help broaden this simple definition, categories have been developed based on the scale of events. These categories, presented in Table 6.1, overlap and are not hard and fast, but help cover a range of events.

Events can be extremely complex projects, which is why, over time, the role of event planners has taken on greater importance. The development of education, training programs, and professional designations such as CMPs (Certified Meeting Planners), CSEP (Certified Special Events Professional), and CMM (Certificate in Meeting Management) has led to increased credibility in this business and demonstrates the importance of the sector to the economy. Furthermore, there are a variety of event management certifications and diplomas offered in BC that enable future event and festival planners to gain specific skills and knowledge within the sector.

Various tasks involved in event planning include:

• Conceptualizing/theming
• Logistics and planning
• Human resource management
• Security
• Marketing and public relations
• Budgeting and financial management
• Sponsorship procurement
• Management and evaluation

But events aren’t just for leisure visitors. In fact, the tourism industry has a long history of creating, hosting, and promoting events that draw business travelers. The next section explores meetings, conventions, and incentive travel, also known as MCIT.

According to the Meetings Mean Business Canada Coalition (MMB Canada), business events are big business. In 2017, Canadian business events:

• Delivered at least $33 billion to Canada’s economy
• Created over 229,000 employment opportunities
• Ranked 6th out of 50 countries in economic impact

The business events industry in Canada is as big as agriculture and forestry, and it provides nearly twice the number of jobs that telecommunications and utilities do (MMB Canada, 2017).

There are several types of business events. Conventions generally have very large attendance, and are held annually in different locations. They also often require a bidding process. Conferences have specific themes, and are held for smaller, focused groups. Trade shows/trade fairs can be stand-alone events, or adjoin a convention or conference. Finally, seminars, workshops, and retreats are examples of smaller-scale MCIT events.

As meeting planners became more creative, meeting and convention delegates became more demanding about meeting sites. No longer are hotel meeting rooms and convention centres the only type of location used; non-traditional venues have adapted and become competitive in offering services for meeting planners. These include architectural spaces such as airplane hangars, warehouses or rooftops, and experiential venues such as aquariums, museums and galleries (Cornacchio, 2019).

Incentive Travel

For many people new to the travel industry, incentive travel is an unfamiliar concept. The Society for Incentive Travel Excellence (SITE) has explained that incentive travel is “a self-funding marketing activity that employs unique travel experiences to reward people who achieve exceptional business performance” (2020). Unlike other types of business events, incentive travel is focused on fun, food, and other activities rather than education and work.

Sectors that use incentive travel include insurance, finance, technology, pharmaceutical, and auto manufacturers and dealers. The incentive travel market is extremely competitive and demanding. When rewarding high-performance staff, Fortune 500-type companies are looking for the most luxurious and unique travel experiences and products available.

Figure 6.3 Pan Pacific Hotel and the Vancouver Convention Centre.

Convention Centres

No discussion of business events would be complete without noting the importance of convention centres — very large venues that can host thousands of delegates.

Key success factors for convention venues include:

• Air access to the destination
• Quality hotels close to or adjacent to the venue
• Quality venue space
• Relative cost of the destination and venue
• Attractiveness of the destination

BC is home to a number of convention centres, including those in Kelowna, Nanaimo, Penticton, Prince George, and Victoria. The signature venue for the province is the Vancouver Convention Centre, which underwent a significant expansion prior to the 2010 Winter Olympics.

With an understanding of the scope of festivals and events, as well as examples of the venues that host them, let’s turn our attention to the diverse number of attractions that contribute to the tourism entertainment sector.

As a broad definition, tourist attractions are those places of culture, heritage, nature, or activities that draw people to visit. When the Canadian Tourism Commission, now Destination Canada, planned a survey of Canada’s tourist attractions in 1995, there was no official definition of tourist attractions. After consultation, federal, provincial, territorial, and industry stakeholders agreed on a working definition: “places whose main purpose is to allow public access for entertainment, interest, or education” (Canadian Tourism Commission, 1998, p. 3).

Five major categories were established:

1. Heritage attractions: focus on preserving and exhibiting objects, sites, and natural wonders of historical, cultural, and educational value (e.g., museums, art galleries, historic sites, botanical gardens, zoos, nature parks, conservation areas)
2. Amusement/entertainment attractions: maintain and provide access to amusement or entertainment facilities (e.g., arcades; amusement, theme, and water parks)
3. Recreational attractions: maintain and provide access to outdoor or indoor facilities where people can participate in sports and recreational activities (e.g., golf courses, skiing facilities, marinas, bowling centres)
4. Commercial attractions: retail operations dealing in gifts, handcrafted goods, and souvenirs that actively market to tourists (e.g., craft stores listed in a tourist guide)
5. Industrial attractions: deal mainly in agriculture, forestry, and manufacturing products that actively market to tourists (e.g., wineries, fish hatcheries, factories)

The term “attraction” can convey a negative meaning. Something becoming a tourist attraction can imply a site that has been commercialized and, likely, negatively impacted by tourism. In addition, attraction typically denotes pleasure and fun, like an amusement park. The term becomes inappropriate, as does ‘entertainment’ when we speak of learning about other cultures and contested histories. For example, the Nikkei Internment Memorial Centre, in New Denver, BC is a National Historic Site of Canada, and tells the history of Japanese-Canadian internment during the Second World War. Another example may be an Indigenous art gallery, with many objects representing the spiritual beliefs and history of a people’s ancestors. Although both examples are technically sites of interest to tourists and therefore attractions, the mandate, approach, and design of the visitor experience varies from site to site.

To exist, these attractions often need to generate revenue to pay for site operations, to pay for staff, and to run educational programs. The sector involves a range of organizations, some privately owned, while others are government-funded, or non-profit. Revenue to culture- and nature-based sites has the added benefit of supporting their preservation as well as to build awareness and a deeper understanding in the public. In the case of Indigenous heritage sites, visitation can also lead to an opportunity for reconciliation. However, the cost of an attraction, such as a museum, gallery, or park, is typically only a fraction of the total travel cost.

The rest of this chapter explores various types of attractions in more detail.

Cultural/Heritage Tourism

The phrase cultural/heritage tourism can be interpreted in many ways. Destination Canada, formally the Canadian Tourism Commission has defined it as tourism occurring “when participation in a cultural or heritage activity is a significant factor for traveling. Cultural tourism includes performing arts (theatre, dance, and music), visual arts and crafts, festivals, museums and cultural centres, and historic sites and interpretive centres” (LinkBC, 2012). Food is also an integral part of the cultural tourism scene.

Figure 6.4 A “pioneer” at the Barkerville historic site near Quesnel, B.C.

A 2018 Government of Canada survey of heritage institutions found:

• Revenues for all non-profit heritage institutions in Canada exceeded $2.5 billion in 2015, a 23% increase over 2011. British Columbia was ranked fourth in earnings, at $225 million or 9% of the national total
• Three provinces — Ontario (43%), Quebec (25%), and Alberta (9%) — had the largest share of heritage institutions
• Museums generated the most revenue for the heritage sector, at $1.1 billion (44%) in 2015, followed by art galleries (22%), archives (15%), zoos and gardens (13%) and finally historic sites (6%). Accounting for various levels of government, they contributed an additional $1.3 billion in 2015
• Roughly 50% of heritage institutions charged admission, and the average adult entry fee was $9.91 in 2015

In 2015, the heritage sector employed over 36,300 people, an increase of 15% since 2011. Volunteers at heritage institutions outnumbered paid staff by approximately three to one, with approximately 115,650 volunteers. The amount of time they donated (over 6.6 million hours) contributed to huge savings for institutions. These statistics indicate that volunteerism is a critical success factor for Canadian heritage institutions.

Overall physical attendance at heritage institutions totalled over 75 million visits in 2015, an increase of 34% from 2011. In addition, as museums and galleries digitize their holding for online access, heritage experienced some 200 million virtual visitors.

An interactive or media element has been excluded from this version of the text. You can view it online here:
https://opentextbc.ca/introtourism2e/?p=1599

Performing Arts

Performing arts generally include theatre companies and dinner theatres, dance companies, musical groups, and artists and other performing arts companies. These activities and entities contribute to a destination’s tourist product offering and are usually considered an aspect of cultural tourism.

British Columbia has 4.7% of the total number of cultural workers in Canada, the second highest concentration, of which performing arts represents some 55% (Hill Strategies, 2019, p.1). Across Canada, there are 726,600 cultural workers.

Art Museums and Galleries

Art museums and galleries may be public, private, or commercial. Both art museums and public galleries present works of art to the public, exhibiting a diverse range of art from more well-known artists to emerging artists. Exhibitions are assembled and organized by a curator who oversees the installation of the works in the gallery space. However, art museums and public galleries have different mandates, and therefore offer different visitor experiences.

Art museums collect historical and modern works of art for educational purposes and to preserve them for future generations. Public galleries, on the other hand, do not generally collect or conserve works of art. Rather, they focus on exhibitions of contemporary works as well as on programs of lectures, publications, and other events.

A few examples of the art museums and public galleries in BC are the Vancouver Art Gallery, the Art Gallery of Greater Victoria, Two Rivers Gallery in Prince George, and the Kelowna Art Gallery.

Many of the smaller galleries have formed partnerships within geographic regions to share marketing resources and increase visitor appeal. One example includes the self-guided Art Route Tour in Haida Gwaii.

Museums

The term museum covers a wide range of institutions from wax museums to sports halls of fame. No matter what type of museum it is, many are now asking if museums are still relevant in today’s high-tech world. In response, museums are using new technology to expand the visitor experience. One example is the Royal BC Museum, which hosts an online Learning Portal, lists recent related tweets on its home page, and is home to an IMAX theatre playing IMAX movies that relate to the museum exhibits.

Data from the 2011 Survey of Heritage Institutions in Canada found that attendance at heritage institutions totalled over 75 million visits in 2015, up 34% since 2011. Of that number, there were 14.1 million to art galleries, 15.4 million to heritage sites and another 31 million visits to museums being the most popular (Government of Canada, 2017).

British Columbia is home to over 200 museums, including Vancouver’s Museum of Anthropology and Victoria’s Royal BC Museum, both with impressive displays of Indigenous art and culture. Smaller community museums include the Fraser River Discovery Centre in New Westminster, and the Zeballos Heritage Museum.

Botanical Gardens

A botanical garden is a garden that displays native and non-native plants and trees. It conducts educational, research, and public information programs that enhance public understanding and appreciation of plants, trees, and gardening (Canadensis, 2014).

Canadian botanical gardens host an estimated 4.5 million visitors per year and are important science and educational facilities, providing leadership in plant conservation and public education (Botanic Gardens Conservation International, 2014). British Columbia is home to notable botanical gardens such as Vancouver’s Stanley Park, The Butchart Gardens near Victoria, UBC’s Botanical Garden, and VanDusen Botanical Garden, to name just a few.

Zoos

Zoos all over the world are facing many challenges. An article The Atlantic entitled “Is the Future of Zoos No Zoos at All?” discusses how the increased use of technology by biologists, such as habitat cameras (nest cams, bear den cams), GPS trackers, and live web feeds of natural behaviours, has transformed the zoo experience into “reality zoo TV” (Wald, 2014). There is also growing opposition to zoos from organizations such as PETA, who claim that zoo enclosures deprive animals of the opportunity to meet their basic needs and develop relationships (PETA, 2014).

Canada’s Accredited Zoos and Aquariums (CAZA) work in support of ethical and responsible facilities. Examples of CAZA members in BC include the BC Wildlife Park in Kamloops, the Greater Vancouver Zoo, and the Vancouver Aquarium (Canada’s Accredited Zoos and Aquariums, 2014).

Canadian zoos with high attendance levels include the Toronto Zoo with over 1.3 million guests in 2010 (Toronto Zoo, 2010), and the Vancouver Aquarium with over 1 million visitors in 2013 (Vancouver Aquarium 2013). In 2013, the Calgary Zoo employed almost 300 full- and part-time staff and an additional 99 seasonal employees (Calgary Zoo, 2013).

Amusement and Theme Parks

Figure 6.5 Wave spinners at Vancouver’s Playland amusement park.

While cultural and heritage attractions strive to present information based on historic and evolving cultures and facts, amusement parks are attractions that often work to create alternate, fanciful realities. Theme parks have a long history dating back to the 1500s in Europe, and have evolved ever since. Today, it is hard not to try to compare any amusement park destination to Disneyland and Disney World. Opened in 1955 in sunny California, Disneyland set the standard for theme parks. The Pacific National Exhibition (PNE) in Vancouver is considered one of BC’s most recognizable amusement parks and recently celebrated its 100-year anniversary (PNE, 2015).

Canada’s ability to compete with US theme parks is hampered by our climate. With a much shorter summer season, the ability to attract investment in order to sustain large-scale entertainment complexes is limited, as is the market for these attractions. It’s no wonder that in 2011 profitable Canadian amusement parks only saw an average net profit of $73,200, with 34% of firms failing to turn a profit that year. BC has only 22 amusement parks, and more than half of these are considered small, with under 100 employees (Government of Canada, 2014d).

Motion Picture and Video Exhibitions

The film industry in Canada, and particularly in BC, has gained international recognition in part through events such as the Toronto International Film Festival, Montreal World Film Festival, and Vancouver International Film Festival. According to the Motion Picture Association — Canada (2013) these festivals attracted an estimated audience of 1.9 million in 2011, as well as over 18,000 industry delegates. Festival operations, visitor spending, and delegate spending combined totalled $163 million that year and generated 2,000 jobs (full-time equivalents).

There are no statistics available on film-induced tourism in Canada, but several notable feature films and television series have been shot here and have drawn loyal fans to production locations. In BC, some of these titles include Reindeer Games and Double Jeopardy (Prince George), Roxanne (Nelson), The Pledge (Fraser Canyon), Battlestar Galactica (Kamloops), The Twilight Saga, Smallville, and Supernatural (Greater Vancouver).

Spectator Sports and Sport Tourism

Spectator sports and the growing field of sport tourism also contribute significantly to the economy and have become a major part of the tourism industry. According to the Canadian Sport Tourism Alliance (2013), sport tourism is any activity in which people are attracted to a particular location to attend a sport-related event as either a:

• Participant
• Spectator
• Visitor to sport attractions or delegate of sports sector meetings

In 2012, the sport tourism industry in Canada surpassed $5 billion in spending. The domestic market is the largest source of sport tourists, accounting for 84% of all spending, followed by overseas markets (10.8%) and US visitors (5.3% of sport tourism revenues) (Canadian Sport Tourism Alliance, 2014).

In British Columbia, sport tourism is supported through the Ministry of Community, Sport and Cultural Development, which invests in event hosting and the ViaSport program (formerly known as Hosting BC). Building on the success of the 2010 Olympic and Paralympic Winter Games, the program has a goal to maintain BC’s profile and reputation as an exceptional major event host. One success story is Kamloops, dubbed the Tournament Capital of Canada, which has made sport tourism a central component of its economy and welcomes over one million visitors to its tournament centre facility each year. And since 1977, the BC Winter and Summer Games have moved around the province, drawing attendees and creating volunteer opportunities for up to 3,200 community members.

Gaming

According to the Canadian Gaming Association, gaming is one of the largest entertainment industries in Canada. It has larger revenues than those generated by magazines and book sales, drinking establishments, spectator sports, movie theatres, and performing arts combined (Canadian Gaming Association, 2011).

Figure 6.6 Vancouver’s Edgewater Casino, which shut down in 2017.

In 2017, the association released an national economic benefits report stating that the industry produced a total of $17.1 billion in annual revenue and reinforced that gaming is an important employer in addition to providing significant economic returns to Canadians (Canadian Gaming Association, 2017).

The British Columbia Lottery Corporation (BCLC) is a Crown Corporation that manages socially responsible gaming in BC. According to the BC Lottery Corporation in 2019, the BCLC, via multiple betting channels and distribution channels, provided:

• 17 casino facilities
• two main horse racetracks
• approximately 3,528 lottery outlets (retailers)
• 3 bingo halls including 18 community gaming centres (or CGCs)

Gaming at these facilities and online generated $1.4 billion in net tax revenue to the province of BC, which was reinvested into the heath care system and distributed to communities through a series of grants (BC Lottery Corporation, 2019).

The gaming industry is growing and the BCLC monitors the marketplace, noting that consumer behaviour and expectations are shifting. Advances in technologies allow consumers to enjoy more digital gaming experiences while those looking for more social interaction can enjoy land based casino gambling with enhanced amenities such as expanded food and beverage options. (BC Lottery Corporation, 2019).

Agritourism, Culinary Tourism, and Wine Tourism

Let’s now have a closer look at the world of farms, food and wine in the entertainment and tourism industries.

Agritourism

The Canadian Farm Business Management Council defines agritourism as “travel that combines rural settings with products of agricultural operations within a tourism experience that is paid for by visitors” (SOTC, 2011). In other words, rural and natural environments are mixed with agricultural and tourism products and services.

Agritourism products and services can be categorized into three themes:

1. Fixed attractions such as historic farms, living farms, museums, food processing facilities, and natural areas
2. Events based on an agricultural theme such as conferences, rodeos, agricultural fairs, and food festivals
3. Services such as accommodations (B&Bs), tours, retailing (farm produce and products), and activities (fishing, hiking, etc.) that incorporate agricultural products and/or experiences

The local food movement is growing in popularity; agritourism presents a great opportunity to use farm resources to create experiences for visitors, whether they be for entertainment, education, or as venues for business/meeting events. In BC, examples of agritourism businesses include Salt Spring Island Cheese, and the Okanagan Lavender and Herb Farm near Kelowna (HelloBC, 2014).

The three primary agricultural regions in BC are:

1. The Fraser Valley (outside of Vancouver)
2. The Cowichan Valley (on Vancouver Island)
3. The Okanagan Valley (in the southern central part of BC)

A number of self-guided circle tours and other experiences are available in these and other areas, including annual festivals and events. Some examples of farm tours can be viewed at the BC Agriculture in the Classroom Foundation.

Culinary Tourism

Culinary tourism refers to “any tourism experience in which one learns about, appreciates, and/or consumes food and drink that reflects the local, regional, or national cuisine, heritage, culture, tradition, or culinary techniques” (Ontario Culinary Tourism Alliance, 2013). The United Nations World Tourism Organization has noted that food tourism is a dynamic and growing segment, and that over one-third of tourism expenditures relate to food (UNWTO, 2012).

Culinary tourism in Canada began to gain traction as a niche in 2002 when Destination Canada, formerly the Canadian Tourism Commission, highlighted it within the cultural tourism market. According to a Ryerson University study, the average culinary tourist spends twice the amount of a generic tourist (Grishkewich, 2012).

For examples of farm fresh meals, artisan drinks etc. visit the Hello BC visitor web page Food, Drink and Wellness. Organizations such as the UNWTO see food-making and wine-making as a key part of maintaining and preserving cultural traditions in addition to promoting local economic development. Culinary (or sometimes referred to as gastronomy) tourism and wine tourism are closely related and often promoted together. Wine tourism will be explored next.

Wine Tourism

The North American Industrial Classification System (NAICS) defines wine tourism as the “tasting, consumption, or purchase of wine, often at or near the source, such as wineries.” It also includes an educational aspect and festivals focusing on the production of wine (Agriculture and Agri-food Canada, 2014).

According to the 2015 Wine Tourism in Canada report [PDF], Canada welcomes over 3 million visitors annually to 550 Canadian wineries with an annual annual economic impact worth 6.8 billion. Nationally three key grape regions exist: British Columbia, Ontario and Nova Scotia with the majority of production in Ontario and British Columbia (Canadian Vintners Association/Tourism Industry of Canada, 2015).

Similar to France’s AOC and Italy’s DOC wine production quality controls, BC and Ontario use VQA (Vintners Quality Alliance) to assure quality and knowledge the wine is grown and produced.

Figure 6.7 Saturna Vineyards on Saturna Island, B.C.

The BC wine industry has grown significantly since the 90’s when only around 17 wineries were in existence. Today, there are more than 280 wineries in BC, ranging from small family-run vineyards to large estate operations. According to the British Columbia Wine Institute’s quick facts, BC’s wine industry generated $2.8 billion in 2019 to the provincial economy and welcomes over a million visitors annually (British Columbia Wine Institute, 2020).

Canada makes great wine, which is a surprise to many international visitors. Many think of Canada as cold and snowy and just too cool to produce great wine. However, BC’s combination of extreme heat during the warmer months and cooler winters creates intense, fruit forward quality wines. BC wines receive many prestigious international wine awards (British Columbia Wine Industry, 2019).

Industry experts agree that agritourism, culinary tourism, and wine tourism will continue to attract lucrative visitors and play a growing role in BC’s tourism economy.

So far in this chapter, we’ve looked at entertainment experiences from wine to gambling, from farm-fresh foods to museums and galleries, and at many things in between. But the entertainment sector doesn’t exist in a perfect world. Now let’s examine some of the trends and issues in the sector today. Festivals, events, and other entertainment experiences can have significant positive and negative impacts on communities and guests.

Impacts of Entertainment

Each type of festival, event, or attraction will have an impact on the host community and guests. Table 6.2 lists some of the positive impacts that can be built upon and celebrated. It also lists some of the potential negative impacts event coordinators should strive to limit.

Technology

The role of technology has shifted much of the guest experience from the physical to the virtual. Online gambling, virtual exhibits, and live streaming animal habitat cams are just a few of the new ways that visitors can be entertained, often without having to visit the destination. As this type of experience continues to thrive, the sector must constantly adapt to capture revenues and attention.

Across Canada and within BC, the range of activities to entertain and delight travellers runs from authentic explorations of cultural phenomena to pure amusement. Those working in the entertainment tourism sector know that providing a friendly, welcoming experience is a key component in sustaining any tourism destination. Whether through festivals, events, attractions, or new virtual components, the tourism industry relies on entertainment to complete packages and ensure guests, whether business or leisure travellers, increase their spending and enjoyment.

Thus far we’ve explored the key sectors of transportation, accommodation, food and beverage, and recreation and entertainment. The final sector, travel services, brings these all together, and is explored in more detail in Chapter 7.

References

Agriculture and Agri-Food Canada. (2014). The Canadian wine industry. Retrieved from www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/by-product-sector/processed-food-and-beverages/the-canadian-wine-industry/?id=1172244915663

Botanic Gardens Conservation International. (2014). Welcome to BGCI Canada. Retrieved from www.bgci.org/canada

British Columbia Alliance for Arts and Culture.

British Columbia Lottery Corporation. (2019). BC Lottery Annual Report 2018/2019 Retrieved from https://corporate.bclc.com/about-us/reports—disclosures/all-reports.html?filter=annual-reports&sort=desc&page=1

British Columbia Wine Industry. (2019). Media Kit – The Wines of British Columbia.Retrieved from https://winebc.com/industry/media/media-kit/

British Columbia Wine Institute. (2020, June 15). Wines of British Columbia Reports. Retrieved from https://winebc.com/industry/media/quick-facts/

Calgary Zoo. (2013). Calgary Zoo 2013 annual report. [PDF] Retrieved from www.calgaryzoo.com/sites/default/files/pdf/2013-CGYZoo-AnnualReport_WEB.pdf

Canada’s Accredited Zoos and Aquariums. (2014). About us. Retrieved from www.caza.ca

Canadensis.(2014). FAQ. Retrieved from www.canadensisgarden.ca/f-a-q/

Canadian Gaming Association. (2011, October 19). Canadian gaming industry matures into one of the largest entertainment industries in the country. Retrieved from www.canadiangaming.ca/news-a-articles/95-canadian-gaming-industry-matures-into-one-of-the-largest-entertainment-industries-in-the-country-the-cgas-economic-impact-study-finds.html

Canadian Gaming Association. (2017). The National Economic Benefits of the Canadian Gaming Industry Key Findings Report. Retrieved from http://canadiangaming.ca/the-national-economic-benefits-of-the-canadian-gaming-industry-key-findings-report/

Canadian Sport Tourism Alliance. (2013). Value of sport tourism. Retrieved from www.canadiansporttourism.com/value-sport-tourism.html

Canadian Sport Tourism Alliance. (2014). Sport tourism: Full steam ahead! Retrieved from http://canadiansporttourism.com/news/sport-tourism-full-steam-ahead.html

Canadian Tourism Commission. (1998). Canada’s tourist attractions: A statistical snapshot 1995-96.

Canadian Vintners Association/Tourism Industry Association of Canada. (2015). Wine Tourism in Canada Retrieved from: https://tiac-aitc.ca/_Library/TIAC_Publications/vintner_report_2015_FINAL.pdf

Cornacchio, D. (2019, October). Non-traditional event venues: Going beyond the ballroom. Retrieved from www.wearesparks.com/blog/non-traditional-event-venues

Destination BC. (2009, October). Wine tourism insight. [PDF] Retrieved from www.destinationbc.ca/getattachment/Research/Research-by-Activity/Land-based/Wine_Sector_Profile.pdf.aspx

Festival and Major Events Canada. (2019). Festival and Major Events Canada Annual Report 2019 [PDF]. Retrieved from www.fame-feem.ca/2018/wp-content/uploads/2020/05/RA2019-20_FAME_ENG_FIN.pdf

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Goldblatt, J. (2001). The international dictionary of event management (2nd ed.). New York, NY: John Wiley & Sons, p. 78.

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Grishkewich, Cheryl. (2012, January 12). Culinary tourists: Recipe for economic development success. Retrieved from: https://ontarioculinary.com/cheryls-tasty-tid-bits/

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The travel services sector helps travellers arrange and reserve their vacation or business trips (StatsCan, 2018). This sector is made up of businesses and organizations that work in a coordinated effort to provide travellers with seamless arrangements to maximize their travel experience. Go2HR describes travel services experiences and employment opportunities as follows:

Within this sector, you have the flexibility of working in various capacities with event and conference planning organizations, travel companies and organizations, as well as associations, government agencies and companies that specialize in serving the needs of the tourism sector as a whole. (go2HR, Essential Tips – Travel Services, 2020)

Before we move on, let’s explore the term travel services a little more. As detailed in Chapter 1, Canada, the United States, and Mexico have used the NAICS guidelines, which define the tourism industry as consisting of transportation, accommodation, food and beverage, recreation and entertainment, and travel services (Tourism HR Canada, 2020). These five sectors are defined and further detailed in B.C. by the B.C. government (BC Government, 2014) and go2HR on their website (go2HR, Career Explorer, 2020).

For many years, however, the tourism industry was classified into eight sectors: accommodations, adventure and recreation, attractions, events and conferences, food and beverage, tourism services, transportation, and travel trade (Yukon Department of Tourism and Culture, 2020; go2HR, 2020, What is Tourism? – Travel Services).

Figure 7.1 The homepage of HelloBC.com, a site where consumers can research and plan their trip to British Columbia.

Tourism services support industry development and the delivery of guest experiences, and some of these are missing from the NAICS classification. To ensure you have a complete picture of the tourism industry in BC, this chapter will cover both the NAICS travel services activities and some additional tourism services.

First, we’ll review the components of travel services as identified under NAICS, as well as exploring popular careers within:

1. Travel agencies (brick and mortar)
2. Online Travel Agencies/OTA
3. Tour operators
4. Destination marketing organizations (DMOs)
5. Other Organizations

Following these definitions and descriptions, we’ll take a look at some other support functions that fall under tourism services. These include sector organizations, tourism and hospitality human resources organizations, training providers, educational institutions, government branches and ministries, economic development and city planning offices, and consultants.

Finally, we’ll look at issues and trends in travel services, both at home, and abroad.

While the application of travel services functions are structured somewhat differently around the world, there are a few core types of travel services in every destination. Essentially, travel services are those processes used by guests to book components of their trip. Let’s explore these services in more detail.

Travel Agencies

Figure 7.2 A travel agency in the United Kingdom.

A travel agency is a business that operates as the intermediary between the travel industry (supplier) and the traveller (purchaser). Part of the role of the travel agency is to market prepackaged travel tours and holidays to potential travellers. The agency can further function as a broker between the traveller and hotels, car rentals, and tour companies (Goeldner & Ritchie, 2003). Travel agencies can be small and privately owned or part of a larger entity.

A travel agent is the direct point of contact for a traveller who is researching and intending to purchase packages and experiences through an agency. Travel agents can specialize in certain types of travel including specific destinations; outdoor adventures; and backpacking, rail, cruise, cycling, or culinary tours, to name a few. These specializations can help travellers when they require advice about their trips. Some travel agents operate at a fixed address and others offer services both online and at a bricks-and-mortar location. Travellers are then able to have face-to-face conversations with their agents and also reach them by phone or by email. To promote professionalism within the travel industry, travel counsellors can apply for a specialized diploma or certificate in travel from ACTA (ACTA, 2020a; go2HR, 2020a).

Today, travellers have the option of researching and booking everything they need online without the help of a travel agent. As technology and the internet are increasingly being used to market destinations, people can now choose to book tours with a particular agency or agent, or they can be identified as seeking Domestic Independent Travel (DIT) or Foreign Independent Travel (FIT), by creating their own itineraries from a number of suppliers.

Online Travel Agents (OTAs)

Increasing numbers of travellers are turning to online travel agents (OTAs), companies that aggregate accommodations and transportation options and allow users to choose one or many components of their trip based on price or other incentives. Examples of OTAs include iTravel2000, Booking.com, Expedia.ca, Hotwire.com, and Kayak.com. OTAs continue to gain popularity with the travelers; in 2012, they reported online sales of almost $100 billion (Carey, Kang, & Zea, 2012) and almost triple that figure, upward of $278 billion, in 2013 (The Economist, 2014).

In early 2015 Expedia purchased Travelocity for $280 million, merging two of the world’s largest travel websites. Expedia became the owner of Hotels.com, Hotwire, Egencia, and Travelocity brands, facing its major competition from Priceline (Alba, 2015).

Although OTAs can provide lower-cost travel options to travellers and the freedom to plan and reserve when they choose, they have posed challenges for the tourism industry and travel services infrastructure. As evidenced by the merger of Expedia and Travelocity, the majority of popular OTA sites are owned by just a few companies, causing some concern over lack of competition between brands. Additionally, many OTAs charge accommodation providers and operators a commission to be listed in their inventory system. Commission-based services, as applied by Kayak, Expedia, Hotwire, Hotels.com, and others, can have an impact on smaller operators who cannot afford to pay commissions for multiple online inventories (Carey, Kang & Zea, 2012). Being excluded from listings can decrease the marketing reach of the product to potential travellers, which is a challenge when many service providers in the tourism industry are small or medium-sized businesses with budgets to match.

While the industry and communities struggle to keep up with the changing dynamics of travel sales, travellers are adapting to this new world order. One of these adaptations is the ever-increasing use of mobile devices for travel booking. The Expedia Future of Travel Report found that 49% of travellers from the millennial generation (which includes those born between 1980 and 1999) use mobile devices to book travel (Expedia Inc., 2014), and these numbers are expected to continue to increase. Travel agencies are reacting by developing personalized features for digital travellers and mobile user platforms (ETC Digital, 2014). With the number of smartphone users expected to reach 1.75 billion in 2014 (CWT Travel Management Institute, 2014) these agencies must adapt as demand dictates.

Figure 7.3 This is what a computer looked like in 1996. Less than 25 years later, you can access the world from your mobile phone.

A key feature of travel agencies’ (and to a growing extent transportation carriers) mobile services includes the ability to have up-to-date itinerary changes and information sent directly to consumers’ phones (Amadeus, 2014). By using mobile platforms that can develop customized, up-to-date travel itineraries for clients, agencies and operators are able to provide a personal touch, ideally increasing customer satisfaction rates.

Despite the growth and demand for OTAs, brick and mortar travel agencies are still in demand by travellers (IBISWorld, 2019) as they have both an online presence and physical locations. The COVID-19 pandemic may see an increase in travellers relying on personal contact with brick and mortar travel agencies but at a distance through mail and phone.

Tour Operators

Figure 7.4 A group tours the Columbia ice field in Alberta.

A tour operator packages all or most of the components of an offered trip and then sells them to the traveller. These packages can also be sold through retail outlets or travel agencies (CATO, 2020; Goeldner & Ritchie, 2003). Tour operators work closely with hotels, transportation providers, and attractions in order to purchase large volumes of each component and package these at a better rate than the traveller could if purchasing individually. Tour operators generally sell to the leisure market.

Inbound, Outbound, and Receptive Tour Operators

Tour operators may be inbound, outbound, or receptive:

• Inbound tour operators bring travellers into a country as a group or through individual tour packages (e.g., a package from China to visit Canada).
• Outbound tour operators work within a country to take travellers to other countries (e.g., a package from Canada to the United Kingdom).
• Receptive tour operators (RTOs) are not travel agents, and they do not operate the tours. They represent the various products of tourism suppliers to tour operators in other markets in a business-to-business (B2B) relationship. Receptive tour operators are key to selling packages to overseas markets (Destination BC, 2020) and creating awareness around possible product.

Destination Marketing Organizations

Destination marketing organizations (DMOs) include national tourism boards, state/provincial tourism offices, and community convention and visitor bureaus around the world. DMOs promote “the long-term development and marketing of a destination, focusing on convention sales, tourism marketing and service” (Destinations BC, 2020).

With the proliferation of other planning and booking channels, including OTAs, today’s DMOs are shifting away from travel services functions and placing a higher priority on destination management components.

Working Together

One way tour operators, DMOs, and travel agents work together is by participating in familiarization tours (FAMs for short). These are usually hosted by the local DMO and include visits to different tour operators within a region. FAM attendees can be media, travel agents, RTO representatives, and tour operator representatives. FAMs are frequently low to no cost for the guests as the purpose is to orient them to the tour product or experience so they can promote or sell it to potential guests.

Other Organizations

The majority of examples in this chapter so far have pertained to leisure travellers. There are, however, specialty organizations that deal specifically with business trips.

Business Travel Planning and Reservations

Unlike leisure trips, which are generally planned and booked by end consumers using their choice of tools, business travel often involves a travel management company, or its online tools. Travel managers negotiate with suppliers and ensure that all the trip components are cost effective and comply with the policies of the organization.

Many business travel planners rely on global distribution systems (GDS) to price and plan components. GDS combine information from a group of suppliers, such as airlines. In the past, this has created a chain of information from the supplier to GDS to the travel management company. Today, however, there is a push from airlines (through the International Air Transport Association’s Resolution 787) to dissolve the GDS model and forge direct relationships with buyers (BTN Group, 2014).

Destination Management Companies

According to the Association of Destination Management Executives International (ADMEI), a destination management company (DMC) specializes in designing and implementing corporate programs, and “is a strategic partner to provide creative local experiences in event management, tours/activities, transportation, entertainment, and program logistics” (ADMEI, 2020). The packages produced by DMCs are extraordinary experiences rather than general business trips. These are typically used as employee incentives, corporate retreats, product launches, and loyalty programs. DMCs are the one point of contact for the client corporation, arranging for airfare, airport transfers, ground transportation, meals, special activities, and special touches such as branded signage, gifts, and decor (ADMEI, 2020). The end user is simply given (or awarded) the package and then liaises with the DMC to ensure particular arrangements meet his or her needs and schedule.

As you can see, travel services range from online to personal, and from leisure to business applications. Now that you have a general sense of the components of travel services, let’s look at some examples in Canada and BC.

Travel Agencies

Travel agencies are the retail side of the industry. Working in cooperation with suppliers throughout the distribution chain, travel agencies provide an important link for the consumer to connect with the best options for a successful trip. Planning vacations or business trips can be complicated matters and qualified agents can help the traveller with professional services.

In British Columbia and elsewhere in Canada, advocacy for travel service organizations and professional certification for individuals is provided by the Association of Canadian Travel Agencies (ACTA). ACTA is an industry-led, membership-based organization that aims to ensure customers have professional and meaningful counselling. Membership is optional, but it does offer the benefit of ensuring customers receive the required services and that the travel agencies have a membership board for reference and industry resources (ACTA, 2020b).

Although travel agencies may be located in a specific community, the agencies and their representatives may operate internationally, within Canada, within BC, or across regions. In Vancouver alone there are over 650 travel agencies available to the searching traveller (Travel Agents in BC, 2020). Examples of some of the more recognized larger travel agencies and agents operating in BC include the British Columbia Automobile Association (BCAA), Marlin Travel, and Flight Centre.

Tour Operators

Many different types of tour operators work across BC and Canada. Tour operators can specialize in any sector or a combination of sectors. A company may focus on ski experiences, as is the case with Destination Snow, or perhaps wine tours in the Okanagan, which is the specialty of Distinctly Kelowna Tours. These operators specialize in one area but there are others that work with many different service providers.

Tour operators can vary in size, niche market, and operation capacity (time of year). An example of a niche BC tour operator is Prince of Whales Whale Watching in Victoria. Prince of Whales offers specialty whale-watching tours year-round in a variety of boat sizes, working with the local DMO and other local booking agents to sell tours as part of packages or as a stand-alone service to travellers. It also works to sell its product directly to the potential traveller through its website, reservation number, and in-person sales agents (Prince of Whales, 2020).

Figure 7.5 Whales off of Victoria, B.C.

An example of a large RTO representing Canada is Jonview. Operators of all kinds frequently work closely with a number of destination marketing organizations, as evidenced during Canada’s West Marketplace, which is a trade marketplace hosted by Destination BC and Travel Alberta. Each year the location of the marketplace alternates between Alberta and BC (past locations have included Kelowna and Canmore). This event provides an opportunity for Alberta and BC sellers (tour operators, local accommodation, activities, and DMOs) to sell their products to international RTOs who in turn work with international tour operators and travel agents to repackage the travel products. In a span of 10-minute sessions, sellers market and promote their products in hopes of having an RTO pick up the package for future years.

On a national scale, Rendez-vous Canada is a tourism marketplace presented by the Destination Canada (formally the Canadian Tourism Commission) that brings together more than 1,500 tourism professionals from around the world for a series of 12- minute sessions where they can learn more about Canadian tours and related services (Canadian Tourism Commission, 2020).

Let’s now look a little closer at the role of BC destination marketing organizations (DMOs) in providing travel services.

Destination Marketing Organizations

At the national level, Destination Canada is responsible for strategic marketing of the country. It works with industry and government while providing resources for small and medium-sized businesses in the form of toolkits. In BC, there a variety of travel service providers available to help with the planning process including Destination BC/HelloBC, regional destination marketing organizations (RDMOs), and local DMOs.

Destination BC/HelloBC

HelloBC is the official travel service platform of Destination BC, British Columbia’s provincial DMO. HelloBC.com offers access to festival activities, accommodation, transportation options, and trip ideas. This website is complemented by a social media presence on TripAdvisors (HelloBC, 2014a).

To assist with trip planning, HelloBC features a booking agent system, offering discounts and special deals created in partnership with operators. Although the site can process these value-added components, it does not handle accommodation bookings, instead directing the interested party to the reservation system of a chosen provider.

Figure 7.6 Cyclists make a stop at a Visitor Centre, identifiable by its distinctive blue and yellow logo.

In addition to operating HelloBC, Destination BC also oversees a network of 136 Visitor Centres that can be identified by the blue and yellow logo. These are a source of itinerary information for the FIT and a purchase point for travellers wishing to book trip components (HelloBC, 2014b,c).

Regional Destination Marketing Organizations

BC is divided into six regional destination marketing organizations, or RDMOs: these are: Vancouver, Coast, & Mountains; Vancouver Island; Thompson Okanagan; Northern British Columbia; Cariboo Chilcotin Coast; and the Kootenay Rockies (HelloBC, 2020d). Along with Destination BC, these RDMOs work to market their designated region.

Figure 7.7 A tour group in the Kootenay Rockies.

Housed within the HelloBC online platform, each RDMO has an online presence and travel guide specific to the region as well as a regional social media presence. These guides are important as they allow regional operators to participate in the guide and consumer website in order to encourage visitation to the area and build their tourism operations.

Community Destination Marketing Organizations

Community destination marketing organizations (CDMOs) are responsible for marketing a specific destination or area, such as Whistler or Kimberley. Travel services typically offered include hotel search engines, specific destination packages and offers, discounts, events and festival listings, and other information of interest to potential visitors. In the absence of a CDMO, sometimes these services are provided by the local chamber of commerce or economic development office.

Complementing BC’s Visitor Centre network mentioned earlier, local visitor centres are managed by individual communities. Visitor centres may be housed in gateway buildings at strategic locations, in historic or cultural buildings, or at an office located in town.

Other Systems and Organizations

A number of customized and targeted reservation systems are used by BC DMOs and other organizations. One example is the BC campground reservation online booking systems. BC Parks, Parks Canada, and private campground operators all use different proprietary reservation systems. Both BC Parks reservations and Parks Canada reservations open on a specific date in the spring for bookings later in the year. These systems let visitors review what a site looks like through photos or video and pick which site they would like to book in the campground. Many campgrounds also offer a first-come-first-served system, as well as overflow sites, to accommodate visitors who may not have reserved a site.

In the business market, there are several companies in BC and Canada that facilitate planning and booking. SAP Concur is an example of a expense management company widely used in British Columbia and Canada by organizations including CIBC, Kellogg’s, and Pentax. It provides services including efficiency software for use by employees, expense and invoicing software for use by managers, and a mobile application that ensures clients can take the technology on the go. Its services have contributed to client savings, such as reducing the travel expenses (Concur, 2020).

So far we’ve looked at travel services as defined by go2HR and NAICS. Next let’s have a closer look at additional services generally considered to be part of the tourism economy.

Many organizations can have a hand in tourism development. These include:

• Sector-specific associations
• Tourism and hospitality human resources organizations
• Training providers
• Educational institutions
• Government branches and ministries in land use, planning, development, environmental, transportation, consumer protection, and other related fields
• Economic development and city planning offices
• Consultants

The rest of this section describes Canadian and BC-based examples of these.

Sector-Specific Associations

Numerous not-for-profit and arm’s-length organizations drive the growth of specific segments of our industry. Examples of these associations can be found throughout this textbook in the Spotlight On features, and include groups like:

• BC Hotel Association
• Sea Kayak Guides Alliance of BC
• Restaurants Canada

These can serve as regulatory bodies, advocacy agencies, certification providers, and information sources.

Tourism and Hospitality Human Resource Support

Tourism HR Canada — formally the Canadian Tourism Human Resource Council (CTHRC) — is a national sector council responsible for best practice research, training, and other professional development support on behalf of the 174,000 tourism businesses and the 1.75 million people employed in tourism-related occupations across the country. In BC, an organization called go2HR serves to educate employers on attracting, training, and retaining employees, as well as hosts a tourism job board to match prospective employees with job options in tourism around the province.

Training Providers

Throughout this textbook, you’ll see examples of not-for-profit industry associations that provide training and certification for industry professionals. For example, the Association of Canadian Travel Agents offers a full-time and distance program to train for the occupation of certified travel counsellor. Closer to home, an organization called WorldHost, a division of Destination BC, offers world-class customer service training.

You’ll learn more about training providers and tourism human resources development in Chapter 9.

Educational Institutions

British Columbia is home to a number of high-quality public and private colleges and universities that offer tourism-related educational options. Training options at these colleges and universities include certificates, diplomas, degrees and masters-level programs in adventure tourism, outdoor recreation, hospitality management, and tourism management. For example, whether students are learning how to manage a restaurant at Camosun College, gaining mountain adventure skills at College of the Rockies, or exploring the world of outdoor recreation and tourism management at the University of Northern BC, tomorrow’s workforce is being prepared by skilled instructors with solid industry experience.

Government Departments

At the time this chapter was written, there were at least eight distinct provincial government ministries that had influence on tourism and hospitality development in British Columbia. These are:

• Tourism, Arts, and Culture
• Advanced Education, Skills, and Training
• Transportation and Infrastructure
• Environment & Climate Change Strategy
• Forests, Lands, Natural Resource Operations & Rural Development
• Indigenous Relations & Reconciliation
• Jobs, Economic Development, & Competitiveness
• Labour
• Public Safety & Solicitor General

Ministry names and responsibilities may change over time, but the functions performed by provincial ministries are critical to tourism operators and communities, as are the functions of similar departments at the federal level.

At the community level, tourism functions are often performed by planning officers, economic development officers, and chambers of commerce.

Consultants

A final, hidden layer to the travel services sector is that of independent consultants and consulting firms. These people and companies offer services to the industry in a business-to-business format, and they vary from individuals to small-scale firms to international companies. In BC, tourism-based consulting firms include:

• IntraVISTAS: specializing in aviation and transportation logistics advising
• Chemistry Consulting: specializing in human relations and labour market development
• Beattie Tartan: a public-relations and reputation management firm

For many people trained in specific industry fields, consulting offers the opportunity to give back to the industry while maintaining workload flexibility.

Now that we have an understanding of the travel and tourism services providers in BC, let’s review some of the current trends and issues in the sector.

Budgets

In the travel services sector, providers such as OTAs and business travel managers must constantly be aware of price sensitivity. Many tourism services organizations are not-for-profit entities that rely on membership dues, donations, grants, and government funding to survive. As the economic climate becomes strained and budgets are tightened, all groups are increasingly forced to demonstrate return on investment to stakeholders. As some of the benefits of travel services are difficult to define, groups must innovate and articulate or face extinction.

The challenge of budget constraints came to life in late 2014 when Destination BC announced it was shutting down its Visitor Centres at Vancouver International Airport and reviewing five other gateway locations including Peace Arch and Golden. While the airport locations welcomed over 180,000 visitors per year, analysis performed by Destination BC showed guests were asking non-tourism questions, and the centres’ value was questioned. Closing the centres at the airport, it was determined, would save $500,000 per year — but some in the industry were left wondering why they weren’t consulted prior to the announcement (Smyth, 2014).

Technology

Figure 7.9 Tablets, laptops, and mobile phones put reservations and booking options at the traveller’s fingertips.

As discussed earlier, online travel agencies have revolutionized the sector in a short span of time. Online travel bookings and marketing accounts for roughly one-third of all global e-commerce, and according to many these continue to rattle the sector.

The acceptance by tech savvy travellers of online purchases will further increase the need for the industry to examine the best opportunities to reach these travellers. The interaction between humans and technology have “become more natural, contextual, and ubiquitous” and are constantly being enhanced in more ways than one (Deloitte Development LLC, 2019). Keeping in mind that travel services pertain to the planning and reserving of trip components, recent beneficial technological improvements include the following (Orfutt, 2013):

• Real-time and automated inventory management, ensuring operators and travellers alike are working with accurate information when planning and booking
• A pollution and weather detection chip that would help tour operators, transportation providers, and visitors anticipate, and plan for changes in conditions
• Personalized information presented to visitors to help them narrow their choices in the trip planning process, ensuring users are not overwhelmed with information, and making the most of limited screen size on mobile devices and tablets
• Social technologies and on-the-go information sharing, allowing users to plan at the last minute as they travel
• Virtual assistant holograms and tablets carrying information that can replace humans during the travel experience (for instance, at airport arrivals and visitor centres)
• The technical expansion of the internet into the Internet of Things (IoT), and
• The use of automated systems and robotics that provide services for the traveller.

These innovations will continue to increase as more advances are made and industry blends technology and travel experiences. This leads to significant implications for the marketing of travel products and experiences, which is explored more in Chapter 8.

Travellers continue to seek authentic experiences. The tools they use to research and book these experiences are constantly changing due to innovations in technology. Destinations are also challenged by limited financial resources and strong competition for tourist dollars from other iconic and even lesser known locations. The personalisation of travel suggests that independent travel will have a stronger presence than group travel, however, we must always consider the type of traveller. The travel services sector is being forced to innovate at a startling rate.

In the past, face to face consultations with a travel agent was paramount for booking both leisure and business travel. Technology and global circumstances, such as pandemics, financial collapses, and terrorism, have put pressure on tourism and travel services. With the development of OTAs and emerging and disruptive technologies, the travel services landscape is constantly changing.

So far we have discussed the elements of the five sectors of tourism: transportation, accommodation, food and beverage, recreation and entertainment, and travel services. With this foundation in place, let’s delve deeper into the industry by learning more about how these sectors are promoted to customers in Chapter 8 on services marketing.

References

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ACTA. (2020b). About us. Retrieved from www.acta.ca/about-us

ADME. (2014). What is a DMC?. Retrieved from https://www.admei.org/

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Figure 8.1 A vintage ad marketing the cost-effectiveness of Econo-Travel hotels from the July 1978 National Geographic. [Long Description]

Marketing is a continuous, sequential process through which management plans, researches, implements, controls, and evaluates activities designed to satisfy the customers’ needs and wants, and meet the organization’s objectives. According to Morrison (2010), services marketing “is a concept based on a recognition of the uniqueness of all services; it is a branch of marketing that specifically applies to the service industries” (p. 767). In general, the aims of marketing are to “create value for customers,” “build strong relationships” and “capture value from customers in return” (Kotler, Armstrong, Trifts, & Cunningham, 2014, p. 2).

Marketing in the tourism and hospitality industry requires an understanding of the differences between marketing goods, services, and experiences. To be successful in tourism marketing, organizations need to understand the unique characteristics of their tourism experiences, the motivations and behaviours of travelling consumers, and the fundamental differences between marketing goods, services, and experiences.

Until the 1930s, the primary objective of businesses was manufacturing, with little thought given to sales or marketing. In the 1930s, a focus on sales became more important; technological advances meant that multiple companies could produce similar goods, creating increased competition. Even as companies began to understand the importance of sales, the needs and wants of the customer remained a secondary consideration (Morrison, 2010).

In 1944, the first television commercial, for Bulova watches, reached 4,000 sets (Davis, 2013). The decades that followed, the 1950s and 1960s, are known as an era when marketing began to truly take off, with the number of mediums expanding and TV ad spending going from 5% of total TV revenues in 1953 to 15% just one year later (Davis, 2013).

Figure 8.2 A 1970s Peter Max–designed ad for the American Cancer Society, urging people to not smoke.

The era from approximately 1950 to around 1970 was known as a time of marketing orientation (Morrison, 2010). Customers had more choice in product, which required companies to shift focus to ensure that consumers knew how their products matched specific needs. This was also the time when quality of service and customer satisfaction became part of organizational strategy. We began to see companies develop internal marketing departments, and in the 1960s, the first full-service advertising agencies began to emerge.

Societal marketing emerged in the 1970s when organizations began to recognize their place in society and their responsibility to citizens (or at least the appearance thereof). This change is demonstrated, for example, by natural resource extraction companies supporting environmental management issues and implementing more transparent policies. This decade saw the emergence of media we are familiar with today (the first hand-held mobile phone was launched in 1973) and the decline of traditional marketing through vehicles such as print; the latter evidenced by the closure of LIFE Magazine in 1972 amid complaints that TV advertising was too difficult to compete with (Davis, 2013).

The 1990s ushered in the start of the online marketing era. E-commerce (electronic commerce) revolutionized every industry, perhaps impacting the travel industry most of all. Tourism and hospitality service providers began making use of this technology to optimize marketing to consumers; manage reservations; facilitate transactions; partner and package itineraries; provide (multiple) customer feedback channels; collect, mine, analyze, and sell data; and automate functions. The marketing opportunities of this era appeared limitless and paved the way for the maturation of social media marketing and a number of other marketing shifts including the increased use of big data, mobile technology, and short- and long-form video content in marketing, as well as a more empowered and engaged consumer. Table 8.1 summarizes the evolution of marketing over the last century and beyond.

Typically, the progression of marketing in tourism and hospitality has been 10 to 20 years behind other sectors. Some in the industry attribute this to the traditional career path in the tourism and hospitality industry where managers and executives worked their way up the ranks (e.g., from bellhop to general manager) rather than through a post-secondary business education that is more the norm today. It was previously commonly believed that to be a leader in this industry one had to understand the operations inside-out, so training and development of managers was based on technical and functional capabilities, rather than marketing savvy. And, as we’ll learn next, marketing services and experiences is distinct and sometimes more challenging than marketing goods. For these reasons, most businesses in the industry have been developing marketing skills for only about 30 years (Morrison, 2010).

Long Descriptions

Figure 8.1 long description: A black-and-white advertisement. A man holds up a calculator looking skeptical. He says, “Are you kidding me? A big double bed, television, air conditioning, and only $12.95 a night? It doesn’t compute.” A hotel staff member stands behind him looking pleased and says, “Please, sir. Economy is our first name.” At the bottom of the ad, it says, “Econo-Travel: Motor Hotels and Lodges. Economy is our first name.” [Return to Figure 8.1]

Figure 8.3 Selling a moment like this one, captured over the holidays in Victoria’s inner harbour, is different from selling a tube of toothpaste.

There are four key differences between goods and services. According to numerous scholars (cited in Lovelock & Patterson, 2015) services are:

1. Intangible
2. Heterogeneous
3. Inseparable
4. Perishable

The rest of this section details what these concepts mean.

Intangibility

Tangible goods are ones the customer can see, feel, and/or taste ahead of payment. Intangible services, on the other hand, cannot be “touched” beforehand. An airplane flight is an example of an intangible service because a customer purchases it in advance and doesn’t “experience” or “consume” the product until he or she is on the plane.

Heterogeneity

While most goods may be replicated identically, services are never exactly the same; they are heterogeneous. Variability in experiences may be caused by location, time, topography, season, the environment, amenities, events, and service providers. Because human beings factor so largely in the provision of services, the quality and level of service may differ between vendors or may even be inconsistent within one provider. We will discuss quality and level of service further in Chapter 9.

Inseparability

A physical good may last for an extended period of time (in some cases for many years). In contrast, a service is produced and consumed at the same time. A service exists only at the moment or during the period in which a person is engaged and immersed in the experience. When dining out at a restaurant, for instance, the food is typically prepared, served, and consumed on site, except in cases where customers utilize takeout or food courier options such as Skip the Dishes.

Figure 8.4 These empty seats represent lost revenue for the airline.

Perishability

Services and experiences cannot be stored; they are highly perishable. In contrast, goods may be held in physical inventory in a lot, warehouse, or a store until purchased, then used and stored at a person’s home or place of work. If a service is not sold when available, it disappears forever. Using the airline example, once the airplane takes off, the opportunity to sell tickets on that flight is lost forever, and any empty seats represent revenue lost (Figure. 8.4).

To ensure effective services marketing, tourism marketers need to be strategic in their planning process. Using a tourism marketing system requires carefully evaluating multiple alternatives, choosing the right activities for specific markets, anticipating challenges, adapting to these challenges, and measuring success (Morrison, 2010). Tourism marketers can choose to follow a strategic management process called the PRICE concept, where they:

• P: plan (where are we now?)
• R: research (where would we like to be?)
• 
I: implement (how do we get there?)
• C: control (how do we make sure we get there?)
• E: evaluate (how do we know if we got there?)

In this way, marketers can be more assured they are strategically satisfying both the customer’s needs and the organization’s objectives (Morrison, 2010). The relationship between company, employees, and customers in the services marketing context can be described as a services marketing triangle (Morrison, 2010), which is illustrated in Figure 8.5.

Figure 8.5 Services marketing triangle (adapted from Morrison, 2010). [Long Description]

In traditional marketing, a business broadcasts messaging directly to the consumer. In contrast, in services marketing, employees play an integral component. The communications between the three groups can be summarized as follows (Morrison, 2010):

1. External marketing: promotional efforts aimed at potential customers and guests (creating a promise between the organization and the guest)
2. Internal marketing: training, culture, and internal communications (enabling employees to deliver on the promise)
3. Interactive marketing: direct exchanges between employees and guests (delivering the promise)

The direct and indirect ways that a company or destination reaches its potential customers or guests can be grouped into eight concepts known as the 8 Ps of services marketing.

8 Ps of Services Marketing

The 8 Ps are best described as the specific components required to reach selected markets. In traditional marketing, there are four Ps: price, product, place, and promotion. In services marketing, the list expands to the following (Morrison, 2010):

• Product: the range of product and service mix offered to customers
• Place: how the product will be made available to consumers in the market, selection of distribution channels, and partners
• Promotion: specific combination of marketing techniques (advertising, personal sales, public relations, etc.)
• Pricing: part of a comprehensive revenue management and pricing plan
• People: developing human resources plans and strategies to support positive interactions between hosts and guests
• Programming: customer-oriented activities (special events, festivals, or special activities) designed to increase customer spending or length of stay, or to add to the appeal of packages
• Partnership: also known as cooperative marketing, increasing the reach and impact of marketing efforts
• Physical evidence: ways in which businesses can demonstrate their marketing claims and customers can document their experience such as stories, reviews, blog posts, or in-location signage and components

It is important that these components all work together in a seamless set of messages and activities known as integrated marketing communications to ensure the guests receive a clear message and an experience that meets their expectations.

Integrated Marketing Communications

Figure 8.6 During the 2010 Winter Olympics in Vancouver, many marketing partners came together to deliver an integrated experience to guests, including shopping malls disguised as igloos.

Integrated marketing communications (IMC) involves planning and coordinating all the promotional mix elements (including online and social media components) to be as consistent and mutually supportive as possible. This approach is much superior to using each element separately and independently.

Tour operators, attractions, hotels, and destination marketing organizations will often break down marketing into separate departments, losing the opportunity to ensure each activity is aligned with a common goal. Sometimes a potential visitor or guest is bombarded with messaging about independent destinations within a region, or businesses within a city, rather than one consistent set of messages about the core attributes of that destination.

It is important to consider how consumers use various and multiple channels of communication and reach out to them in a comprehensive and coherent fashion. As a concept, IMC is not new, but it is more challenging than ever due to the numerous social media and unconventional communication channels now available. Each channel must be well maintained and aligned around the same messages, and selected with the visitor in mind. Too often businesses and destinations deploy multiple channels and end up neglecting some of these, rather than ensuring key platforms are well maintained (Eliason, 2014).

In order to better understand our guests, and the best ways to reach them, let’s take a closer look at the consumer as the starting and focal point of any marketing plan.

Long Descriptions

Figure 8.5 long description: The services marketing triangle. At each triangle point is the company, customers, and employees. Between the company and its employees is internal marketing; between the company and its customers is external marketing; and between the employees and the customers is interactive marketing. [Return to Figure 8.5]

Customers use their senses to see, hear, smell, and touch (and sometimes taste) to decipher messages from businesses, deciding on a product or service based on their perception of the facts rather than, at times, the actual facts. A number of factors have been shown to impact the choices the consumer makes, including personal factors, which reflect needs, wants, motivations, previous experience, and a person’s lifestyle, and interpersonal factors, such as culture, social class, family, and opinion leaders.

Perception Is Reality

The area of perception can be further broken down to screens and filters, biases, selective retention, and closure (Morrison, 2010). Let’s look at these concepts in more detail.

Figure 8.7 All people view things through their own perceptual filters.

The world is filled with things that stimulate people. People are exposed to thousands of messages every day. Some stimuli come from the people around us; for example, a person on the bus might be wearing a branded cap, the bus may have advertising pasted all over it, and free newspapers distributed at the bus station could be filled with advertising. The human brain cannot absorb and remember all of these messages; people will screen out most of the stimuli they are exposed to. They may remember a piece or segment of a message they have seen or heard.

Figure 8.8 A “vending machine” in San Francisco entices people to experience 100 BC Moments.

Perceptual Biases

Everyone has perceptual biases; each person sees things from his or her own unique view of the world. An advertising message can be received and changed to something very different from the marketer’s intended statement.

Selective Retention

Once messages have made it through the screens, filters, and biases, they still may not be retained for long. Customers will practise selective retention, holding on only to the information that supports their beliefs and attitudes.

Closure

Figure 8.9 People use multiple filters to process information.

The brain does not like incomplete images. There is a state of psychological tension present until the image is complete (closure). Where information is unavailable to round out the images, the mind adds the missing data. Over time, through the use of imagery and music (such as jingles), messages are ingrained in a customer’s mind, and he or she automatically adds the company’s name, whether it is mentioned or not.

Applying Psychology to Marketing

Marketers may determine a degree of predictability about customer perceptions. 

Customers are likely to:

• Screen out information that they are already familiar with
• Notice and retain information to satisfy a need they are aware of (want)
• Purchase services that reflect the image they perceive themselves to project
• Notice and retain things out of the norm
• Attach credibility to personal information rather than commercially generated information

Customers are less likely to:

• Use perceptual biases to distort information received on an interpersonal basis
• Absorb complicated information that requires effort to comprehend
• Notice and retain information about a competitive service or product if they are satisfied with another brand

Tourism marketers are in the business of reminding and making customers aware of their needs. Customers have to be motivated to act on satisfying their wants and needs, while marketers need to trigger the process by supplying objectives and potential motives.

Consumer Decision-Making Process

Figure 8.10 The Victoria Visitor Centre (at the base of the tower), located in downtown’s bustling harbour, helps consumers through the decision-making process.

In 1968, Kollat, Blackwell and Engel released the first edition of a book called Consumer Behavior where they identified a distinct five-step pattern for consumer decision-making (1972). These steps are: need recognition, information search, pre-purchase evaluation, purchase, and post-purchase evaluation.

Here are some critical components at each stage:

• Need recognition: For this process to start there needs to be a stimulus; a need must be triggered and identified.
• Information search: The customer begins to consult different sources of information; personal (marketer dominated) and intrapersonal (non-marketer) factors will likely be used.
• Pre-purchase evaluation: After researching the choices, the customer starts to evaluate options using both objective criteria, such as price and location, and subjective criteria, such as the perceived status of the product or service.
• Purchase: The customer intends to buy the product or service that best matches the criteria, although he or she can still be influenced by a number of factors, such as friends and family who disagree with the purchase, or a change in personal finances.
• Post-purchase evaluation: After use, the customer evaluates the purchase against expectations; if these don’t match, the customer will be either dissatisfied (expectations not met) or impressed (expectations exceeded). For this reason, it’s best for hospitality and tourism providers to “under promise” and “over deliver.”

In order to reach consumers and stimulate need, tourism marketers can employ a number of traditional and online channels. These are detailed in the next section.

Marketers have more choices than ever when it comes to broadcasting their message to consumers. Potential travellers and guests will respond, in varying degrees, to traditional channels and emerging online communications tools. There are many choices in marketing and communication channels, each with strengths and weaknesses. Determining the right mix, frequency, and message depends heavily on establishing objectives, completing research, performing a situational analysis, and creating a positioning approach (Morrison, 2010). Let’s take a closer look at communications channels that may form part of the marketing mix.

Traditional Channels

Mass Media

Mass media is best described as the use of channels that reach very large markets. Examples include national newspapers and radio or television advertising. The immediate advantage of using mass media is the ability to reach multiple target markets in significant numbers. Disadvantages include the high expense and difficulty in effective target marketing and measuring return.

Figure 8.11 This is an out-of-home ad for Grouse Mountain, in a downtown Vancouver rapid transit station, targeting people working in the area. Note the special web address for the campaign: grousemountain.com/night-ski.

Out-Of-Home (OOH)

Out-of-home (OOH) channels refer to four major categories: billboards, transit, alternative outdoor, and street furniture. OOH advertising plays an important role in the tourism and hospitality industry as it provides an opportunity to inform travellers in unfamiliar territory. Transit advertising includes airports, rail, and taxi displays. Alternative outdoor refers to arenas, stadiums, and digital media. Street furniture includes bus shelters, kiosks, and shopping malls.

Print Media

Print media includes newspapers, magazines, journals, and directories. There is an increased trend away from traditional purchased print advertising toward editorial features, as these are more trusted by consumers. A print ad and an editorial feature created together is known as an advertorial.

An interactive or media element has been excluded from this version of the text. You can view it online here:
https://opentextbc.ca/introtourism2e/?p=1647

Online Channels

Figure 8.12 This is a web page detailing cross-promotion and partnership between the Fairmont Empress Hotel and Helijet. Consumers are being offered this transportation option next to the hotel booking info.

As discussed in Chapter 7, the internet is nearly twice as important as travel agents as an information source for travel (Deloitte, 2015). There are an estimated 4.5 billion people around the globe with internet access, and social media has become truly integrated into the travel and hospitality industry. TripAdvisor and similar sites have become the customer’s first point of connection with tourism and hospitality products and experiences. This can be both an opportunity and a threat: an opportunity to open the channels of communication, but a threat if negative information about the travel or hospitality organization is widely spread. As online distribution expands, empowered and savvy travellers are unbundling the booking component and self-booking directly (Deloitte, 2015).

Internet and mobile technology are referred to as interactive media. For tourism and hospitality businesses, an online presence is crucial: it’s cost effective, it provides global reach, it allows a business to be available 24/7, and it provides a reciprocal communication platform for customers. An online presence can also produce instant access to critical consumer data such as click through rates on websites, views of social media posts and pages, paths-to-purchase, and much more.

Social Media and Reputation Management

There are also challenges with online marketing, including being noticed within the volume of information customers are exposed to, and loss of control in delivering a message. Despite these challenges, as more consumers seek real-time information online, tourism marketers are responding with increasingly sophisticated online marketing strategies, such as search engine optimization, personalized content, and social media monitoring and analytics.

Social Media

Social media is a broad term that refers to web-based and mobile applications used for social interaction and the exchange of content (Zheng & Gerritsen, 2014). Social networking is the act of using social media to “communicate directly with people you’re already connected to or with whom you wish to be connected with” (Zheng & Gerritsen, 2014, p. 28). Unlike traditional media such as newspapers, magazines, and television, social media is largely powered by user-generated content. This refers to content created and shared by consumers rather than by marketers, journalists, experts, and other paid professionals, although they too contribute to social networks. Influencers also play a major role in generating content and hype about tourism products, services, and experiences, ultimately affecting consumer purchasing decisions. Tourism marketers are increasingly leveraging influencer authority, knowledge, and relationships to reach and capture new markets.

Word of Mouth in the Age of Social Media

Social networking has transformed how many people interact with businesses and share experiences with others, in a communication channel known as electronic word of mouth where customers share directly with each other in an online environment. Consumers now have a variety of channels (e.g., Twitter, Instagram, Facebook) and formats (e.g., videos, blogs, reviews) on which to leave ratings, express preferences, and share stories. Many of these platforms have large audiences, and much of this commentary is made in real time, on a smartphone, while the customer is still in the business.

Advertising and Trust

Social networks, and review sites in particular, are used more and more to seek information and advice on things to do and products and services to purchase. Travellers and locals alike check out these sites for ideas on where to stay, eat, relax, shop, and explore. These channels are highly trusted. A survey of over 28,000 consumers in 56 countries found that consumers trust the advice of people they know (92%) and consumer opinions posted online (70%) more than any other advertising source (Nielsen, 2012). A more recent survey of over 31,000 consumers in 36 countries confirmed that personal recommendations and internet sties are the most important planning sources for travellers (Skift, 2014).

Online Reviews = Business Success

Research shows a direct correlation between consumer reviews and purchase decisions. A 2019 survey by BrightLocal found that 92% of consumers made decisions based on online reviews and 76% trusted online reviews as much as personal recommendations (BrightLocal, 2019). A 2011 study conducted by Harvard Business School found that, for independent restaurants, a one-star increase in Yelp ratings led to a 5% to 9% increase in revenue (Luca, 2011). According to a study by the Cornell Center for Hospitality Research, if a hotel increases its review score on Travelocity by 1 point on a 5-point scale, it can raise its price by 11.2% without affecting demand (Anderson, 2012). Finally, a report published by TripAdvisor and Oxford Economics claims that TripAdvisor was responsible for $US 546 billion in traveller spending in 2017 alone (Tourism Economics, 2020).

Understanding Customer Needs

As we have discussed, service plays an important role in shaping customer impressions, where the ultimate goal of a tourism or hospitality business is to exceed expectations. Every customer has different wants and needs, but virtually all customers expect the following basic needs to be taken care of:

• Quality
• Value
• Convenience
• Good service

To fully satisfy customers, businesses must deliver in all four areas. If they meet the basic needs listed above, they’ll create a passive customer — one who is satisfied, but not likely to write a review or mention a business to others.

Figure 8.13 This unhappy customer is likely to broadcast news of her bad experience across multiple platforms.

On the other hand, failure to deliver on the promise can result in a disappointed customer undoing all the efforts of the marketing plan. For this reason, the entire process must be well coordinated and well executed.

The Role of Destination BC

Destination BC is responsible for marketing the Super Natural British Columbia brand to the world (British Columbia Ministry of Tourism, Arts and Culture, 2020). As we learned in the last chapter, this provincial destination marketing organization has been mandated to fulfill several key marketing and leadership responsibilities critical to the long-term sustainable growth of the provincial tourism industry. This includes marketing British Columbia domestically, nationally, and internationally as a tourist destination (Destination BC, 2020a). Destination BC’s 2020–2023 corporate strategy articulates its aspiration to share the transformative power of BC experiences with the world by focusing on key markets, paths to purchase, visitor dispersion, and key partnerships (Destination BC, 2020b).

Market Segmentation

Tourism marketers, including the team at Destination BC, choose target markets for their efforts through market segmentation techniques, where potential visitors are separated by:

• Demographics
• Countries of origin
• Trip purposes
• Trip planning and arrangements
• Psychographics and lifestyles
• Special interests
• Technology uses

Destination Canada’s award-winning Explorer Quotient program provides tourism marketers with detailed psychographic and travel motivations information (Destination Canada, 2013). It allows destinations and experiences to market themselves to target audiences based on psychographic profiles (their psychological tendencies) rather than geographic segments.

BC’s Tourism and Hospitality Key Markets

BC’s key target tourism markets can be broken down into three main categories: nearby markets, top priority markets, and emerging markets (BC Ministry of Tourism, Arts and culture, 2020).

Nearby markets are BC, Alberta, and Washington State, which are characterized by high volume and strong repeat visitation. Marketing activities to these areas are led by the regions, communities, and/or sectors such as ski. Top priority markets of Ontario, California, Germany, Japan, United Kingdom, South Korea, and Australia are characterized by high revenue and high spending per visitor. Marketing efforts here are led by Destination BC. Emerging markets, which include China, India, and Mexico, are monitored and explored by Destination BC.

Performance Measurement and Evaluation

In order to measure its success in the realm of destination marketing, Destination BC has introduced a tool called the net promoter score (NPS), a metric designed to monitor customer engagement. The NPS indicates the likelihood of travellers recommending a destination to friends, family, or colleagues. NPS is based on responses to the question, How likely are you to recommend [British Columbia] as a travel destination to a friend, family member, or colleague? Responses are scored from 0 = “not at all likely” to 10 = “extremely likely.” Respondents are divided into three categories:

• Detractors (scores of 0 to 6): Unhappy visitors, unlikely to tell others to visit and might even damage the reputation of a destination through negative word of mouth
• Passives (scores of 7 or 8): Marginally satisfied visitors not excited enough to tell others about their travel experience
• Promoters (scores of 9 or 10): Loyal enthusiasts likely to return and rave about their travel experience

NPS is calculated by subtracting the percentage of detractors from the percentage of promoters: NPS = % of detractors — % of supporters. The intention to recommend a travel destination, reported by the NPS, is a proxy measure of overall satisfaction with the travel experience. Satisfaction with the travel experience and the intention to recommend greatly increase the likelihood of a return visit to British Columbia. And word-of-mouth advocacy, either face-to-face or through social media, is critical for attracting first-time visitors to British Columbia.

Destination BC uses NPS as a performance measurement tool (among others) to help determine the overall effectiveness of online and integrated marketing communications strategies (Destination BC, 2020c). Furthermore, Destination BC has developed the Remarkable Experiences program to “shift thinking beyond a tourism product to consider how a business can deliver local, authentic experiences that are designed with the BC traveller in mind” (Destination BC, 2020d).

Effective planning, research, customer understanding, integrated marketing communications, and using online customer service strategies to support effective marketing are fundamental requirements for successful services marketing. However, it is critical that marketers understand the key trends and issues that will help to identify tomorrow’s marketing strategies (Government of Canada, 2012).

Figure 8.14 Social media trends are just one of the influences that marketers need to monitor.

Tourism marketers in B.C. need to monitor trends in the following areas that may impact the success of their marketing efforts:

• Demographic shifts (aging population, the rise of millennials), and socioeconomics (cultural changes, economic decline/growth)
• Political, economic, and geographic changes (emerging or declining economies)
• Trip purpose (growth of multipurpose trips and microtrips)
• Psychographic changes (special interests, healthy lifestyles, sustainability)
• Behavioural adaptations (free independent travel, decreasing brand loyalty)
• Product-related trends (emerging niches)
• Distribution channels (online travel agencies, virtual travel)

Remaining abreast of information in these areas is critical to the success of any services marketing plan, which should be continually monitored and adapted as the landscape changes.

Effective services marketing in the tourism and hospitality sector requires marketers to gain a solid understanding of the differences between the marketing of goods, services, and experiences. Successful organizations use market research to learn the preferences and behaviours of key customer segments. Through a strategic planning process, organizations and destinations develop a marketing orientation designed to identify customer needs and trigger their wants, while striving to meet organizational objectives. Activities are designed to support integrated marketing communications across multiple platforms with reciprocal communications — that is, not just broadcasting information, but having conversations with customers. Savvy marketers will leverage these conversations to keep up with evolving customer interests while seeking an understanding of emerging trends in order to anticipate needs and wants. Engaged marketers also know that social media and integrated marketing communications must be complemented with remarkable customer service, which ultimately supports successful marketing strategy.

Chapter 9 will delve further into the components of delivering exceptional customer service as a key component of industry success.

References

Anderson, C. (2012). The impact of social media on lodging performance. Retrieved from www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-16421.html

BC Ferries Services. (2020). BC Ferries vacations. Retrieved from www.bcferriesvacations.com

British Columbia Ministry of Tourism, Art and Culture. (2020). Home. Retrieved from www2.gov.bc.ca/gov/content/governments/organizational-structure/ministries-organizations/ministries/tourism-arts-culture

Callahan, S. (2020). So Long, 2010s: Reflecting on a decade in marketing and what is next. Retrieved from: www.business.linkedin.com/marketing-solutions/blog/b2b-content-marketing/2020/so-long–2010s–reflecting-on-a-decade-in-marketing-and-whats-ne

Destination Canada (2013). The explorer quotient toolkit [PDF] Retrieved from www.destinationcanada.com/sites/default/files/archive/206-Explorer%20Quotient%20Toolkit/toolsexplorerquotienttoolkitjul2018en.pdf

Davis, K. (2013, July 17). A (kind of) brief history of marketing (infographic). Entrepreneur. Retrieved from www.entrepreneur.com/article/227438

Deloitte. (2015). Hospitality 2015 game changers or spectators? Retrieved from www2.deloitte.com/ie/en/pages/consumer-business/articles/hospitality-2015.html

Destination BC. (2020a). About Destination BC. Retrieved from www.destinationbc.ca/who-we-are/

Destination BC. (2020b). Corporate documents. Retrieved from www.destinationbc.ca/who-we-are/corporate-documents/

Destination BC. (2020c). Net promoter score. Retrieved from www.destinationbc.ca/learning-centre/introduction-to-the-net-promoter-score/

Destination BC. (2020d). Remarkable experiences program. Retrieved from www.destinationbc.ca/learning-centre/designing-remarkable-experiences-workshop/

Eliason, K. (2014, December 23). The importance of integrated marketing communications. Retrieved from www.portent.com/blog/internet-marketing/raining-marketing-importance-integrated-marketing-communications.htm

Government of Canada. (2013). FedNor: A guide to using market research and marketing measurement for successful tourism destination marketing. Retrieved from www.ic.gc.ca/eic/site/iccat.nsf/eng/02979_5.html

Kollat, D., Blackwell, R., & Engel, J. (1972). The current status of consumer behavior research: Developments during the 1968-1972 period. Proceedings of the Third Annual Conference of the Association for Consumer Research. Chicago, IL : Association for Consumer Research, pp. 576-585.

Kotler, P.T., Armstrong, G., Trifts, V., & Cunningham, P. H. (2014). Principles of Marketing (9th ed., Canadian ed.). North York, ONT: Pearson Education.

Lovelock, C., & Patterson, P. (2015). Services marketing. Melbourne, AUS: Pearson Australia.

Luca, M. (2011, September 16). Reviews, reputation, and revenue: The case of Yelp.com. [PDF] Retrieved from www.hbs.edu/faculty/Publication%20Files/12-016_0464f20e-35b2-492e-a328-fb14a325f718.pdf

Morrison, A. M. (2010). Hospitality & travel marketing (4th ed., international ed.). Clifton Park, NY: Delmar Cengage Learning.

Nielsen. (2012, April 10). Global consumers’ trust in ‘earned’ advertising grows in importance. Retrieved from www.nielsen.com/us/en/press-room/2012/nielsen-global-consumers-trust-in-earned-advertising-grows.html

Skift. (2014, March 24). Personal recommendations are still the most important planning source for travellers. Retrieved from www.skift.com/2014/03/24/personal-recommendations-are-still-the-most-important-planning-source-for-travelers/

Tofino Saltwater Classic. (2020). Tofino saltwater classic. Retrieved from www.tofinosaltwaterclassic.com

Tourism Economics (2020). Sizing worldwide tourism spending (or “GTP”) and TripAdvisor’s economic impact. Retrieved from www.tourismeconomics.com/case-studies/sizing-worldwide-tourism-spending-or-gtp-tripadvisors-economic-impact/

Tourism Victoria. (2020). Visitors centre. Retrieved from www.tourismvictoria.com/plan/local-info/visitor-centre

Wickaninnish Inn. (2020). Elopement wedding packages. Retrieved from www.wickinn.com/accommodation/packages/romance/

Zeng, B., & Gerritsen, R. (2014). What do we know about social media in tourism? A review. Tourism management perspectives, 10, 27-36.

Overview

While there are many other factors that contribute to the success of a tourism business, one of the easiest to control is customer service levels.

Many of BC’s tourism operations have mastered high and consistent customer service levels. Why and how are they able to do this? What are the characteristics of exceptional customer service and the benefits to the business and the employees? How does technology apply to customer service and how is it constantly evolving?

This chapter will answer these questions as we explore the fundamentals of customer service in the context of a competitive global tourism environment. We will interview experienced tourism professionals, as well study the success of BC’s own customer service program, SuperHost, which has been training BC hospitality professionals for over 35 years.

We will be introducing concepts such as Total Quality (TQ), Net Promoter score and Customer lifetime value (CLV) used to measure customer service impact.

Figure 9.1 A family getting their regular drink at the local coffee shop, where they are provided with prompt and courteous service.

Customer service delivery and experience in today’s economy is becoming increasingly significant owing to change in demographics and psychographics. Words such as “authenticity”, “unique,” “one of a kind,” and “memorable” are being widely used by BC hospitality and tourism businesses to describe their customer experience.

Experience in the hospitality and tourism industry is a word that has been defined by various authors since 1982 until now. In the published article from Godovykh & Tasci (2020), the literature review explores the definition of the word “experience” spanning across various periods of time (Table 9.1).

The above word “experience” has seen an evolution in terms of its description where now this is further expanded across the customer journey through various interactions. In the next section, Ben Day sheds some light on what customer service is and how critical it is to the industry.

Figure 9.2 Great customer service and experience takes place across many platforms and is critical for tourism and hospitality employers.

Figure 9.3 Service encounters as a guest enters Blackcomb Spring Suites in Whistler, B.C.

Quality customer service is an experience of feeling valued or heard. Sometimes it’s an intangible component of why a guest may prefer one tourism or hospitality provider over another. There is something about quality customer service that you often can’t put your finger on — but you know it’s there. And it’s a critical factor for tourism success, both as a means of satisfying ever-increasing customer expectations, and as a way to achieve business profitability (Erdly & Kesterson-Townes, 2002).

In 2019, A Forbes article from Blake identified that, “Companies with a customer experience mindset drive revenue 4-8% higher than the rest of their industries. Two-thirds of companies compete on customer experience, up from just 36% in 2010” (Blake, 2019).

Training is critical to ensuring quality service and meeting these objectives (Brown et al., 2009). On a global scale, Canada ranks high in human resources capabilities. Unfortunately, due to the seasonal nature of many tourism and hospitality positions, and limited access to affordable and accessible training, the industry isn’t always able to take advantage of this position (Blanke & Chiesa, 2009), as it can be difficult to attract, train, and retain reliable and qualified staff year-round.

The concept of total quality (TQ) refers to an approach by businesses to integrate all employees, from management to front-level, in a process of continuous learning, with a goal of increasing customer satisfaction. It involves examining all encounters and points of interaction with guests to identify points of improvement. Total quality management (TQM) in tourism and hospitality is a process where service expectations are created by the entire team, with a collaborative approach between management and employees (Kapiki, 2012).

Employers understand the positive impacts of training on their bottom line. Key benefits may include improved employee attraction/recruitment, retention, engagement, and innovation. Saunders (2009) suggests that to be most effective, training should be oriented to develop employee potential versus addressing deficiencies.Customer service training provides employees with a foundation for effective service delivery. Potential benefits of this training include:

• improved skills and attitudes
• better communication skills
• better understanding of workplace practices
• increased morale, confidence, self-satisfaction and work satisfaction
• increased participation
• greater job/career advancement potential
• greater interest in and willingness to participate in further training
• more independence (Grey, 2006).

As employees acquire certifications and credentials, and these are recognized by employers, both groups benefit. Employees have a tangible way of demonstrating mastery of service knowledge and skills, and employers have tools to assist with the recruitment and screening of potential staff.

Overview of Net Promoter Score

Net Promoter Score (NPS) is a method of calculating how customers are talking about your company and their willingness to recommend your organization to others. NPS breaks down customers into groups based on how they answer a question similar to this:

“On a scale of 1 to 10, how likely are you to recommend our company (or product) to a friend or colleague?”

Based on the score they give you, they are sorted into Detractors (scores of 1–6), Passives or Neutral (scores of 7–8), or Promoters (scores of 9–10). Detractors can harm businesses.

They are not only likely to not return, but they may also urge others to do the same (i.e., they will give bad reviews).

Passives are satisfied. Satisfaction is desirable of course, but passives may or may not come back to a business. Passives are not likely to go out of their way to recommend the business (and also likely won’t complete a review).

Promoters are very satisfied or delighted customers. They can help your business — they come back repeatedly and will recommend your business to others. These are the people who give you 4 or 5 star ratings!

Figure 9.4 Net Promoter Score. [Long Description]

To calculate the Net Promoter Score, which is an index ranging from −100 to +100, follow these steps:

• Break down the responses by Detractors, Passives, and Promoters
• Add up the total responses from each group
• To get the percentage, take the group total and divide it by the total number of survey responses (you might have received 100 responses)
• Now, subtract the percentage total of Detractors from the percentage total of Promoters — this is your NPS score (which is a numerical unit, i.e., 40, 50 or −20)

Most businesses are looking for a positive number — more promoters than detractors. (Example: If all of your scores would be promoters, you get a +100. If all of your scores would be detractors, you get a −100.)

Given the NPS range of −100 to +100, a “positive” score or NPS above 0 is considered “good”, +50 is “Excellent,” and above 70 is considered “world class.” Based on global NPS standards, any score above 0 would be considered “good.” This simply means that the majority of your customer base is more loyal.

Action/Goal: Once you know your Net Promoter Score, you can then make every effort to appease detractors and to create promoters. (go2HR, 2018, p. 16)

Figure 9.5 Calculate Net Promoter Score. [Long Description]

According to Kim (2008), customer-oriented interactions between consumers and tourism employees influence the quality of the tourism experience. Let’s take a closer look at the concept of customer orientation and what this means in today’s tourism businesses.

Recovery from Service Failures

Figure 9.6 Handle customer complaints before guests take them online.

If a business fails to meet customer expectations, there’s a risk the customer will tell others about it, often through social media networks. An on-location problem that turns into an online complaint, going from private to public, can become far more damaging to business than the original issue. To avoid any problem from escalating, organizations and staff must work hard to resolve issues before the customer walks out the door — or pulls out a smartphone to make an online posting.

Of course, it’s not always possible to resolve issues on the spot. A customer’s expectations may go beyond the service the business is able to provide, or staff might not be authorized by management to provide the means necessary to resolve the complaint. In these cases, staff must still step up as service professionals, realizing that the actions they take when faced with a complaint can have a significant impact.

Online complaints highlight this point; reviewers are often more upset about how a problem was handled than about the problem itself. As well, potential guests who read online complaints are looking for reassurance that the same thing won’t happen to them. If they don’t find it, they may dismiss the business as an option and move on. How a business respond to complaints, face-to-face and online, is critical to ensuring successful recovery from service failures.

Service recovery occurs when a customer service professional takes action that results in the customer being satisfied after a service failure has occurred. Often service failures are not the fault of front-line staff, and at times, may not even be the fault of the business. Failure may be the result of an error made by another employee, by the guest him- or herself, or by a technical error. Regardless of where the problem originated, when customers bring it to the attention of the staff, they have certain expectations for resolution.

Figure 9.7 Listen, understand, act: the building blocks for resolving disputes.

Disappointed customers often want:

• An empathetic ear. Sometimes they simply want to vent. They want to know that the employee or manager is listening and cares.
• An apology. In some cases a sincere apology is enough.
• A solution. Typically customers bring issues to the attention of staff because they want them fixed.
• Compensation. Upset customers are looking for compensation, but not always.
• Follow-up. For some people, it’s important to know that their concerns are brought to the attention of management and are fixed for future customers.
• Reassurance. Customers want to know they’re in good hands.

Skilled service recovery is especially important in the age of social media. Customers who are active on social networks are likely to be equally vocal about their satisfaction with service recovery when a problem is expertly handled as they are with their displeasure when they are disappointed with service (WorldHost Training Services, 2013).

While service recovery is a critical skill, all tourism and hospitality professionals should approach each encounter with the goal of providing remarkable service. The next section explores how this is accomplished.

Long Descriptions

Figure 9.4 long description: Net Promoter Score scale. The scale shows 11 people in three different ranges.

The first seven people, numbered 0 to 6, are depicted in red and labelled detractors.

The next two, numbered 7 and 8, are depicted in yellow and labelled passives.

The final two, numbered 9 and 10, are depicted in green and labelled promoters.

The net promoter score formula is shown as the percentage of promoters minus the percentage of detractors.

[Return to Figure 9.4]

Figure 9.5 long description: Formulas for calculating Net Promoter Score.

To calculate the percentage of customers who are detractors, who rate 0 to 6 (“I am out of here”), divide the total of detractors by the total of statements, then multiply by 100.

To calculate the percentage of customers who are neutrals, who rate 7 or 8 (“okay”), divide the total of neutrals by the total of statements, then multiply by 100.

To calculate the percentage of customers who are promoters, who rate 9 or 10 (“wow”), divide the total of promoters by the total of statements, then multiply by 100.

The Net Promoter Score can be found by subtracting the percentage of customers who are detractors from the percentage of customers who are promoters.

[Return to Figure 9.5]

Figure 9.10 Customer loyalty cards are very common in the hotel industry. They are often paired with credit cards.

With competition between tourism destinations and businesses continuing to grow, organizations are increasingly focusing on retaining existing customers, which is often less expensive than attracting new ones. This focus forces tourism businesses to look at the customer relationship over the long term, or the customer lifetime value (CLV) cycle, rather than at single transactions only.

It has been proven that it is much less expensive for a company to retain an existing customer than acquire a new one (Beaujean, Davidson & Madge, 2006). Ultimately, successful organizations will strive to build a base of loyal customers who will provide repeat business and may influence other potential customers. Building positive relationships with loyal customers requires planning and diligence for all customer touch points. This may include (Lovelock & Wirtz, 2007):

1. Managing service encounters: training staff to provide personal service to customers
2. Providing customer incentives: inducing customers to frequent the business
3. Providing special service options: offering enhanced services or extra offerings to loyal customers
4. Developing pricing strategies to encourage long-term use: offering repeat customers special prices or rate
5. Maintaining a customer database: keeping an up-to-date set of records on customer purchase history, preferences, demographics, and so on.
6. Communicating with customers: reaching individual customers through direct or specialized media, using non-mass media approaches

Loyalty programs pull together several of these elements to help a business identify, maintain contact with, and reward frequent customers.

Examples of Outstanding Service

If one uses the definition of quality in service as “meeting or exceeding customer expectations” (Kapiki, 2012), then the following examples certainly fit the description. These embody a concept known as a moment of truth (Beaujean, Davidson & Madge, 2006) when a customer’s interaction with a front-line employee makes a critical difference in his or her perception of that company or destination. The characteristics of employees that are best able to create these moments include self-empowerment and self-regulation, a positive outlook, awareness of their feelings and the feelings of others, and the ability to curb fear and anxiety while being able to access a desire to help others. These past winners of the WorldHost customer service award demonstrate this concept in action (WorldHost, n.d.):

Tamara Turcotte of the Sidney Airport Travelodge was nominated after she came into work on her day off after hearing that hundreds of travellers had been stranded after a bomb threat led to the cancellation of ferry trips from nearby Swartz Bay. Reporting for duty, she helped coordinate accommodations for these travellers, looking beyond the hotel (which was full) to the homes of coworkers and friends. Her compassion and swift actions helped turn a negative experience for these guests into a moment of truth about visiting British Columbia.

Agazzi Abbay received word that JetsGo, a small airline and his employer, had suddenly gone out of business, and he was out of a job. Concerned for the passengers that would be stranded by this abrupt end for the airline, he went to the airport to give them the opportunity to share their frustration. Even though he was unable to help their situation, he was able to demonstrate empathy and provide a listening ear as the only former JetsGo employee available across Canada.

Andrea Chan, a guest services supervisor at the Holiday Inn and Suites in Vancouver, received a call from a hotel guest who said she was ill. Concerned because the caller sounded disoriented, Andrea recommended a visit to the hospital. To be sure her guest was safe, Andrea accompanied her to the emergency room and stayed with her until her health and safety were assured — working well beyond the hours of her shift, and returning home the next morning. By treating every guest like family, Andrea created a lasting impression about Holiday Inn and its customer service value.

Figure 9.8 Customers ready to experience hopping on and hopping off.

Kim defines customer orientation “as the set of activities, behaviours, and beliefs that place high priority on customers’ interests and continuously create superior customer value” (2008, p. 195). Even when employees have positive attributes, it may not be enough to ensure positive customer engagements unless they are specifically trained toward customer orientation (Kim, 2008).

Customer Service and Competition: The Customer-Oriented Organization

According to Masberg and colleagues, “to the customer, only service may distinguish a business from its competition” (Masberg, Chase, & Madlem, 2003, p. 19). While specific customer service jobs require different skills, building an overall customer-oriented organization may better meet customer expectations. One way to ensure quality service may be to encourage tourism and hospitality professionals to acquire industry certifications. Businesses can also choose to implement tools to determine customer satisfactions levels, such as the SERVQUAL technique that compares customer perceptions of quality against customer expectations (Morrison, 2010). Under the SERVQUAL model, the five dimensions of service are:

1. Reliability: where the quality and level of service is consistent
2. Assurance: knowledge and courtesy of staff and their ability to convey trust and confidence
3. Tangibles: the organization’s physical facilities, equipment, and appearance of staff
4. Empathy: the degree of caring, individualized attention that the organization’s staff provide to its customers
5. Responsiveness: the willingness of staff to help customers and provide prompt service

You can remember these five dimensions by using the acronym RATER. When these dimensions are consistently met, a company is well on its way to becoming customer oriented.

So far we’ve explored the reasons good customer service is critical to our industry. And with the acronym RATER, we now understand the basics of what a customer might expect from an organization. Together, these concepts can form part of a customer relationship management (CRM) strategy for tourism and hospitality businesses. CRMs are tools used by businesses to select customers and maintain relationships with them to increase their lifetime value to the business.

There are a number of points in time where this relationship is maintained. For example:

• The first time potential guests visit a website and leave their email address to receive more information
• The moment a reservation is made and the company captures their personal details
• The in-person service encounters from the front desk to the parking lot
• Welcome notes, personalized menus, friendly hellos, and other touches throughout the interaction
• Background messages including clean facilities and equipment in good repair, pleasant decor and ambiance (flowers, etc.)
• Follow-up communications like a newsletter
• Further interactions on social media

All of these touch points are opportunities to maintain strong relationships with customers and to increase the likelihood of positive word of mouth sharing. Let’s take a closer look at the role of social media in customer satisfaction.

The Role of Service and Social Media in Customer Satisfaction

Figure 9.9 A customer reviews a hotel, and the general manager responds to acknowledge their comments. [Long Description]

While the basics of great service haven’t changed, social media and networking have raised the stakes in the service industry. The cost of a negative experience is higher — but so is the value of a positive experience. In fact, the opportunities of social media reviews and ratings far outweigh the risks.

Businesses that take time to “listen” to social media are going to be more successful at leveraging the power of online interactions. These companies effectively read review sites such as TripAdvisor, Yelp, and others and respond to guest comments both good and bad.

Many factors contribute to how people rate businesses, including value, quality, and convenience. More than anything, however, service influences customer impressions. Whereas a lapse in quality or convenience can be overcome with excellent service, it is especially challenging to overcome the effects of bad service.

Long Descriptions

Figure 9.9 long description: An online review of a hotel, dated June 25, 2020. The review is titled, “Accomodation [sic] and Location as good as it gets!”

The customer has written, “We really enjoyed our brief stay at The Oswego and would plan another trip to Victoria around staying there. A few short blocks in one direction and you are on Dallas Road for a stroll or a run. A few short block [sic] in the other direction to the harbour, legislature building, museum, restaurants, shops etc. It was a very quiet hidden gem just off the main streets. Clean, well-equipped. Perfect!”

The general manager wrote back, “Thank you so much for your review, and we are pleased to hear you enjoyed your time. Dallas Road is one of our favorites as well for a nearby run! We look forward to welcoming you again soon.”

On a scale of 1 to 5, the customer rated the hotel a 5 for location, service, rooms, cleanliness, and sleep quality. The customer gave the hotel a 4 for value.

[Return to Figure 9.9]

Figure 9.11 British Columbia set the bar high when it welcomed the world to the 2010 Winter Olympic Games.

This chapter has explored the importance of customer service and its relationship with hospitality and tourism, particularly in the industry in BC. Using the SERVQUAL technique to describe characteristics of exceptional customer service and its benefits explain how the quality of customer service differentiates a business. Communication strategies in any situation has been reviewed with the service recovery, and proactively through Total Quality (TQ), the Moment of Truth process as well as how to retain and attract new customers through the analysis of customer lifetime value (CLV) and Net Promoter scores (from the SuperHost “Foundations of Service Quality”).

BC tourism and hospitality employers named customer service as the most beneficial training topic in a number of surveys. These skills are integral to customer satisfaction, employee engagement, organizational performance, and a destination’s competitive position (Freeman, 2011; Tourism Vancouver Island, 2010).

Employers can either commit to creating a learning organization or undermine their business depending on their investment (or lack thereof) in training. Essentially, employers get out of training what they put into it, often by attracting and retaining better, more motivated employees. Ultimately, this investment results in a better customer experience with improved levels of customer loyalty and organizational profitability. Prudent employees seek employers who value investment in training.

We know there are a variety of ways to ensure quality of service and recover when things go wrong. A key factor of success is understanding that customers want to be listened to — they would like an apology, a solution, at times compensation, and often follow-up and reassurance. And when a complaint is expertly handled, the customer can be converted from a potential social media detractor to a loyal advocate for the business.

Technology is working at a furious pace, and BC’s tourism and hospitality industry has worked to keep up with the latest opportunities. As a leader in customer service and a well-established international destination, now more than ever, BC’s tourism industry will pivot to ensure its continued success.

References

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Erdly, M. & Kesterson-Townes, L. (2002). Experience rules, IBM Business Consulting Services’ vision for the hospitality and leisure industry. IBM Business Consulting Services.

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One of the main reasons people travel is to visit areas that are unspoiled, natural, beautiful, or unique in terms of their local environment. Unfortunately, through our actions either as tourism businesses or as visitors, we risk damaging the natural environments we depend on (Hardin, 1968; Williams & Ponsford, 2008). Establishing management practices in tourism that limit harm and damage to the environment is a key priority for most tourism destinations. For this reason, environmental stewardship in tourism is of paramount importance.

Environmental stewardship can be defined as “the responsible use (including conservation) of natural resources in a way that takes full and balanced account of the interests of society, future generations, and other species, as well as of private needs, and accepts significant answerability to society” (Worrell & Appleby, 2000, p. 263). Further to this, indigenous peoples within BC and Canada see people and communities as integral pieces to the land management and caretaking process. As noted by the Assembly of First Nations (2020):

Indigenous peoples are caretakers of Mother Earth and realize and respect her gifts of water, air and fire. First Nations peoples’ have a special relationship with the earth and all living things in it. This relationship is based on a profound spiritual connection to Mother Earth that guided indigenous peoples to practice reverence, humility and reciprocity. It is also based on the subsistence needs and values extending back thousands of years. Hunting, gathering, and fishing to secure food includes harvesting food for self, family, the elderly, widows, the community, and for ceremonial purposes. Everything is taken and used with the understanding that we take only what we need, and we must use great care and be aware of how we take and how much of it so that future generations will not be put in peril.

This chapter explores the concept of environmental stewardship, the impacts of tourism on the natural environment (and vice versa), and ways we can minimize these impacts.

Figure 10.1 A foraging black bear is photographed by a tourist on a wildlife viewing trip. Protecting B.C.’s natural assets is paramount to maintaining the province’s tourism product.

Generally speaking, environmental education, research, stewardship and practice have been informed by the traditions of western, Euro-centric culture. It is critical to note that Indigenous peoples throughout the world, including the various Indigenous Nations throughout the land now known as British Columbia have always been the original stewards of their Territories and lands. 

Stewardship is often defined as having the duty of and then actively participating in the careful management of resources. Resource stewardship concepts have roots in a diversity of early practices, often founded on intimate connections between humans, their unique cultural practices and nature (McMillen et. al., 2020). Indigenous knowledge and practices of stewardship concepts were pushed aside for decades as European and white settlers in British Columbia removed Indigenous people from their Lands and implemented Euro-centric systems of land management (Kimmerer, 2013; Wildcat et. al., 2014). Indigenous peoples are often ideally suited to implement stewardship of lands due to in-depth knowledge of their Territories and the stewardship practices developed over centuries of ecosystem management and land connection (Bird & Nimmo, 2018; Kimmerer, 2013). 

The topic of stewardship entered Western thought in the middle of the last century in the works of writers such as Aldo Leopard (A Sand Country Almanac), Garret Hardin (The Tragedy of the Commons), and Rachel Carson (Silent Spring). Building on this growing consciousness, concepts of sustainability and sustainable development was introduced into mainstream policy and thought.

One of the first commonly accepted definitions of sustainable development came from the World Commission on Environment and Development, later renamed the Brundtland Commission. It defined sustainable development as meeting “the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland, 1987, p. 41). Sustainable development models include aspects that interconnect components of social, economic and environmental sustainability, and how these components can work together for long-term, intergenerational outcomes.

A related concept is environmental management, where the natural resources of the environment are managed through policies designed to protect natural values while providing a framework for use. In tourism, this management may be the responsibility of many groups including individual operators, tourism industry organizations, non-governmental organizations, or government agencies (Mercer, 2004; Williams & Ponsford, 2008).

Figure 10.2 Delegates at the 2009 United Nations Conference on Climate Change in Copenhagen.

The Need for Change

Experts around the world agree that the need for stewardship has never been greater, as there exists overwhelming evidence that the environment is being irrevocably damaged by human actions. Climate change caused by increased greenhouse gas emissions (World Tourism Organization, 2008a) and the loss of biodiversity due to declining habitat loss are just two compelling issues.

Tourism, in particular, relies on environmental resources of land, waters, wildlife, air, etc. and often abuses these resources at the detriment to local people and ecological systems. Tourism continues to grow globally, and many tourists are in pursuit of pristine, natural environments. Development of tourism products results in increased urbanization, overuse, exceeding carrying capacity, and contamination of natural resources (Williams & Ponsford, 2008). Later in this chapter, we’ll provide several examples of specific tourism and hospitality impacts and approaches to mitigating them.

There is one issue that is currently taking precedence over all others: climate change. The next section focuses specifically on this critical global issue and its relationship to the tourism industry.

Figure 10.3 The Helm Glacier in Garibaldi Provincial Park, melting.

The Intergovernmental Panel on Climate Change (IPCC) concluded the “observed increase in global average temperatures since the mid-20th century is very likely (> 90% probability) the result of human activities that are increasing greenhouse gas concentrations in the atmosphere” (World Tourism Organization, 2008a, p. 38). Climate change should be considered to be one of the most important challenges currently facing the tourism industry.

Impacts of Climate Change

According to the World Tourism Organization, impacts from climate change on tourism include the following (2008a):

Direct climate impacts are changes that occur as a result of warming trends, cooling trends, or extreme weather events. Examples include a lack of snow to operate mountain resorts, melting glaciers in mountainous regions, and floods, landslides, and wildfires that could affect tourist areas.

Figure 10.4 The aftermath of Hurricane Sandy, which destroyed large sections of coastline in New York and New Jersey, including popular tourist attraction Coney Island (seen in the distance).

Indirect environmental change impacts are the byproducts of climate change. Global temperature changes may create water shortages, a loss of biodiversity, impacts to landscape aesthetics, and damage to infrastructure through extreme weather events. Examples in tourism include the inability to maintain resort facilities in desert environments due to water shortages, erosion of tropical atolls from rising sea levels, extinction of valuable wildlife species due to changes in habitat, and increased costs of maintaining infrastructure in the face of environmental change.

Impacts of mitigation policies on tourist mobility will become apparent as the tourism industry adjusts to environmental changes. Environmental impact mitigation strategies may create challenges for the long-term sustainability of the tourism industry. Tourism products may be offered over a shorter season, prices may increase due to a rise in operating costs, and there may be a shortage of pristine natural areas available for visits.

Indirect societal change impacts will slowly become apparent. Economic growth may be stunted in some areas and increase in others, creating societal inequality between nations. Political instability may arise in areas that are facing drastic environmental impact. All these changes will present new challenges to the industry and may threaten the long-term security of the industry (Watson, Zinyowera, & Moss, 1997; World Tourism Organization, 2008a).

Table 10.1 provides a detailed list of these impacts and their implications for tourism, as compiled by the World Tourism Organization.

To understand how we might begin to address these impacts and other environmental issues, it’s helpful to understand the fundamentals of environmental stewardship theory, which is explored in the next section.

Some basic concepts of environmental management and ethics, especially as they apply to tourism, include carrying capacity, footprint, tragedy of the commons, and the tourism paradox.  This section also outlines some of the key approaches to dealing with environmental and sustainability issues in the tourism industry including sustainable tourism, ecotourism, and responsible tourism management.

Carrying Capacity

Carrying capacity is “the average maximum number of individuals of a given species that can occupy a particular habitat without permanently impairing the productive capacity of that habitat” (Rees, 2001, p. 229).

Figure 10.5 A tourist’s snapshot of a “full moon party” in Thailand, where bottles, trash, and human waste litter the beach for days afterward and noise and light pollution are common.

This concept has been applied to tourism in the context of a tourism carrying capacity (TCC), “the maximum number of visitors which an area can sustain without unacceptable deterioration of the physical environment and without considerably diminishing user satisfaction” (Salerno, Viviano, Manfredi, Caroli, Thankuri, & Tartari, 2013, p. 116).

Carrying capacity factors are determined within a scientific framework and must adapt to various changes and needs of local people and ecosystems. There are many examples of TCC being applied in tourism globally and it is important to note that no two areas have the same set of factors to determine carrying capacity. In Canada, national parks use the concept to ensure visitor numbers are restricted to a sustainable level along with other wilderness areas, protected areas, Indigenous Territories and waterways, campgrounds, and front country experiences.

Although TCC is a theoretical concept that is often discussed and utilized for analysis, in reality it can be challenging to restrict the numbers of tourists arriving at a destination.  Both determining and managing the carrying capacity of a destination requires input from local peoples and environmental data.  One successful approach is to limit access to an area or to simply limit tourist numbers.

Ecological Footprint

Ecological footprint is essentially a tool to analyze the impact of a population on Earth (Rees, 2001). The model calculates the total area of land and water resources used to support the population, presenting it in a manner that can be easily related to — usually in terms of the amount of land needed to support an individual at the standard of living that person is used to.

Many countries and people of those countries use more natural resources within and beyond their own borders than ecosystems can regenerate (biocapacity). Because of this, these countries and people are essentially running an “ecological deficit.” Nations and people can run these ecological deficits by overusing their own (and other Nations’/peoples’) resources, such as by overfishing, taking resources from other areas, and/or emitting higher levels pf carbon dioxide into the atmosphere than can be absorbed (Global Footprint Network, 2020).

Tragedy of the Commons

Tragedy of the commons is an economic theory first proposed by Garrett Hardin in 1968, which states that if individuals are given the chance to overuse a common property, they will, in order to realize the maximum personal benefits. If every person does this, common property quickly becomes overused and damaged (Hardin, 1968).

For example, a group of tourism operators may look at a pristine natural area and see a chance for economic profit, and in the race for development, little or nothing is done to protect the area. If this unchecked development were to continue, the damage to the environment could reach a point where the elements that attracted tourists in the first place are irreversibly damaged, thus resulting in the “tragedy” that Hardin discusses (Hardin, 1968).

The tragedy of the commons leads to something known as the tourism paradox, a concept that describes the paradoxical nature of tourism’s relationship with the environment.

The Tourism Paradox

Figure 10.6 B.C.’s tourism assets centre heavily on scenery. Seen here are the Coast Mountains and the Georgia Strait, as viewed from Neck Point Park near Nanaimo.

A common theme promoted by many tourism destinations is their location in some of the most ecologically fragile environments in existence — coastal, mountain, and river environments (Williams & Ponsford, 2008). Tourism requires these areas to be intact to serve as an attraction to visitors. Tourists expect a clean physical environment, appropriate seasonal conditions, and diversity of wildlife. Destinations failing to provide at least some of these elements risk losing their competitive edge in the global market; visitors will steer clear of polluted, barren landscapes with unpredictable or uncomfortable weather.

At the same time, the tourism industry is itself causing environmental damage through its own development in pristine areas, consumption of resources, and contribution to climate change. This is the paradox: as an industry, tourism both creates damage and suffers from it. That’s why it’s critical for the industry to be proactive about environmental sustainability in tourism; failing to do so may result in our downfall (Williams & Ponsford, 2008).

Before we gain a better understanding of the ways the tourism industry and individual operators can try to mitigate their impacts, let’s take a closer look at the overall management of BC’s environmental resources.

Sustainable Tourism

The UNWTO sees sustainable tourism as a set of guidelines and management practices that can be applied to all forms of tourism (from small-scale to mass tourism) and in all destination types (2005).  When referring to sustainable tourism, sustainability principles relating to environmental, economic and socio-cultural aspects of tourism development must be addressed.  As such, sustainable tourism development requires the informed consent and input from local people and stakeholders and must address the need to:

1. Make optimal use of environmental resources that constitute a key element in tourism development, maintaining essential ecological processes and helping to conserve natural heritage and biodiversity.
2. Respect the socio-cultural authenticity of host communities, conserve their built and living cultural heritage and traditional values, and contribute to inter-cultural understanding and tolerance.
3. Ensure viable, long-term economic operations, providing socio-economic benefits to all stakeholders that are fairly distributed, including stable employment and income-earning opportunities and social services to host communities, and contributing to poverty alleviation (UNWTO, 2005, p. 11–12).

Many industry leaders feel that the sustainable tourism movement is fragmented and lacks leadership and accountability due to the fragmentation of the tourism industry itself (Mullis, 2017). Tourists themselves have a large role to play in this equation in that their experiences are generally more positive when experiences incorporate sustainability principles and it has been found that tourists are more likely to visit or make purchases from tourism companies that have sustainability practices in place (Mandala Research, 2015).

Responsible Tourism

Responsible Tourism is an approach to tourism development that was defined through the Cape Town Declaration in 2002 in an effort to provide practical, evidence-based solutions that sustainable tourism approaches have not succeeded to do.  Responsible tourism is defined as “making better places for people to live in and better places for people to visit” (Cape Town Declaration, 2002).  Responsible tourism approaches focus on identifying important issues to local people and their environments, addressing those issues and transparently reporting and monitoring on those issues.

The Cape Town Declaration recognizes that Tourism can provide numerous benefits to people and destinations however tourist and industry behaviour must be managed in a way that is defined by local people who know what they need best.

The Responsible Tourism approach is defined by tourism that:

• minimizes negative economic, environmental and social impacts;
• generates greater economic benefits for local people and enhances the well-being of host communities, improves working conditions and access to the industry;
• involves local people in decisions that affect their lives and life changes;
• makes positive contributions to the conservation of natural and cultural heritage, to the maintenance of the world’s diversity;
• provides more enjoyable experiences for tourists through more meaningful connections with local people, and a greater understanding of local cultural, social and environmental issues;
• provides access for people with disabilities and the disadvantaged;
• is culturally sensitive, engenders respect between tourists and hosts, and builds local pride and confidence (Harold Goodwin, 2014).

Environmental impacts in BC are managed by a variety of governmental organizations and should always be in consultation with and by the consent of First Nations people and governments. Each of these agencies at First Nations, provincial and federal government levels have a role to play, from regulation of land access and resource extraction to environmental monitoring and cleanup. To understand how the impacts are managed, let’s review the basic categories of land use in BC.

Land Use

There are essentially four broad land categories in BC: First Nations land, private land, provincial Crown land, and federal Crown land.

First Nations land includes any area where “Aboriginal title” has been established and responsibilities for management lie with the relevant First Nations group. Large areas of designated Crown land in BC are considered by First Nations groups as traditional, and these are currently going through the treaty negotiation process, which will likely result in a larger proportion of the BC land area coming under First Nations management.

In 1997, the Supreme Court of Canada ruled in the Delgamuukw case that Aboriginal title is “a right to the land itself—not just the right to hunt, fish and gather.” This case confirmed that “Aboriginal title still exists in BC and that when dealing with Crown land the government must consult with and may have to compensate First Nations whose rights are affected” (BC Treaty Commission, 2020).

Private land in BC is any land where private property rights apply. This includes residential, commercial, and agricultural zoned land throughout the province. If private property rights apply, the owner has more rights over that land for development and use than any other classification of land. Tourism companies wishing to operate on private property need to gain ownership of the land, or failing that, permission to operate on the land. Private property accounts for approximately 5% of the land mass in BC (Government of BC, 2011).

The term Crown land applies to any land that is owned by either the provincial or federal government. Provincial Crown land makes up 94% of BC, making it the largest category of land in the province. Provincial Crown land is available for a wide range of activities that encourage recreation and economic development, including tourism (Government of BC, 2011).

Figure 10.7 A BC Parks ranger conducts an interpretive program.

Designated park areas are managed by BC Parks, the agency that reviews and issues permits for tourism companies to operate within a park. Other provincial Crown land is managed by a variety of government agencies, such as the Ministry of Forests, Lands, and Natural Resource Operations (MFLNR).

Federal Crown land is all land that is owned by the Government of Canada; in BC, less than 1% of the overall land is federal Crown land. It primarily consists of parks and protected areas that are managed by Parks Canada, the federal agency that has a mandate to preserve and share “natural and cultural heritage” and help ensure enjoyment and appreciation “for present and future generations” (Parks Canada, n.d.).

Land Use for Tourism and Hospitality

Businesses and organizations wishing to use Crown land for economic development must apply and be approved for Crown land tenure, which is an agreement with the BC government to use the land for commercial purposes. Examples of the types of tourism operations that might seek tenure include mountain resorts, golf courses, backcountry lodges, tour operators, resort development, and marina construction. It’s estimated that about 16% of the tourism industry in BC depends on access to Crown land through the Crown land tenure program (Government of BC, 2010).

Different tenures are available depending on the type, location, and intensity of use proposed. A temporary permit grants use for approved activities for up to two years, but not exclusive use (other commercial operators may still use the area). A licence of occupation, the next level of tenure, provides for light development (e.g., semi-permanent structures or trails). This type of licence is typically issued for terms of five to 30 years and is renewable. A lease is a long-term contract for tenure, typically for 30 years. With a lease, operators can make substantial improvements to the land including significant structures such as lodges, restaurants, ski lifts, roads, and so on. It is the longest term and the most secure type of tenure (Government of BC, 2010).

Any tourism business wishing to operate on First Nations land requires permission from the local First Nation. Companies wanting to operate in a National Park also need to apply for a permit. Although resource extraction is restricted, national parks often encourage tourism development that is sustainable and appropriate for the local environment.

Other elements of environmental stewardship in BC fall to the Ministry of Environment and Climate Change Strategy. This ministry focuses on environmental protection, environmental sustainability, strategic policy, managing and developing parks and protected areas, climate action, and managing Conservation Officer Servicea.

Additionally, the Environmental Assessment Office plays an important role in environmental stewardship on Crown lands in BC. All major projects being proposed for development on Crown land must undergo an environmental assessment and have it approved by this office, which is a neutral agency set up specifically for this purpose. Projects are evaluated not only for their potential impacts on the environment, but also on their economic, social, cultural, and heritage aspects. Large-scale tourism projects such as mountain resorts are required to proceed through the environmental assessment process (Environmental Assessment Office, n.d.).

Figure 10.8 Logging sites visible from the air in Jervis Inlet.

The current land management system in BC has led to numerous conflicts between tourism operators and resource extraction operations such as mining and forestry. Often, overlapping tenure is given to multiple companies with conflicting operational goals. Tourism operators typically require a clean environment, high-quality viewscapes, intact biodiversity, and an environment free of industrial scars. To maintain these values, any resource extraction needs to occur far from where tourism operators conduct their activities. In recent years, tensions have been building as access to wilderness areas becomes scarcer, with tourism values often falling second to resource extraction under the existing system (Webster, 2013).

The issues discussed above provide a framework for thinking about environmental management and the impacts of the tourism industry in BC. As part of the industry, we have an important responsibility to recognize impacts and take steps to reduce them. The next section addresses how we might do just that.

Figure 10.9 Moose tracks on Liard River in northern B.C.

In recent years in BC, the tourism industry has felt the impacts of climate change, habitat destruction, biodiversity loss, and increased conflicts over the use of natural areas. The winters of 2013/2014 and 2014/2015 were two of the warmest on record, and numerous low-elevation coastal mountain resorts were forced to close in the middle of the winter season (Hager, 2015). As well, the province is experiencing increased pressure on endangered wildlife species that draw tourists and residents alike. The death of an orca whale off the coast of Vancouver Island in late 2014 raised questions of water pollution and contamination (Theodore, 2014).

In the face of this negative environmental news, there are a variety of initiatives underway that have the potential to implement real change. These include:

• Carbon offsetting
• Energy conservation
• Water conservation
• Food production management
• Waste management
• Accreditation

This section explores these potential solutions.

Carbon Offsetting

Carbon offsetting is a standardized, regulated system that provides organizations with the ability to invest in green initiatives that will counterbalance their emissions, hence creating a carbon neutral situation (David Suzuki Foundation, 2009).

The concept of carbon offsetting stems from a recognition that despite a desire to entirely eliminate carbon emissions, sometimes doing so isn’t immediately feasible. Consequently, carbon offsetting has proven popular with tourism companies that can offset some or all of their emissions, either by themselves or by providing the opportunity for customers to do so. Examples are most commonly found in the transportation sector, where the reliance on traditional fossil fuels makes it challenging to completely eliminate carbon emissions.

Figure 10.10 A detail from the side of a Harbour Air seaplane.

Take the small B.C. airline Harbour Air, for instance. Since 2007, the company has completely offset all of the emissions produced by its airplanes by investing in energy-efficiency and fuel-switching projects in BC. The cost of the projects is passed on to passengers through a small levy added to the ticket price, and despite the cost increase, passenger traffic increased by 12% to 15% in the following year (Offsetters, n.d.).

Carbon offsetting isn’t just for the transportation sector, however. Tinhorn Creek Winery in Oliver has become a tourism destination for wine and culinary tourists and has some innovative conservation concepts. In addition to having an offsetting program, the winery runs its vehicles on biodiesel. It also holds virtual tastings with travel media over the web (media obtain samples of the product ahead of time), eliminating travel to the Okanagan to have a Tinhorn experience. The property remains dedicated to exploring sustainability concepts as its survival is based on mitigating climate change and the negative effects of drastic weather changes on wine production (Tinhorn Creek Winery, 2014).

Energy Conservation

Despite the relatively low cost of electricity in BC, it benefits all operators to do their part by reducing consumption and greenhouse gas emissions. Not only is this the right thing to do for the physical environment, it’s also a means to save money.

For example, the Four Seasons in Vancouver reduced their electricity consumption by 4,000 megawatt hours in the period between fall 2012 and spring 2014. They did this by installing timers and photocells on lights, auditing appliances, ensuring proper maintenance of the furnace and HVAC systems, and cleaning light fixtures and fans so these operated at their best. The energy reduction represented a savings of $135,000 for the property (Hui, 2014).

BC Ferries is another organization that has realized energy savings. It did this with the help of BC Hydro education programs and incentives, retrofitting lighting and installing radiant heat in a workshop and toll booths. These efforts yielded an energy savings of over 335 megawatt hours in one year. That represents enough energy to power 31 average homes over the same time period (BC Hydro, 2013).

Water Conservation

Figure 10.11 A hiker comes across surging fresh water from a “pineapple express” storm on B.C.’s coast.

British Columbia is home to 25% of Canada’s fresh water, and so to many it appears that water conservation is not an issue in the province. However, water is not evenly distributed across regions, nor is it equally available all seasons of the year (BC Ministry of Environment, n.d.b). This is especially evident on Salt Spring Island, a popular tourist destination with numerous small accommodation properties. The island experiences water shortages in the peak summer season when lake and groundwater levels drop and demand is highest.

In 2006, a number of local water conservation groups on Salt Spring Island surveyed 117 accommodation providers to determine what measures might be taken to alleviate the summer pressure on freshwater systems. They were pleasantly surprised to find that several properties had already taken steps, including installing low-flow toilets and flow restrictors on shower heads, requiring minimum two-night stays (which reduces the amount of laundry required), and offering visitor education campaigns. The combined efforts of properties on the island have proven to make a significant difference to the collective capacity of 1,500 guests per night (O’Callaghan, 2006).

Food Production and the Environment

As discussed in Chapter 4 on food and beverage services, there is increasing awareness among the general public about the importance of healthful eating. This goes hand in hand with an increased understanding of food production issues including environmental impacts such as pollution, soil depletion, and the toxicity (both to humans and the environment) of industrial food growth practices. Over the last 30 years, American (and to an extent, Canadian) food growth has centred on the mass production of inexpensive staple foods such as corn and soy, which are used in unhealthy foods like high-fructose corn syrup and soybean oil, and are fed to the animals we eat (University of Minnesota, 2009).

Farming mass amounts of one crop is known as monoculture, a practice that depletes the soil and encourages the use of pesticides and fertilizers for increased production. The impacts of these chemicals to date include the creation of a “dead zone” at the outflow of the Mississippi River into the Gulf of Mexico, where no fish or other animals can live (University of Minnesota, 2009).

The soil in which food is grown is becoming less rich as commercial fertilizers focus only on building specific nutrients. Combined with the long distances that foods are shipped (sometimes causing nutrients to be depleted), consumers are becoming wary of commercially produced foods (University of Minnesota, 2009).

The 100-Mile Diet and Farm to Table

In 2005, two BC-based journalists, J.B. MacKinnon and Alisa Smith, began chronicling the challenges of only eating food produced within 100 miles of their homes, as part of a serial of articles for the Tyee. Their posts became a book, The 100-Mile Diet, launched in 2007 and heralded as a vanguard of the local food movement (Tyee, 2005).

Organizations such as FarmFolk CityFolk, a not-for-profit organization dedicated to food sustainability in the province, have been promoting farm-to-table dining for over 20 years. Their efforts include working with restaurants to bring quality ingredients to the sector, and hosting annual events that celebrate the “feast of fields” in regions such as the Okanagan (FarmFolk CityFolk, 2014).

Waste Management

Figure 10.12 A food scraps bin ready for composting, collected at a Vancouver farmer’s market.

In 2012 in BC, the amount of garbage generated was equivalent to 570 kilograms per person. With landfills and treatment sites filling to capacity (and sometimes beyond), it’s imperative that communities and businesses work together in the practice of proper waste management through implementing recycling programs, reducing garbage, properly treating industrial and hazardous waste, and treating sewage and wastewater (Government of BC, n.d.).

One very effective means of reducing garbage taken to the landfill is implementing a food waste program in which food scraps are placed in a green bin and collected by the community for composting. The City of Vancouver initially introduced such a program to single family households from 2011 to 2013 and saw a 30% drop in garbage generated. In 2014, the program was expanded to include all households and businesses and placed a ban on food scraps in the garbage. The program met resistance from the BC Restaurant and Foodservices Association, which viewed the initiative as placing an extra cost and being a logistical challenge for members (Nagel, 2014). Individual restaurateurs were hopeful, however, that the city would help businesses by increasing pickup and expanding the efficiency of their other recycling programs (Robinson, 2014).

Plants & Wildlife

The impact of tourism to plant-life and wildlife in BC is immense, and the impacts range from habituation of animals to humans to the actual destruction of ecosystems and habitats as well as the hastening of species decline. Tourism can affect plant-life through acts of trampling sensitive ecosystems, gathering branches for campfires, over-collecting flowers and plants, litter, and/or careless acts with backcountry use that have sparked uncontrolled forest fires in BC especially this past decade. Wildlife are also affected wherein many animals have become habituated and tolerate tourists wherein feeding and breeding habits are disrupted, habitats are destroyed/access is limited, and food systems are altered greatly.

Accreditation and Certification

Environmental accreditation or certification is a type of voluntary regulation where an organization agrees to follow a set of standards, predefined processes, or regulations. These are generally developed by independent non-governmental organizations with a goal of reducing the environmental impact within an industry. Accreditation can encompass any of the practices discussed so far — from carbon offsetting to energy and water conservation to waste management.

Beyond the value of making the ethical decision of working to reduce environmental impacts, organizations receive value by being able to promote themselves as being environmentally friendly and therefore attracting consumers (Font, 2002). And for guests, choosing an independently accredited business may help them avoid companies that are guilty of greenwashing, which is the promotion of environmentally friendly tourism products without actually achieving the environmental standard promised (Lelenicz & Simoni, 2012; Self, Self, & Bell-Haynes, 2010).

Organizations join such programs voluntarily. This typically involves going through an audit to prove adherence to a set of environmental standards (Font, 2002). Generally, an audit consists of an independent third party visiting a business or operation and reviewing its practices against a checklist of standards; those that pass earn the certification or accreditation.

It is estimated that over 100 different tourism environmental certification programs exist, each with different standards and criteria (Self, Self, & Bell-Haynes, 2010).

Whether it be through carbon offsetting, energy and water conservation, increased use of local and organic food products, or official accreditation programs, the tourism industry has a number of options for lessening the impacts of businesses on the physical environment.

Numerous studies suggest society will face increasing pressure for scarce resources and a changing natural environment due to habitat destruction, pollution, and climate change (Hardin, 1968; Mercer, 2004; Williams & Ponsford, 2008; Wong, 2004; World Tourism Organization, 2008b). The tourism industry must recognize its considerable contribution to this global challenge and take aggressive steps to mitigate the impacts.

Figure 10.13 Bertram Beach near Kelowna, one of many B.C. sites the industry should strive to keep beautiful.

On a global scale, the tourism industry needs to recognize its release of significant carbon emissions and explore ways to reduce these while maintaining the mobility needed for travel. On a local scale, tourism stakeholders need to recognize the risk they pose to the destruction of local pristine environments and take steps to ensure the sustainability of their operations. Only by working together can we ensure a future for tourism and our society as a whole.

This chapter has addressed a major risk to the tourism industry — the threat of environmental impacts and disasters on businesses and communities. Chapter 11 addresses the concept of risk management and legal liability in the industry.

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This chapter examines the concepts of risk management and legal liability within the context of tourism and hospitality. We’ll review theoretical risk concepts and practical risk management applications while exploring applicable areas of statute, tort, and contract law. Insurance and occupational health and safety are also discussed.  Examples from tourism and hospitality will be used throughout. Please note that the content provided in this chapter is provided for educational purposes, and should not be relied on in the event of legal action.

What is Risk Management?

Risk is defined as the potential for loss or harm (Destination Canada [publishing as CTC], 2003a). This could be experienced as a financial loss, damage to property, or injury to workers or guests. Understandably, tourism operators are interested in preventing these events from occuring, which is why practicing risk management is an essential business skill.

Figure 11.1 Signage indicates a risk for people wanting to fish in this stream near Waneta, B.C., due to turbulent flows and rapidly rising water levels. [Long Description]

Risk management refers to the practices, policies, and procedures designed to minimize or eliminate unacceptable risks (Cloutier, 2000; Destination Canada [DC], 2003a; Heshka & Jackson, 2011). Depending on the type of operation undertaking the risk management process, these may vary greatly. Vastly different risks exist across the breadth of tourism and hospitality businesses; there are significant differences in the operation of a hotel as compared to delivering an adventure tourism activity.  Consequently, it is helpful to think of risk management as being a process of determining the exposure to risk, and then initiating action to either minimize or eliminate the risk specific to your operation (Enterprise Risk Management, 2004).  Mastering a generic model of risk management allows you to apply that model to all operations.

Why Practise Risk Management?

There are generally two core objectives in the practice of risk management by tourism operators: to avoid injury to guests and employees, and to protect their business operations from financial or physical ruin.  Keeping guests and employees safe is a moral, ethical and legal responsibility; this is not to be taken lightly. Protecting business operations includes protecting against damage to property, damage to reputation, and any financial impacts occurring from litigation (Centre for Curriculum, Transfer, and Technology [CCTT], 2003a). By practising this twofold approach, operators demonstrate that they are prioritizing the health and safety of individuals, while still taking steps to protect the operational sustainability of their company.

Figure 11.2 Media scrutiny after an incident can be damaging to a business that has not demonstrated effective risk management.

On a larger scale, practising effective risk management can be seen as an important business skill. Destination Canada (2003a) suggests that risk management:

• Reduces the likelihood of an unwanted and unplanned event
• Reduces the consequences of the event
• Enhances your ability to access comprehensive and cost-effective insurance

Risk management can be undertaken at any scale. Individuals, companies, societies, communities, cities, regions, and even governments can follow the process in order to protect themselves from risks, which may range from company-specific risks associated with the operation or significant international risks such as climate change and civil disturbances.

Some risk management initiatives are more straightforward to implement than others; they are required by law and enforced by government agencies. For example, companies providing transportation services (such as commercial motor vehicle transport ) have clearly defined requirements as set out by their local motor vehicle branch in government. They are required to use appropriately licensed commercial drivers, submit to regularly scheduled commercial vehicle inspections, and insure their vehicles as required. Failing to adhere to these standards may result in suspension of operating privileges, fines, or even imprisonment.  Similar to this is occupational health and safety; this is discussed later in the chapter.

However, other aspects of risk management are not regulated. This is characteristic of the majority of tourism and hospitality activities offered in Canada today. Operators offer services to the general public and self-regulate in terms of safety. If injury to a guest occurs, and that guest feels that he or she has grounds for a financial claim, that person can initiate a lawsuit against the tourism operator. If this claim is found valid in court, then the tourism operator may be responsible for a financial settlement to that claimant for damages – physical, financial or otherwise.  To prevent, or to respond adequately to scenarios such as this, operations need to be both proactive and diligent in the practice of risk management.

In short, tour operators must comply with applicable statutory requirements and be sure to self-monitor to determine if the standard that they are operating at is acceptable to society and their peers. Failing to do so may result in a range of consequences including fines, suspension of operations, or a lawsuit.

Concepts of Risk

Before we proceed deeper into an examination of the risk management process, let’s look at three theoretical concepts of risk: real risk, perceived risk, and inherent risk.

Real risk is the actual statistical likelihood of an incident occurring. This is typically established through reviews of statistics and other relevant data, and by an analytical process and use of expertise in the field. There is little ambiguity or subjectivity in real risk (DC, 2003a).

Perceived risk is the perception of risk by those undertaking or evaluating the risk itself; it may vary greatly based on their level of apprehension, anxiety, or experience with the specific risk. Perceived risk can also vary greatly from the real risk of an activity; it can be higher or lower than the actual risk. In Adventure Tourism, successful management of perceived risk may include operators promoting the risk of activity as high, even if in reality the risk is minimal (Dowling, 1986).

Inherent risk is the risk that must exist for the activity to occur; examples include the risk of drowning whilst swimming and the risk of falling during skiing. It is impossible to eliminate inherent risk from these activities because it would preclude participating in them. However, operators should take steps to minimize inherent risk; this could include, for example, conducting safety inspections, providing appropriate safety equipment for guests, training staff, and informing participants of the hazards of the activity (CCTC, 2003b).

Figure 11.3 An ambulance outside a Vancouver hotel.

Long Descriptions

Figure 11.1 long description: A person walking a dog stops to read a sign beside a rushing stream. The sign reads, “Danger: Turbulent flows and rapidly rising water levels. Fish at own risk. Siren indicates emergency spill in progress.” [Return to Figure 11.1]

There are a variety of risk management models that have been utilized and promoted. Each is generally a variation on the same theme, with each having a slightly different approach to the analysis. You’ll find that large operations, government agencies, military, search and rescue all have their own proprietorial processes. Outlined below is the model from Destination Canada for small and medium enterprises. It has four stages: risk identification, risk analysis, risk control, and risk treatment (DC, 2003a).

Risk Identification

The initial stage of the risk management process is systematically identifying risks facing the organization. This step is often referred to as risk assessment. An organization can identify risks in the following ways (CTC, 2003a, p. 6):

• On-site inspections and discussions with management and staff
• Review of products, services, processes, and contracts
• Review of historical activities and losses
• Identification of possible risk scenarios

Once an exhaustive list of the risks is compiled, the next step is to ensure a thorough analysis occurs.

Risk Analysis

A typical risk analysis compares the probability (frequency) of any risks occurring by the consequence (severity) if they do occur. This can be done either in a qualitative or quantitative manner, with either numerical values or descriptors applied. For example, an analysis of the risk of the catastrophic failure of a ski lift at a resort resulting in passengers falling to the ground would likely indicate that the probability of this incident occurring is low due to historical records of use, and required maintenance for safety. However, the consequence would likely be high, considering there could be a large number of passengers involved in a significant fall, resulting in multiple casualties.

Operators need to respond (through risk control, see section below) if the analysis determines any of the following: 1) the probability of the risk occurring is unacceptable; 2) the consequence of the risk occurring is unacceptable; or 3) the combined impact of the probability and consequence is deemed unacceptable (Cloutier, 2000).

Figure 11.4 Technical safety equipment needs to be regularly inspected as part of the risk management process.

Risk Control

Once the risks are identified and analyzed, the next step is implementing mitigation strategies for any unacceptable risks. This step is called risk control, and it comprises two primary concepts: exposure avoidance and loss reduction.

Exposure avoidance involves any mitigation strategies used to avoid the exposure to the risks. Examples are eliminating particularly hazardous activities or services, avoiding certain areas due to environmental threats, or changing a tour destination due to political unrest.

Loss reduction is a different approach; it assumes that you have acknowledged the risk of a particular activity or service, and choose to continue to offer it, but will take steps to mitigate the severity of damage that may occur (CCTT, 2003a). An example is requiring all participants in a ski lesson to wear helmets; the risk of falling still exists, but you have taken action to reduce the severity of any fall.

Risk Treatment

Failing the ability to control all risks identified, the next step in the process is risk treatment. This includes the concept of risk transfer and risk retention. Risk transfer refers to the transfer of responsibility to another party, either contractually or by insurance. Risk can be transferred through contract either by entering into a contract for service, or by requiring participants to sign a waiver. Risk is transferred through insurance by paying premiums to an insurer, wherein they absorb the financial risk of an incident. Risk retention refers to the level of risk that is retained by the company through a conscious decision-making process. Examples of this may include the decision to increase the size of insurance deductible to use, the use of self insurance, or consciously not transferring risks due to an inability to do so (CTC, 2003b).

Tort Law and Negligence

Figure 11.5 The plaza at B.C.’s provincial law courts.

Tort law in Canada refers to the “body of the law which will allow an injured person to obtain compensation from the person who caused the injury” (Tort Law, n.d.). Two categories of torts exist: intentional and unintentional. Intentional torts consist of assault, battery, trespass, false imprisonment, nuisance, and defamation. Unintentional torts primarily consist of negligence (Tort Law, n.d.). In tourism, most lawsuits involve negligence, with one party seeking financial compensation.

Tourism operators must consider their exposure to unintentional torts, primarily negligence. Negligence can be defined as “the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something a prudent and reasonable man would not do” (Cloutier, 2000, p. 13). In other words, if the safety standards of a business fall below an established standard and injury occurs as a result, the injured person may sue for negligence.

Pursuing legal action against an operation for negligence is a process that needs to be initiated by the party who has been injured (plaintiff). To be successful, four elements have to be proved: injury, duty to care, breach in the standard of care, and causation.

The first of these, injury, means that it must be shown that the person suing did, in fact, receive an injury that resulted in damages. This might be physical damage, such as a bodily injury, or it may be damage to property.

The concept of duty to care refers to the relationship between the plaintiff and the defendant, a relationship requiring the defending party to care for the plaintiff. For example, in tourism, duty to care relationships exist between hotels and guests, tour guides and tour participants, and instructors and students. Is it expected that the person or organization in the relationship is responsible for ensuring the other person is safe from reasonable harm.

Once a duty has been established, the next step is proving negligence is to show that there was a breach in the standard of care. Can it be shown that the defendant failed to work to the recognized standard? The standard may be established by professional organizations or simply by the “reasonable person test,” which is an assessment of what other individuals or operations would have done in the same situation. Tourism operators are responsible for determining what current standards in industry are; not being aware of industry standards is not be an acceptable defence in the courts.

The last element that needs to be proved is causation. This means that there must be a strong link between the actions of the defendant that caused injury to the plaintiff. As an example, if a ski resort failed to clear the ice off its pathways, and a guest fell and was injured on the icy path, it is likely that causation could be proved (Heshka & Jackson, 2011).

Contract Law

Figure 11.6 Signing a contract.

Contracts are frequently used by tourism operators. Common types of contracts include contracts for service, employment agreements, rental agreements, and legal releases [waivers] (Cloutier, 2000). Given the importance of all of these types of agreements, it is vital that operators use documents that are valid and based in contract law. For a contract to be valid and legally enforceable, it must contain all of the following components: an offer and acceptance, consideration, an intent to enter into a legal relationship, and sufficient capacity (understanding) of those involved involved (Longchamps & Wright, 2007). Each of these is described below.

Offer and acceptance means that the “offer” (e.g., a rental car agency will advertise a car for rent) must be clear, unequivocal, and include all of the important and relevant terms in the contract. The acceptance also must be clearly expressed (e.g., the renter agrees to rent the car according to the terms and conditions offered by signing the contract). Once the offer is accepted, it becomes a promise with both parties being bound by the terms of the contract.

Consideration refers to the value that is exchanged between parties in the contract, such as money or services (e.g., the renter pays for use of the rental car). Sometimes consideration is waiving your legal rights for a right to participate in an activity.

Capacity refers to the ability of individuals to enter the contract. If a person signing a contract does not have sufficient capacity, the contract will not be binding. The most common reason for not having sufficient capacity is age. In most cases, a person who has not reached the legal age of majority cannot contract with someone else. Other requirements for capacity include having sufficient mental capacity, and being the authorized signatory (the person with the authority to sign on behalf of an organization) (Longchamps & Wright, 2007).

The implications of contract law to the tourism and hospitality industry are extensive; any contact signed needs to have unambiguous terms, be clearly accepted, have an exchange of value, and be signed by an adult with full mental capacity or by an authorized signatory of the organization. Failing to adhere to any of these conditions will likely result in the contract being considered void.

Waivers

For many tourism operators, waivers are considered a key part of their risk management process. Waivers are particularly important in the adventure, outdoor, and sport tourism sectors where there is a greater risk of personal injury, and have been proven as an effective risk management tool.

A waiver is a form of contract that transfers acceptance of the risk to the participants by requiring them to acknowledge the risks present in the activity. It also requires participants to waive their right to take legal action if an accident occurs. In Canada, these have been repeatedly successful in defending against lawsuits. Despite their effectiveness, there have been cases where waivers have failed to protect an organization, often because the waiver was poorly written or delivered incorrectly (Importance of Waivers in Recreation Programs, n.d.).

To be effective, a waiver should include the following four components:

1. It should clearly outline the risks in the activity; this is ‘voluntary acceptance of risk’ in that the signee accepts the risks of the activity.
2. It should waive the participant’s right to pursue legal action against the tourism operation in case of negligence; this is a ‘waiver of claims’ in that the signee agrees not to pursue legal action.
3. It should be relatively short and easy to read, be easily recognized as a legal document, and include a place for signature that can be witnessed by a company employee. Current best practices indicate a waiver should not be signed by a friend of the signee or another guest.
4. It should be signed by participants only when they have been given ample time to read and understand it well in advance of the event or activity. Failure to provide enough time may be interpreted by the courts as signing under duress, which would make the contract void and mean that the waiver could not be used as a defence against negligence

The components above are brief summary of what components should be included in waiver documentation; legal counsel should be sought to draft a waiver for specific operation (Importance of Liability Waivers in Recreation Programs, n.d.; Karroll v. Silverstar Resorts, 1988).

Statutory Requirements for Tourism and Hospitality in BC

All tourism companies must adhere to the laws in the jurisdiction in which they operate. In BC there are certain statutes (laws) that are particularly relevant to tourism and hospitality. These are outlined in brief below.

Hotel Keepers Act

The Hotel Keepers Act allows an accommodation provider to place a lien on guest property for unpaid bills, limits the liability of the hotel keeper when guest property is stolen and/or damaged, and gives the provider the authority to require guests to leave in the event of a disturbance (Hotel Keepers Act, 1996).

Hotel Guest Registration Act

The Hotel Guest Registration Act requires hotel keepers to register guests appropriately, which includes noting a guest’s arrival and departure dates, home address, and type and licence number of any vehicle (Hotel Guest Registration Act, 1996).

Liquor Control and Licensing Act

The sales and service of alcohol in BC hospitality establishments is highly regulated by the provincial government through the Liquor Control and Licensing Branch (LCLB).

Hospitality operators and their staff must be aware of fundamental requirements of the Liquor Control and Licensing Act, which defines the ways in which alcohol can be made, imported, purchased, and consumed in BC. As these requirements change frequently, it is the responsibility of operators and staff to keep up-to-date on the particulars of liquor legislation.

Travel Industry Regulation

As part of the Business Practices and Consumer Protection Act, the Travel Industry Regulation outlines the requirements for licensing, financial reporting, and the provision of financial security for travel sales. Additionally, it requires licensed travel agents to contribute to the Travel Assurance Fund, which compensates consumers if a travel provider is unable to provide the purchased product due to insolvency (Travel Industry Regulation, 2009).

Occupiers Liability Act

The Occupiers Liability Act specifies the responsibilities of those that occupy a premise such as a house, building, resort, or property to others on their property. It includes a definition of a premise, as well as the duty of care the occupier has to care for the condition of the premises, activities on the premises, and the conduct of other people (third parties) on the premises. It also outlines when occupiers liability is excluded, such as on Crown land or private roads (Occupiers Liability Act, 1996).

Figure 11.7 An abandoned hotel outside Radium Hot Springs, B.C.

Resort Associations Act

The Resort Associations Act was developed to provide opportunities to fund a variety of promotional services for a resort community. It outlines the organizational structure for the community and allows funding through member fees for activities such as marketing, planning special events, developing signage, and acting as a central booking agency (Resort Associations Act, 1996). To meet the criteria for this Act, resort areas are required to be within a designated resort region, have alpine ski lift operations, and provide year-round recreational facilities or commercial overnight accommodation (Government of BC, 2015).

Obtaining and maintaining appropriate insurance coverage is an important part of the risk management process. Insurance transfers the financial risks to a third party — the insurance company. Operators pay premiums that are established by the insurer based on the risk of the coverage. If the likelihood or the uncertainty of claims is high, the premiums will be higher. There are a variety of reasons why a tourism company requires insurance: to control the risk of offered activities, to meet statutory requirements, because industry partners require it, to protect business and assets, and to protect employees (DC, 2003b, p. 3). Insurance does not prevent accidents from happening, nor does it make an operation safer. It does, however, provide a reasonable amount of financial protection if an accident does happen.

Common types of insurance policies required by tourism operators include commercial general liability (CGL), property insurance, and accounts receivable insurance. CGL insurance can be one of the most important coverages, but unfortunately it can also be one of the most difficult and expensive to obtain. CGL policies cover operators for liability if an accident occurs, including bodily injury, medical payments, and personal injury. Property insurance provides coverage for the financial risks associated with loss of assets such as buildings, equipment, and merchandise. Accounts receivable insurance can cover a large proportion of account receivables if a customer fails to pay due to default or insolvency, thus providing a considerable safeguard to any tourism operation (DC, 2003a; DC, 2003b; Destination BC, 2013).

Some insurance coverage is optional, and operators may decide to self-insure on assets such as property and accounts receivable. Self insuring is the practice of an operation retaining the risk rather than transferring through insurance; it may be a conscious choice or a necessity based on lack of available coverage. Other insurance coverage may be required, such as motor vehicle insurance or liability insurance (required by most industry partners and some statutory requirements). In the end, the tourism operator must determine what coverage is required and what optional additional coverage is desired.

So far we have primarily discussed risk management from a client/guest perspective. However, substantial effort in a tourism and hospitality operation must be put into managing worker safety as well. Responsibilities for worker safety are generally legislated by occupational health and safety laws, which clearly dictate safety standards. Employers who fail to adhere to these standards may be penalized or fined (WorkSafeBC, 2015a).

WorkSafeBC is the provincial organization for occupational health and safety in BC. It is an independent agency managed by a board of directors who are appointed by government. The mandate of WorkSafeBC is to:

• Promote the prevention of workplace injury, illness, and disease
• Rehabilitate those who are injured and provide timely return to work
• Provide fair compensation to replace workers’ loss of wages while recovering from injuries
• Ensure sound financial management for a viable workers’ compensation system (2015b)

There was an average of 4300 tourism and hospitality WorkSafeBC claims each year from 2014 to 2018, which is slightly below the average of all sectors within BC. (WorkSafeBC, 2020c). To reduce these claims and protect workers, WorkSafeBC has an extensive worker safety program with educational resources and training programs available. A partnership with go2HR — the tourism and hospitality human resources organization — has been developed to raise awareness in tourism and hospitality about worker safety, particularly for young, vulnerable workers (go2HR, 2015).

Figure 11.8 Kitchen accidents are a common workplace injury in hospitality. Many are more serious than this.

The nature of tourism and hospitality often means operations need to employ a considerable number of employees; these are often entry-level positions, requiring little experience. Employers need to be cognizant of the requirements for worker safety under WorkSafeBC; failing to do so may result in fines for the operation, or far worse — workplace injuries to employees.

In addition to concerns about safety, employers and employees must be aware of the Employment Standards Act. This act defines the legal requirements around employment such as minimum wage, breaks, meal times, vacation pay, statutory