2016 Planning Process Environmental Scan
2016 Planning Process Environmental Scan Presented: May 26, 2015
Environmental Scan Purpose: Assesses the macro-environment the firm is operating in. • Sets context • Helps to frame opportunity and risk • Look for trends, opportunities and disruption • Prudent step to help kick off a strategy cycle Output - Strategic Issues: Key factors in the corporate plan which need to be addressed by the organization.
PESTEL Framework
P - Political E - Economic S - Societal T - Technological E - Environmental L - Legislative
Sources
• Financial forecasts: use latest wherever possible • Leading economic and societal thinkers • Leading business media • Highly reputable management consultants and private sector commercial research • Look for stories and trends that repeat themselves
Tourism: A Complex Ecosystem • Many factors input • Helps to set strategic, then operational context • Nothing in this scan will be dominant
Political
UNWTO/G20 Context
United Nations World Tourism Organization Projects 1.8 Billion international arrivals by 2030, up from the current 1.1 Billion international arrivals. 2008 saw 890 Million international arrivals. Source: UNWTO projections
Victoria Context 2015: Strong Start April occupancy up 12 % over 2014 April ADR up 5.7 % over 2014 April RevPAR up 18.4 % over 2014 44,475 more hotel room nights transacted YTD through April Source: Chemistry Consulting
Source: Smith Travel Research
All Levels Embracing Tourism • Announcement last Friday by Prime Minister Harper • Tourism Victoria has secured its matching partnership investment from CTC • First DMO in Canada to secure funding
Province of BC: Jobs Plan •
Tourism is listed as one of the nine priority sectors in the BC Jobs plan
•
Three mentions in the speech from the throne
•
Very engaged responsible Ministers
•
Opportunity for increase in MRDT from 2% to 3%
•
View destination marketing as an investment with ROI
Municipal: Tourism Part of Strategy
• Tourism and Technology identified as two priorities sectors • Tourism now firmly supported by City of Victoria • Understand the local importance
Sense of Collaboration • Mayor’s Economic Development Task Force • Rolling up sleeves and getting down to work • Tourism is front and centre • Actionable results by July
Infrastructure Investments • Victoria International Airport $25 Million Capital Plan • Belleville Terminal Phase one nearing approval
Leaner Destination Marketing Organizations • Canadian Tourism Commission downsizing • Destination British Columbia downsizing • Tourism Victoria downsized • Tourism Vancouver downsized • Focus on impact, knowledge and skill: not headcount
Economic
Fast Growing Sector • Tourism one of the faster growing segments of global economy • Labour intensive • Cannot be outsourced • Innately local “Tourism and advanced IT will get B.C.’s Economy through this resource slump.” Jock Finlayson, Business Council of B.C. March 2015
Era of “Lowflation” •
Global “Lowflation” but not deflation.
•
Lower wage growth, but low household cost increases
Source: CIBC, OECD (Note: Based on OECD data on 34 countries, including Latvia, South Africa, and all OECD nations except
Australia and New Zealand.)
Global Growth: 3.6% in 2016
Source: CIBC
“If terms of age, if 50 is the new 30 then in terms of GDP Growth, 2% is the new 3% for Western Economies”
Oil Shock More Painful for Canada
Source: CIBC
And Painful to Some Canadians
Source: CIBC
Less Inputs Required in New Economy What a $4 B Market Cap Company Looked Like: Crescent Point Energy before Oil Shock
What a $4 B Market Cap Looks Like Now: The Candy Crush Economy
Candy Crush Inputs: - Talent - Office space - Pizza for developers - Ping pong table
Source: CIBC
Interest Rates May Rise: But Will Take it Slow Remember we just had a .25% reduction in BOC overnight rate.
Source: CIBC
Young and Restless: 25-35 Group Outlook Improving • Employment prospects improving • Wages slowly improving • Skilled workers in demand • Key to housing market and travel growth • Demand a voice and have it on social media and into other forms of media
U.S. Economy “Determined” • Narrative of US economy based on innovation is true • New emphasis on invention, making and creating value • Pure speculation is seen as taboo • Next generation of “Greatest Generation” want to do good by America • When political institutions are gridlocked, faith back in private sector
US Credit Healthy Again • Real estate market implications. Buyers re-entering after seven year “rest”.
Source: CIBC
Asia Continues to Grow and Evolve
• China Focused on pivoting to a service sector economy by 2020. Shift away from reliance on low cost manufacturing. • Very difficult transition with emphasis on education.
Canadian Dollar
• Ongoing weakness projected • .75 - .85 range seems realistic for medium term • Helps but cannot rely on it • Consumer doesn’t understand in planning phase • Need to be competitive
Lesson: Exchange rates don’t magically make sectors more competitive
Societal
Continued Importance of Travel
“Work Life Blend” • Work life balance is being replaced by the concept of “work-life blend” • Extending work hours into leisure time combined with more flexibility at work
Rise of the Freelancer
World is Shrinking: Less Travel Options • More global demand for travel • Less choice in safe destinations • War and disruption have placed emphasis on safety • Travel trade adjusting itineraries
Population is “Up in the Air” • 650,000 people in air at any moment • Air travel as lifestyle • Air network expansion • Rise of secondary airports to support global networks
Social Networks: Content & More Content
Content marketing is effectively replacing broadcast and making broadcast obsolete
Media is Changing • Nice digital players have massive reach • Constantly looking for good content & “news” • Tremendous opportunity to influence
Sharing and Selfie “Culture” • Conspicuous experience consumption • Deep need to share • Selfie sticks meet drones
Need for Digital Detox
Source: Emarketer.com Photo Credit: CTC
Print Fights for Relevance & Survival
Chinese Travellers More Sophisticated Canadian Tourism Commission’s Canadian Travel Ambassador: • Independent & More Sophisticated Twitter – 70K Followers https://twitter.com/godfreygao Instagram – 291K Followers https://instagram.com/godfreygao/ Weibo – 1.3 Million Followers http://weibo.com/godfreygao1
• Epitomizes “sophisticated cool”.
Technological
Disruptions in Manufacturing Sector • Advanced Robotics • 3 – D Printing • SaaS and construction and manufacturing process • Less jobs more technical jobs
Go-Pro Transforms Vacations
Mobile Search Trumps Desktop • Google reported for mobile now over 50% of search in March 2015 • Profound implication for marketers • Repositioning of online properties a priority
Wearables and Marketing • 20% of US consumers already own a form or wearable technology • Deep marketing implications
Internet of Things • Emerging but vulnerable • How secure it is? • More free time or more worry? • How will marketing & communications infiltrate?
Environmental
Climate Change Established
• Broader acceptance • Suncor CEO calls for broad carbon tax • Renewed public policy vigor • Adaptation strategies
Drought in California • Real societal change • Changes in behaviours required • Farmland to fallow • Will affect one of our largest source markets
Lake Oroville California: 2011 and 2015 comparison. Source: CBC News
Asian Travellers Crave Fresh Air • Only 4% of Chinese cities reported clean air. (source: ChinaUSA Daily March 2014) • Fresh air and nature are most certainly differentiators for Greater Victoria
Transportation Sector Making Improvements • Aviation is making significant improvements • Committed to carbon neutral growth by 2020 • IATA showing industry leadership along with ICAO who is global regulator of aviation
Legislative
Privacy = Big Topic • Anti Spam (CASL) fines starting from CHRT • Security of mobile phones • So far consumers seem to be trading convenience over privacy
Payment Processing Security • Companies have suffered large reputational blows - Target - Starbucks • Payment processing will continue to evolve rapidly
More Progressive Social Policy • Gay Marriage Rights • Focus on anti-bullying • Healthy/safe work environments
Conclusions
•
Unprecedented Political and Policy support for Tourism
•
Stable if slow growth economy
•
Economic fundamentals for Tourism in place
•
Travel, learning and enrichment continue to be key motivators
•
Societal focus on sharing, content and telling stories
•
Environmental concerns come into clearer focus
Thank-You
Environmental Scan Purpose: Assesses the macro-environment the firm is operating in. • Sets context • Helps to frame opportunity and risk • Look for trends, opportunities and disruption • Prudent step to help kick off a strategy cycle Output - Strategic Issues: Key factors in the corporate plan which need to be addressed by the organization.
PESTEL Framework
P - Political E - Economic S - Societal T - Technological E - Environmental L - Legislative
Sources
• Financial forecasts: use latest wherever possible • Leading economic and societal thinkers • Leading business media • Highly reputable management consultants and private sector commercial research • Look for stories and trends that repeat themselves
Tourism: A Complex Ecosystem • Many factors input • Helps to set strategic, then operational context • Nothing in this scan will be dominant
Political
UNWTO/G20 Context
United Nations World Tourism Organization Projects 1.8 Billion international arrivals by 2030, up from the current 1.1 Billion international arrivals. 2008 saw 890 Million international arrivals. Source: UNWTO projections
Victoria Context 2015: Strong Start April occupancy up 12 % over 2014 April ADR up 5.7 % over 2014 April RevPAR up 18.4 % over 2014 44,475 more hotel room nights transacted YTD through April Source: Chemistry Consulting
Source: Smith Travel Research
All Levels Embracing Tourism • Announcement last Friday by Prime Minister Harper • Tourism Victoria has secured its matching partnership investment from CTC • First DMO in Canada to secure funding
Province of BC: Jobs Plan •
Tourism is listed as one of the nine priority sectors in the BC Jobs plan
•
Three mentions in the speech from the throne
•
Very engaged responsible Ministers
•
Opportunity for increase in MRDT from 2% to 3%
•
View destination marketing as an investment with ROI
Municipal: Tourism Part of Strategy
• Tourism and Technology identified as two priorities sectors • Tourism now firmly supported by City of Victoria • Understand the local importance
Sense of Collaboration • Mayor’s Economic Development Task Force • Rolling up sleeves and getting down to work • Tourism is front and centre • Actionable results by July
Infrastructure Investments • Victoria International Airport $25 Million Capital Plan • Belleville Terminal Phase one nearing approval
Leaner Destination Marketing Organizations • Canadian Tourism Commission downsizing • Destination British Columbia downsizing • Tourism Victoria downsized • Tourism Vancouver downsized • Focus on impact, knowledge and skill: not headcount
Economic
Fast Growing Sector • Tourism one of the faster growing segments of global economy • Labour intensive • Cannot be outsourced • Innately local “Tourism and advanced IT will get B.C.’s Economy through this resource slump.” Jock Finlayson, Business Council of B.C. March 2015
Era of “Lowflation” •
Global “Lowflation” but not deflation.
•
Lower wage growth, but low household cost increases
Source: CIBC, OECD (Note: Based on OECD data on 34 countries, including Latvia, South Africa, and all OECD nations except
Australia and New Zealand.)
Global Growth: 3.6% in 2016
Source: CIBC
“If terms of age, if 50 is the new 30 then in terms of GDP Growth, 2% is the new 3% for Western Economies”
Oil Shock More Painful for Canada
Source: CIBC
And Painful to Some Canadians
Source: CIBC
Less Inputs Required in New Economy What a $4 B Market Cap Company Looked Like: Crescent Point Energy before Oil Shock
What a $4 B Market Cap Looks Like Now: The Candy Crush Economy
Candy Crush Inputs: - Talent - Office space - Pizza for developers - Ping pong table
Source: CIBC
Interest Rates May Rise: But Will Take it Slow Remember we just had a .25% reduction in BOC overnight rate.
Source: CIBC
Young and Restless: 25-35 Group Outlook Improving • Employment prospects improving • Wages slowly improving • Skilled workers in demand • Key to housing market and travel growth • Demand a voice and have it on social media and into other forms of media
U.S. Economy “Determined” • Narrative of US economy based on innovation is true • New emphasis on invention, making and creating value • Pure speculation is seen as taboo • Next generation of “Greatest Generation” want to do good by America • When political institutions are gridlocked, faith back in private sector
US Credit Healthy Again • Real estate market implications. Buyers re-entering after seven year “rest”.
Source: CIBC
Asia Continues to Grow and Evolve
• China Focused on pivoting to a service sector economy by 2020. Shift away from reliance on low cost manufacturing. • Very difficult transition with emphasis on education.
Canadian Dollar
• Ongoing weakness projected • .75 - .85 range seems realistic for medium term • Helps but cannot rely on it • Consumer doesn’t understand in planning phase • Need to be competitive
Lesson: Exchange rates don’t magically make sectors more competitive
Societal
Continued Importance of Travel
“Work Life Blend” • Work life balance is being replaced by the concept of “work-life blend” • Extending work hours into leisure time combined with more flexibility at work
Rise of the Freelancer
World is Shrinking: Less Travel Options • More global demand for travel • Less choice in safe destinations • War and disruption have placed emphasis on safety • Travel trade adjusting itineraries
Population is “Up in the Air” • 650,000 people in air at any moment • Air travel as lifestyle • Air network expansion • Rise of secondary airports to support global networks
Social Networks: Content & More Content
Content marketing is effectively replacing broadcast and making broadcast obsolete
Media is Changing • Nice digital players have massive reach • Constantly looking for good content & “news” • Tremendous opportunity to influence
Sharing and Selfie “Culture” • Conspicuous experience consumption • Deep need to share • Selfie sticks meet drones
Need for Digital Detox
Source: Emarketer.com Photo Credit: CTC
Print Fights for Relevance & Survival
Chinese Travellers More Sophisticated Canadian Tourism Commission’s Canadian Travel Ambassador: • Independent & More Sophisticated Twitter – 70K Followers https://twitter.com/godfreygao Instagram – 291K Followers https://instagram.com/godfreygao/ Weibo – 1.3 Million Followers http://weibo.com/godfreygao1
• Epitomizes “sophisticated cool”.
Technological
Disruptions in Manufacturing Sector • Advanced Robotics • 3 – D Printing • SaaS and construction and manufacturing process • Less jobs more technical jobs
Go-Pro Transforms Vacations
Mobile Search Trumps Desktop • Google reported for mobile now over 50% of search in March 2015 • Profound implication for marketers • Repositioning of online properties a priority
Wearables and Marketing • 20% of US consumers already own a form or wearable technology • Deep marketing implications
Internet of Things • Emerging but vulnerable • How secure it is? • More free time or more worry? • How will marketing & communications infiltrate?
Environmental
Climate Change Established
• Broader acceptance • Suncor CEO calls for broad carbon tax • Renewed public policy vigor • Adaptation strategies
Drought in California • Real societal change • Changes in behaviours required • Farmland to fallow • Will affect one of our largest source markets
Lake Oroville California: 2011 and 2015 comparison. Source: CBC News
Asian Travellers Crave Fresh Air • Only 4% of Chinese cities reported clean air. (source: ChinaUSA Daily March 2014) • Fresh air and nature are most certainly differentiators for Greater Victoria
Transportation Sector Making Improvements • Aviation is making significant improvements • Committed to carbon neutral growth by 2020 • IATA showing industry leadership along with ICAO who is global regulator of aviation
Legislative
Privacy = Big Topic • Anti Spam (CASL) fines starting from CHRT • Security of mobile phones • So far consumers seem to be trading convenience over privacy
Payment Processing Security • Companies have suffered large reputational blows - Target - Starbucks • Payment processing will continue to evolve rapidly
More Progressive Social Policy • Gay Marriage Rights • Focus on anti-bullying • Healthy/safe work environments
Conclusions
•
Unprecedented Political and Policy support for Tourism
•
Stable if slow growth economy
•
Economic fundamentals for Tourism in place
•
Travel, learning and enrichment continue to be key motivators
•
Societal focus on sharing, content and telling stories
•
Environmental concerns come into clearer focus
Thank-You
