Oceanside’s Tourism Economy - Parksville€¦ · Secondary Spending ... Population growth from new residents retiring in Oceanside ... This section of the report addresses the structure

Oceanside’s Tourism Economy

An Assessment of the Value of Tourism in Oceanside

Conducted on behalf of

Oceanside Tourism Association

By

December 2003


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Manecon Business Strategies Inc.

The Tourism Economy of Oceanside

Table of Contents

The Tourism Economy of Oceanside................................................................................. 1

Introduction and Methodology......................................................................................... 1

Acknowledgements ......................................................................................................... 2

Summary of Key Findings................................................................................................... 3

Benefits of The Tourism Economy..................................................................................... 4

The Value of Oceanside’s Tourism Role........................................................................ 4

Oceanside’s Tourism Industry ........................................................................................ 5

Visitors to Oceanside ...................................................................................................... 6

Visitor Spending .............................................................................................................. 7

Economic Impacts........................................................................................................... 7

Sensitivity Analysis.......................................................................................................... 8

Capacity and Opportunity ............................................................................................... 9

Tourism Industry Employment ...................................................................................... 10

Distribution of Visitor Spending ........................................................................................ 12

Reliance on Tourism..................................................................................................... 13

Secondary Spending..................................................................................................... 13

Oceanside’s Tourism Marketplace ................................................................................... 16

A Competitive Marketplace........................................................................................... 16

The Destination Team................................................................................................... 17

Oceanside’s Visitors ......................................................................................................... 19

Visitor Profile ................................................................................................................. 19

Optimizing Community Benefits from Tourism................................................................. 25

Industry Trends and Potential for Growth ..................................................................... 26

Enhancing Community Benefits.................................................................................... 30

Conclusions and Recommendations ................................................................................ 33

Overall Conclusions ...................................................................................................... 33

Recommendations ........................................................................................................ 35

Appendix One – Visitor Count Estimates ......................................................................... 38

Appendix Two – Visitor Spending..................................................................................... 39

Appendix Three – TVI/MUC Survey Data Tables ............................................................ 40


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The Tourism Economy of Oceanside

Introduction and Methodology

This research was conducted on behalf of the Oceanside Tourism Association to explore the value of tourism in the Oceanside area. The study was designed to bring into focus the way in which tourism contributes to the local economy.

The research program included both quantitative and qualitative approaches. The conclusions summarized in this report result from the development of a model of the Oceanside tourism economy.

The model draws on significant known data, including the Occupancy Tax statistics and the results of several surveys conducted over many years. An exploratory interview program contributed to interpretation of the data and brought anecdotal information of value to the research.

A significant source of data in many analyses is a recently published year-long survey of visitors conducted by Tourism Vancouver Island and Malaspina University College (“TVI/MUC”). While some aspects of that research project remain to be finalized, and in that context the results based on the data should be considered cautiously, the survey provides a comprehensive profile of Vancouver Island’s visitors.

In all, nearly 7,500 interviews were conducted in this survey at dozens of locations on Vancouver Island. The interviews conducted in Oceanside were included in the “Central Vancouver Island” sample. A total of 397 interviews were conducted in Oceanside. This sample provides confidence at a level reasonable for making marketing decisions.

The primary interviews were held with Oceanside’s front line tourism industry participants, including accommodation providers, food and beverage establishments, local transportation operators, attraction and entertainment facilitators, and retailers. Interviews were also conducted with many other businesses to assess the involvement of the tourism economy in their businesses. Interviews were distributed between Parksville, Qualicum Beach, Nanoose Bay, and Coombs. The following table summarizes the extent of the Oceanside exploratory interview program.

Interviewee Tourism Direct* Other Interests Total Interviews

Bed & Breakfasts 10 10

Commercial Fixed Roof Accommodation 5 5

Community Organizations 5 5

Restaurants 2 1 3

Attractions, Entertainment 4 2 6

Retailers 14 14

Service 3 3

Financial Services 4 4

Government 6 6

Total 26 30 56

* “Tourism Direct” means a direct participant in Oceanside’s tourism industry. Most are OTA members


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Secondary sources of data were used to assess economic impacts and to guide the conclusions. It is inevitable that data gathered for one purpose sometimes do not directly reflect the needs of other research. Therefore, data are interpreted to provide study inputs. In some cases the sample sizes in surveys are limited and that limitation constrains confidence in the resulting data.

Acknowledgements

The consultants take this opportunity to acknowledge the enthusiastic support for this project shown by the business community in Oceanside. The research program included interviews with front line tourism businesses and many businesspeople in Oceanside. The business community and municipal government representatives committed a significant volume of time and thought in these interviews with the consultants. The commitment of Oceanside businesspeople and government illustrates the importance of tourism to the local economy.


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Summary of Key Findings This document explores the value of tourism for the Oceanside communities and examines opportunities for expanding the benefits of tourism in the area.

Tourism is a major influence in the economy of Oceanside communities

Ø Approximately 516,000 visitors spent 947,000 “visitor days” in Oceanside during 2002 (One visitor day is one day spent by one visitor.)

Ø Visitors to Oceanside in 2002 spent an estimated $76.0 million on accommodation, food and beverages, attractions and entertainment, retail, and local transportation. The economic benefit of this spending is likely $150.0 million

Ø For 40% of local businesses tourism spending is either their primary or a secondary source of revenue

Ø Many goods, services, and activities would not be available to local residents without the support of tourism spending

Ø Many local businesses would fail or diminish without tourism receipts

Ø Local government receives direct benefits from tourism.

Visitor spending is re-spent in the community

Ø Most tourism businesses have policies to buy locally where feasible in connection with the operation of their business

Ø Likely more than 1,000 local residents are directly employed in Oceanside’s tourism industry.

Ø Perhaps 40% of Oceanside employees are supported by the tourism economy

Ø Local businesspeople are quick to acknowledge spending by Oceanside’s tourism industry employees.

There is extraordinary potential to expand local benefits from tourism

Ø World events cost Oceanside communities some $8.7 million in visitor spending in 2002 – but Oceanside recovers quickly from these impacts

Ø Aggressive marketing and destination strategies may yield a further $15.0 million in visitor spending annually in Oceanside

Ø Residents, government, community organizations, direct tourism industry businesses and other businesses can become a powerful team to execute strategies to enhance economic and lifestyle benefits from tourism.

Ø Capacity for growth exists year-round. Benefits for Oceanside residents and businesses are directly enhanced by a stronger tourism economy

Ø The research shows opportunities to target specific high-yield populations in marketing strategies

Ø Focused visitor servicing strategies can optimize visitor spending


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Benefits of The Tourism Economy This section of the report explores selected key characteristics of the local tourism economy. While it is perhaps simplest to consider this issue by following the flow of tourism dollars, data are not available to undertake quantitative analysis and documentation of this very interesting issue.

However, examination of the Oceanside’s Occupancy Tax data, interpretation of survey results, and discussion with business people and others in Oceanside communities contribute valuable knowledge to this assessment. Further, those inputs to the research reinforce clearly the importance of tourism to Oceanside’s economy.

The Value of Oceanside’s Tourism Role

It is essential for the health and sustainability of the Oceanside community that new cash is consistently introduced to the economy to replace cash spent outside the community by residents and businesses, to offset inflation, and to provide for the needs and increasing expectations of a growing population. Tourism presently offers the most significant opportunity to introduce new cash to Oceanside.

Interviewees in this study assert their belief that tourism is the most important industry in Oceanside and that without it the community would be unable to sustain its lifestyle or vitality. Businesses would fail. The population would decline and unemployment would increase as jobs would not be available elsewhere in Oceanside.

Tourism is thus an economic driver. It provides money to fuel the economy and it supports and sustains the values and lifestyle of Oceanside residents and businesspeople. This is vitally important as Oceanside strives to adjust to new economic realities and its population seeks jobs and income from new sources.

Visitors come to Oceanside, they spend money, and they leave. As the visitors spend their money in Oceanside, they facilitate the opportunity for Oceanside to put in place the infrastructure, opportunities, and services that makes the Oceanside lifestyle so attractive to the local population.

The proceeds of visitor spending provide revenue and create opportunities for existing and new businesses. This process generates new employment, which is essential to accommodate the growing population. The tourism employees and tourism businesses spend money in the community. Business and other interviewees in this research who are not front line tourism businesses showed clearly that spending by employees of the tourism industry and by tourism businesses is equally as important to Oceanside as spending by visitors. This is a crucial message.

Population growth from new residents retiring in Oceanside produces new demands on the community. Without new and sustainable cash flow, the population can easily outgrow its capacity. Municipal services may decline and the burden of supporting failing infrastructure would fall on an aging population who moved to the community with the expectation of high standards of services.

Further, the attributes that attract tourism are the same attributes that attract new residents. Supporting these attributes is essential.


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Even without population growth, new demands are placed on the community. It is therefore essential that Oceanside’s residential and business populations celebrate the contribution of tourism to its lifestyle and seek opportunities to expand the positive economic and social benefits brought by tourism. Given the extraordinary population growth in Oceanside this becomes a crucial issue.

Tourism is a fibre of Oceanside that is woven throughout the lifestyle and economy of the community and its population. It contributes to incubating other business sectors that are targeted for growth. For example, new technology businesses are traditionally started in locations that meet the lifestyle interests of their owners.

The lifestyle of Oceanside is conducive to the growth of small technology businesses for this very reason. However, the assets that make tourism successful, and the resulting flourish of tourism businesses, significantly contribute to making that lifestyle a reality. Further, a vibrant tourism industry contributes employment statistics and cash flows that encourage people considering a location for their new business.

Oceanside’s Tourism Industry

This section of the report addresses the structure of Oceanside’s tourism economy.

The Stakeholders

The beneficiaries of tourism are its stakeholders. In this context, the research shows the extent to which, in Oceanside, most people are beneficiaries of tourism and therefore must be considered to be stakeholders.

At the front line, the primary recipients of tourism dollars are the accommodation, food and beverage, attractions and entertainment, local transportation, and retail segments of the economy. These players all depend to one extent or another on tourism receipts.

In turn, these businesses spend money in the Oceanside communities on a wide variety of goods and services, including construction trades for new developments and maintenance, business professionals, financial organizations, food suppliers, retailers, governments, and many other areas. The tourism dollars spent by these front line organizations are again re-spent by the businesses they trade with.

Notably, the tourism businesses spend money on salaries and wages. And their employees spend their own money gained from salaries and wages (still tourism dollars) to meet the needs of their day-to-day living.

Structure of the tourism economy

The tourism economy includes direct tourism industry participants and many other community organizations and businesses, as well as the resident population. The economic group is segmented into the following components:

• Deliverers of primary service to visitors

o The accommodation sector, food and beverage, attractions and entertainment, local transportation, and certain retail establishments. Most of these groups have local clients as well as visitors.

• Deliverers of goods and services to the front line tourism industry operators


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o Business professionals, contractors, food suppliers, equipment suppliers, financiers, retailers and wholesalers.

• Businesses that benefit from visitors to Oceanside

o Realtors o Non-conventional retailers (e.g., auto dealers)

• Government

o Municipal, Provincial, and Federal governments all benefit from tourism spending and from the spending of the tourism industry

• The population

o Direct employees in the tourism industry o Students o Own or are employed in businesses whose customers include tourism

industry employees o Directly benefit from the availability of many opportunities and services

that would not exist without tourism receipts.

• Promoters and business organizations

o Oceanside Tourism Association, as the region’s destination marketing organization

o The Chambers of Commerce, whose members include many direct and indirect recipients of tourism receipts and who promote the health and growth of the business community

• Other institutions

o Many institutional or publicly owned facilities that benefit from or focus on visitors in Oceanside.

Visitors to Oceanside

This research concludes that approximately 516,000 visitors spent 947,000 “visitor days” in Oceanside during 2002. A visitor day is derived from the number of groups of visitors, the average number of people in the group, and the average number of days they stay in the community.

Appendix 1 to this document summarizes the approach used to build these estimates and the sources of data used. Some interesting characteristics revealed in the research include:

• Visitors came in a total of 187,000 groups

o 154,000 groups included overnight accommodation in their itinerary; their average group size was 2.8 people

o 33,000 groups were “day trippers”; their average group size was 2.6 people.

• With an average occupancy factor of 49% in commercial fixed roof accommodation and a total of 1,047 rooms, a total of 186,400 room nights were


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sold; and there is extraordinary capacity to expand the benefits of tourism for Oceanside.

Visitor Spending

Overall visitor spending in Oceanside in 2002 was estimated to be $76.0 million. Appendix 2 shows the characteristics of visitor spending and the method used for estimation.

This represents new cash left in the community each year by visitors who bring money and, when they leave, take nothing from the Oceanside economy but their purchases and their memories. Oceanside’s primary tourism draws involve generally non-destructive, non-consumptive activities.

Economic Impacts

The methodology agreed for this study did not include quantitative economic impact analysis. However, in general, the local and sub regional economic impacts of the $76.0 million spent in Oceanside by visitors might be expected to produce the following results:

• Generated a total value in industry output of $150.0 million (including the direct benefits of visitor spending and the associated stimulation of the local economy).

• A total (direct and indirect) benefit in salaries and wages in the region of approximately $50 million

• Contribution of more than 1,900 direct and indirect jobs

• Contribution of more than $30 million in taxation to all levels of government.

Tourism is a significant net contributor to economic growth and to employment. The British Columbia economy notes tourism as its second largest contributing industry, with a value of approximately $9.2 billion. It is also growing steadily, unlike the “Number One” industry (forestry). Tourism in British Columbia contributes $1.0 billion annually to the provincial treasury through taxation and user fees. Tourism accounts for one job in every 14 in British Columbia.

Defining tourism in economic terms has long been a challenge for the tourism industry. This is because tourism is not one of the internationally acknowledged Standard Economic Accounts governments use to measure their economies. Various portions of the tourism industry are defined in other industries and are therefore hidden.

The United Nations Statistical Commission has published principles to define tourism accounts. The tourism satellite accounts simulate a defined economic sector for tourism by extracting from the economic accounts those values defined by the UNSC as tourism accounts.

The tourism industry accounts for 2.3% of Canada’s economy, larger than both forestry and agriculture. Nearly 4% of all jobs in Canada are in the tourism industry.

Benefits for Municipal Governments

Taxation benefits accrue to the Oceanside municipal governments at a rate of 1.8 cents for every tourism dollar spent. Thus the $76 million that visitors spent in Oceanside in 2002 resulted in a $1.4 million direct taxation contribution to the municipal budget. The


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Canadian Tourism Commission recently published these factors following their analysis of the Canadian Tourism Satellite Account.

Municipal governments are expected to provide community infrastructure in suitable condition and with suitable capacity to meet the needs of tourism, other important local industries, and the demands of the population. However, municipalities differ in their view of tourism.

There is no question that increased tourism brings increasing service cost for the municipality. However, increasing tourism also results in new direct and indirect business growth and increasing municipal revenues from property taxation and other fees. Further, the prosperous community can maintain high standards.

Without economic growth, the residents of communities suffer from increasing taxation as infrastructure deteriorates. It is the opinion of the consultants that the economic growth that results from a vibrant tourism economy carries benefits for the residents and the local businesses that far outweigh the financial and other costs associated with tourism. Effective planning will optimize the benefits while ameliorating most negative impacts.

Sensitivity Analysis

Examination of Occupancy Tax data over several years shows that 2002 was not a stellar year in Oceanside’s tourism industry. This was primarily due to the effects of a sluggish world economy, the lingering travel impacts of “9/11”, and the impact of Oceanside’s brush with the Cryptococcus fungus, among other factors.

The Occupancy Tax data provide for strong quantitative tracking of the performance of the commercial fixed roof accommodation sector (hotels, motels, and resorts) on a monthly basis. Occupancy and revenue data can be examined in the reports. Therefore, a detailed evaluation of 2001 and 2002 data was conducted to assess the impacts of the various events through variance in occupancy percentages.

The data presented previously in this report show the actual performance in 2002. In this sensitivity analysis, for each month in the year 2002, the higher of the occupancy rate for 2001 and 2002 was used to replace the occupancy data shown for 2002. Thus the effect of various events that affected each year is removed. The result of this change is that the average annual occupancy rate increases from 48.8% (actual 2002) to 54.4% (using the 2001 or 2002 high average occupancy rate for each month). This increase of 5.6 percentage points equates to an increase in occupancy of 11.5%.

A Normalized 2002

Were these the actual data for 2002, the following profile of visitors and visitor spending might have been achieved:

• 575,400 visitors and 1,055,500 visitor days

• $84.7 million in visitor spending.

In other words, if the optimum monthly performance of the two years was the actual performance, visitors may have spent a further $8.7 million in Oceanside during 2002.

Another forecast was conducted to explore the opportunity for additional growth. The forecast shows that Oceanside’s commercial fixed roof accommodation sector could


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withstand a gross increase of a 10% in occupancy in each month, equivalent to additional occupancy of 5.5%.

Capacity and Opportunity

Capacity

Within the scenario described above, there remains significant capacity for increasing the number visitors, and consequently the benefits of visitor spending, in all months. The month of August would become quite challenging with 95% occupancy.

There remains significant capacity for an expanded tourism economy in Oceanside beyond that level. This would be achieved through aggressive promotion of the shoulder and winter season opportunities.

Further, the potential for very significant increases in Oceanside’s inventory of commercial fixed roof accommodation are associated with several new projects that are presently under consideration or in various stages of planning. These projects may increase the overall overnight capacity of Oceanside’s hotels, motels, and resorts by more than 20%. Provided that new marketing investment would be associated with these new projects, it is anticipated that the volume of visitors and economic contribution of tourism would generally increase comparably.

For the foreseeable future, the capacity of commercial fixed roof accommodation does not directly limit the potential for increasing the cash flow in Oceanside from visitor spending. However, increases in visitor spending will be limited by the extent to which aggressive, targeted, and strategic promotion of Oceanside takes place.

Opportunity

The research concludes that there is enormous potential for growth in shoulder and winter seasons. Elsewhere, this document describes the attractiveness of Oceanside as a destination for a high-spending target market of adults traveling without children. Their motivation to travel is also addressed. These travelers, and the organizers of small meetings, would be targeted as a strategy to reduce excess capacity in the commercial fixed roof accommodation sector in the spring and fall.

Likely the capacity in campgrounds would limit the overall growth in the summer. Used extensively by family travelers, the campgrounds may not be able to withstand these increases in summer. There is good capacity for growth in the B&B community.

The high proportion of visitors who stay with their friends or relatives resident in Oceanside is expected to continue to increase as the influx of new residents from elsewhere in BC, Alberta, Ontario, and various other locations continues.

Thus it appears not unreasonable that a further $10 to 15 million in visitor spending could be introduced to the Oceanside community with additional marketing, but little change in the existing product. That means that aggressive marketing strategies focused on selected targets may result in a further $10 to $15 million being spent among Oceanside’s businesses each year by visitors.

The benefits of visitors to the community are vibrancy in the economy, the availability of facilities and activities for the local residents, and community pride.


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It is important to understand that destination marketing is about optimizing the benefits of visitor spending by facilitating the investment of targeted marketing initiatives and stimulating the response of the destination’s tourism stakeholders.

Tourism Industry Employment

Direct Employment in Front Line Tourism Businesses

A 2002 study by Tourism Vancouver Island and Malaspina University College addresses the issue of employment in the tourism industry. The research reveals several key characteristics of employment:

• The largest proportion of businesses in Vancouver Island’s tourism industry is privately owned businesses. Many are operated directly by the owners.

• Vancouver Island tourism businesses employ an average two people in management or supervisory positions, 7 to 9 full time employees (depending upon the season).

• The management or supervisory positions constitute 29% of total full time employment, equating to an average of 2.2 people in management or supervisory roles per tourism business

• Average part time employment needs provide for additional 3-4 positions.

Of the nearly 1,400 interviews conducted in this survey, 17% were conducted in the Central Island (Oceanside plus Nanaimo).

In 2000, a study conducted for Oceanside Tourism revealed that more than 1,000 people in Oceanside are employed in the tourism industry. Personal tourism-related income includes income from salaries and wages and distribution of corporate profits through dividends paid to the owners. Further, the owners benefit from increases in the value of their company.

The large number of employees in Oceanside’s tourism economy includes all levels of seniority, from entry-level positions to senior executive roles as well as many investors in tourism businesses. Tourism industry employees, managers, and owners are strongly integrated into the Oceanside business community.

It would be appropriate to conduct detailed research on employment in Oceanside’s tourism economy. In the current research, interviews with Oceanside’s tourism industry businesspeople revealed that most front line and secondary tourism businesses can attribute employment to tourism dollars.

Even several non-traditional tourism businesses interviewed in Oceanside noted that measurable and noticeable proportions of their payroll and their profitability are directly attributable to tourism dollars, either because of sales to visitors or sales to tourism businesses or their employees. These businesses see the benefits of tourism and encourage investment in growth. Several of the interviewees were surprised to learn how little is spent by OTA and the individual tourism industry operators to promote Oceanside in its competitive marketplace.

Many of the front line tourism industry operators employ students from the Recreation and Tourism Management Degree program at Malaspina University College. Graduates of that program or its predecessors operate several of the businesses.


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Non Traditional Tourism Employment

Within the methodology employed by this study it is difficult to determine the overall employment impact of tourism in Oceanside. However, other research and the qualitative interviews conducted in this study reveal that Oceanside’s employment statistics are significantly bolstered by tourism. Business people interviewed said that growth in the tourism economy would deliver significant employment benefits for Oceanside and these benefits would be felt throughout the business community.


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Distribution of Visitor Spending The following table shows how the visitor dollars were estimated to have been spent:

Distribution of Visitor Spending

$ (%) Accommodation 17,847,409 23.5 Food and beverage 18,986,605 25.0 Entertainment & attractions 10,632,499 14.0 Local transportation 11,391,963 15.0 Retail 17,087,944 22.5 Total 75,946,420 100%

This table shows an estimated distribution pattern that is consistent with the spending profile of visitors to similar locations and reflects a profile comparable with that documented by Tourism British Columbia in a study of tourism on Vancouver Island.

The distribution of spending shown in this table does not suggest that all of this money is spent in Oceanside. For example, it is likely that spending in many categories takes place outside Oceanside. However, visitors not staying in Oceanside also spend money in Oceanside.

Spending in the Accommodation Sector

Accommodation sector revenues in 2002 were estimated to be as follows:

Analysis of Accommodation Revenue Visitor Spending on lodging ($)

Commercial Fixed Roof Accommodation* 14,758,778 B&B 1,200,830 Camping 3,337,139 The homes of Friends and/or Relatives - Boat 258,426 Other 98,945 19,654,119

* Hotels, motels, resorts

The distribution profile is derived from Occupancy Tax data and interpretation of accommodation profiles reported by respondents in the 2002-2003 TVI/MUC Visitor Survey. It should be noted that several properties are not subject to the 1% Occupancy Tax that is paid by visitors. These are properties in the Regional District of Nanaimo rather than in the Parksville or Qualicum Beach (e.g., Schooner Cove Hotel). Thus it is likely these results are under stated.


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Reliance on Tourism

The retailers interviewed in this research include those focused on servicing a visitor market directly, and other businesses whose normal line of business is not directly oriented towards visitors, such as grocery stores, car dealerships, newspapers, and professionals. It is very clear from the interviews that many well-known Oceanside businesses of both kinds would fail without visitor spending.

Secondary Spending

The research suggests that secondary and tertiary spending of tourism dollars is approximately equivalent to the value of visitor spending. Thus there is an additional dollar of economic activity associated with each dollar spent by the visitor.

This issue was explored in qualitative terms in this study. Interviews were held with approximately 50 businesses in Oceanside including direct tourism industry participants, to assess their philosophies and spending patterns, and other businesses that may be associated with or may benefit from tourism.

Spending in Oceanside by Tourism Industry Businesses

The tourism industry participants interviewed included representatives of the accommodation, food and beverage, attractions and entertainment, and retail sectors. These businesses all have a commitment to supporting local businesses where possible. There are, of course, instances where particular supplies are not available through local suppliers and these are bought elsewhere.

Spending in Oceanside by Employees of Front Line Tourism Businesses

Most of the more broadly focused interviewees in this research noted that one of the significant benefits of any major industry is that the employees of the industry spend their salaries and wages in the community.

Interviews included the financial sector. Interviewees in this sector indicate that more than 30% of their clients are directly related to the tourism industry and more than an additional 10% are supported to some extent by tourism. Further, they conclude that more than 40% of the employees in the businesses they serve are supported by tourism.

Visitor-Focused Businesses

Not surprisingly, most visitor-focused businesses said they would not survive without visitor spending. However, they revealed that their customers include local residents, and commented that they provide goods and services that would not be available without the viability produced by visitor spending. Typically, these businesses saw the largest proportion of their revenue from visitors.

While the interviews conducted in this research were not designed to gather data suitable for quantitative assessment, the interviewees produced remarkable anecdotal evidence. The following notes summarize comments gathered in a selection of these interviews:

• “$40,000 in local purchases and $135,000 in wages went into the community”


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• “30% of overall business is due to tourism”

• “Would have to do things differently without the visitors”

• “Can track steady growth in tourism business, including snowbirds from the Prairies”

• “Business growth from tourism usually starts around Spring Break. Up to 50% of business during the tourism season is due to tourism”

• “Would not survive without the tourists”

• “We always hire locally and buy locally wherever possible”.

Broadly Focused Businesses

The more broadly focused businesses indicated an astonishing reliance on visitor spending. Grocers, hardware, and similar suppliers indicate sales boosts from visitors in the order of 25 to 30%, and some as high as 50%, during the tourism season. This is significantly to do with the large proportion of Oceanside visitors who are not staying in commercial fixed roof accommodation.

The following selection of comments support the importance of tourism to these businesses:

• “Revenue is dependent of tourism employees spending money”

• “The seasonal tourism jobs lead to full time jobs in other parts of the economy”

• “My customers are spending visitor dollars”

• “20% of our annual business volume is sales to tourists”

• “Up to five jobs are directly a result of spending in my business by tourists”

• “Tourism adds to the community – people bring new ideas and views, as well as money”

• “Advertise more; promote more; bring more people here”

• “40% more business May to October”

• “Tourism stabilizes our economy and reduces our reliance on the resource sector”

• “We need to do more to support our tourism businesses so they can grow and become stronger”

• “Local Chambers of Commerce do a good job at the Information Centres”

• “Establish and promote a central reservations system like the Okanagan Reservation System to make bookings”

• “We need to provide more things for people to do. They don’t come here to stay in hotels”

• “Take an active role to promote your business to the hotels, B&B’s and other tourism industry businesses”

• “People start as tourists and 5 years later they are buying real estate here”


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• “Probably better than one third of my business is with tourists”

• “Don’t get many referrals from the tourism industry, but I know they are the same customers as I serve”

• “Without tourism we would have about 25% of the businesses close”

• “People come here as tourists to experience the whole community.”


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Oceanside’s Tourism Marketplace

The tourism economy is predicated on the influence of visitor spending. Thus tourism marketing is predominantly about attracting visitors to the community to spend money. Resident pride in the community is a both a beneficial by product of tourism and a stimulus to the continued growth of tourism, and the community.

Tourists are visitors to the community who have chosen the destination for a leisure or business trip. It is of significant importance that visitors have a choice about the destination they visit. While for some the destination is dictated by business or personal business needs, most of the visitors to Oceanside are travelling for leisure.

It is that visitor spending that stimulates the value of tourism for Oceanside, as it does for other destinations. Tourism infrastructure and services are established to respond to the demands of visitors. Local residents are employed to facilitate the presence of visitors in the community. They spend their pay cheques in the community. Front line tourism businesses receive payments from visitors, and then re-spend that money in the community on supplies and services. However, growth in tourism receipts is hard to win due to the very competitive nature of the marketplace.

In this highly competitive marketplace, the strongest and most innovative marketers attract the largest volumes of visitors, and their visitor dollars. To quote the CEO of the San Francisco Visitor and Convention Bureau: “You have to market San Francisco like it’s a wide spot on a flat road, due to the intensive competition and people’s perceptions that they know all about San Francisco and need to try somewhere else”.

A Competitive Marketplace

Leisure travellers have the greatest discretion of all travellers when they select a destination for a trip. They are influenced to select their destination by many factors. Many learn about destinations from friends and relatives.

The recent year-long MUC/TVI survey helps to build a profile of visitors on Vancouver Island. The survey reveals that 60% of the visitors interviewed at Oceanside locations said that Oceanside was the main destination for their trip.

Nearly all visitors interviewed at Oceanside locations said they were travelling for leisure. Just 4% were travelling for business and leisure, 4% for personal business, and 1% for business or work.

It is essential that research continues to explore the characteristics of the marketplace. “Executing research-based targeted, competitive marketing strategies focused on the highest yield opportunities” is one of ten identified “critical success factors” that guide North America’s leading destination marketers.

In this research, discussions with Oceanside Tourism Association and individual tourism business operators illustrates that OTA and others are very focused in their marketing efforts and use monitoring processes where possible to evaluate the results of marketing strategies (another “critical success factor” of destination marketing).

However, continued focusing of the community’s marketing investment must remain a priority in order to optimize the results of the initiatives. The industry is challenged in that


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respect. Several of the small businesses that constitute Oceanside’s tourism economy do not have the resources to invest significantly in growth.

Trip Planning

The role of the travel media is significant in destination marketing, in that people respect editorial material provided by television, radio, newspapers, and magazines. They learn about destinations and attributes that are consistent with their own travel interests. They then seek further information from sources such as Destination Marketing Organizations, the Internet, visitor centres, travel agencies, and friends.

The Internet is becoming a significantly important component of the tourism industry. The incidence of travel related purchases is among the highest purchases on the Internet. Travellers are flocking to the Internet to acquire information and to make bookings.

The Oceanside Tourism Association and its industry partners (including local tourism businesses and Tourism Vancouver Island) focus significantly on these crucial priorities. They are encouraged to increase their efforts in this respect in order to expand Oceanside’s tourism benefits.

The Destination Team

Destination teamwork is an acknowledged “critical success factor” of destination marketing. The joint investment and commitment of the stakeholders is essential to building community benefits from tourism. In Oceanside:

• The Destination Marketing Organization (OTA) builds and executes joint marketing initiatives to attract travellers to select Oceanside in the competitive destination marketplace

• The individual tourism operators (e.g., hotels, attractions, restaurants) participate financially in OTA initiatives. They also focus their own marketing strategies on securing customers for their own business from among the visitors to the community

• The Chambers of Commerce and the Visitor Centres communicate directly with visitors and stimulate their use of local businesses

• The Municipalities facilitate the evolution of community infrastructure and public services to maintain community standards to appropriate levels

• The population participates in the attraction of VFR travellers and extends a warm welcome to other visitors

• Other business people provide interests and attractions for the travellers during their visit

• Other regional destinations contribute regional attractions for Oceanside’s visitors.

Continued efforts to enhance the teamwork and integrate strategies will contribute to expanding the benefits from tourism for Oceanside.

The effort of the Chambers of Commerce and Visitor Centres in referring business to tourism players is acknowledged. The statistics of the visitor centres show the existing


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profile of referrals. Certainly these referrals assist visitors to find ways to spend money in Oceanside.

Likely stronger benefits could be achieved from a concerted effort within the destination team to find a suitable mechanism to directly stimulate bookings for visitors. Such efforts might include centrally located walk in “concierge” services with extensive telephone access and supported by “strolling” promoters.


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Oceanside’s Visitors The following comments address selected tourism market segments perceived to be of particular importance to Oceanside. These comments are based in many cases on the TVI/MUC study data. Throughout this section it is important to acknowledge that sample sizes from which the tables are produced are often small and data must be interpreted with caution.

Visitor Profile

The following paragraphs summarize key characteristics of specific groups of visitors to Oceanside. The source of data for all tables in this section of the report is the Tourism Vancouver Island/Malaspina University College survey conducted through 2002-2003.

The research distinguishes between respondents who have visited Vancouver Island within the past five years and those who have not. Among the non-resident respondents interviewed in Oceanside, two thirds had not visited Vancouver Island in the past five years.

Appendix 3 to this report, bound separately, contains detailed tables drawn from the survey data. These tables present analyses of a variety of visitor characteristics.

Origin of Visitors

Using data from the 2002-3 Tourism Vancouver Island/Malaspina University College survey, the following table displays the origin of the visitors interviewed at Oceanside locations. A comparison with the origin of respondents interviewed at other locations on Vancouver Island is also shown.

32.9% 23.6% 24.1%

25.4% 23.6% 23.7%

23.9% 24.5% 24.5%

9.8% 16.8% 16.4%

8.0% 11.6% 11.4%

Vancouver Island

Other BC

Canada

United States

International

Origin ofRespondent

Oceanside

OtherVancouver

Island

Respondent InterviewLocation

Total

The table shows the significantly higher propensity for Oceanside’s visitors to be Vancouver Island residents.

The research shows that Vancouver Island and Oceanside attract substantial repeat business but continue to attract new visitors. The following table summarizes the origin of visitors who are not residents of Vancouver Island, showing whether they are repeat visitors to Vancouver Island or not.


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Origin of Visitor (Oceanside Interview Locations)

Visited VI in past five years

No prior visit in five years

n= 174 87 % of respondents

Other BC 48.3 17.2 Other Canada 34.5 37.9 United States 13.8 16.1 International 3.4 28.7

100.0 100.0

Not surprisingly, repeat visitors are also more likely to be from closer locations. Further analysis shows that the largest proportion of new Vancouver Island visitors (or visitors who have not visited in the last five years) interviewed in Oceanside are residents of other B.C. locations.

This table and further analysis suggests a strong correlation between the focus of marketing investment by Oceanside Tourism and the growth in new tourism to Oceanside. The investment is significantly focused on near in markets. More detailed analysis of the data shows the importance to Oceanside of visitors from the Lower Mainland, Alberta, and the Pacific Northwest. These are the primary target markets for Oceanside Tourism Association’s marketing investment.

Seasonality

The TVI/MUC research included interviews conducted in Oceanside in all seasons. The Occupancy Tax data shows the changing profile of the industry as the seasons change.

Not surprisingly, one of the most significant differences between the seasons is the very low proportion of visitors who are families traveling with children outside the summer season, and the broader representation of adults travelling without children in all seasons.

Themed and targeted promotions can capitalize effectively on the seasonal benefits of Oceanside to expand the benefits of tourism for the Oceanside population.

Groups

The following tables summarize overall data from interviews conducted in Oceanside in the TVI/MUC survey. More detailed analyses of these data are included in Appendix 3.


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The overall sample shows the following distribution of groups in the interview sample:

The average group size is shown in the following table:

Nature of group Average group size

Traveling alone 1.0 Couples or friends no children 2.5 Groups with children 4.2 Organized Groups 6.9 Other 4.8

Visitor Spending by Type of Group

The spending profile of the visitors as estimated from the data is shown in the following table.

Nature of group Spending ($/day)

Traveling alone Group spending 120.6 Individual spending 96.1 Couples or friends no children Group spending 198.2 Individual spending 100.0 Groups with children Group spending 185.7 Individual spending 48.5 Organized Groups Individual spending 59.7

Visiting Friends and/or Relatives

The TVI/MUC research notes that 26% of the visitors interviewed in Oceanside stayed with friends and/or relatives (“VFR”) during their visit to Vancouver Island. This is generally consistent with the remainder of the respondents interviewed on Vancouver Island (26%) and the experience of other destinations. Recently reported data for destinations in Australia, the U.S., Britain, and Quebec showed proportions ranging from 28% to 44%.

The Journal of Travel Research recently published a study of the international VFR market to the United States. The document noted new findings that the VFR market is not only substantial but also exerts more of an economic influence on receiving communities than was previously assumed.

7.1% 20.6% 19.9%57.3% 56.6% 56.6%

29.8% 14.3% 15.2%3.1% 3.7% 3.7%

2.8% 4.8% 4.7%

Travelling aloneCouples or friends not travelling with children

Groups travelling with childrenOrganized Groups

Other

Natureof group

Oceanside

OtherVancouver

Island

Oceanside InterviewsComparison

Total


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That study notes that strong immigration traditions stimulate significant volumes of VFR travel. For example, visiting friends and relatives continues to be the main reason for travel for more than half of the visits of U.K. residents to Canada.

These findings suggest VFR travel to Oceanside will increase as its population grows with an in-migrant population. This constitutes significant strategic advantage for Oceanside.

The study also suggests that large proportions of VFR travellers are repeat visitors. The stronger the tradition of immigration, the larger the international VFR market tends to be. The research literature clearly confirms that both the domestic and international VFR markets are sizable. As repeat visitors, these travellers will likely spend more during their travel life cycle than other visitors.

Visitor spending among VFR travellers is noted to contribute significantly to the overall foreign currency earnings. This suggests VFR travellers are among the higher spenders.

However, interviews in Parksville show that the hosts for VFR travellers also spend more during these visits. Interviewees noted:

• “I hear from newer residents that don’t travel themselves any more – they just receive visitors”

• “People bring their visitors to my shop”

• “People spend more at my business when they have visitors”

• “I see some of my customers mostly when they have visitors”.

The recently published study notes that the VFR market is growing worldwide and that for some destinations, it is the principal source of tourists. In mature travel destination the growth in VFR travel is outpacing the growth rates in other forms of travel.

The VFR market has characteristics that may be of unique value for tourism marketing organizations. It can function as a “moderator” to compensate for seasonal variations typically found in tourism destinations and businesses. A 1997 study determined that VFR travel was more equally distributed throughout the year and actually peaked in months that general tourism volumes are traditionally low.

The study reports that VFR travellers are an important source of “word of mouth” promotion of travel destinations. The TVI/MUC research reveals that 58% of respondents interviewed on Vancouver Island used information from friends and or relatives to plan their trip.

The TVI/MUC research shows that friends and relatives are the most influential source of information for visitors. Most significantly, 52% of the respondents first heard about their destination from friends or relatives and 47% said that information from friends or relatives was the most influential in stimulating their visit.

If this market can be tapped more it would provide more evenly distributed economic benefits, support more full time year long jobs, and reduce pressure on peak times. It would mean better use of existing resources and provide more long term sustainability for the community without requiring additional development or expense

There is a common assumption that travellers visiting friends and relatives spend less than other types of tourists. However, they make significant use of restaurants, shops,


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tourism attractions, spectator and cultural events, commercial recreation organizations, and national airlines. They contribute significantly to the local economy.

It is true that they spend less on commercial accommodation and packages at their primary destination. However, large proportions of these visitors travel while visiting their the friends and relatives and spend money in accommodation at the regional locations to which they travel.

The research shows that 48% of international VFR travellers use commercial fixed roof accommodation during their trip. Often they motivate their hosts to travel with them. Their spending on food, shopping and travel were generally consistent with that of other travellers and in some cases they spent more that other traveller groups.

This suggests the opportunity for Oceanside to attract hosts in other B.C. or near in markets to bring their visiting friends and relatives to Oceanside.

Camping and Self Catering

The research shows that 31% of the respondents interviewed in Oceanside camped during their visit to Vancouver Island. Campers, along with those in self-catering accommodation are most likely to be customers at Oceanside grocery stores. Oceanside grocers interviewed in this research reported that they benefit significantly from these visitors.

The Food and Beverage Industry

The food and beverage industry in Oceanside also encourages growth. Restaurants and bars do not rely exclusively on tourism and most will say that their primary marketplace is their local community population. However, they are quick to acknowledge the benefits in sales that are associated with tourism.

The TVI/MUC study provides the opportunity to explore the food and beverage economy from the perspective of the visitors. The following table shows, for visitors staying in different types of accommodation, their use of food and beverage facilities.

43.2% 36.3% 17.4% 71.9% 50.0% 58.3%

28.4% 31.2% 30.4% 24.0% 10.0% 8.3%16.8% 28.7% 39.1% 5.0% 30.0% 25.0%44.2% 45.2% 47.8% 19.8% 40.0% 33.3%

23.2% 17.2% 30.4% 9.1% 40.0% 8.3%1.1% 4.3% .8% 10.0% 8.3%

156.8% 158.6% 169.6% 130.6% 180.0% 141.7%

None

Fast foodFine diningFamily restaurants

Pubs or loungeNightclubsCol Response %

Friendsand Family

CommercialFixed Roof B&B Camping Boating Other

Accommodation profile

Note: Totals in this table will add to more than 100% due to multiple responses.

While this table shows that campers, boaters, and those staying with friends and relatives are less inclined to take advantage of Oceanside’s bars and restaurants, the grocers acknowledge the benefits from these guests in increased sales during the tourism season.


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The grocers and hardware and similar retailers also talked of the Snowbirds. While sales do not increase when the Snowbirds are in Oceanside, they would otherwise decline as many local residents themselves become Snowbirds and leave Oceanside for warmer climates during winter. Stronger local promotion may assist the restaurateurs to take better advantage of the visitor population.

Interviewees noted that several restaurants would not survive without their tourism revenue or the revenue they derive from the spending of tourism employees. Thus tourism enhances the choice of food and beverage outlets for local residents.

Tourism and Real Estate

The population of Oceanside has been expanding as new residents move to the area to take advantage of the same attributes that attract visitors. Often these new residents have taken retirement from their careers in other parts of Canada. A significant proportion of these new residents were drawn to Oceanside first as tourists. They liked what they saw and chose to investigate options for retirement here. Others selected several options for retirement then researched them until selecting the “right one”.

This illustrates clearly an important relationship between tourism, the real estate economy, and population growth. It is the same set of attributes, including the attractions and activities that draw both tourism and new population to Oceanside.

This presents the opportunity for joint marketing initiatives between the tourism industry and the real estate or development community. There are similar target markets for each group.

Ongoing destination marketing programs in targeted markets support the positioning of the real estate community for the area.

A major benefit for the growth of tourism is that the new residents attract visitors from their business, social, and family backgrounds. The TVI/MUC research shows that these visitors are good spenders and they enjoy their experience in Oceanside. Many of them also move here.

The new residents bring wealth to Oceanside. However, the municipality is challenged by the cost of servicing the single-family lot developments the affluent new residents prefer.


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Optimizing Community Benefits from Tourism This section of the report suggests some opportunities for Oceanside and its tourism industry to optimize their benefits from the desirability of Oceanside as a tourism destination.

The Economic Consequences of Increased Tourism

The consequence of pursuing increased visitors and visitor spending would be enormous when measured in increased employment, wealth, and cash flow in the community. As tourism industry receipts grow, more employees are required for longer periods of time to accommodate the associated service, management, and supervisory needs. New businesses would develop and become prosperous. Existing businesses would see increased revenue associated with spending by visitors, spending by the front line tourism industry businesses, and spending by employees dependent upon tourism dollars for their income.

The potential to achieve growth of this magnitude is expanded due to new tourism development proposals. If the several proposed projects reach reality, they will need to attract new business to the community in order to achieve their own financial objectives.

Thus critical additional marketing investment and product enhancement will take place. Marketing investment and careful destination product facilitation lead to the successful growth of a tourism destination.

It is important to consider, though, that significant growth is not achieved without careful planning in the destination. Infrastructure maintenance costs would likely increase and these costs may not all be offset by increased revenue for the municipalities. However, this document shows elsewhere that tourism generates significant benefit for the municipalities.

Some people abhor the increased congestion that may be associated with increased tourism. Many of those who complain also seek the community benefits that are available as a result of the strong tourism economy.

Addressing these issues is a matter for enhanced planning. Improvements in facilitating the use of the time of visitors, in signage, and in traffic flows and managing destination attributes can effectively offset perceived challenges in this regard.

Industry challenges

The industry suffers from significant seasonal fluctuation in sales. That is an issue that may be addressed through strategies focused on optimizing the benefits of the tourism culture and economy. However, in the short term many of the businesses that are making Oceanside a significant destination during peak times, are barely able to survive for many of the fall, winter, and spring months. The health of the tourism economy of Oceanside will be enhanced with the success of continuing efforts to attract visitors during the shoulder and winter seasons.

It is a reflection on this issue that several business people interviewed in this research explained that Oceanside has many attributes that benefit the local population, but that


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while their sales to local residents are their “bread and butter”, the local trade does not provide viability for those businesses. Many businesses would cease to exist without tourism receipts. The owners of these businesses know that Oceanside has excellent potential for growth in its tourism business, but that it must actively pursue that growth.

Industry Trends and Potential for Growth

Growth opportunities for Oceanside’s tourism economy may be extrapolated from the occupancy tax and average occupancy data reported by Oceanside’s hotels, motels, and resorts.

Trends

The Occupancy Tax data provide a process to track changes in visitation to Oceanside. Most commercial fixed roof accommodation businesses in Oceanside report their revenue for tax remissions.

The Occupancy Tax reports shows the volatility of the industry to world events. During the past three years, significant impacts can be observed from these events:

• 2001 showed a reduction of 6% in the receipts of hotels, motels, and resorts. This reduction is attributed to world economic slowdown and September 11. This impact continued into 2002. Several research findings have shown that recovery began in 2003.

• In 2002, the publicity surrounding the incidence of Cryptococcus fungus devastated the industry early in the summer. The industry was already suffering from the slow recovery from September 11.

• In 2003, the discovery of BSE in an Alberta cow and the SARS jointly spurred a further reduction in travel to Canada by non-residents and again that has affected Oceanside’s tourism economy.

Traditionally, travelers respond to these events by limiting travel and staying close to home. The better-funded Destination Marketing Organizations and their industry colleagues then spring into action to retain their “near in” markets. In other words, they increase and re-focus their investment in order to increase their market share in a shrinking marketplace.

In the competitive sense, this reactive marketing shift by key industry players swamps the efforts of destination marketing organizations promoting smaller communities and with limited funding.

To put this into context, Tourism Victoria initiated a major new thrust in the fall of 2001, simply to prevent short-term loss of their tourism receipts from the Seattle area following 9/11. The marketing campaign was simply to attract Seattle and area residents to take a “getaway” trip in the fall of 2001. The value of this single, short term, narrowly focused advertising campaign was equivalent to almost the entire budget of Oceanside Tourism for 2002.

One of the most significant opportunities for growth is the high regard that is shown for Vancouver Island in publications such as Conde Nast Traveler and the American Express Travel and Leisure magazines. The readers of these publications consistently


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rate Vancouver Island as a “Number 1” destination and Vancouver Island receives awards and publicity for these accolades.

However, Vancouver Island destinations must aggressively pursue the benefits of this positioning with focused promotions. This “windfall” offers the opportunity for significant marketing partnerships with commercial organizations that would benefit from the exposure.

New opportunities exist with respect to the 2010 Olympic Winter Games. This event offers huge promotional and business development opportunities for Oceanside due to its proximity to Vancouver. This may be a stimulus for destination development and promotion, as well as for small corporate meeting and events development. With adequate promotion, Oceanside can benefit very significantly from the 2010 Olympic Games. The opportunity follows the enormous media coverage and public interest that will benefit Vancouver from 2003 until long after 2010. However, the time to begin taking advantage of this is now.

Potential for Growth

Examination of the Occupancy Tax data shows the sensitivity of Oceanside’s tourism economy to external events. This issue is addressed in the previous discussion.

Several factors have been considered in order to understand the growth potential for Oceanside’s tourism economy. These factors are:

• The occupancy statistics in Oceanside’s commercial fixed roof accommodation and other accommodation types show clear potential for growth in the summer, and in shoulder and winter seasons.

o Even in summer, when Oceanside is perceived to be full, there is potential for growth.

o A surprisingly large number of visitors interviewed in the TVI/MUC research do not have children with them. This is significant as those without children are less constrained in their travel plans by the timing of school holidays.

§ They display higher propensity to use commercial fixed roof accommodation and B&B accommodation than groups including children.

§ They spend more. The TVI/MUC research indicates that at $100 per person per day, they spend more than double the daily per-capita spending among groups with children.

§ They already visit Oceanside outside the summer season. They represented a significant majority of the respondents in the spring and fall interviews in the TVI/MUC research. Notably, this group was also the largest group of respondents in the summer survey.

§ More than half of these respondents were touring through several zones, or “just passing through” Oceanside. Thus opportunities exist to target them in partnership alliances with other Vancouver Island destinations.


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§ Thus focused efforts to attract them outside the summer season will contribute to growth in shoulder seasons, where occupancy levels in fixed roof accommodation drop alarmingly. The growth will be of higher spending visitors and will benefit a broad cross section of Oceanside’s tourism-related businesses.

• Clear potential for growth is reflected in the TVI/MUC study. The research shows strong repeat business and growth of new business for each of the areas targeted for growth by Oceanside’s tourism industry.

o 28% of the respondents interviewed in Oceanside had not previously visited Vancouver Island

o The remaining respondents are regular visitors, with an average of more than one visit per year during those five years.

• Visitors are very happy with their Oceanside travel experience. The TVI/MUC study asks respondents to rate the importance of a selection of destination characteristics in their decision to select the destination. Later in the interview, the respondents are asked to rate their satisfaction with their experience with the same characteristics.

o The respondents consistently rated their satisfaction with their experience higher than they assessed the importance of each of these characteristics in selecting the destination. In other words, they got from their trip even more than they expected.

o This positive differential applies across the marketplaces, whether respondents have been to Vancouver Island in the last five years or not, and regardless of the group composition.

• While Oceanside has a number of facilities suitable for small meetings and conventions, there is significant opportunity for growth. Upgrades in Oceanside meeting facilities, travel infrastructure improvements with the addition of the HarbourLynx passenger service to Vancouver, WestJet connections to Alberta, highway improvements on Vancouver Island, etc., all contribute to increasing the suitability of Oceanside to attract this lucrative market.

o The meetings market prefers timing in the spring and fall

o Meeting and convention delegates spend significantly more than other visitors

o Again, this is a highly competitive marketplace. However, given the somewhat limited capacity of Oceanside as a meetings destination, focused sales strategies in targeted, close in markets will likely deliver the highest yield.

o The high satisfaction of visitors with their Oceanside experience and the wide range of activities available enhance the value of Oceanside as a meetings destination and constitute a major selling point.

• Visitors find lots to do in Oceanside. Examination of the survey data, and consideration of the many accolades bestowed upon Vancouver Island by the world’s most prestigious travel publications, confirm the validity of Vancouver Island and Oceanside as a destination with a strong draw. This provides a clear opportunity


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to focus promotional effort to take advantage of Vancouver Island’s high market profile.

• The TVI/MUC study shows the importance of wildlife related activities, active recreation, cultural destinations, and family fun. Tables in the appendix to this document show the importance of the various activities and interests that constitute a visit to Vancouver Island. The tables show, for those interviewed in Oceanside, what they did during their visit to Vancouver Island.

o The leading activities for those primarily destined for Oceanside are:

§ Wildlife: Wildlife viewing and bird watching

§ Active recreation: Hiking, golfing, cycling/mountain biking

§ Cultural locations: Parks, local shops and artisans, gardens, farms and country markets, museums and historic sites, and festivals and special events.

o This analysis indicates the potential for expanding the product offering with attractions, local activities, cultural destinations, and fun activities.

o Interviews in the community noted concern that many visitors shop at the “big box” stores in north Nanaimo rather than locally. This analysis shows that local shops and artisans are a popular destination for the survey respondents.

• Oceanside businesses, including retailers, attractions and entertainment operators, restaurateurs, and others are not deriving the optimum benefit from tourism to Oceanside.

o Interviews with several business operators indicate there is an opportunity to increase local spending by visitors by facilitating the direct connection between visitors and operators.

o The Chambers of Commerce are acknowledged for their hard work on behalf of the business community and for the effectiveness of their visitor information programs.

o Oceanside Tourism is acknowledged for its role in coordinating and delivering a strong and focused marketing program that attracts visitors to the community.

o There is no organization (with the exception of in-house ventures at resorts) that directly helps visitors to understand how to get the best out of their visit to Oceanside and how to spend money doing it. This report recommends the initiation of an aggressively proactive and highly visible concierge program to be located where the visitors are to facilitate increasing the exposure of visitors to opportunities to spend money.

• Oceanside’s population continues to host visitors at home. However, new initiatives that actively convey the pride of local residents in Oceanside to their friends and family can increase the volume of VFR visitors for the benefit of Oceanside’s economy.


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Enhancing Community Benefits

This research suggests strategies for growth that may integrate the expertise and resources of Oceanside Tourism and the Chambers of Commerce. However, this report does not recommend diluting the narrowly focused efforts of Oceanside Tourism Association in destination marketing.

An Oceanside Tourism Summit, including participation from key organizations involved in promoting Oceanside as a tourism destination, may be an effective way to stimulate the economic focus in Oceanside associated with tourism.

Such an event would be organized to build community momentum and would be focused on a single mission:

• To examine opportunities to optimize the economic and community benefits of tourism in Oceanside.

Key Issues for the Summit

Several key issues could be addressed in such a forum in pursuit of the proposed mission. Specific thrusts that may result from this summit may include:

• Build a strategic plan to optimize economic benefits for Oceanside communities and businesses from tourism spending (including visitor spending and investment in infrastructure)

• Develop a “destination strategy” to guide the continuing evolution of Oceanside as a premier regional destination for its targeted markets

• Reinforce Oceanside’s commitment to destination marketing and seek opportunities to increase the investment in destination marketing and the return on that investment

• Continue to enhance community teamwork with respect to development of Oceanside’s tourism economy

• Stimulate awareness of the opportunity for a strong return on Oceanside’s investment in marketing initiatives (including Oceanside Tourism Association and other marketing initiatives)

• Develop strategies to optimize visitor spending once visitors have committed to, or have begun, an Oceanside visit

• Stimulate community commitment to, and active involvement in, strategies that will enhance benefits from tourism in Oceanside by attracting visitors and facilitating their spending in the community

• Explore strategies to attract visitors to other Vancouver Island destinations to include a visit Oceanside in their itinerary.

Growth goals

Goals for the continuing enhancement of community benefits from tourism should be established through teamwork among the stakeholders to take advantage of the opportunities revealed in the analysis of capacity (the Occupancy Tax data) and the


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market opportunity (the TVI/MUC research). Growth strategies would be developed to pursue those goals.

Product strategies

Product strategies should be focused on several key factors:

• Building and defining the destination and developing a strategy for the evolution of the destination

• Facilitating the attraction of attractions, entertainment, food and beverage, and other businesses that are consistent with the direction of the destination development strategy

• Assisting local tourism industry players to increase their revenue through referral systems, concierge/booking systems, workshops and seminars, and alliances with other tourism operators

• Building strong destination teamwork focused on common goals

• Facilitating groups of like tourism operators to work together for their mutual benefit and growth

• Filling in the destination offering for visitors

• Bringing visitors in touch with business operators.

Marketing strategies

Marketing strategies should also be focused on several clear opportunities:

• Goals focused on increasing revenue opportunities for tourism operators in shoulder and winter seasons

• Themed marketing consistent with the destination development strategies

• Local research and communication to build community spirit around tourism opportunity and to motivate local residents to bring their friends and relatives

o Visitors staying with friends and relatives spend an average of $71 per visitor day. Thus their spending net of accommodation cost is higher than that for most other visitors

• Jointly funded marketing initiatives focused on attracting adults traveling without children

o They spend more per capita than families with children, stay in fixed roof accommodation, and are less limited by school holidays.

• Increased emphasis on media relations to take advantage of the opportunities afforded by the Travel and Leisure and Conde Nast accolades.

• Increased focus on Albertans to make Oceanside their “Seaside Home”

o A significant proportion of visitors are from Alberta; Albertans know Vancouver Island and Oceanside; they are interested in what Oceanside has to offer.


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• Build non-traditional alliances, for example, with the real estate community, to invest in jointly targeted marketing initiatives.


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Conclusions and Recommendations

Overall Conclusions

Oceanside has many attributes that confirm its role as a tourism destination. It has the critical mass, with its tourism economy and the motivation for economic growth, to become a major regional tourism and recreation destination. Tourism assets include the natural attributes of the area, which draw visitors, and the businesses that have evolved to deliver opportunities for visitors.

There is clear opportunity for the Oceanside communities to enhance significantly their benefits from tourism. However, this will require the formulation and execution of clear destination development and marketing strategies. These strategies must include financial strategies for growth.

Tourism is the “number one” industry in Oceanside. It remains important to maintain a strong communication strategy with all of the stakeholders to reinforce their understanding that their lifestyle is a tourism lifestyle and that the more visitors they see spending money in the community the more they will directly benefit from that spending.

Most businesspeople and government interviewees in this research could immediately provide a clear picture of how tourism benefits the population and business community of Oceanside. Most encourage aggressive growth in the contribution of tourism to their community and their economy. It is important to integrate them in growth strategies.

Several opportunities exist to increase the volume of tourism receipts from visitors who are already in Oceanside. These would be focused on offsetting leakage of tourism dollars and stronger efforts to ensure the optimum capture of available spending.

• Leakage

o Create a stronger focus on Oceanside communities as a “village” destination, with enhancements to community core and waterfront areas, and attraction of more shops and other services focused on the targeted tourism audiences.

o Explore thematic options to enhance and clarify the identity of Oceanside.

o The TVI/MUC research shows clearly the interest of the respondents interviewed at Oceanside location in “local shops and artisans” and such activities as “gardens”, “art galleries”, and “farms and country markets”.

o For many of the TVI/MUC survey respondents, “local shops and artisans” is a higher priority than “shopping malls”.

o Promote the various outdoor activities and interests that clearly attract groups of all kinds to the area.

o Opportunity is lost to Oceanside if it does not pursue the leaked dollars. However, the regional attributes and visits to other communities are part of the visitor’s destination experience and must be encouraged in


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destination promotion. Visitors to other regional destinations are a part of the Oceanside target market.

o Discussion with the municipalities of Parksville and Qualicum Beach show that strategies to limit leakage are municipal priorities. It is vitally important to the success of these initiatives that the business community actively endorses them.

• Spending optimization

o Oceanside is an attractive destination for a wide assortment of visitors. The TVI/MUC research shows the value of pursuing the higher spending groups of adults travelling without children. These visitors are looking for a more active vacation or “getaway” than may be the case with the family visitor groups.

o A proactive approach to day planning and actually making bookings has been shown in many locations to be an effective approach to stimulating increased visitor spending. This opens the opportunity for Oceanside to become more aggressive in promoting and securing bookings and stimulating direct referrals.

o Visitors are in the community for a pleasurable experience and active facilitation of their activities can significantly contribute to their perception of Oceanside as a fun place to visit. They will spend more in the community if they are enjoying their visit. They will recommend Oceanside, and they will continue to return.

Most of the interviewees noted the importance of product strategies to enhance Oceanside as a destination. They also volunteered their opinions that the marketing effort for Oceanside must be increased in order to attract more visitor spending.

Oceanside is a regional destination and it is important that strong partnerships and alliances are developed to take advantage of this. Some of the interviewees in this research were concerned that visitors are spending money outside the community. However, most understood that people visiting Oceanside are also going to visit attractions, entertainment, and sights in other locations on Vancouver Island. They acknowledge that this is a touring area.

Oceanside’s tourism economy is fragile and is comprised of small businesses and a few local outlets of national franchises. Because of the high incidence of small businesses in the mix, the suppliers to the tourism economy tend not to be highly visible.

New ventures, such as the proposed Island Hall and other site development in Parksville, the Quality Foods investment in Qualicum Beach, and other developments will benefit the growth of tourism. Marketing strategies employed by these suppliers will likely be aggressive. It is important that the community is able to integrate its marketing and product strategies to take the best advantage of these opportunities.

Oceanside’s tourism receipts are subject to significant influence from world events and other occurrences over which Oceanside has no control. This is offset by the desirability of Vancouver Island as a destination. Thus recovery from these events is not unreasonably slow. However, continuing marketing and destination strategies should focus on solidifying the image and attractiveness of Oceanside in its targeted markets.


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Destination Marketing

The Oceanside Tourism Association marketing budget is invested in a program that is consistent with the responsiveness of the marketplace. Further, new market strategies, such as Snowbird attraction, are effectively focused on the appropriate audiences. Interviewees in this research agree with the focus and targeting of Oceanside Tourism.

OTA strategies to enhance industry teamwork through packaging and other educational seminars are well received and will result in building structural integrity and marketing strength.

People who have moved to Oceanside after retirement and formed their business as a “second career” have formed some of the Oceanside businesses that deal in the tourism marketplace. There is an argument that these individuals do not want growth and their business is more to keep them occupied. No businesses displaying this characteristic were interviewed in this research. However, these players should not be made to participate in growth initiatives from which they do not wish to benefit. It is recommended that Oceanside Tourism Association attempt to identify these businesses and explore their motivation. An argument against destination marketing focused on increasing visitor volumes is that some people move to an area because they like it and then they do not wish to see it change.

Overall, the interviewees in this research encourage growth, indicating that they have waited long enough for it in difficult economic times and now it is time to get the economy moving.

Recommendations The following recommendations address broad impacts and opportunities for growth.

Broad Impact Recommendations Expected Benefit for Oceanside

Operate on a test basis in each community a “concierge” program to stimulate actual attraction, restaurant, and other bookings. This could be a joint venture operation and should be located in highly visible locations easily accessible to visitors on foot or by car. This could be complemented by a roving service to be positioned at events and other locations of high tourism activity. It should be a commissionable program.

Optimization of visitor spending by increasing sales for attraction, restaurant operators.

Conduct more detailed research among Oceanside residents and businesses to quantify the value of tourism in the minds of the population

Increased support for tourism growth initiatives; opportunities to assist non-direct tourism businesses to increase their revenue from the tourism economy

Increase dialogue with the population and the business community about the value and benefits of tourism

Increased support for tourism growth initiatives


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Initiate a program to optimize referrals within the Oceanside community. This could be achieved through consultation with business operators

Optimization of spending by visitors in the community

Continue to take a leadership role to establish alliances with other local and regional destinations for joint promotions

Increased return on the marketing investment through leveraged investments

Build alliance groups to co-invest in marketing initiatives focused on shoulder season opportunities

Expansion of shoulder season revenue opportunities

Continue to focus on building the destination. Reinforce strategies for downtown and oceanfront development, park renovation, signage, traffic flows, etc. Stimulate the attraction of new businesses consistent with the themes

Mold and theme Oceanside communities as destination beach villages where visitors like to “wander”, shop, look, and dine.

Take every opportunity to increase Oceanside’s investment in focused marketing initiatives and emphasize tracking the return on the marketing investment

Increased numbers of visitors to Oceanside

Increase the emphasis on media alliances Increased numbers of visitors

Develop and implement an Oceanside Destination Development Strategy

Optimize and facilitate the focus of destination development

Micro Level Recommendations Expected Benefits for Oceanside

B&B operators should work closer together to initiate marketing strategies for their mutual benefits, including strong alliances and packages with attractions and transportation operators

Increased revenue in B&Bs, increased tourism receipts in Oceanside

Initiate a focused “getaway” program for targeted populations (e.g., Golf for Albertans in March)

Shoulder season growth

Increase marketing focus on shoulder and winter season opportunities (themed packages, etc.)

Increased attraction of visitors during shoulder and winter seasons


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Initiate new events and activities that have broad impacts (n.b.: Oceanside business people note the benefits of broad-based events such as the Beach Festival

Increased activity within the destination

Integrate tourism with other segments of the economy (e.g., education, technology, forestry, marine)

Build a stronger, integrated economy and better cross-industry economic awareness


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Appendix One – Visitor Count Estimates

Source of data

Total room nights available 382,155 Occupancy tax dataOccupancy % 48.8 PKF; consistent with Grant ThorntonTotal room nites used 186,358 Calculation

Source of data

Guests/room/night 1.3 AccommodatorsGuest nights 242,265 Calculation

Source of data

Average nights stay 2 Oceanside accommodation industry interviewsVisitors in Commercial Fixed Roof Accommodation 121,132 Calculation

Source of data

Proportion of visitors using Commercial Fixed Roof Accommodation (%) 28.1 TVI/MUC - consistent with TBCVisitors, not including day trippers 430,710 CalculationVisitor days not including day trippers 861,420 CalculationAverage Group Size, not including Day Trippers 2.8 TVI/MUCNumber of Groups, not including Day Trippers 153,825 Calculation

Source of data

Day tripper proportion of respondent visitor groups 17.60% TVI/MUCDay Tripper Group Size 2.6 TVI/MUCNumber of Day Tripper Groups 32,856 Number of Day Trippers 85,425 Total visitor days, incl Day Trippers 946,845 CalculationTotal individual visitors incl. day trippers 516,135 Calculation

Estimation of Guest Nights

Estimation of Room Nights Sold in Oceanside

Estimated Number of Visitors to Oceanside, not including Day Trippers

Estimated Number of Individual Visitors using Commercial Fixed Roof Accommodation in Oceanside

Estimated Number of Visitors to Oceanside, including Day Trippers


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Appendix Two – Visitor Spending Total visitor days, incl Day Trippers 946,845 CalculationTotal individual visitors incl. day trippers 516,135 Calculation

Spend/visitor day 80.21 TVI/MUCOverall visitor spending 75,946,420 Calculation

$ (%)Accommodation 17,847,409 23.5Food and beverage 18,986,605 25Entertainment & attractions 10,632,499 14Local tansportation 11,391,963 15Retail 17,087,944 22.5Total 75,946,420 100

Analysis of Accommodation Revenue Visitor Spending on

lodging

Visitor Days Using Fixed Roof Accommodation

Accommodation Profile (%) -

TVI/MUC

Unit price per guest day*

Commercial Fixed Roof Accommodation 14,758,778 242,264.91 28.1% 60.92B&B 1,200,830 26,685.12 3.1% 45.00 Camping 3,337,139 333,713.92 38.7% 10.00The homes of Friends and/or Relatives - 239,266.58 27.8% - Boat 258,426 12,921.29 1.5% 20.00 Other 98,945 6,596.32 0.8% 15.00

19,654,119 861,419.67 100%

Visitor Spending

Distribution of Visitor Spending

Compiled distribution: consistent with data from a

variety of comparable sources including Tourism

BC

*Estimated from Ocupancy Tax data and Oceanside accommodation sector interviews


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Appendix Three – TVI/MUC Survey Data Tables Bound separately in Volume Two.

Documents

Oceanside’s Tourism Economy - Parksville€¦ · Secondary Spending ... Population growth from new residents retiring in Oceanside ... This section of the report addresses the structure