3 Nov, 2003
“Time for Assessment of Security Costs Facing Travel Industry”
The chairman of the Canadian Tourist Commission says it is about time global travel industry associations to start doing some serious calculations about how much upgrading security is going to cost the industry, and the impact it could have on profitability and travel patterns.
In an interview last week, Mr. Doug Fyfe said it was “imperative” for organisations like the World Travel & Tourism Council, the Pacific Asia Travel Association, International Air Transport Association, World Tourism Organisation and other groups representing the hotels and travel agents to start paying some serious attention to this issue.
“In the past, security measures like visas, airport taxes once used to happen one at a time and were protested individually. Now, they are aggregating into a layer of costs on top of what is already a thin-margin business. This is not a one-time cost but an incremental cost that will only grow over time.
“This isn’t going to go away. It’s a fundamental shift in the cost dynamics of doing business.”
Mr. Fyfe said the Canadian tourism industry is getting increasingly concerned. “People are coming up to me and saying: ‘Is there anything we can do about it. Can we modify this? Can we think about this’?”
While the level of questioning is sporadic at the moment, Mr. Fyfe said it will become more of an issue when the first bill lands on their desk. And the time to take it up is now, he said. “We don’t need talk to the minister but the guy who writes the paper that the minister reads, and talk to him early.”
He said a study on the impact and implications of security costs would be too much for any one industry body. However, a coalition of industry associations would “be able to draw in the intellectual horsepower, throw some dollars at this, do the analysis and service the sharp end of the spear. It is not going to be any one group that mails out the results.
He said that while the scope of the study can cover basic issues like what was it costing before, what is going to cost in future and what are we going to do about it, it also needs to take into account the impact on travel patterns and the hassle factor, especially for business travel.
“That is where time is of the essence. Now, they are having to check in two hours before departure for a 40-minute flight. That’s bizarre. Business is hard money and time and we have dramatically increased the time factor.”
Mr. Fyfe said it is driving people crazy (in North America). “The inexperienced leisure travellers, they don’t really care, it’s just something they have to go through, even if it takes long and is a pain in the butt.
“But the experienced travellers, they know it’s not supposed to be like this, and they are saying, ‘I am not going to put up with this’. All this taking off of shoes, belts. That part of it is really annoying. Sooner or later, they will say, ‘There must be alternate ways of doing business’.”
He said Canada is also being affected because of pressure from the neighbouring United States to clamp down on its own visa issuance and border control formalitiess to secure a 5,000-kilometre land frontier.
This is hurting bilateral tourism flows; visitor arrivals from the US by automobiles during January-August 2003 dropped 15.7% to 6,720,998 and arrivals by non-auto by 11.1% to 3,551,196. Similarly, Canadians travelling to the US by automobile fell 3.4% to 5,432,891 in the same period and arrivals by non-auto fell by 3.6% to 3,558,100.
“It’s no longer possible to just wave (at the border control checkpoints) and drive on,” he said. “It’s becoming a sticky issue.”
Mr. Fyfe was in Bangkok to attend Canada Showcase, the annual trade event organised by the CTC to tap the outbound Asian market. This year’s event was held against the backdrop of a significant downturn in arrivals from Asia to Canada, e.g., S. Korea -12.42%; Singapore -29.91%; Malaysia -66.43%; Philippines -24.60% and Thailand -49.14%.
However, in what CTC’s Sydney-based regional director Donna Brinkhaus called a clear sign of commitment from the Canadian sellers to maintain a profile in the Asian market, the showcase was attended by 21 Canadian sellers, down from 41 last year.
Most of the private sector sellers pulled out because of cost factors stemming from the business downturn. Instead, 13 of the 21 sellers were tourism boards representing provinces and cities.
They met with 55 wholesalers/tour operators from Singapore, Malaysia, Thailand, the Philippines, Hong Kong, South Korea and Taiwan, down from 85 last year. The length of the show was also cut from four days to three to help keep costs down for the sellers.
Ms Brinkhaus said the main reason for the arrivals decline was the cutback in airline capacity due to the SARS crisis. However, she was optimistic that arrivals would surge again as many of the airlines have reinstated flights to Vancouver and Toronto in their present winter schedule which took effect in October.
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