Alberta’s Minister of Culture and Tourism is watching Canmore closely after the community’s destination marketing organization announced it was ceasing operations last Friday (July 15).
Canmore Business and Tourism’s board of directors issued a statement at the end of last week announcing it would shut down operations and eliminate key staff positions in light of a funding crisis.
“Canmore Business and Tourism (CBT), also known as Tourism Canmore Kananaskis, is winding up operations effective immediately due to its inability to secure a sustainable source of funding,” said the statement.
It left local officials with the Town of Canmore scrambling and has caught the attention of Minister of Culture and Tourism Ricardo Miranda, who said he would monitor the fallout of CBT’s closure.
“It is disappointing,” Miranda said Tuesday (July 19) “We are going to continue to monitor the situation and work very closely with our partners.”
The funding crisis at the heart of CBT’s closure culminated this summer with the demise of a voluntary hotel-driven Destination Marketing Fund – a third party organization that was committed to funding CBT’s operations through a three per cent fee added to hotel room nights in Canmore.
The end of the DMF quickly left CBT without enough revenues to continue operating, a shortfall of approximately $1.5 million for the fiscal year. It prompted CBT’s board to make the decision to cease operations and lay off all staff members.
Canmore Mayor John Borrowman said he is not surprised that a lack of sustainable funding has crippled CBT, however, he is disappointed “that it has come to this.”
“I did not think that was imminent,” he said regarding CBT ceasing operations. “But I am not overly surprised because I know the voluntary method of funding has always been tenuous and I have known for some time hoteliers voluntarily collecting that three per cent contribution have been declining.
“It has been a building frustration for the destination marketing fund and I frankly don’t blame them for pulling the pin, but I am disappointed it has come to this.”
The three per cent destination marketing fee, which hotels in Alberta are allowed to charge, has been the major source of operational funding for the work CBT has undertaken over the past eight years.
Over that time, DMF has contributed $7.1 million towards CBT, said board chair Donna Trautman, and would continue to support a coordinated approach to destination marketing.
However, Trautman said hotels in Canmore have been removing their inventory from the voluntary organization over the past year to a point where those who are left in the DMF have elected to discontinue the endeavour.
“We have not been effective in convincing all hotels to participate,” she said.
Trautman called the voluntary hotel room tax a flawed mechanism for sustainable funding because the amount of contributions was uncertain and based entirely on occupancy rates.
“It is not stable in that it is voluntary,” she said.
The hotel room fee was an unsustainable and unstable source of funding, agreed CBT’s outgoing CEO Andrew Nickerson. Nickerson compared the arrangement to a house of cards, which has come tumbling down with the demise of Canmore’s destination marketing organization.
It leaves the community without a committed organization to strategically market Canmore as a destination to visit.
“Destination marketing is momentum building,” he said. “Destination marketing is the result of years of targeted and careful brand building and we will continue to see the benefit of (CBT’s work), but there will be a point where we lose that momentum.
“Simply relying on the mountains to attract visitors is not an effective strategy. Destination marketing is a scientific discipline that targets potential visitors that are most likely to be influenced to come to Canmore and spend money in our businesses.”
Visitation to Canmore, said Nickerson, represents $350 million annually in spending. With declining revenue, however, he said it has become impossible for CBT to be effective any longer.
“This is not through lack of trying to find a mechanism for funding,” he said. “We have tried so many different models; unfortunately, we have reached this crossroads.”
CBT is responsible for multiple contracts and will wrap them up in the near future. What that means for CBT’s contracts to run the Visitor Information Centre for Travel Alberta and the VIC downtown is uncertain. The weekly Mountain Market will continue through the rest of this summer and Canmore Uncorked will be put out to tender as an event, according to CBT board member Sean Meggs.
He said the CBT board and membership would like to see the successful and award-winning annual culinary event continue and the tender process find a successful new home for it.
Borrowman said the municipality is working to ensure those services are provided in the interim until the future of things like staffing information centres and managing the farmers market can be determined.
He said administration and council will engage the community on a conversation about what model can be developed to deliver destination marketing and economic development. The latter was a service council hired CBT to provide on a yearly basis at a cost of $400,000, which was paid for with business registry fees.
“Moving forward, there will be a transition to some other model of delivery of destination marketing and economic development, which may or may not be the same thing and may or may not be delivered by the same agency, but I am totally confident we will morph into a new model,” he said.
“I am confident we are going to get through this and have a strong functioning destination marketing organization.”
