B.C.'s tourism industry cheered in 2004 with the announcement that Canada would be gaining Approved Destination Status from China within the next year.
Thousands of Chinese tourists would flock to our shores, they said. We'd be drowning in visitors, they said. One small question: where the hell are they? For decades, U.S. tourists have been the mainstay of B.C.'s tourism sector. But a steady decline, thanks to fallout from 9/11, a dippling U.S. dollar relative to the loonie, not to mention border and security hassles, has the industry searching desperately for a new saviour. Along came China, with its millions of curious citizens itching to travel the world and, more importantly, the much-hyped announcement by federal politicians that the Asian country will be granting Canada the coveted Approved Destination Status, or ADS. The label is China's way of encouraging its people to travel in tour groups to the 81 countries currently granted the privilege, and Canada was only too happy to join the pack - or so we throught. ADS was billed as just the balm the ailing industry needed. With China's population of 1.3 billion and its growing middle class, B.C. wouldn't have to attract a very big piece of that market to give tourism a massive and much-needed boost. The World Tourism Organization says more than 30 million Chinese citizens travelled to other countries in 2005. That number is expected to grow to 50 million by 2010 and 100 million by 2012. The Canadian Tourism Commission was forecasting a total of 136,000 Chinese visitors to Canada for 2006 - with no ADS in place - followed by 170,000 in 2007, 212,000 in 2008, and 265,000 in 2009 - all with the ADS designation signed. But nearly two years after China agreed to begin talks (in January, 2005) on ADS, an agreement has not been signed. There was genuine optimism a year ago that the agreement would be finalized by the summer of 2006 and Chinese tourists would begin flocking to Canada, but the last time talks were held on the subject was December 2005. Since then, nothing. And according to nearly every tourism official contacted for this story, none was scheduled. “Everything we hear is second-hand,” says Cam Routledge, overseas marketing director with Tourism BC, “but there are no further negotiations planned at this time. One can try and deduce a number of things from that, but every one of them is a guess. I wouldn’t be rushing out to plan for an ADS agreement being signed tomorrow. Our target was the end of the year. What can I say?” Stephen Pearce, VP of leisure travel for Tourism Vancouver, is equally perplexed: “I don’t know. It’s a matter of priorities. China is being approached by a number of other countries looking for ADS, including the U.S. They are conducting negotiations with other countries now. I think we are still an important partner for China. The talks could be wrapped up as quickly as the parties want them to be wrapped up, frankly.” A spokesman for International Trade Minister David Emerson says the minister has raised the ADS talks with China’s ambas¬sador to Canada. But he declined to comment on when the last discussions took place. “Those who might be questioning the pace of progress on ADS – or speculating about why it has not yet been finalized – need to recognize the complexity of issues both countries face as they consider this,” says ministry spokes-man Robert Klager. “Our government’s efforts to reach a mutually satisfactory agreement continue, as does the dialogue around a number of other initiatives and opportunities to strengthen Canada’s relationship with China.” That doesn’t cut it with former B.C. Tourism Minister Olga Ilich (a cabinet shuffle in August gave Stan Hagen the post), who says she’s quite frustrated by the pace. “Obviously we’re not very happy that it has stalled, and we’re trying to figure out why it has stalled and whether or not we can do something about it,” she says, adding that the ADS agreement is key to the province’s Asia-Pacific strategy. And always in the back of her mind is that declining U.S. traffic. “Every one-per-cent drop in tourism is about $10 million less to the provincial coffer,” she says. “That’s $10 million we can’t spend on other things.” While Emerson’s office won’t speculate on what’s behind this, lots of others will. Kenny Zhang of the Asia Pacific Foundation of Canada sees a number of possibilities: Canada’s ongoing ¬reluctance to deport Lai Changxing, who is wanted in China on smuggling charges; Chinese officials being distracted with Taiwan; and a simple loss of interest. “Canada did not get in at the right time when Beijing was interested,” Zhang says. “When we were ready, Beijing had lost interest. Canada didn’t move quickly enough.” Pearce sees more of the complexities: “China sees it [ADS] as a tourist agreement, and we see it as trade and immigration,” Pearce says. “We have the interests of a number of parties to be accommodated – foreign affairs, border services, immigration. We also have a Charter of Rights and Freedoms that doesn’t allow us to have separate policies in place for one country versus another country – that’s part of the issue.” Whatever the reasons, and they are most likely political, there are some troubling indications that it might last for a while. Business Council of B.C. executive VP Jock Finlayson worries that stagnation on the ADS file is just the tip of the iceberg. “The Chinese have always displayed hypersensitivity, particularly around the one-China policy. Anything seen by a relatively small country like Canada to reopen that question could lead to a very significant backlash by China,” he says, adding that the huge Gateway project is vulnerable. “To punish us, or for political reasons, they may look to divert some of their own shipping business to other ports – that’s speculative on my part, but I don’t see any upside for us. Our province has identified this whole Gateway initiative as a big priority for B.C.” There are other examples indicating that China is less than enthusiastic about Canada right now, including on the seemingly vital (to the Chinese) energy front. Enbridge is planning a new pipeline to carry oil sands oil to Kitimat and on to China, but in its last earnings release, Enbridge said the in-service date has been “pushed back” to 2011 because of the slow pace of negotiations with China. China wants and needs this oil as badly as Canada wants to sell it. Giving the slowdown an official context, Zhang Weidong, a political counsellor in the Chinese Embassy in Ottawa, in late July chastised the Harper government for its decision to grant honorary citizenship to Tibet’s Dalai Lama, saying the move “harms the Canadian image and will harm the relationship between China and Canada.” The Dalai Lama has been to Canada four times and has a close connection to Vancouver. He was most recently here in mid-September, when he received his honorary citizenship and opened a new centre for peace and education at UBC. [pagebreak] There has been no official change in Canada’s “one China” policy. But the governing Conservative Party has lots of members who think Canada should ¬strengthen its economic and cultural ties with Taiwan, and while in opposition introduced a private member’s bill to that effect. Finlayson is blunt about this strategy: “Is there a real strategic re-evaluation going on or not, and if so what are the options?” he said. “Have the ramifications been assessed; has there been any dialogue? To my knowledge the answer is ‘no’ on the consultation side.” Whatever’s behind the ADS stalemate, there is a clear consensus on the part of tourism officials that it needs fixing, fast. Without ADS, Canada can’t do any advertising in China, can’t encourage people to visit, and faces challenges with foreign exchange transactions. “It is important that it happens,” says Pearce. “If it doesn’t, we’ll be conspicuous by our absence. On so many levels the Chinese like Canada. They see us as a country that is welcoming, hospitable, safe and we are working with so many other sectors – why not tourism?” Whatever the holdup, tourism officials say they’re preparing now. Cam Routledge of Tourism B.C. says planned activities include everything from implementing the recommendations of marketing studies done on what Chinese tourists will be looking for to an accreditation program for local operators. But accreditation remains key, Routledge says, because it tells the Chinese tour operator that his group can expect certain minimum conditions to be met. “We’re working on the China National Working Group [an umbrella organization to coordinate the activities of both government and private-sector tourism officials] to develop a receptive tour operation selection and monitoring program,” he says. Tourism Vancouver’s Stephen Pearce says it’s essential to be prepared. Assume nothing. “One of the first misconceptions: they thought all they had to do was say the door is open,” Pearce says. “If you’re going to get involved, you really have to understand the fundamentals of what the market is looking for.” Chinese tourists are already coming to B.C. and Canada as individuals in growing numbers, without the ADS agreement in place. But the tour groups – and that’s where the big numbers are – won’t come without it. If China doesn’t give the ADS nod soon, tourism industry leaders wonder how long they’ll languish in the starting block before the gun finally goes off – if it goes off. Ready, set… According to Stephen Pearce of Tourism Vancouver, Canada faces three main challenges before it can cash in on the China tourism boom: Visas must be relatively easy for prospective Chinese visitors to get. Right now, there are only three places in China where visas can be ¬obtained: Hong Kong, Shanghai and Beijing. Guangzhou will be next, but as Pearce points out, there are some simple fundamentals to put in place. An example? Canadian visa applications are ¬printed in French and English only. “A lot has to do with clear communication,” Pearce says. “There are misconceptions on both sides on this. We hear this time and time again. They get visas from other countries much easier than Canada, and these are people who are world travellers.” Canada has to be the brand name. That might be difficult for a country that is 10 loosely tied provincial fiefdoms, but initially at least, Chinese tour groups will likely stay in Canada’s urban centres. The vast majority of Chinese tourists know very little about Canada beyond some of the more obvious icons, like Niagara Falls or the Rocky Mountains. “We have to be careful not to regionalize this. We still have to support a Canada brand. Australia competes as Australia, not as Brisbane versus Melbourne, or state ¬versus state. Provinces tend to get up a head of steam and that would do us a disservice. The ¬reality is we have a ¬challenge as a country to compete against the rest of the world,” says Pearce. There needs to be complete coordination, attention to detail and consistent messaging in all the communications with China, whether it’s websites (which Pearce says are springing up all the time), brochures, magazines or broadcast communications. “We have our articles translated by three different translators to make sure we pick up on the idioms and dialects, and we’ve still made some mistakes,” Pearce says. “The website has to continue to change because it’ll be tested by individuals every day.” Opportunities up in the air Tourism and trade with China won’t grow without air travel, says Harmony Airways president Gary Collins. And he has a bone to pick with Ottawa about that. After the China-Canada bilateral air treaty was signed more than a year ago, Harmony immediately expressed interest in running new routes to China from its Vancouver hub, and was hoping to be up and running by the summer of 2006. “We were hopeful,” says Collins. But he’s quick to point out that Air Canada is still the only Canadian carrier flying between the two countries. Harmony has applied for permission to fly to Beijing and Shanghai, and is looking at Guangzhou once consular services are established there in 2007. In the meantime, Harmony has a code-sharing agreement with China Eastern Airlines that will let customers book connecting travel between China and Canada, and use Harmony’s North American routes to get passengers beyond Vancouver. But what the local airline really wants is to fly its own aircraft on those routes. While Collins is concerned about the slow pace of the Approved Destination Status negotiations, he’s more concerned with red tape in Ottawa. Existing policies state that a small carrier like Harmony has to buy or lease the aircraft before they’ll get the routes. “We’re in a position... to begin serving those markets – but it’s difficult to go out and ask an investor to commit hundreds of millions to a broad fleet plan to secure the aircraft before you know you’ll have the routes,” Collins says. “They are asking me, or the owner, to put a lot of money on the table and commit to an entire fleet plan for hundreds of millions of dollars’ worth of aircraft going forward, with no knowledge or certainty that there’s going to be a frequency available. We find far greater entrepreneurial spirit in Beijing than we do in Ottawa.” John Korinc of the Vancouver International Airport Authority points out that Air Transat is also interested in flying to China, and there are Asian carriers looking to expand further into Canada. But he, too, points a finger at the slow ADS process. “We’re still seeing growth in the China market, but the ADS will bring it up another step. The world doesn’t stand still, and I think we’ve missed part of the boat already. But it’s never too late.”