Buddy up with a partnership strategy, it's good for business.
It was shaping up to be the best of times. Late last year the snow was deep and crisp and even and Doug Washer’s 60-sled snowmobile business was firing on all cylinders. “It looked like we were on track to have our best January in years,” recalls the owner of Canadian Snowmobile Adventures. Then, halfway through January, the Pineapple Express arrived, a warm and wet low-pressure system sweeping in off the Pacific. The rain fell, and fell, and fell. “At first we weren’t too worried,” says Washer. “This is Whistler and it always snows at Whistler.” But the rains kept coming, the snow kept melting and after a week the trails resembled creeks. Washer and his crew were soon spending as much time in the woods doing damage control, diverting water so it didn’t wash away the trails, as they were running tours. By the end of January business was down by 60 per cent and Washer was reduced to ferrying clients up to the rapidly vanishing snowpack in Hummers and ATVs. Between tours and trail grooming he scurried about town circulating notices to keep the hotels and ticket agents up to date on the changing nature of the business. By the first week of February the white flag was flying. The snowmobiles were idle. Now what? “We’d always had heli-touring in the back of our minds,” says Washer. “But there’d always been so much snow we’d never really given it much thought.” He called his buddy Steve Flynn of Blackcomb Helicopters and the two of them ‘long-lined’ a couple of snowmobiles underneath one of Flynn’s Astars and choppered off in search of opportunity, the sleds swinging over the village like pendulums in a grandfather clock. Flynn’s business wasn’t suffering. The lack of snow meant two things: more work moving snow guns around as the ski hills struggled to manufacture the white stuff nature wasn’t providing; and more work evacuating medical cases. (Sad but true; less snow means more obstacles, which means more injuries as skiers and obstacles make contact.) But gazing down on that reconnaissance flight they discovered that the snow on Sproat Mountain was still in perfect shape. Bonus: the route they used to get there, much of it over terrain set aside for the 2010 Olympics, was a scene-merchant’s dream. So they flew 16 machines up to the alpine and left them there, and then Washer papered Whistler with a new sheaf of flyers promoting his latest product, heli-snowmobiling. The phones rang off the hook. It was a more expensive product to be sure, but the clients loved it and willingly absorbed the price increase of $120. (The new fare was calculated by adding the per-minute rate Flynn charged for the helicopters.) “It turned out to be the ultimate bragging-rights thing to do,” says Washer. Today’s travellers are more sophisticated than ever. They’ve been there and looked at that and taken home all the T-shirts they need. Now they want to go somewhere and do something special. As Tourism Vancouver VP Stephen Pearce explains, “Tourism is all about experiences nowadays,” he says. “A destination has to be like a diamond, it has to have different facets. The more experiences the destination can provide, the broader the appeal.” It’s difficult for one business to be all things to all travellers. You’re either a river rafting company or a golf course, a health spa or a mountain bike park. What’s more, travellers come in all shapes, sizes, ages, fitness levels and both sexes. What’s appropriate for a retired couple in their 70s is not going to appeal to their teenage grandchildren. Husbands and wives may want to do the same thing together one day and completely separate stuff the next. Satisfying all these needs is not impossible when a variety of entrepreneurs offering different products and experiences band together. Complimentary businesses team up but competitors, too, are recognizing the benefits. As SFU marketing professor Lindsay Meredith observes, “You get an awful lot bigger bang when you’ve got a whole bunch of guys yelling bang together.” It may seem counterintuitive to view the golf course across the street from your own course as an ally but in the destination marketing business, he’s your best friend. “A serious golfer isn’t going to travel all the way to Whistler or the Okanagan to play one golf course,” Meredith says, “but they’ll come to play five or 10.” And while they’re in town playing golf they’re also staying in a hotel and eating in restaurants and, for a change of pace, going on a river-rafting adventure, which of course makes the hotels, restaurants and river rafters allies as well. Soon the exponential power of marketing kicks in. When five golf courses get together they discover that their marketing dollars suddenly travel five times further. When they add five hotels to the mix, their original power of five is multiplied by the reach of the hotels and all the partners the hotels have, and so on. With enough critical mass, you can create something like Tourism Whistler, which takes money from all the players and uses it to promote them around the world. Tourism Whistler, previously the Whistler Resort Association, was the first legislated resort association in Canada with taxation or assessment power. Members include property owners and businesses in Whistler and Blackcomb villages, as well as those in the Whistler Gondola area. According to communications manager Breton Murphy, the amount each member pays is based on a complicated formula that takes into account where your property is located, revenues, number of accommodation units, whether you’re strata or non, and square footage. These membership assessments provide Tourism Whistler with its income – some $7 million in 2004. There are other revenue streams in place, too. TW operates a central reservations system, charging a commission for its services; it netted $136,000 last year. It also runs the Whistler Golf Club, which earned $800,000 after expenses, and the Telus Whistler Conference Centre. All this revenue allowed Tourism Whistler to spend upwards of $5.5 million in marketing and sales in 2004 – this in addition to the money the individual players spent on promoting themselves. Whistler Blackcomb, the division of Intrawest in charge of the ski hills, declined to tell us what it spends yearly on marketing and special events; PR manager Christina Moore would only say that it’s a “significant” amount of money. However, a 2001 report prepared by NGR Resort Consultants estimated that the company spent a whopping $4 million in 2000 to push its lift tickets and other products. Needless to say, Tourism Whistler and its major players meet regularly to ensure they don’t duplicate efforts. Attracting partners was a cornerstone of the Wickaninnish Inn’s business plan from the start, says managing director Charles McDiarmid. “We want to specialize in what we do, which is accommodation, but since we also wanted to be able to offer the best of what Long Beach has to offer, we decided to attract partners who could help us create a destination experience.” One of the Wick’s partners is Sonic Blue, previously North Vancouver Air, which used to fly between Vancouver and Tofino on the weekends, and only in the summer. Back in 1996, when the hotel opened, McDiarmid approached the carrier and made the owners an offer: provide scheduled flights year-round between Vancouver and Tofino and the Wick will refer all its customers to you. The airline took the bait and “that support provided the momentum for three regularly scheduled flights a week,” says Sonic Blue GM Arthur Harrison, who took over the company two years ago. Reliable air access to Tofino prompted other area resorts to steer their clients toward the airline. The combined business doubled Sonic Blue’s passengers and generated enough revenue for the airline to offer daily service and fund the purchase of a second nine-passenger aircraft. [pagebreak] Another Wickaninnish partner is Jamie Bray, president of Jamie’s Whaling Station, which has been offering whale-watching tours for 24 years. Bray’s value to the region’s tourism industry became apparent in the early 1980s when he traveled to the Evergreen Sportsmen’s Show in Seattle and sold 684 room nights on behalf of the Ocean Village Beach Resort to attendees who liked the idea of a whale-watching holiday. “This was for March and April,” says Bray. “A time when [the local hotels] would have been lucky to sell 60 room nights on their own.” Partnering with a complimentary business has certainly worked for Pat Corbett, president of Hills Health and Guest Ranch in Cariboo country. “I like to work with my competitors,” he says, “because as far as I’m concerned, my competition is not those that are in the same business but that are offering competing activities such as beach or golf vacations.” In 1995, Corbett joined 35 other high-end destination spa owners across the country to create Leading Spas of Canada. Working together allowed the group to create a branded image, which you need in the spa business; there are currently an estimated 15,000 spas in North America. An annual Leading Spas of Canada membership costs $500 and gets you the brand-name seal of approval, the networking benefits associated with being part of the group and a posting on the organization’s website. For $3,000 a year you can be included in the national marketing program that earns you a bigger splash on the website and the right to participate in group-purchase magazine advertising programs. “I’d say being a part of the Leading Spas of Canada is worth about 10 per cent nnually on the bottom line,” says Corbett. It’s often difficult to measure the success of a partnership. Continued growth is a good sign that you made the right marriage, according to Catherine Temple of Paradise Found Adventure Tours. Her Campbell River-based company opened eight years ago offering guided hikes, then slowly branched out into other areas. Temple teamed up first with Aboriginal Adventures, which offered Zodiac tours on the Campbell River, and then with a whale-watching company in Telegraph Cove. A few years ago she started offering snorkel-with-salmon adventures and convinced the folks at Campbell River Lodge to include the unusual excursion in one of their accommodation packages, offering the hotel a straight commission for selling the trip. “Actually, it wasn’t a very difficult sell,” Temple recalls. “We swam right by the hotel every day; they could look out and see us go by.” The relationship was informal at first. Clients would phone up from out of town to book a tour and ask for advice on where to stay. Campbell River Lodge, a historic log building right on the river, was a natural choice and Temple made the recommendation without hesitation. Then she invited the hotel’s front-end staff to come for a free salmon swim and six of them showed up, lithered into their wetsuits and splashed off into the river. They loved it and immediately began recommending the tour to their guests, eventually building the adventure into a package. “We’re package B,” says Temple laughing. The hotel has sent so many clients to Temple – about 100 last year alone, or 10 per cent of her total business – that Temple wound up doubling the hotel’s commission to 20 per cent. SEALING THE DEAL Companies that send business Temple’s way don’t have to sign on any dotted lines to earn a commission. In a practice she says is increasingly common in the tourism industry, anyone whose recommendation to a customer leads to a sale gets his or her name on a list and a cheque in the mail. “It doesn’t matter if they work for a tour company or a marina or a hotel; if they send us a client we send them a cheque,” she says. “And we’ve had some that have made a fair dollar from us doing this.” Jamie Bray explains the one he has with the Wickaninnish Inn: “Charles and I go to lunch, I tell him what my net rate is, he agrees to knock a few bucks off his room rate so we have a nightly rate that includes a whale watch, and we shake hands.” Initially the Wickaninnish had an exclusive deal with Bray, but that was mainly because he was the only operator in town. In recent years an increasing number of suppliers have joined the scene, and the Wick has since spread the business around. This is fine with Bray, who says he now has the momentum and the reputation to survive without exclusivity but still welcomes the clients, dozens each week, whom the Inn sends his way. The arrangements get more complicated from there. Scott Mason of LandSea Tours, a Vancouver-based tour company with a fleet of 13 tour buses, says he has a number of supplier agreements with area attractions that he agrees to include on his routes. One of them is the Capilano Suspension Bridge. The tour operator’s incentive to include the North Vancouver attraction is a ‘net rate,’ essentially an admission discount. The net rate itself is negotiated and usually based on volume; the more passengers you bring the deeper the discount. “The Suspension Bridge is actually really good to work with,” Mason says. “They used to just give everybody the same rate and then rebate at the end of the year, but now long-term operators get charged a rate based on historic volume, so it’s fair to old and new players alike.” In addition to negotiated rates, contracts could include guaranteed room inventory at hotels, meal plans, parking agreements and preferential ‘queue jumping’ access, ensuring that when you bring clients to a particular attraction they don’t have to stand in line. Obviously a hand-shake contract is easier to get out of than one written in stone and notarized, and because partnerships can evolve (sometimes rapidly) over time, short-term agreements are better than iron-clad, multi-year ones. Big players obviously have more clout than the small ones. A name hotel in Whistler that has 10 river-rafting companies to choose from is obviously in the driver’s seat. But at the same time, if you decide to go into the river-rafting business knowing there are already nine other players trying to negotiate the rapids, you can only blame you-know-who if you find yourself playing the weak hand at the poker table. The best way to enhance your negotiating power is to offer the best product and send clients back to their hotels raving about what a great time they had. The whole idea behind partnering is to broaden your reach and exclusivity arrangements prevent that. “I can only speak for Rocky Mountaineer,” says Graham Gilley, marketing VP for Rocky Mountaineer Rail tours. “But no one chain or property or attraction can offer all the inventory requirements we need. We need all sorts.” The one exception? Gilley says Rocky Mountaineer has an exclusive arrangement with Hertz for rental cars because Hertz was willing to provide inventory in places like Banff. The Rocky Mountain tourist town lacks an airport, which makes it an unattractive location for a rental car agency. In exchange for agreeing to provide inventory in an otherwise slow market (most Alberta visitors rent vehicles in Calgary or Edmonton), Hertz became the exclusive car rental supplier for Rocky Mountaineer passengers. FINDING MR. RIGHT Believing in partnerships is one thing; securing good ones is another. Carol Nelson, North American marketing director for Tourism B.C., says any search should be preceded by a period of critical self-examination, partly because your potential partners are also going to be taking a close look at you, and also because you have to be able to explain who you are and what you have to offer. “Try to be realistic about your product, destination and service,” she says. “Understand what it is that makes you stand out.” [pagebreak] Due diligence is essential. “If you’re going to double-date and you choose poorly it’s going to rub off on you,” warns SFU marketing professor Lindsay Meredith. Trust a track record, adds Graham Gilley of Rocky Mountaineer. “If they’ve been in business a while, there’s a reason.” Ask for testimonials or a list of past clients you can talk to. Ensure your partners are up to code as far as health and safety standards are concerned, and make sure they carry adequate insurance. Find out how they deal with complaints and get it in writing. It’s a good idea for multi-party associations to retain the power to expel members who sully the brand. “Find partners with a similar brand quality,” advises James Cronk, GM at Westwood Plateau Golf Course. He did so when he partnered up with the Fairmont Waterfront Hotel and Helijet Airways to offer a stay-fly-and-golf deal appropriately named the Heli-va-view package. Avoid the mistake of overselling your partners, adds Cronk. “Your clients aren’t stupid.” Find the right partners and let the products speak for themselves. Finding partners is not as difficult as it might at first seem. The local chambers of commerce in your area are a good place to start looking. This is where networking comes in. Join local business associations and make contact with regional tourism promotion bureaus. Bear in mind that once partnerships are established, they must be nurtured. Penny Sopel, VP marketing and sales for Pacific Coastal Airlines, says a partnership is doomed if someone makes the mistake of thinking that inking the deal is all there was to it. If you’re not prepared to do your part, and that can include putting sufficient funds into promotion, “Don’t even bother.” In time, provided you’ve made the right contacts and done your share of the work, potential partners will come looking for you. And the good news is that in the destination marketing game, extramarital relationships are encouraged.