Newfoundland and Labrador Product Development Strategy

- 94-The approach focuses on building on strength, not need. It also focuses on supportingenterprises that can become self-sustaining, in a fashion and to a degree that allows them toachieve this objective. That also means doing a few things really well rather than giving toolittle to too many.And finally, the development effort will necessarily have to be led to a large degree in themedium term by government, and government funding will play a key and essential role, at leastfor the medium term. That is another factor that will constrain what can be accomplished andhow quickly.Strategies for Growing Revenues in All SeasonsWe are operating at capacity with accommodations being essentially full in two of our mostimportant tourism destinations in the summer, St. John’s and parts of the Northern Peninsula,particularly for the travel trade. Tour operators are finding it very difficult to get accommodations,rental cars, RV rentals and decent motorcoaches for charter. These conditions arecontinuing into the early fall season.But being busy in the summer isn’t enough to justify building new tourism products orexpanding capacity of existing ones if there is only a couple of months of high demand. Thenumbers simply won’t work for most products, particularly if they involve capital investment ofany significance.So the main agenda for the future has to be to build demand in the shoulder and winter seasonsand to maximize ‘yield’ (revenue) in the high season. That has to do with marketing, but it alsohas to do with what kinds of products are taken to market and how they are priced.To grow shoulder and winter season tourism, businesses need to provide new reasons to buy,through programming, packaging and the use of ‘value’ pricing (discounts) to increase appeal.Doing this first involves identifying experiences that are not summer-based and that willmotivate travel, then developing product around them. Providing appealing prices for theseofferings is part of the strategy.In high season, the strategy should be to add value through programming and packaging, andraise prices.Developing a basic ‘revenue management’ system is part of the equation. This involves usingprice to stimulate demand in soft demand periods and improve yield in high seasons.Presenting the Business Case for Public Sector Involvement andSupportWhy should government invest in tourism when other more critical public needs are going short?Isn’t this a bit of a luxury? Won’t people come anyway? And, anyway, is this the kind ofindustry we want to develop in Newfoundland and Labrador?THE ECONOMIC PLANNING GROUP of Canada Newfoundland & Labrador Tourism Product DevelopmentD. W. Knight Associates Strategy and Accommodation Needs Study