Newfoundland and Labrador Product Development Strategy

- 181 -John’s. The convenience for consumers and for tourists is of secondary priority. Perhaps thisbalance can be shifted by HNL.The issue of stopping cost recovery pricing and providing the service at lower cost is probablynot realistic. It may, however, be possible to lobby Transport Canada to reduce the targetpercentage of cost recovery for the Newfoundland and Labrador service.For those wanting cheaper travel, this new age of low cost/low fare air travel provides a betteroption.Tourist traffic on the ferries has been declining and is likely to continue to do so with thecontinuing improvements in air service. This trend is not likely to be reversed unless there is asignificant improvement in this service. There is, in fact, a very real risk the service willdeteriorate further and its prices continue to increase as subsidies decline.AirliftAir service to the province from within Canada has improved dramatically with the growth ofdiscount airlines and a higher level of competition. Hopefully that will continue.Service from the USA and Europe hasn’t changed very much but hopefully that will improve infuture as well with the growth of discount carriers. One of the ideas discussed earlier in thisreport, in Section 7, is the use of a ‘consolidator’, essentially a tour operator that would charteraircraft and operate in collaboration with tour operators and tourism businesses in the province tooperate flights on other routes, such as direct from the USA to St. Johns and Deer Lake, ordirectly from Europe to these airports.We are starting to see service improvements within the province as well, particularly with therecent announcement of low cost jet service between St. John’s and Deer Lake by CanJet.There are still major challenges with the high cost of in-province air service using smalleraircraft, whose economics virtually prohibit comparable fares to the jets. However, it would behelpful if interline arrangements could be made between the discount carriers and the localairlines to improve connections.Car and RV RentalsThere is a significant shortage of rental cars during the tourist season, which is a major barrier togrowing independent travel and FIT package tourism. This is a product of the short touristseason in that it isn’t cost-effective for car rental companies to expand their fleet for just a fewweeks a year. It also leads to high prices in high season.In other jurisdictions the rental companies will move vehicles from one region to another inresponse to different seasonal cycles of demand. However, in Newfoundland and Labrador, allof the companies are independent franchisees with their own fleets, so they have little or noTHE ECONOMIC PLANNING GROUP of Canada Newfoundland & Labrador Tourism Product DevelopmentD. W. Knight Associates Strategy and Accommodation Needs Study