Newfoundland and Labrador Product Development Strategy

- 212 -o Occupancy/utilization rates can’t be the only consideration on BDP applications. Lowoccupancy may be because there is not enough supply for the market to consider the areaas an overnight destination. Supply, quality, product appeal, traffic volumes andoccupancy rates are all relevant considerations. Also, whether the new productdiversifies the product available at the destination is another. The focus shouldn’t be justoccupancy. (This was addressed in Section 9.)o Not-for-profits (NFPs) and community projects are getting money too easily, and toomuch - while private sector is finding it too difficult, too onerous and too little.o Don’t fund NFPs that compete with the private sector without significant differentiationin product offer.o Don’t fund NFP/community projects that haven’t got assured operational fundingcommitted, or at least a reasonable and realistic plan in place in this regard.o Don’t under-fund projects to stretch dollars if it weakens the project, and particularly if itputs the operator under financial duress. Do it right.Other suggestions we would offer to ACOA are summarized below:o Private sector projects that are significant demand generators or influencers for tourismshould be eligible for some portion of their funding to be non-repayable. This wouldapply to non-commercial elements of the project, such as infrastructure and amenitiesthat contribute to demand but not directly to revenue.o For key strategic projects, a broader range of financing alternatives should be available,including ‘soft’ financing such as equity. Also higher percentages than 50% should bepossible in these cases.o The SCIF and BDP programs both continue to merit the same attention to addressingnegative impacts on competing products/programs.o We recommend that ACOA be a partner in other initiatives discussed later in this section.Financing IncentivesDITRD, in cooperation with the Department of Finance administers the EDGE Program and theDirect Equity Tax Credit program, as discussed in Section 3.Investors also can have the option of making their tourism investments into self-directed RRSPsas well, providing them with a tax shelter.It will be important for tourism product development staff to become familiar with these optionsand encourage their use where they apply.It would be helpful if experts in investment incentives could be engaged to bring forward newideas and new concepts that could assist with tourism product development.THE ECONOMIC PLANNING GROUP of Canada Newfoundland & Labrador Tourism Product DevelopmentD. W. Knight Associates Strategy and Accommodation Needs Study