Business
Mark Rendell

Selling Yellowknife to the World

An "edgy" plan to re-brand and market the erstwhile City of Diamonds

“Yellowknife is on the edge—of expansive lakes, untamed wilderness, of civilization itself—putting visitors on the cusp of a diverse range of activities and experiences…”

This is the branding language suggested to city council on Monday by local communications consultant Leanne Tait, as part of a strategy to establish a ‘Destination Marketing’ organization that will promote Yellowknife as an exciting place to visit.

The idea—essentially to establish a visitor’s levy and funnel the revenue to a third-party marketing organization—has been buzzing around for a while. Back in 2012, the Yellowknife Hotel Association supported a proposed visitor’s levy for tourism marketing, though the plan never moved forward. More recently, the idea received broad support during the ill-fated debates over hosting the Canada Winter Games.

An image from Tait's presentation

The rationale behind it is pretty simple: tourism is a fiercely competitive industry, and right now we’re getting seriously outspent by other northern destinations like Whitehorse, Fairbanks, AK, and even Reykjavik, Iceland.

Fairbanks, for example, a city of around 32,000 people, spent $3.3M on destination marketing in 2015; of that, 84 percent was funded through a visitor’s levy. By comparison, Tait’s strategy notes, “In 2016, the City of Yellowknife allocated $105,400 to Communication activities and $170,500 to tourism activities—a total of $275,900 (or 1/7 what Explore Fairbanks dedicates to destination marketing).”

The proposed plan involves the City acting as an “incubator” for the first year of the project, then handing it over to a third party to run. According to a preliminary budget, this would cost the City $350,000 in the first year. After that, the visitor’s levy would kick in—provided the GNWT can be convinced to change the requisite legislation—providing an estimated $1 million annually to pay for the program’s continuation.

Do we need it?

This is slightly harder to answer. As a City, we do spend less than our competitors, at least according to Tait’s numbers. But it’s not as if we haven’t tried branding Yellowknife before. Diamond Capital of the World, anyone?

A number of the plan’s goals are laudable: translating menus and signs, improving our online game so it’s easier to book tour packages, placing some sort of tourism kiosk right downtown. But some of it seems less than essential, such as collecting data on what Yellowknifers think about tourism.

According to Tait, the investment is a no-brainer: serious destination marketing efforts could see Yellowknife’s tourism spending grow at as much as 10 percent a year, which would mean roughly $10 million more annually being spent by tourists in Yellowknife, according to her numbers.

“I don’t have a crystal ball, I’m not a pundit, but I feel strongly that that’s a conservative number. If we’re already achieving five percent growth, I think 10 percent growth is absolutely doable with a small amount of effort,” said Tait.

How this 10 percent number was arrived at, however, isn’t entirely clear. Sure we’ve seen an average growth in tourism numbers and spending increases of around five percent over the past five years. But much of that “growth” was simply getting back up to pre-2008 levels. Moreover, we actually saw a significant drop in visitor numbers from 2013/14 to 2014/15, though total spending increased.

The other, and perhaps more important, thing to note, is that almost all of our growth has been in aurora tourism, where spending increased from $7.1 million in 2008 to $25.4 million last year. “General tourism” and “visiting family and friends” have also seen growth since 2008, but other fields like “business travel” or “outdoor adventure” have remained static or dropped.

This suggests that any branding or destination marketing strategy should focus on those segments of the market that are actually growing. If we want to spend public money pushing Yellowknife, perhaps we should direct that spending towards demographics who have been coming here in droves, rather than developing an amorphous brand that may not provide the same returns as focused advertising.

Either way, with the hotel association already on board for a visitor's levy, meaning little cost to the public purse, a destination marketing strategy of some sort seems like a positive step. As Tait explained: “While [tourism] may not have the same impact as mining or oil and gas, the City does not have the same ability to…  influence those industries as they do with this one.”

The strategy will be adopted for information by council next Monday.