CITY CLERK Clause embodied in Report No. 9 of the Economic Development and Parks Committee, as adopted by the Council of the City of Toronto at its meeting held on October 29, 30 and 31, 2002. 1 Toronto Tourism Sector 2002 Performance Update (Various Wards) (City Council on October 29, 30 and 31, 2002, amended this Clause to provide that the following Members of Council be appointed to the Tourism Sector Advisory Committee: - Councillor Brian Ashton; - Councillor David Miller; - Councillor Denzil Minnan-Wong; - Councillor Joe Pantalone; and - Councillor Kyle Rae.) The Economic Development and Parks Committee recommends the adoption of the report (September 30, 2002) from the Commissioner of Economic Development, Culture and Tourism, subject to adding: “(a) the composition of the Tourism Sector Advisory Committee be amended to include as voting Members a representative from Exhibition Place, the Toronto Transit Commission, the Toronto Zoo and the Cultural Sector; and (b) the Budget Advisory Committee and the Commissioner of Economic Development, Culture and Tourism be requested to protect and enhance the budget of Tourism Toronto during the 2003 budget deliberations due to the sensitivity of the industry at this time.” The Economic Development and Parks Committee reports, for the information of Council, having received the report (September 9, 2002) from the Commissioner of Economic Development, Culture and Tourism. The Economic Development and Parks Committee submits the report (September 30, 2002) from the Commissioner of Economic Development, Culture and Tourism: Purpose: To provide further information on the tourism sector as requested by the Economic Development and Parks Committee at its September 12, 2002 meeting. Toronto City Council2 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1 Financial Implications and Impact Statement: There are no financial implications resulting from the adoption of this report. Recommendations: It is recommended that: (1) the Economic Development, Culture and Tourism Department work with representatives from the tourism sector, including the City’s ABCs, to identify strategies to revitalize Toronto’s tourism economy; (2) City Council establish a Tourism Sector Advisory Committee to look into the revitalization of the tourism industry in Toronto; and adopt the terms of reference (Attachment No. 1) for the Advisory Committee; (3) the Economic Development, Culture and Tourism Department present to City Council in early 2003 a five-year Tourism Development Action Plan that takes into consideration the work of the Advisory Committee; (4) City Council reaffirm its commitment to request the Provincial Government to approve and expedite the implementation of a hotel room tax or levy; and all proceeds raised from the tax be directed to marketing Toronto as a business and leisure travel destination; (5) the Commissioner of Economic Development, Culture and Tourism report to the Economic Development and Parks Committee on an semi-annual basis on the state of tourism in the City of Toronto; and (6) the appropriate City officials be authorized and directed to take the necessary action to give effect thereto. Background: Tourism is a key economic activity within the City. In recent years, Toronto has experienced a gradual decline in tourism. In other North American regions tourism has increased. The Toronto Tourism Sector 2002 Performance Update, presented to the Economic Development and Parks Committee on September 12, 2002, illustrated that the tourism sector in Toronto is experiencing significant declines. The slippage in market share in Toronto can largely be attributed to two factors. First, other jurisdictions have more financial resources for tourism destination marketing. Second, sound long-term strategic planning, progressive tourism policies and renewed investment in attractions, facilities and products are making other North American cities more desirable for business and leisure tourism. The purpose of this report is to address issues deferred for consideration resulting from the presentation to the Economic Development and Parks Committee on September 12, 2002 of the Toronto Tourism Sector 2002 Performance Update report and to present a co-ordinating strategic approach to improve the outlook for this important sector of the economy. Toronto City Council3 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1 Comments: Strategic Planning Sound strategic planning is the key to success for long-term growth of any sector of the economy. The Economic Development Strategy adopted by City Council in August 2000 identified tourism as one of the three largest economic clusters in Toronto. The creation of the Tourism Division in the Economic Development, Culture and Tourism Department in 2002 represented the first step to reinforce the City of Toronto’s commitment to building the strength of the tourism sector. One of the first objectives of the Tourism Division will be to immediately work with the representatives of the tourism industry to expedite a collaborative and results oriented tourism action plan for Toronto. Toronto’s last Tourism Development Strategy was completed in 1994. It was developed in partnership with the Municipality of Metropolitan Toronto, the Metro Toronto Convention and Visitors Association and the Ontario Ministry of Tourism and Recreation and funded partially through the Canada-Ontario Tourism Development Agreement. The strategy presented six primary action steps: (i) Develop a clear, consistent image supported by an innovative marketing program. (ii) Develop Toronto as a gateway City. (iii) Pursue additional convention and trade show potential. (iv) Gain leverage from regional demand generators such as Niagara Falls. (v) Enhance Metro Toronto’s position as a regional centre. (vi) Develop Metro Toronto’s unique selling propositions. Two of the six actions have been achieved. Toronto’s Pearson Airport expansion and the planned expansion and renovations of Union Station clearly establish Toronto as the main gateway to Canada. The Metro Toronto Convention Centre and National Trade Centre expansions have been completed. The four remaining actions have not been accomplished but they still remain valid objectives. The Tourism Investment Study presented to Council in May 2002 also made some strategic recommendations to address how more investment in tourism projects could be generated as well as confirming the need for more resources to be dedicated to tourism marketing. The study examined Toronto’s tourism infrastructure in comparison to competing North American cities. The Tourism Division of the Economic Development, Culture and Tourism Department has been established to work with the tourism industry to develop an action plan for tourism. The plan must be developed with the guidance and support of the tourism industry. The Tourism Division needs to work with Tourism Toronto, City Agencies such as the Toronto Zoo, BIAs and representatives from all parts of the tourism industry. It is recommended that a tourism sector advisory committee of the Economic Development and Parks Committee be established to oversee the development of a five-year Tourism Action Plan. Toronto City Council4 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1 The Committee would be comprised of Councillors and senior tourism sector leaders. Terms of Reference for the establishment of the Committee are presented in Attachment No. 1. The Tourism Action Plan will review the previous Tourism Development Strategy, Tourism Investment Study, The Economic Development Strategy, Culture Plan and tourism development documentation from the Provincial and Federal Governments. The plan will examine a wide range of issues. How the City of Toronto can improve relations with Canadian Tourism Commission and Department of Foreign Affairs offices in Canadian Embassies and Province of Ontario representatives in key tourism markets needs to be examined. As well, the tourism industry may benefit from the department’s International City Alliance initiative and thus needs to be formally integrated into the development plan. Projects such as the Toronto Zoo’s proposed initiative to explore developing a Panda exhibition and strategies to examine the development of tourism landmarks are consistent with creating new events and attractions designed to increase leisure visitation. Support for Destination Marketing There is fierce competition for the business and leisure traveller. Toronto is competing against cities from all over North America. Destinations are investing millions of dollars to attract visitors and Toronto’s loss of market share can be attributed to the decline in Tourism Toronto’s marketing budget while competing destinations have increased marketing activities. Toronto’s lack of competitive funding for destination marketing is well known. The level of marketing support is low, even when compared to other Canadian cities. Toronto receives $8.3 million in marketing support while Vancouver receives $12 million and Montreal receives $16 million. Toronto remains the only major North American City without some form of a tax, levy or user fee designed to generate a stable source of marketing funds for a destination marketing organization. Studies have proven that there is a direct correlation between increases in tourism marketing budgets and increases in visitation, revenue generation and