New firm targeting Japanese tourists
BY KIM GUTTORMSON, CALGARY HERALD SEPTEMBER 3, 2010 BE THE FIRST TO POST A COMMENT
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Canadian Pacific Travel hopes to bring thousands of Japanese tourists to Canada.
Photograph by: Archive, Calgary Herald
A new vacation company expects to bring more than 17,000 Japanese tourists through Calgary next summer, part of its strategy to rebuild Canada as a go-to destination for that part of the world.
Canadian Pacific Travel plans to be operating by next June, flying from three cities in Japan into Calgary and Vancouver.
The Asian market, and Japan in particular, is "the highest growing segment of the industry," says CEO Jacques Kavafian, a former airline analyst.
He also expects that many of the 17,000 the company plans to fly into Vancouver will also make their way to Calgary en route to Banff.
Thousands of Japanese tourists, who spend on average $1,000 a day during their visits, including airfare, would be a boon to the city, say local tourism officials.
"It's the equivalent of six citywide conventions," said Tourism Calgary CEO Randy Williams.
Kavafian has also managed to bring in two airline veterans - and former rivals- as part of Canadian Pacific's executive management.
Mark Hill, a co-founder and former vice-president at WestJet, who resigned in 2004 amid a $220-million lawsuit launched by Air Canada alleging the Calgary-based airline was involved in corporate espionage, is the company's chief operating officer. That lawsuit was settled with WestJet paying $5.5 million to Air Canada for legal costs and $10 million to charity.
Robert Peterson, Air Canada's chief financial officer before retiring in 2005, has taken the same position with Canadian Pacific Travel.
"Business is business," Kavafian said of enticing the former competitors out of retirement to work together, adding the business plan for the new company convinced them.
The number of Japanese tourists to Canada and Calgary has dropped over the past few years - a 16.6 per cent decline in 2008 from the previous year, according to Statistics Canada.
But Kavafian says he knows how to bring them back - lower prices.
"Ask anybody on the street in Japan the top five places you want to go and Canada is up there. But it's bottom five in terms of destination. More and more Japanese go visit (the Czech Republic) and Austria than they do Canada because it's cheaper," he said.
His three-year plan sees 155,000 tourists flown into Calgary and Vancouver.
Williams said travel from Japan into the city has been dropping over the past few years because of the economy and the fact existing flights are full, leading to little competition on price.
While a new Air Canada Calgary-Tokyo flight will help with that, a tour company bringing in 17,000 people "is great for the city," he said.
Williams estimates each Japanese tourist spends about an average of $1,000 a day during their visit, including the airfare to get them here.
Kavafian said Canadian Pacific Travel will only buy seats during the peak season, not attempting to fill year-round seats with other destinations. The privately owned company won't own the planes and Kavafian said they are in .negotiations with a number of companies to fly for them.
"The business model is based on us flying only when there's demand," he said.
The size of planes they're looking at makes flying into Vancouver and Calgary the only options, Kavafian added, although the company plans to strike deals with domestic .carriers to take tourists to Montreal and Niagara Falls.
While initial plans include flying from three Japanese cities, Kavafian says two more are possible, as is expanding into the Korean and Chinese markets in five to seven years.
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