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The next cycle Tourism Whistler President Suzanne Denbak on the challenges facing the resort Three years ago Pique Newsmagazine sat down with then-Whistler Resort Association President David Thomson to talk about the challenges facing the WRA. Among the issues then was a huge 50 per cent increase in the number hotel rooms that would become available in the next couple of years and trying to increase the number of visitors to fill those rooms. The Open Skies agreement had also just been reached and Vail had just merged with Ralcorp, bringing Vail, Beaver Creek, Breckenridge, Keystone and Arapahoe Basin together to create the largest mountain resort company on the continent. As a resort, Whistler seems to have met those challenges; last winter’s record 2.1 million skier visits being one indication. Pique editor Bob Barnett recently sat down with Tourism Whistler President Suzanne Denbak to discuss the next cycle of challenges facing the resort. SUZANNE DENBAK: I think Whistler has historically been tremendously successful but there are still many new opportunities for us as a resort to pursue. I think of our business really as having two significant components. We have our leisure market and we have our meetings and incentives market. On the leisure market side, Whistler now has incredible momentum. Our awareness on the world stage is the highest it’s ever been. So that’s an opportunity for us to continue to capitalize on that awareness. Our travel trade partners and tour operators and travel agents are all very excited about Whistler and it’s definitely top-of-mind. So I think that that’s certainly an opportunity that we have to continue to exploit and, as well though, consider that in the leisure market, as with any business portfolio, you have to be sure that you have an appropriate mix of business. So you never want to be overly reliant on any one market. Right now our largest market is the United States but then, looking to our overseas markets, just as Japan was beginning to decline because of their economic situation, the U.K. market took off. That’s the kind of business strategy that we need to continue to pursue in our leisure markets. So I think it’s a critical part of the WRA’s role to be involved in new market development so that we are constantly reviewing our portfolio in markets and balancing the geographic markets that we participate in. PIQUE: That’s primarily winter, is it not? SD: There’s also a seasonal balance to be had. And what’s very exciting as well is the news that we hear from our travel trade partners. For example, I was just recently in Mexico at a Canadian Tourism Commission winter show for tour operators and travel agents. We met with all of our key accounts in Mexico, and Mexico primarily is a winter market for us. But again, without exception, of the dozen tour operators we met with, they are all interested in summer products. So we have tremendous momentum with the awareness of Whistler. And the fact that, although in many markets we begin as a winter resort, the interest level for summer is phenomenal. Not just our golf product, which is of course becoming better and better known throughout the world, but also our soft adventure and the mountain sight-seeing. And our sophistication as a resort — we also have appeal for the consumer who is perhaps not quite as active in as much as they don’t want to go screaming down the mountain on a bike, but we now have a reputation for our fine dining and our spas. And to a lesser degree our festivals programs, which we are strategizing on as we speak. We’re looking to change the mix, somewhat, of our festivals. While street performers and jugglers are very entertaining and it’s an important part of the family mix that we have here in the resort in the summer, we’d also like to add a more cultural dimension to that. So we have more dance performances and musical performances as well in that whole category of festivals that we call street entertainment. So you’re absolutely right. We have to balance our markets, our leisure markets, our geography. But it’s also a very important role of the WRA in new market development to take existing winter markets and expand them so that they become summer markets for us as well. Because of our weather patterns, for the leisure traveller spring and fall are a more difficult sell, although we do want to create festivals, such as Cornucopia, which are independent of the weather and attract a high-end clientele. But that’s where the second opportunity that I see comes into play, and that’s with the meetings and incentives market. That is a market which traditionally books spring, summer, fall and in fact they’re heaviest booking patterns are May-June, October-November. So you can appreciate what an ideal match that is for our leisure market. Because of our awareness in the leisure market we’re able to lever off that in the business and incentives market. So people have heard of Whistler as a vacation destination. We’re now coming into our own as a meetings destination. So that also is a tremendous opportunity, and that is why the WRA, in the business plan that we put together last November — we put together a very comprehensive plan for the entire organization that covered a three-year period. This is our vision for the organization which we developed with our board of directors. This is our mission, and each department, in turn, developed a supporting mission. In the conference sales department, that team’s mission is to represent the entire resort in the meetings and incentives market. That was a strategic shift from previous years, where the conference sales team was simply selling the Whistler Conference Centre. We decided, as a management team, that was too narrow a focus for that group. That in fact we needed to have a sales team in place selling the entire resort for conferences. So now, we’ve more than doubled the sales team. We now have four sales managers, a director of sales, a telemarketer and three sales co-ordinators in conference sales, selling the resort. And based on the client’s needs, they may choose to go to the Chateau or the Delta, or the Westin. That really is a second-tier decision. We want them to come to Whistler, and then what facility they’re in in Whistler becomes a match to their needs. And it’s good for the entire resort because these groups come in and it’s not just their accommodation, it’s restaurants and shopping — and they come at a time of year when we need the business. So that’s also a tremendous opportunity for us, but it also speaks to why we need to renovate the conference centre. This conference centre is, for many of the properties, the leading space that they would affiliate with. Other than the Chateau, the Delta, the Westin, most properties do not have integral meeting space, so they have to work with the conference centre. This building has suffered from deferred maintenance for many years and it’s time to make an investment. In looking at the renovations, we started with just the existing facility. When it became apparent that the Mountain World space would be available the architect had a look at how that might fit in. So the ability to add capacity to this facility is very exciting. The annual incremental benefit — not just the $15 million we’re generating currently — in addition to that $15 million, once it roles out — and granted it will take two-three years to get there, it’s not going to happen over night because of the booking times — but that could be an additional $40 million a year. So that also is a huge opportunity for us as a resort. And then we truly become four-season; year round. We have a balanced portfolio of leisure versus business; by season and by geographic market and then we really need to manage our exposure to any fluctuations in the market. PIQUE: So most of these directions were laid out last November in the business plan? SD: We undertook a really comprehensive business planning process that started last summer — more than a year ago — with the board of directors. We went away for a two-day visioning session, with a facilitator. We addressed the question: What are we here to do? What is the role of the WRA? That was also very important for me to understand, being new to the position. I needed to understand the vision and the mission so that I could in turn deliver on it. So we started with that process and then, with that vision in place, each of the departments were able to develop supporting missions. So, ‘this is the big picture: what do each of us have to do in order to support that?’ And it was very much a bottom-up process. It was not mandated to departments that you should do this. It was ‘let’s sit down, let’s brainstorm and talk about it.’ They each developed their own statement and then from that, understanding what they needed to do to support the organization, they developed their strategies and their tactics. It was also very clear to me a year ago that, from the WRA’s perspective, one of our challenges was communicating to our membership and in displaying a degree of accountability that in the past had perhaps not been displayed. It may well have been there but it hadn’t been communicated well. So in this business plan we had, and we still have today, over 100 measurable targets. Every department has very clear goals that they must deliver on. In market development it’s the number of new tour operators or the number of pages of Whistler itinerary in the brochures — all of that is measured and regularly monitored. In conference sales we look at the number of leads generated, number of room nights for the resort — all of this activity is monitored very closely. So it was a very comprehensive plan and I think it gave the organization a sense of focus and a sense of direction that has really energized it. We have an incredible team here. With this incredible team in place and with them knowing very clearly what they have to deliver, 1999 has been a year of execution for us and delivering results. We had a board meeting at the end of July. It’s becoming an annual two-day board retreat where we go away and we strategize and we look at the bigger picture issues. What I did for the board of directors this year was a six-month status against that business plan. So in the first year of that three-year plan we said we would achieve all of these things. Six months into the year, this is what we’ve done, this is what remains to be done and this is the date we expect to have it done by. So again, a very comprehensive package of accountability. What we said we were going to do last November we are in fact doing. PIQUE: Three years ago the Open Skies agreement was just coming into place. Now we’re looking at perhaps just one national airline. Is there anything the WRA can do or are there any strategies in place for what seems to be a change in the Canadian airline industry, particularly given that the WRA has traditionally had a stronger relationship with Canadian Airlines than with Air Canada? SD: We have excellent relationships with all of the airlines, and some airlines are stronger in some of our markets than are others. Our buy-down program, which we will continue with this year, is done in conjunction with Canadian and American Airlines. So absolutely we have a close relationships with them. If I had to look into the future as to the impact of a merged airline, there is some potential for a reduced capacity as they consolidate their operations. So certainly that is of some concern. But the airlines are profit oriented, so if they see there is new market demand for flights into Vancouver... and we will certainly bring that to their attention if we believe there’s a capacity issue. We’ll raise the flag and make sure it gets on their radar screen so they can address it. That would be my greatest concern — impact on capacity — from a merged airline. But it’s also part of our ongoing strategy where we on a regular basis review air access because in many respects it is one of the greatest influencing factors in the purchase decision. The more direct non-stops we have into Vancouver the easier it is for people to access Whistler. So when we’re in market we always meet with our airline partners, whether it’s in Canada, the U.S., Mexico, the U.K., Germany, Australia — we always meet with them to discuss their capacity, their load factors, so that we have a clear read on whether people’s ability to access Whistler is being dampened by air issues. There are a few markets where we would like to see some incremental capacity (increases) but the Open Skies has done significant good for us, it certainly has been a real boost. PIQUE: Is there anything new happening with European connections, with the U.K.? SD: We did, of course lose the charter out of the U.K. It was organized through Inghams. But we understand that there is still capacity on the scheduled airlines. And with the U.K. what we’re seeing is a shift of business toward a higher income demographic who prefers a scheduled airline. So, while we were initially concerned with the loss of the charter we believe there is sufficient capacity on the scheduled airlines. PIQUE: I’d heard from some restaurateurs that the U.K. visitor last winter was willing to pay more than the U.K. visitors from four or five years ago. SD: I think the price-sensitive piece of the market out of the U.K. will still be attracted to Banff and they’ll take a charter to Banff or Lake Louise. But because Whistler now has such cache in that market we are attracting a higher income demographic. PIQUE: Has that reduced the demand for chalets, or is it a matter of the supply of chalets was reduced and therefore the demand followed? SD: We certainly have a reduced supply, no question about that. But this demographic is more willing to stay in a hotel property or a condo property so they are less interested in the chalet product. Now that said, as a marketer of this resort I would like to be able to offer a mix of accommodations for that segment of the market, from the U.K. or anywhere else, that is interested in the chalet product. I would like to see us as a community come to some sort of resolution on the chalet issue so that we are still able to offer that in our mix of accommodations. But the one thing that we did find when we surveyed — and the WRA specifically surveyed U.K. visitors, I believe it was two years ago when the chalet issue was certainly pressing, specifically to understand whether they would adopt condominium properties instead of or if the chalet properties were not available. And the results were very strong. I believe it was in the 80-85 per cent mark. They said now that they had visited Whistler and they understood the nature of our accommodation offerings, the fact that condominiums had all the kitchen facilities they’d be interested in using — and the fact that the condominiums were, by and large, closer to the ski hills so that you were within walking distance — that had great appeal for them. So what we’ve been trying to do is also migrate the market, away from chalets, knowing that we were going to have a supply issue with chalets, and try and migrate them toward our condominium properties. And that seems to be working. PIQUE: Is Whistler still looking at what Aspen, Vail and other mountain resorts are doing or are we looking less at what others are doing and... SD: Charting our own path? I think that it’s always wise to monitor your competition, whether it’s in Colorado or Europe. And in some respects our competition is broader than that. Certainly on one level it’s other mountain resorts, but on another level it’s any other way that the consumer can spend their recreation dollar. One of our initiatives this year was to regularly poll our competition and look at package prices, look at air fares. So on a very specific level we monitor them and also on a strategic level we stand back and try and assess what a Vail or Aspen is doing well, what their difficulties are and then working with our partners in the community, through initiatives like One Whistler or specific relationships that we have with the mountains or the municipality, understanding what pitfalls our competitors have experienced that we can avoid if we work together and work strategically. PIQUE: You’ve got the study underway now on the proposed Stoltmann National Park or preservation area... SD: Yes. This is a One Whistler initiative, but I took the lead on finding the consultant who would conduct an economic assessment of the alternate land uses. The belief was that we needed a document in place that could be a flash point for discussion on this issue. In particular there were views being taken that were perhaps based more on emotion than on fact. And that it would be incredibly useful to have a document that was very factual, that laid out the economic value of using that land for the forestry industry, using the land in the tourism industry, the value of a national park designation and actually converting that into an economic benefit: jobs, employment. And obviously not just for Whistler, but for Squamish and Pemberton. Our desire is that we’re able to come to a consensus with our neighbours and a solution that has incremental economic value for all of us. And as well, not just thinking of our neighbours in Squamish and Pemberton, but also within Whistler there has been concern by backcountry operators that a national park would potentially curb their ability to go into that area. So the other thing we’ve asked the consultant to do is to look at ways backcountry operations, forestry operations could be... integrated with a national park. Whether the concept is a community forest, such as Whistler tried to pursue, so that within that community forest there’s a buffer zone where all the backcountry operations can take place, where there can be selective or controlled logging — based on whatever the plan was for the community forest, established by the community. Potentially there could be a Squamish community forest, a Pemberton community forest, that if properly instituted would actually give Squamish and Pemberton more control over their forestry assets than they have today. And the ability to mandate that certain elements of the value-add would remain in their communities, as opposed to being shipped out on trucks and on barges and all the value-add goes south of the border to workers in the United States. So, we’ve asked the consultant to consider a whole variety of ways in which we could work together, as well as actually quantifying the economic value of the different land uses. Realistically, I would hope by the end of October, first week of November we would have a draft document in our hands. We of course asked the communities of Squamish and Pemberton and the regional district to participate. I also extended the invitation to the various First Nations: the Squamish Nation, Mount Currie band and In-SHUCK-ch N’Quat’qua. PIQUE: Is the intent of the study to be a starting point for discussion about a national park, rather than a be-all; end-all? SD: Yes. It is intended to be a document for discussion that at least puts a set of facts on the table that can be discussed and the facts have some integrity and validity to them, having been developed by a consultant. PIQUE: From Whistler’s point of view, seemingly, a national park would be the most beneficial. Would there still be tourism value if it was something less than a national park? SD: Well the reality is that in the highly competitive world of destination marketing, provincial parks just don’t cut it. When you go into Germany or the Netherlands or Brazil, a provincial park doesn’t carry a fraction of the marketing leverage that a national park does. Canada is, in many respects, renowned for its national parks, like a Banff. And the fact that that national park attracts millions of visitors and hundreds of millions of dollars in spending — and it is an icon, not just in Canada but internationally. So that’s what really carries the marketing end. Now that said, if there was some alternate form of protection, that absolutely has value because we still have the 1,300-year-old Douglas firs to appeal — we can still sell that. It just doesn’t have the same status as a national park. So an alternate absolutely should be considered if a national park is not considered viable. I understand completely, with regard to Squamish and Pemberton, their economies are currently based on forestry, so I do hope we can find a consensus and a position that provides value for all of us. And perhaps, as an impetus to the diversification of their economies, so that, as they think about their futures and the vision that they have for their communities, the balanced portfolio of industry includes tourism, includes forestry. There’s no need for Whistler to be the gateway to this park. And in many respects, we may not want to be the gateway, simply because of our size and our infrastructure. It might be far more appropriate to have the gateway in Squamish or Pemberton. And then when you look at these communities and their tourism potential — every time I go into the Pemberton Valley I’m awe-struck. It’s beautiful, it’s absolutely stunning. Mount Currie, this gorgeous green mountain. And then the same with Squamish. The tourism potential there is enormous. They have access to the mountains but they also have access to the ocean. So when I think of those communities I see a tremendous potential to develop their economies through the growth of tourism, and a national park could be a real kick start.