New study helps local tourism firms fight cost misperceptions

Local tourism officials are hoping to convince Canadian tourists that a trip south of the border
won’t break the bank.

By William L. Spence
The Daily Inter Lake

That’s been a tough message to sell in recent years, given the poor exchange rates. However, a
recent "purchasing power parity" study has offered some new ammunition in the fight.

The study was conducted earlier this year by Gregg Davis, director of the Center for Business
Information and Research at Flathead Valley Community College.

It looked at 41 summer tourism-related goods and services, comparing prices here with prices in
six Canadian cities: Banff, Calgary, Cranbrook, Edmonton, Lethbridge and Saskatoon.

Using daily exchange rates, prices were converted into U.S. dollars. The results offer an
apples-to-apples comparison that highlights which south-of-the-border products are bargains for
Canadian visitors.

Davis’ research indicates that the Flathead has a comparative advantage in several important
areas, including the price of gasoline, accommodations, and recreational purchases such as
whitewater raft trips and mountain bike rentals (see box).

Tourism officials are now using the study to create trade show props — actual "baskets" with
representative vacation goods — that visually demonstrate the kind of deals Canadians can find
south of the border.

"This gives us some power because now we can make comparisons," said Kristen Stern, director
of sales for Big Mountain resort.

Stern recently created two baskets for the Flathead Convention and Visitor Bureau’s booth at the
Lethbridge Home and Garden Show, which is expected to attract about 25,000 people.

The baskets — one for a vacation in the Flathead Valley, the other for a similar vacation in Banff
— feature a selection of goods, including hotel accommodations, a gondola ride, a white water raft
trip, gasoline, meals, camera film and theater tickets.

The Flathead vacation costs about $280, compared to $360 (U.S.) for the Banff vacation.

"The excuse has always been that Canadian business is down because of the exchange rate,"
Stern said. "I don’t see the rate changing much, so now we have to figure out how to live with it."

Davis’s study can help with that by giving Flathead businesses ammunition to fight the perception
that it’s more expensive for Canadians to travel south.

"It shows we don’t have to be at par to be competitive," said Meredith Haverfield, director of sales
for the local WestCoast hotels.

WestCoast used a previous purchasing power study to build a vacation package last year in
cooperation with the Eagle Bend and Northern Pines golf courses.

"It wasn’t hard to do," Haverfield said. "We pulled it together in less than a week. We took our
regular golf package and added all the other items that were favorable."

The resulting offer included 18 holes of golf with a cart, accommodations, breakfast, a steak
dinner, a fast-food meal, five gallons of gas and a camera. The total cost was about 30 percent
less than a comparable vacation north of the border.

"I think the reason it worked was because we took a product that already sells well," Haverfield
said. "Golf packages are probably the number one attraction here, next to Glacier National Park."

Besides helping to attract Canadians, Davis’ study has other advantages as well.

Canadian tourism businesses "are down here in a big way" marketing their products at American
trade shows, Haverfield said.

They’re trying to capitalize on the perception that it’s cheaper for Americans to head north. Failing
to addressing that perception — failing to point out that it’s sometimes false — could cost U.S.
firms a share of the American market.

"The market here needs to understand that we aren’t only missing out on Canadians," Haverfield
said. "We’re also missing out on the American tourists who go up there."

Armed with the right purchasing power information, local businesses can now combat that trend.

Reporter Bill Spence may be reached at 758-4459 or by e-mail at [email protected]

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