Tourism Kelowna Report to the Community 2021

2021 REPORT TO THE COMMUNITY

LAND ACKNOWLEDGEMENT We respectfully acknowledge that we live, work, and play on the traditional, ancestral, and unceded territory of the syilx/Okanagan people.

2021

AN UNBEATABLE SPIRIT ENDURES

2,208,870

46.9%

OVERALL OVERNIGHT TRIPS TO KELOWNA (+18.2%)*

AVERAGE HOTEL OCCUPANCY (+6.0 pp)***

829,804

$169.60

PASSENGERS THROUGH KELOWNA INTERNATIONAL AIRPORT (YLW) (+12.4%)**

HOTEL AVERAGE DAILY RATE (ADR) (+10.2%)+

$79.50

HOTEL REVENUE PER AVAILABLE ROOM (REVPAR) (+26.4%)

As one of the first and hardest-hit industries, the tourism sector has faced tremendous losses over the past two years. While 2020 forced us to pivot and adapt like never before, this past year required grit and determination to navigate ongoing challenges and tackle new obstacles.

Tourism businesses and organizations in the area continued to work together, creating new offerings for visitors and locals.

Strong momentum in early spring and summer, coinciding with Step 3 of BC’s Restart Plan, was hindered by challenging weather in August, highway closures due to severe flooding in midNovember, and added restrictions to combat a new, highly contagious variant at the end of November. Through it all, local tourism industry members continued to collaborate, persevere, and build off the entrepreneurial spirit that Kelowna is so well known for.

Thanks to this collective tenacity and the hard work of the entire sector, along with financial support from all levels of government and eased restrictions at points during the year, industry indicators for the region showed positive gains in 2021, with many year-over-year increases. These indicators still fall well below pre-pandemic levels though, and it will take a few years for the tourism industry in Kelowna to generate the economic impact it did in 2019, the region’s benchmark year.

Kelowna remains a highly desirable destination for travellers and there is no doubt that the local tourism industry’s unbeatable spirit will serve it well through recovery. The combined efforts of the industry and the smart decisions made over the past two years put the region in a good position to rebuild and strengthen the visitor economy, allowing it to flourish once again.

SHINING MOMENTS IN 2021 • CNN featured Canada as one of the 21 places to go in 2021—Kelowna was one of the destinations highlighted.

• Air Canada launched a new direct route from Montreal to Kelowna.

• Kelowna won the right to host the 2026 BC Summer Games.

• The OKGo marketing campaign won two International Economic Development Council awards.

• Kelowna placed fourth on Destination Think’s 50 Most Loved Travel Destinations for Canada list for 2021, based on consumer sentiment.

* Data provide by 2022 TELUS Insights. TELUS has implemented industry-leading Privacy by Design standards to ensure that privacy is not compromised. All the data analyzed by TELUS Insights is strongly de-identified. For further information, please visit telus.com/insights or email TELUSInsights@telus.com. **Kelowna International Airport (YLW) Facts & Statistics *** Variance in hotel occupancy is displayed as a percentage point difference. + Hotel data provided by: 2022 STR, LLC / STR Global, Ltd. trading as “STR” Image credits: Front cover: Downtown Kelowna | Nic Collar Film Current page: 50th Parallel Estate | David Vassiliev

86% of decided residents CONFIRMED THAT SUSTAINABLE, RESPONSIBLE TOURISM DEVELOPMENT IS IMPORTANT TO THEM.

83% of decided residents RECOGNIZE THE VALUE OF THE WORK THAT TOURISM KELOWNA DOES AND THE IMPACT IT HAS ON RESIDENTS.

88% of stakeholders AGREE THAT SUSTAINABLE AND RESPONSIBLE TOURISM DEVELOPMENT IN KELOWNA IS IMPORTANT.

78% of stakeholders ARE SATISFIED WITH THE OVERALL PERFORMANCE OF TOURISM KELOWNA.

MESSAGE FROM THE PRESIDENT & CEO As the Central Okanagan’s lead destination marketing organization (DMO), Tourism Kelowna remained committed to supporting its members and industry stakeholders in 2021, connecting consumers with local businesses, and marketing beyond the region whenever constantly changing health orders allowed. Equally important but not as obvious was the strategic planning work completed this year to ensure long-term success for the DMO and for the destination.

We supported the City of Kelowna’s renewal application to secure another five-year Municipal and Regional District Tax (MRDT) agreement with the province, our primary source of destination marketing funds. We also formalized our partnership with the City to implement those funds and to co-create a Tourism Destination Development Plan, a guiding document for the sustainable growth of the visitor economy that will benefit residents, tourism businesses, and visitors alike.

Tourism Kelowna’s Board of Directors worked tirelessly this year to complete the DMO’s first-ever comprehensive strategic

plan. Our work for the next two to three years will flow from this visioning document focused on four strategic goals that balance the need for seasonality with destination management, as well as organizational excellence while providing value for industry stakeholders and the communities we serve.

Despite a challenging year we are proud of our operational performance, strong financial stewardship, our sales and marketing results, and our collaboration-first approach that has strengthened vital relationships with our partners. This Report to the Community will outline these key results and accomplishments in 2021 and highlight how the organization has set the stage for recovery in 2022 and beyond.

From our team to yours, thank you.

Lisanne Ballantyne President & CEO Tourism Kelowna

“On behalf of the Kelowna Hotel Motel Association, we would like to thank Tourism Kelowna for their extraordinary efforts in 2021, continuing to respond to the COVID-19 pandemic. They excelled in the ability to flex between traditional destination marketing when it was appropriate and promoting to local markets when it was not. We are excited and encouraged by the development of the Tourism Kelowna strategic plan and appreciate the degree of involvement and consultation with our members. Our group is looking forward to further recovery in 2022 with the close support and cooperation of Tourism Kelowna.”

NATALIE CORBETT, PRESIDENT | Kelowna Hotel Motel Association

KEY RESULTS & ACCOMPLISHMENTS The second year of the global pandemic significantly impacted travel markets, the local tourism community, and our organization.

Despite the ongoing challenges, we were able to build off the foundational elements established in 2020 to successfully execute key deliverables aligned to our strategic pillars and achieve numerous accomplishments on behalf of our region’s tourism sector.

Increasing High-Value Visitation • Promoted the new non-stop flights between Montreal and

Kelowna through a targeted seasonal campaign, in collaboration with the Kelowna International Airport (YLW); in conjunction, a French microsite of tourismkelowna.com was launched.

• Introduced a variety of enhancements to our website,

including an itinerary builder, dynamic content, and enhanced website listings. Sessions on the website exceeded 1 million for 2021, an increase of 29% compared to 2020 and only 1% below 2019.

• Pursued ongoing business development with meeting and event planners, servicing 67 leads which will generate an estimated economic impact of just over $4.8 million.

• Supported Kelowna’s winning bid to host the 2026 BC

Summer Games, which will bring more than 4,000 people to the region, and secured new business for 2022, including Spartan Race’s North American Championship (in partnership with Big White Ski Resort), the Canna Golf Classic, and the inaugural BC Cannabis Summit.

• Invested the largest amount of marketing funds towards the winter season in Tourism Kelowna’s history.

The OKGo marketing campaign—created through a collaboration between Tourism Kelowna, Central Okanagan Economic Development Commission, and Accelerate Okanagan—was launched to showcase Kelowna’s key economic sectors and attract business events. The campaign secured $30,000 in new marketing funds and won two International Economic Development Council (IEDC) awards.

Growing In-Destination Spending • Welcomed 97,000 guests to the Kelowna Visitor Centre, an increase of 40% over 2020.

• Increased efforts in winter and spring 2021 to encourage residents to stay local and support local; initiatives included local activations and contests, content marketing, and a staycation travel series.

• Partnered with the Kelowna Hotel Motel Association to create a Stay Local campaign and passport/training program for front-line staff.

• Teamed up with the City of Kelowna and the Downtown Kelowna Association to launch Meet Me on Bernard, which animated and activated several blocks along Bernard Avenue during the pedestrian-only summer months.

• Created and promoted three #exploreKelowna digital

experience passports—Local Savings Pass, Wine Trails Passport, and Uptown Rutland Murals Pass—to disperse visitors and locals throughout the destination by connecting them with area businesses, activities, and attractions.

• Spearheaded the second annual Love for Kelowna Day, which received an official proclamation from City of Kelowna Mayor, Colin Basran.

• Partnered with Orchard Park Shopping Centre to open a

satellite visitor centre at the Guest Services Kiosk. This kiosk is the third location—in addition to the Kelowna Visitor Centre and YLW kiosk—where our team helps to connect visitors and residents to regional tourism experiences and services.

Supporting Sustainable Growth Of The Destination • Worked extensively with the City of Kelowna to support the

renewal application for its Municipal and Regional District Tax (MRDT) agreement with the province. This resulted in a five-year service agreement with Tourism Kelowna, which allows our organization to continue its work marketing the destination and delivering benefits to the community.

• Formed a mutual agreement with the City of Kelowna to co-create a long-term Tourism Destination Development Plan with community partners. This guiding framework reflects the transition from traditional tourism promotion to a long term, holistic destination management model.

• Achieved Platinum Certification for the Kelowna Visitor Centre through GreenStep’s Sustainable Tourism Program thanks to several initiatives including a new partnership with One Tree Planted. For every purchase made in the Kelowna Visitor Centre and through the Love for Kelowna online store, one tree will be planted in BC; in 2021, this equated to more than 7,500 trees.

• Worked with YLW to create an air bridge advertising campaign in Vancouver and the Lower Mainland to connect with and educate travellers during highway disruptions in the fall.

• Launched a Relocation Guide in response to the high demand of visitors seeking comprehensive information on relocating to the Central Okanagan.

Kelowna International Airport Credit: Michael Hintringer

Ensuring Organizational Excellence • Maintained a core membership base of approximately 400 stakeholders who invested funds to support their businesses and overall destination marketing.

• Expanded the Kelowna Visitor Centre’s consignment retail program by 21% to support more than 100 local businesses, entrepreneurs, artists, and artisans. The program generated approximately $144,000 in direct sales for these suppliers.

• Joined Destination BC’s new Data Hub pilot program; Tourism Kelowna was the first destination marketing organization invited to join the program after founding partners Destination Vancouver and Tourism Whistler.

• Resumed stakeholder plug-in sessions, delivering three

sessions where tourism industry members learned about the City of Kelowna’s Official Community Plan, Tourism Kelowna’s destination marketing plans and MRDT strategic plan, and ways to improve sustainability performance through the pandemic and beyond.

• Hand-delivered more than 100 gift bags to front-line staff at local tourism-related businesses as part of the 10 Million Acts of Kindness movement that was launched in 2021.

• Achieved Destination Marketing Accreditation Program (DMAP)

recertification through Destinations International, which required Tourism Kelowna to demonstrate adherence to stringent industry standards within areas such as operations, marketing, finance, and stakeholder relations.

Downtown Kelowna

TOURISM KELOWNA OPERATING STATEMENT

Municipal and Regional District Tax (MRDT)/ Destination Marketing Fund (DMF)

Dilworth Mountain Park Credit: Studio Iverson

62%

Retail/Other

6%

ADMINISTRATION & FINANCE

Partner Advertising

9%

The administration and finance team helps manage Tourism Kelowna’s daily operations, acting as stewards of the organization’s external funding as well as its self-earned revenue, and supports the Society’s Board of Directors.

In 2021, the team worked extensively with the City of Kelowna to assist with the successful renewal application of its Municipal and Regional District Tax (MRDT) agreement with the province. They also remained focused on expertly guiding the organization through the continued fiscal impact of the COVID-19 pandemic, which included:

Government Subsidies

Municipal/ Provincial Funds

9%

Total Revenue $4,504,252*

• Developing and overseeing the Society’s conservative budget strategy to successfully manage at-risk revenue and reduced cash flow.

• Managing ongoing re-forecasting of the operations budget, as needed, while applying for and managing administration of COVID-19 government grants and relief subsidies.

14%

Leisure Marketing Meetings, Conferences, & Events

46%

6%

• Overseeing a second unique year of revenue analysis and reporting requirements associated with the MRDT funding.

• Sustaining Tourism Kelowna’s history of delivering a clean annual audit report of all financial statements, risk management, and balance and controls.

Wages/Benefits Administration

28%

9%

Community & Visitor Engagement

THANK YOU

11%

Tourism Kelowna thanks the following partners and organizations who have either assisted with direct funding or collaborated with us to leverage budgets: • Government of British Columbia

• Destination Canada

• City of Kelowna

• Destination British Columbia

• City of West Kelowna • District of Lake Country

• Thompson Okanagan Tourism Association

• Westbank First Nation

• Kelowna International Airport

Total Expenses $4,002,280

*Note: With decreased 2022 revenue projections, the operating revenue surplus was carried over from 2021 to continue marketing activities.

THE STAGE IS SET Although 2021 ended with ongoing uncertainty about the

and diversity, equity, inclusion, and accessibility—that influence

pandemic, the first few months of the new year have bolstered

how people travel and how DMOs will market and manage

optimism for recovery.

destinations. Our organization’s strategic planning, which in-

The recent release of updated census data shows that Kelowna is Canada’s fastest-growing metropolitan area, thanks to population growth of 14% between 2016 and 2021. With more than

cludes destination marketing, management, and development, continues to take these considerations into account.

Moreover, working collaboratively and strategically with area

220,000 residents, there is no doubt the region is more than

residents is more vital than ever. Through our ongoing desti-

just a vacation resort destination. The love for Kelowna from

nation development work, we will strengthen our connection

Canadian visitors also remains strong—Kelowna ranked number

with locals, building trust and enhancing our social license. All

4 on a recent 50 Most Loved Destinations in Canada for 2021

these efforts combined will allow our organization to fulfill its

list, compiled from consumer sentiment.

mission and execute its vision.

The easing of restrictions, including the removal of limitations on organized gatherings and events, was welcome news early in the year. As essential contributors to Kelowna’s economy, meetings, conferences, and events are critical to recovery, strengthening visitation during traditionally slower times of the year, and encouraging business investment and talent recruitment.

While several factors could impact tourism in the months ahead—weather, rising costs of transportation, labour shortages, and public health measures—our team remains optimistic.

Early indicators, including search and booking activity as well as traffic on our website, show there is already strong interest from visitors looking to travel to Kelowna in the coming months.

We have strategically planned destination marketing efforts to increase interest and visitation during the spring, fall, and winter, while also sustaining strong summer visitation.

In addition to recovery, there are economic, social, and environmental considerations—like changing market conditions and consumer demands, the global climate emergency,

Our team remains committed to engaging with the community through partnerships, activations, and social responsibility. Through these actions, we can maintain the social license required to invite visitors to explore Kelowna’s four-season playground.

Tourism is a vital part of our local economy, and we will continue to highlight its value from an economic and quality of life perspective. As we reflect on the year gone by and look to the road ahead, it is evident that the collective work the industry has done over the past two years and its unbeatable spirit have set the stage for recovery. The completion of our collaborative Tourism Destination Development Plan later this year will add to the recovery roadmap and further encourage sustainable, long-term growth, ensuring Kelowna remains a sought-after, valued, and well-regarded destination for years to come.

Acknowledgements We want to express our sincere gratitude for the insight, expertise, and support our Board of Directors continued to provide our organization as we navigated the second year of the pandemic.

We are thankful for our team members and volunteers who, through uncertain and challenging times, continued to work with determination and positivity, supporting our stakeholders and local businesses while also inspiring and encouraging residents and visitors to explore Kelowna, safely.

Finally, we applaud the grit, resiliency, and unwavering spirit of our local tourism industry. We are continually grateful for your support and stand ready to serve and support you as we recover, rebuild, and grow.

THE VALUE OF TOURISM ECONOMIC IMPACT

2018 ECONOMIC IMPACT SUMMARY** Tourism in Kelowna & Central Okanagan

Tourism is a vital economic driver in the Central Okanagan, producing revenue for local businesses, creating jobs, and generating tax revenue that is reinvested in the communities that make up the region.

94%

OF DECIDED RESIDENTS AGREE THAT TOURISM IS AN IMPORTANT INDUSTRY IN KELOWNA AND THE CENTRAL OKANAGAN.*

$2.1 BILLION 12,970 TOTAL ECONOMIC OUTPUT

TOTAL JOBS GENERATED

$1 BILLION

$573M

$204M

$443M

TOTAL GDP

WAGES GENERATED

“People want to have fun while on vacation. They want to experience something new and different, to create a memory, and by spending their vacation dollars in Kelowna they are investing in local businesses, restaurants, and attractions. They are investing in our community, and we are so grateful.”

RENATA MILLS, EXECUTIVE DIRECTOR | FESTIVALS KELOWNA

VISITOR SPENDNG BY OVERNIGHT & DAY VISITORS

TAX CONTRIBUTIONS $121M (59%): Federal Taxes $65M (32%): Provincial Taxes $18M (9%): Municipal Taxes

QUALITY OF LIFE Golf Courses

19

Galleries & Museums

12

The value of tourism is not only economic, as the industry contributes positively to the quality of life of the region’s residents, who can enjoy world-class amenities, events, and attractions year round, alongside visitors.

“The benefits [residents gain] are evident and directly related to Parks, Beaches, & Lakes

300+

Wineries, Breweries, Cideries, and Distilleries

70+

tourism when we look at the multitude of activities we have around us and the diversity and quantity of wineries, breweries, tourist attractions, and sporting events we host here in our small community.

It’s amazing to see and experience our growth firsthand and much of it is attributed to the contribution of our tourism sector.”

KELOWNA RESIDENT, YURIKO LARSON OWNER | VINTAGE ORIGAMI

Ski Resorts

02

Restaurants & Cafés

300+

*Tourism Kelowna’s 2021 Resident Sentiment Survey **InterVistas 2018 Economic Impact Study Printed on recycled paper.

#exploreKelowna | tourismkelowna.com