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LANDSEA TOURS & ADVENTURES ENGLISH VERSION

SUNDAY, FEBRUARY 12, 2017

2017 VANIER COLLEGE BDC

Erin Whittle Marketing Management Department

British Columbia Institute of Technology

Landsea Tours & Adventures

Vancouver is a “new” city, at only 130 years old, and an even newer tourist destination. Although the first meeting of the Vancouver Information & Tourist Association (later to be renamed Tourism Vancouver) was in 1902, it wasn’t until 1986—Vancouver’s Centennial—that the city earned the world’s attention and consideration through the World Exposition, Expo 86.1 The six-month event attracted over 22 million visitors, a huge influx to the city of just over 430,000 (the metropolitan region had about 1.2 million residents), and lifted the city’s tourism for years to come. Many of the exhibits were temporary, but remaining exhibits and infrastructure from the fair, such as the Skytrain, Canada Place Convention Centre and cruise ship terminal, BC Place Stadium, and the geodesic Expo Centre (now Science World at Telus World of Science), are now quintessential elements of the Vancouver landscape. The legacy of Expo 86—the exhibits, infrastructure, and awareness—paved the way for the next great wave of tourists to Vancouver, the 2010 Winter Olympic and Paralympic Games. At the peak of the Games, tourism in Vancouver increased by just 20% over the previous year, but the event served to establish the Vancouver brand and bring incredible pride to the city, the most enduring impact. In the thirty years since Expo 86 and the seven years since the 2010 Winter Games, Vancouver has grown into a world-class city, winning awards as one of the world’s best places to visit, including Destination of the Year from the Luxury Travel Guide Awards in 2016. The city has grown to 610,000 residents and the metropolitan region has doubled to 2.4 million. Vancouver Tourism’s research indicates that Metro Vancouver received more than 9.3 million overnight visitors in 2015, including 5.6 million from within Canada, 2.1 million from the U.S., 940,000 from the Asia-Pacific region and 424,000 from Europe, providing a boost of $4 billion to the local economy.2 Vancouver has developed a global appeal and reputation as a diverse, eco-friendly, and foodie destination. Landsea Tours History In the anticipation of Expo 86, a young entrepreneur named Scott Mason saw an opportunity in the local sightseeing industry. Competitors at the time only offered tours on large highway motor- coaches, and served the less adventurous traveller. Mason envisioned a more personalized and fun service on a mini-coach, and so in 1985, Landsea Tours and Adventures began operations. The company grew quickly, jump-started by the tourism boon of Expo 86, as Vancouver developed as a tourism destination. In 2004, a keen co-op student from Capilano University in North Vancouver named Kevin Pearce joined the Landsea team. Pearce caught the tourism bug early: excelling in Tourism 11 while in high school, he found his passion and went straight to work, enrolling in Capilano U’s Tourism Management program, specializing in Business & Tourism, in 2003. While he was a student, he worked part-time for Grouse Mountain Resorts, a mountain adventure destination just 20 minutes from downtown Vancouver. During that period, the family-owned resort successfully developed into a year-round tourist destination that now includes alpine skiing in the winter, and a mountaintop theatre and wildlife refuge in the summer.

Pearce helped rebrand the company into Landsea Tours and Adventures, introducing a new service, Landsea Charters, in 2009. Three years later, Pearce became a partner of Landsea Tours and Adventures, and today, he is President and Co-Owner. The company has flourished, growing from one mini-bus and one guide, to two divisions with a fleet of 34 busses and vehicles and a team of 85 employees in peak season. The company effectively serves a booming industry that is vital to Vancouver’s economy. Landsea Tours Services Landsea Tours and Adventures has two divisions: Landsea Tours and Adventures, the original tours and sightseeing division; and Landsea Charters, which offers private charter tours and transportation for individuals and groups.

Vision Landsea Tours & Adventures’ elite team provides year-round premium boutique sightseeing experiences. We strive to be the innovators and company of choice in Vancouver’s tourism industry. Mission Landsea Tours & Adventures – exceed expectations by providing world-class service excellence. Sightseeing the way, it should be!

Landsea Tours and Adventures offers multi-day, full- and half-day tours to ten destinations, including: Vancouver, Victoria on Vancouver Island (via BC Ferries), Whistler, and Grouse Mountain (via 24-30 person mini-coach or a van for smaller groups). All tours pick up and drop off from downtown Vancouver, and therefore include a city component (see appendix 1 for list of tours, attractions, and prices). The charter service offers these excursions or custom tours via 6-passenger luxury SUV, a Mercedes Benz Sprinter Van that seats up to 11, and a mini-coach that can accommodate up to 24 passengers. Landsea Tours and Adventures has bright blue and white uniforms, and drivers have bright blue embroidered Arc’teryx jackets and polo shirts. Their charter service has discreet black luxury vehicles with tinted windows and professionally attired drivers (see appendix 2). They are currently the only tour company offering Sea to Sky tours, which visit the Sea to Sky Gondola near Squamish, about 60 km from downtown Vancouver (most tours skip Squamish and continue along to Whistler, 121 km from downtown Vancouver). This attraction opened in May 2014, and includes a 100-metre-long suspension bridge, viewing platforms, and guided hiking and “via ferrata” (engineered vertical pathway) tours. Pearce anticipates competitors will soon offer trips to this popular new destination. The company is unique in that it owns and maintains its own fleet and is one of only three companies licenced to do their own vehicle inspections. Their vehicle fleet is newer than most competitors, and they pride themselves on being cleaner and more fuel-efficient. They tested biodiesel and hydrogen bus formats, before switching to propane. Their fleet also includes an electric car. In 2015, Landsea was awarded Silver Certification from Green Tourism Canada and is Climate Smart certified. Above all, Landsea prides themselves on carefully selecting their guides through an extensive hiring process. They have a staff of about 85 in peak season, and about 40 year-round employees. Many employees are semi-retired, or students, or they split their work between winters at ski resorts and

summers as guides. All the workforce is young at heart. Landsea hires based on personality and teaches employees the skills they need. Above all, they look for people who genuinely care about their visitors’ vacation experience. They have great employee retention rates for the industry, with about 72% returning each year, which is important because Landsea pays a considerable amount to train a new employee. New employees spend five weeks in training, including two-and-a-half weeks of driver training to complete commercial driver licensing requirements. After licensing is secured, new hires start with routing hotels, learning the five key tour destinations, logistics, and the operations side (managing the payments, scheduling, booking systems, and radio). The first responsibilities granted are shuttle pick-ups, then, with experience, city tours and then additional tours as the weeks go by. Guides learn the history of every location and may work with actors on tone and delivery, but most of what they say—while operating a $150,000 vehicle—is unscripted. Pearce estimates the cost of training a new employee to be roughly $5,000. The effort shows. For their excellent service, Landsea Tours and Adventures earned the Georgia Straight Reader's Choice Awards in 2013-2015, Trip Advisor Certificate of Excellence from 2013- 2016, and many Vancouver Tourism Awards. Though the experience may be different from other tour companies, and the costs of delivering that experience higher, pricing is standardized. Price cuts create the perception of desperation, and tour companies who have attempted to undercut their competitors have found themselves priced out of business. Four-hour city trips with Landsea cost about $75 for adults, with many add-on options available. Full-day trips cost between $140 (to Whistler) and $200 (to Victoria, which includes ferry fares and admissions). The Competition Landsea is a niche player in the tours and sightseeing market, carrying about 70,000 visitors a year— only a small percentage of Vancouver’s visitors. But in this fragmented market, they dominate in the small-group excursions segment. Westcoast Sightseeing offers hop-on, hop-off tours of Vancouver as well as guided tours to the same destinations as Landsea (except Sea to Sky) and charters. Their website offers complete tour information and online booking. They have a similar presence on social media and a 4/5 rating on TripAdvisor from 1,149 reviews. Westcoast Sightseeing is a licensee of Gray Line, a Denver-based tour company that offers sightseeing tours all over the world. The Vancouver Trolley Company is an indirect competitor, as the Vancouver Trolley Company and Landsea sell each other’s products. Vancouver Trolley offers hop-on, hop-off tours on San Francisco- style trolleys. During the day, they connect with free shuttles to Capilano Suspension Bridge and Grouse Mountain; in the evenings during peak season (from Victoria Day through Labour Day), they offer budget-friendly tours. Star Limousine is an indirect competitor for Landsea Charters, as both organizations offer high-end VIP experiences to people seeking private luxury. However, limousine services focus on the transportation side, whereas Landsea focuses on the related experiences that can range from taking a helicopter to a winery to enjoying yoga on a mountaintop.

The industry has very low barriers to entry, and there are frequent new entrants, and fly-by-night companies. Perhaps the biggest shift will happen when (and if) Uber is permitted entry into the Vancouver market. This could happen before the province’s May election. With Uber, anyone with a car could offer customized sightseeing tours. Or use one of the many apps connecting consumers with guides (like start-ups GuideHire and AnyRoad) and hail an Uber driver. Kevin and his team must constantly watch for potential new entrants to the market as the regulatory environment is continuously shifting. The Customers Destination Canada has done extensive research into visitor profiles in the nation. Using traveler psychographics to understand what drives people to seek out certain types of experiences, they have created the Explorer Quotient® (EQ). This tool is available to tourism-based organizations to help them in “the way travel experiences are developed, marketed and sold in Canada.”3 The key EQ for Landsea Tours and Adventures are “Authentic Experiencers,” who are: typically, understated travelers looking for authentic, tangible engagement with the destinations, with a particular interest in understanding the history of the places they visit. This group is not interested in escapism, instead they travel to learn and experience. They tend to be older (55+) and represent 9% of global travelers and 12% of Canadian travelers. A significantly higher proportion of these visitors (17%) are from short-haul markets within BC, Alberta, and Washington State (most using their own vehicle) and 20% of these visitors are from long-haul North American markets like Ontario and California. Their top sources for trip planning are: airline websites, hotels, attractions or other services at destination; websites of online retailers, travel agencies or tour operators; and travel guides and books. They seek good value and like tours that show the highlights but focus on nature. The secondary EQ group is defined as “Cultural Explorers,” (12% of the global market and 9% of the Canadian market); they are “defined by their love of constant travel and continuous search for opportunities to embrace, discover and immerse themselves in the culture, people and settings of the places they visit.” This segment of the travel market tends to be a bit younger than Authentic Experiencers, mostly aged 35-45. Cultural Explorers don’t want to feel like tourists; they enjoy shared authentic experiences, avoid “checklist” travel and don’t require pampering or luxury. Their primary trip planning sources are: websites of airlines, hotels, attractions or other services at destination; travel guides and books; and websites of regional or city tourism offices. For more on these EQ segments and for details on the appeal of travel experiences in BC with the top ten geographic markets for the province (see Appendix 3). Promotions Mix Like most companies in travel and tourism, managing customer communications is tricky. Landsea is too small to market directly to consumers from all over the world who plan to visit Vancouver, so they rely on trade promotions. The bulk of the company’s efforts are directed at trade shows like Rendez-vous Canada and Canada’s West Marketplace as well as sales trips with destination marketing organizations like Tourism Vancouver (Germany, Switzerland, and the UK). The company also works with global wholesalers. The focus of most trade communications is on product knowledge. Hotels and attractions are another key channel. For example, most hotel concierges have been recommending Landsea Tours and Adventure or Landsea Charters for a long time. They are trusted trip advisors for hotel guests, and they stake their reputations on their recommendations.

Therefore, Landsea works carefully to deliver on their promise of exceeding expectations. Concierges are the number one driver of business, and happy customers lead to happy concierges and new referrals. While LandSea depends on the marketing of many of their destinations, like the Capilano Suspension Bridge and Buchart Gardens, none of them have a booking engine so there is no equivalent to a hotel concierge. In addition, the hotel landscape is changing with the rise of Airbnb (many tourists are not staying at traditional hotels). Unfortunately, Airbnb doesn’t have concierges, nor is Landsea able to pick up from Airbnb locations since they are not centralized like hotels. Viator, with their slogan “Travel with an insider,” is their biggest wholesaler, and because of their leadership position in the market, has negotiated the highest commission. Viator has more than 60 consumer–facing digital properties (websites and apps) that reach 11 million travelers a month, plus more than 3,000 partners, including American Express and Lonely Planet.4 And Viator is owned by TripAdvisor, so the Landsea tours booked through the world’s largest travel website are sold by Viator. For consumers, the company website is the primary promotional channel (See Appendix 4). It is supported by a brochure that directs consumers to their site. The company has a great domain name for search engine optimization—vancouvertours.com—and ranks in the top three for “Vancouver tours,” and on the first page for “Vancouver sightseeing tours.” The website offers detailed information on all tours and online booking. On social media, Landsea has a relatively small but engaged network on Facebook, with about 1,200 Likes and 37 reviews (36 of which are five stars, one is four stars). They post positive, relevant content most days without erring on the side of being too “sales-y.” On Instagram, they have 624 followers and generate around 40 likes per post. On Twitter, they have 1,372 followers, and mostly repost Facebook and Instagram content (using Hootsuite); there is very low engagement through Twitter. Their YouTube account is largely inactive, with a couple of short promotional videos. At the time of writing, 732 visitors have rated Landsea Tours and Adventures and Adventures on TripAdvisor. Their average rating is 4.5 out of 5, with 589 Excellent, 82 Very Good, 25 Average, 7 Poor, and 5 Terrible reviews. Unlike their social media pages, Landsea does not control the content on TripAdvisor; they can’t post or delete content. TripAdvisor is an extraordinary challenge to Landsea and other companies in the travel and tourism market in two ways: firstly, the reviews on the website can make or break a company; and secondly, it makes money by displaying the prices of online travel agents or, in the case of Landsea Tours, offering direct bookings through its subsidiary, Viator. When you search for “Landsea” on most search engines, the second listing after the company is Landsea’s TripAdvisor profile. Online reviews have more credibility with consumers. According to Vendasta, 92% of consumers read online reviews, and star ratings are the number one factor used by consumers to judge a business. Knowing this, Landsea uses testimonials on their website. But just as positive reviews can sell (reviews produce an average of 18% uplift in sales), negative reviews can dissuade users from buying (having one to three bad reviews is enough to deter 67% of shoppers).5 Managing a company’s online reputation has become fruitful enough to create specialists and companies dedicated to writing positive reviews, sabotaging competitors, and “fixing” bad reviews.6 (Googling “online reputation management companies Canada” returns 2.8 million results.)

TripAdvisor “prohibit(s) properties from offering incentives (for reviews) because they can hinder the validity and accuracy of reviews,” but there are plenty of examples of travellers threatening to write bad reviews if they aren’t offered a discount or even a total reimbursement.7 TripAdvisor does have a “blackmail review” procedure, but it is difficult for a small company and their software only works before the review is posted. After a “blackmail review” is posted, the review stays up until TripAdvisor can review it. The only recourse is a Management Response. Landsea takes every review very seriously. Negative reviews trigger immediate replies from Pearce using the Management Response feature (see appendix 5). Frustratingly, some recent less-than- perfect reviews were from visitors dissatisfied with the attraction or destination rather than the tour or guide, but those reviews still affect the company’s overall rating (although TripAdvisor’s rating system is not just an average of all reviews; some importance is placed on the number of reviews and the recency of reviews). But with 55 unscripted tour guides and 70,000 travellers a year—with exceptionally high expectations, fuelled by the great online reviews—there will be unhappy customers. It’s a catch-22. The Challenge Landsea Tours and Adventures would like to not just survive the shifting technological landscape of the disintermediating sharing economy, user-generated comments, and online booking monopolies, but to thrive. The next Expo 86 or 2010 Winter Olympics is not yet on the horizon, so there is no expectation of another tourism boom, but Kevin Pearce and his exceptional team of professional guides want to be proactive in their approach. How can a small company, like Landsea, make the best use of their passionate, well-trained employees to stay on top of technological shifts in the tourism industry? Is there a way to harness these changes to come out even further ahead? How can they leverage the reach of online channels to make the most of their $200,000 annual marketing budget (which also must cover brochures, trade shows, and the website)? Kevin believes that his company has unique experiences to offer, but without a shift in their approach to technology, the business might not continue to grow.

Good luck!

Appendix 1: Landsea Travel & Adventures Tours (as of December 2016)

Tour Name Length Cities: Attractions Cost per Adult

Availability

Vancouver City Highlights Tour

4 hours Vancouver: Stanley Park, Granville Island Public Market

$75.00 Year round

Vancouver Delights Tour

7 hours Vancouver and North Vancouver: Stanley Park, Granville Island, the Vancouver Lookout, Gastown, Chinatown, Robson Street, English Bay, Vancouver Harbour, Capilano Suspension Bridge Park, and the Capilano Fish Hatchery

$125 Year round

Mountain Discovery Tour

6.5 hours North Vancouver: Capilano Fish Hatchery, Capilano Suspension Bridge and Grouse Mountain

$165 May 19-Oct 29

Peak & Canyon Tour

5 hours North Vancouver: Capilano Suspension Bridge Park and Grouse Mountain

$155 May 5-Sep 25

Sea to Sky Tour 7 hours Horseshoe Bay, Squamish: Sea to Sky Gondola, Shannon Falls, Britannia Mine Museum

$120 May 1-Sep 25

Sea to Sky Tour with Deep Fjord Zodiac Tour

7 hours Sea to Sky Tour plus 1-hour zodiac ride $195 May 1-Sep 25

Whistler & Shannon Falls Tour

10.5 hours Squamish, Whistler: Whistler Village, Shannon, Aboriginal Cultural Centre and Museum

$140 Year round

Whistler Tour & Seaplane Adventure

10.5 hours Whistler & Shannon Falls Tour plus 45- minute seaplane tour

$340 May 1-Sep 24

Whistler Departure Day Tour

7-9 hours Brackendale, Squamish, Vancouver: eagle watching, Shannon Falls, Lions Gate Bridge, English Bay, Chinatown, Gastown, Robson Street

$140 Dec 17-Apr 22

Victoria & Butchart Gardens Tour

13.5 hours Victoria (via ferry): Victoria Harbour, Butchart Gardens

$205 Mar 12-Nov 5

Victoria Tour with Whale Watching and Butchart Gardens

13 hours Victoria & Butchart Gardens Tour + 4 hour whale watching tour

$400 May 20-Sep 18

Victoria Tour with Seaplane & Butchart Gardens

12 hours Victoria & Butchart Gardens Tour + 35- minute seaplane tour

$399 Jun 15-Sep 15

Coastal Discovery Tour

Multi-day Vancouver, Whistler, Victoria: Whistler & Shannon Falls Tour, seaplane to Victoria (1 hour), flexible return to Vancouver, via Butchart Gardens

$615 May 1-Sept 24

Appendix 2: Landsea Travel & Adventures and Landsea Charters logos, tag line, vehicles and staff

Appendix 3: Destination British Columbia’s Target Consumer Profiles8

(CTC stands for Canadian Tourism Commission)

Destination British Columbia’s Target Travel Experiences9

Appendix 4: Home page screenshot

Appendix 5: Sample negative post screenshot from TripAdvisor.com

1 "Vancouver's History | Fun Facts & Information." Vancouver's History | Fun Facts & Information. N.p., n.d. Web. 15 Nov. 2016. 2 "Assignment: Vancouver. Tourism Vancouver’s 2016 Media Kit." Tourism Vancouver. N.p., n.d. Web. 14 Nov. 2016. 3 "Explorer Quotient." Www.DestinationCanada.com. N.p., n.d. Web. 15 Nov. 2016. 4 "Viator.com | Corporate Information." Viator.com | Corporate Information. N.p., n.d. Web. 15 Nov. 2016. 5 @vendasta. "[Infographic] 50 Stats You Need to Know About Online Reviews - Vendasta." Vendasta. N.p., 2016. Web. 15 Nov. 2016. 6 Stimmler-Hall, Heather. "Choking on a Macaron: What You Don’t Know About Trip Advisor.” Medium. N.p., 26 Feb. 2016. Web. 14 Nov. 2016. 7 Stimmler-Hall, Heather. "Choking on a Macaron: What You Don’t Know About Trip Advisor.” Medium. N.p., 26 Feb. 2016. Web. 14 Nov. 2016. 8 Target Consumer Profiles. (n.d.). Retrieved December 09, 2016, from http://strategy.destinationbc.ca/where-we-will-focus/our-consumer-segments/target-consumer- profiles/ 9 http://strategy.destinationbc.ca/where-we-will-focus/our-consumer-segments/target-consumer- profiles/

©2017. Erin Whittle, Instructor, Marketing Management Department, BCIT for the Vanier/BDC Marketing Case Challenge. The case is for educational purposes and is not to be reproduced for other purposes other than the case competition without the permission of the author. I wish to thank Kevin Pearce for his information and insight, and the material he provided for the development of this case. Any errors in fact are my own. All rights reserved.