Report from the Municipal
Chief Administrative Officers
in Waterloo Region
In Support of the New Tourism
RECOMMENDING A DESTINATION MARKETING ORGANIZATION
FOR WATERLOO REGION
Tourism is a significant industry in Waterloo Region. Statistics Canada data indicate
that in 2004 this Region attracted almost 2.4 million person trips, which generated $390
million in revenue, supported 3,200 jobs and contributed $5 million in total municipal
taxes. While this economic activity is significant, it has been declining in recent years,
particularly with the precipitous drop in cross-border travel from the United States. It
also lags behind comparable municipalities such as Hamilton and London, which have
municipally-supported tourism destination marketing organizations (DMO).
Currently the three cities and two of the Townships provide individual tourism-related
services, primarily through Visitor Centres. As a result, tourism promotion in the Region
faces several challenges including:
• Fragmented approach with no overall brand or marketing strategy;
• Limited destination marketing activities, resulting in low external profile;
• Duplication of some efforts, such as visitor guides;
• No central body to develop partnerships and participate in provincial initiatives.
2.0 Steps to Date
Recognizing these challenges, a consensus has developed within the tourism industry
and the municipal administration in Waterloo Region that there is a need and
opportunity to improve the delivery of tourism services, particularly destination
marketing, in this community. Over the past 15 months, these groups have worked to
define, develop and consult on a tourism initiative, as outlined below.
• Municipal and Regional Chief Administrative Officers (CAO) assessed current
tourism initiatives, organizations in other municipalities, and possible funding
sources to develop a proposal which was documented in ‘A Discussion Paper
Regarding Delivery of Tourism Services in Waterloo Region’, May 2006.
• Municipal Councils endorsed the proposal in principal.
• CAOs held two consultation sessions with the tourism industry in June 2006.
Approximately 90 people attended. Responses were documented in the report
‘Continuing the Development of a Tourism Organization for Waterloo Region’,
• Municipal Councils endorsed the creation of a Steering Committee to continue
the development of a new Tourism Organization in July 2006.
• The Steering Committee, comprised of six tourism industry representatives and
the CAOs of Cambridge, Kitchener, Waterloo, Wilmot, Woolwich and the Region,
met initially in August 2006, and has met 9 times since then.
• A consultant was engaged to assist the Committee in developing a Business
Plan, and a timeline for organization start-up.
• A second set of industry consultation sessions was held in February 2007 to
gauge industry response to the business plan and budget.
• The Business Plan highlights and Industry response are summarized in this
report. The industry is very supportive of the proposed initiative
3.0 Proposed Tourism Organization
Based on a review of initiatives in other communities, and considerable discussion
among local tourism industry and municipal leaders, the creation of a new Tourism
Destination Marketing Organization for Waterloo Region is proposed. The interim
working title for the organization is “The Waterloo Regional Tourism Marketing
The new organization would focus primarily on marketing tourism opportunities in
Waterloo Region – encouraging more people to visit this area, and encouraging visitors
to stay longer. The organization would replace the existing municipal destination
marketing activities currently being provided by K-W Tourism and Cambridge Tourism.
The organization would be a membership-based, not-for-profit corporation, governed by
a board of directors comprised of tourism industry and municipal representatives. Its
funding would be derived from a combination of municipal grants, industry membership
fees and co-operative marketing opportunities. Further details regarding the proposed
organization are provided below.
Interim Mission Statement
The following Mission Statement is proposed, but would be refined following
development of the organization’s Strategic Plan.
A municipal, industry and community partnership that operates as a Destination
Marketing Organization for the Waterloo Region. Dedicated to maximizing tourism
visitation to the community, and industry economic impacts, on a year round basis,
• Development and delivery of both broadcast and targeted marketing and
• Provision of visitor information and support services
• Development and participation in tourism partnerships and joint initiatives
• Support for industry capacity development.
Four marketing priorities have been identified:
• Conduct market research, create a marketing plan and develop an advertising
• Build image and awareness through attendance at trade and consumer shows,
development of lure brochures, etc.
• Undertake Cooperative Marketing Programs, funded by the tourism industry and
the DMO (with possible support from senior levels of government) which
promote both Waterloo Region and the individual industries, using various
media such as radio and TV spots, print, website banner ads, visitor guide, etc.
• Undertake a branding initiative to develop the organization name, identifier, tag
Visitor Service Focus
The organization will provide the single point of contact for visitors requesting
information about tourism opportunities in Waterloo Region. Visitor Information
Services include: single telephone number, website, telephone and e-mail response,
and literature fulfillment. These services would be coordinated by the DMO to ensure
consistency across the region. The DMO will also produce a single visitors guide for
Visitor Centres will continue to be operated and funded by the Local Municipalities.
They will offer a core level of services and programs including tourism literature
distribution and over-the-counter travel counseling. Local Municipalities may enhance
the services offered.
The DMO would be a membership-based, not-for-profit corporation. The Board of
Directors would be comprised of eight tourism industry members (one representative
from each of five identified sectors, and three at-large) and six municipal
representatives (the CAO or designate of the Region, Cambridge, Kitchener, Waterloo
and two of the Townships).
The existing Steering Committee has agreed to act as the interim Board of Directors
until a full Board can be elected at the first Annual General Meeting, anticipated by year
The proposed membership fees are differentiated by industry type, and range from
$150 to $750 per year. Membership provides the opportunity to participate in the DMO,
and includes a basic website listing, visitor guide listing and brochure distribution. The
DMO membership fee replaces the separate fees currently charged by Cambridge and
The proposed budget for the first three full years of operation is shown in Figure 1. The
budget components are:
• Financed 50% by Region of Waterloo and 50% by Local Municipalities. Does not increase
over the three year period.
Basic Service Package Revenues
• Revenue from tourism industry individuals and organizations that choose to become
members. Membership sales efforts will be minimal. Budgeted to be less than combined K-
W and Cambridge Tourism current revenue from membership, since duplication eliminated.
Partner Cooperative Marketing Revenues
• Industry participation in marketing initiatives such as trade publications, electronic and print
media, trade shows. Expected revenue is based on experience of other DMOs and
assumption of quality advertising campaign. Expect it will be achievable if industry members
shift 5% to 10% of individual advertising dollars to the DMO.
Municipal In-kind Services
• Services such as Finance, Legal, Human Resources or facilities such as space, telephones,
web hosting may be provided by the partner municipalities at no charge to the DMO.
visitor guide Licensing Fee (net)
• The production of the visitor guide could be licensed to a third party, which could be
expected to pay a small fee to the DMO.
Merchandise and Local Opportunities (net)
• Merchandise sales through website, local event sponsorship and miscellaneous revenue.
Partner In-Kind Services
• Tourism industry members could provide in-kind support, such as operators underwriting the
cost of FAM trips (accommodation, meals), hotels hosting Board and Committee meetings,
local media supporting marketing campaigns.
Payroll and Benefits
• Reflects a modest team of three professionals (General Manager, Marketing and
Media Relations Coordinator, Group Services Coordinator) plus clerical support. These staff
are dedicated to the marketing effort, and considered part of the overall expenditure on
• Note that DMO’s with similar mandates have seven to 10 staff, not including Visitor
Information Centre staff.
• As partner revenue increases, so would the staff complement.
• Other services requiring staff are assumed to be contracted out.
Overhead and administration
• Includes rent, professional fees, office supplies, telephone, travel, Board expenses.
Image and Awareness
• Trade shows, lure brochures, print and electronic campaigns.
Visitor Information Services
• Literature fulfillment, call centre, e-mail response, website maintenance, trunk lines
Cooperative Marketing Programs
• Includes radio and television spots, print media, trade publications, etc.
• The expenditures depend on the buy-in by industry, as reflected in revenue.
Since the organization will be initiated mid-way through 2007, the estimated budget for
2007 is approximately $300,000. This will consist primarily of municipal grants, and will
be used to fund salaries, and the development of initial marketing activities.
Other sources of funding will be explored, both to support the start-up phase, and to
supplement marketing revenues in the longer term.
Figure 1: Waterloo Regional Tourism Marketing Corporation Budget
12 months ending 12 months ending 12 months ending
Dec 31 2008 Dec 31 2009 Dec 31 2010
Municipal Grant $600,000 61.1% $600,000 54.6% $600,000 49.3%
Basic Service Package Revenues $46,770 4.8% $63,438 5.8% $76,245 6.3%
Partner Cooperative Marketing Revenues $250,000 25.5% $325,000 29.6% $400,000 32.9%
Municipal in-kind services $25,000 2.5% $25,000 2.3% $25,000 2.1%
visitor guide Licensing Fee (net) $25,000 2.5% $25,000 2.3% $25,000 2.1%
Merchandise and local opportunities (net) $10,000 1.0% $20,000 1.8% $40,000 3.3%
Partner in-kind services $25,000 2.5% $40,000 3.6% $50,000 4.1%
Total $981,770 100.0% $1,098,438 100.0% $1,216,245 100.0%
Payroll and benefits $260,000 26.5% $338,000 30.8% $351,520 28.9%
Overhead & Administration $173,600 17.7% $172,100 15.7% $178,984 14.7%
Image & Awareness $120,000 12.2% $110,000 10.0% $100,000 8.2%
Visitor Services $62,520 6.4% $88,040 8.0% $118,560 9.7%
Cooperative marketing programs $350,000 35.6% $375,000 34.1% $450,000 37.0%
Total Expenses $966,120 98.4% $1,083,140 98.6% $1,199,064 98.6%
Total Surplus/Deficit $15,650 1.6% $15,298 1.4% $17,181 1.4%
4.0 Comments from Tourism Industry Consultation
Consultation sessions were held with the Tourism Industry on Wednesday, February 21,
2007 in Kitchener and Friday, February 23, 2007 in Cambridge. About 70 people
attended, in addition to the Steering Committee. An Information Handout and Comment
Sheet were distributed, and subsequently emailed to all members of Cambridge and
K-W Tourism. In addition to the comments made at the meeting, 15 comment sheets
have been returned.
A separate initiative led by the industry representatives on the Steering Committee
resulted in 22 signed letters of support from key industry members. The letters indicate
full support for the Waterloo Regional Tourism Marketing Corporation goals, structure
and marketing focus. They also pledge financial support in the form of paid
membership, participating in cooperative programs, and “new and aggressively created
programs that will clearly show benefit to our organization.”
The overall tone of the meetings and comments was clearly positive. Several industry
members stated strongly that the initiative is needed and on the right track. They
applauded the planned involvement of the municipalities, noting that it makes this
initiative significantly different from previous attempts to establish a single DMO.
The responses from the meetings and comment sheets are summarized below.
Do you agree with this business concept?
All respondents agreed with the concept, and some industry members expressed
enthusiastic support. Caution was expressed about follow-through and the need to
involve all partners. Previous attempts have failed, but having municipal
funding/involvement this time is seen as a key difference.
Some still questioned the reason for not including the operation of Visitor Centres in the
business model. However, this issue has been extensively discussed by the Steering
Committee, with the conclusion that Visitor Centres should be funded and operated by
the Local Municipalities.
Do you agree with the proposed Marketing Plan Goals, and the Marketing
Almost all respondents indicated agreement with the marketing approach. There is
concern about when the branding initiative is planned, with some suggesting it should
be started immediately. The Steering Committee’s intention that the proposed
marketing campaign will be tested with the industry in the third quarter of 2007 is seen
Would you become a member, based on the proposed initiative and fee
All respondents indicated they would become a member of the organization. There is
strong support for a single organization and one member fee. There were several
comments about the fees proposed for some categories, and questions about how
volunteer-run events would be included. The Board will have to re-visit and finalize the
membership fees taking these comments into account.
Would you allocate 5-10% of your marketing budget to the DMO cooperative
Most agreed that they could direct 5% to 10% of their current marketing budget toward
cooperative marketing with the DMO. About two-thirds of the respondents indicated an
amount which ranged from $1,000 to $15,000 and averaged $5,000. Concerns have
been expressed both that the anticipated revenue amount of $250,000 in the first year is
too high an expectation, and that the amount to be spent on cooperative marketing
($350,000) is too low. Although these projections are in keeping with the experience of
other DMOs, it will be a challenge to engage the industry sufficiently to ensure success
of the organization.
Is the proposed budget appropriate?
Almost all respondents agreed that the budget is appropriate. Some suggested that the
percentage to be spent on staffing and office overhead seems to be high. However, it
was noted that there are only three staff included in the initial budget, and most of their
time will be spent on marketing. Other DMOs in comparable municipalities have 7 to 10
staff accounting for 70% of the budget. One respondent suggested that more than
three staff would be required for an organization with this much responsibility.
5.0 Next Steps
If municipal council approval and funding commitments are received, the next steps are
outlined in the chart below.
2007 Transition Year Activities A M J J A S O N D
Establish Organization X
Develop Marketing Framework, Advertising Campaign X X X X
Recruit and Hire staff (3 positions) X X X X X X
Image and Awareness initiatives X X X X X
Solicit memberships, Board members X X X
Hold first Annual General Meeting X
6.0 Conclusions and Recommendations
The Business Plan developed by the Steering Committee provides sufficient detail on
which to base the start-up of the Destination Marketing Organization. The proposal has
been positively received by the Tourism Industry. There appears to be sufficient
interest and support to expect that the cooperative marketing revenues anticipated in
the budget can be achieved, provided that the right type of marketing campaign is
Based on these results, the Steering Committee recommends that Municipal Councils
approve the establishment of the ‘Waterloo Regional Tourism Marketing Corporation’.
Although the municipal funding required for the organization may need to be approved
on an annual basis, it should be recognized that the Business Plan assumes a three
year commitment (through 2010) to solidify the organization and assess its
DOCS #: 368597-v5