Gord Knowles:
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If you're ready to invest in a tourism business, this
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is the absolute opportune time.
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Michelle Samson: Welcome to the
Destination Northern Ontario podcast.
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This is a series for tourism
business operators here in the
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rugged and beautiful North.
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Whether you're just starting out,
or you've got years under your belt,
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this podcast will make sure you're
well equipped for the journey.
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I'm your host, Michelle Samson.
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Northern Ontario's tourism
sector is at a crossroads.
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There are big challenges to
navigate, from global economic
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uncertainty to seasonal realities.
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Yet visitor numbers and spending are up,
new builds are rising across the north,
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and there's real momentum in the sector.
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In this episode, Gord Knowles, Destination
Northern Ontario's senior coordinator
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of investment attraction and economic
development, shares insights into
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what's driving investor confidence
right now, why tourism businesses need
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to diversify beyond the US market, and
the emerging trends that should be on
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every tourism business operator's radar.
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Welcome back, Gord.
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You are now officially our first two-time
guest on Destination: Northern Ontario.
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Gord Knowles: Great.
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Thanks for having me.
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Michelle Samson: We had you in the very
first episode of the very first season,
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but we're bringing you back to talk about
investment attraction in Northern Ontario
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when it comes to the tourism sector.
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So maybe we can start by getting a
little bit deeper than we did in the
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first episode about your role and what
it is that you do, particularly when
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it comes to investment attraction.
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Gord Knowles: Yeah, absolutely.
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So, a lot's changed with the role
and it's kind of indicative of what's
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changed in the world in that time.
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So we've become a lot more nimble in
being able to work with our municipalities
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and our communities on doing projects
that kind of help increase capacity
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and opportunities for new builds and
new inventory to come onto the market.
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For business investors, business
builders our role at DNO is to
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work with you, to work with your
stakeholders in your community,
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to help try and find the best fit.
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Whether that's getting into an existing
business or looking for opportunities
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and peeling back the numbers to find
where those opportunities may exist and
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what's gonna be happening in the future.
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I think we have a big role to play in
that, in helping our business investment
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community get the maximum return and that
they're able to build their business not
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just for what the needs of today are,
but looking for something that's gonna be
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future facing and able to meet the needs
of the tourism community moving forward,
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because it is changing very quickly.
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Michelle Samson: Right.
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So yeah, you're kind of seeing the 40,000
foot view, which is why we're gonna be
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picking your brain to see, you know,
what those opportunities are, what some
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of the challenges might be, what the
trends are, what the state of things are.
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So maybe let's start with the broad view.
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How is Northern Ontario doing as a
destination right now when it comes
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to visitor numbers and receipts?
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Gord Knowles: Right now
things are doing quite well.
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Spending is up in Northern Ontario.
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Visitation is up.
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A lot of it gets down to the communities.
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There are communities that are
doing better and communities
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that are having more challenges.
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Perhaps they're in a community
that's been impacted by the closure
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of a resource such as a sawmill or
a wood mill, or a mining operation.
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But we're also seeing more communities
pivoting towards tourism, not just as a
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single revenue generator, but as something
that can compliment the existing resources
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that are there so that when there is a
bust in the boom and bust cycle, that
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there's some ability to catch that and to
make sure that your community's diverse
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and able to sustain those changes.
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Michelle Samson: Yeah, how are
Canada-US relations playing into this?
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Gord Knowles: Really depends where you go.
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The further away you get from
the GTA, the more it's affected.
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A lot of that has to
do just with proximity.
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In Northwest Ontario in particular,
your closest neighbors are the US.
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Winnipeg and Manitoba is a
pretty small comparative area.
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It's harder to draw people
from that location as well.
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Right now things are pretty steady with US
folks coming up using services in Ontario.
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And it remains strong.
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But When you have issues with the US like
we're seeing now, it's a bigger challenge
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to bring people across the border.
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There's a lot more uncertainty.
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Some challenges with the economy
of both countries and what that's
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gonna mean for travel spending.
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So it, it is a big challenge to how do
we navigate that and how do we invite new
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customers, new clients to these businesses
so that we can kind of almost bulletproof
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ourselves as an industry from some of
these external forces, which, you know,
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really can come out of nowhere, but be
really catastrophic to the industry if
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we're not able to diversify and manage
the challenges that are out there.
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Michelle Samson: So to balance out
some of these challenges, I hear that
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there are some good news stories that
have popped up when it comes to the
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context of tourism in Northern Ontario.
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Can you share some of those?
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Gord Knowles: Yeah, absolutely.
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So one of the biggest things right now
is that we're seeing new builds go up.
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We're seeing new accommodations be built.
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Investors with a real stake in Northern
Ontario who understand some of the
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challenges that are unique to the area
are putting their money where their mouth
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is and they're building, they're putting
up new properties, they're expanding
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properties, they're renovating old,
dilapidated buildings, and turning them
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into things that are tourism drivers that
are really building up their communities.
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So that's really exciting to see.
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We know that there's a lot happening
as far as diversifying what tourism
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is in Northern Ontario and making
sure that we're offering new
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products that meet the global need
and that expectation of service.
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And there's a lot of positive
things going on as far as increasing
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tourism receipts on a national scale
as well as on a regional scale.
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So we are seeing more and more people
who are doing cross country road trips.
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RV tourism continues to be very strong.
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There was some questions about
what it would look like post
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pandemic, but it remains strong.
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Our park systems are doing very well.
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And there's just, there's a lot of
optimism that really tie into the numbers.
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That it lets us know that we're on the
right path and that those who are looking
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to invest can feel confident knowing that
they're investing in something that's
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on an upswing and is still at a quite
affordable time to get into the game.
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Michelle Samson: Can you tell me
a bit more about what's driving
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that investment right now?
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So aside from visitors being up, what else
is making them so confident to invest?
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Gord Knowles: I think there's just a
reality that perhaps in other places the
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market is oversaturated or perhaps the
market is not affordable in the same way.
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And realizing that tourism
comes in many forms.
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It's not just people looking to
get away, it's people who are road
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tripping it across the country.
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Or even, you know, just
where their work takes them.
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So we see a number of outfitters
and accommodations that are
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catering to construction sites and
road repairs work, bridge work.
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Because they're located closely
to the job site they're able to
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book their accommodations there
and not have to travel every day.
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So places are seeing opportunities,
seeing these large scale, multi-year
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projects coming out from both levels of
government and seeing the opportunity
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to put down roots in communities
that may not be serviced, may not
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have even a single motel or hotel.
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And seeing the opportunity that
if we build one here, it doesn't
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need to be big, it doesn't need to
be fancy, but it needs to be here.
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So they see that and
they see the opportunity.
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If you're the only one in the game, or
if you're in the game and you're doing
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it the best, you're gonna do well and
you have that long-term model to build on
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and start building up in your community.
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Michelle Samson: That's great.
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And then what about like interest
rates and things like that?
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Is that also kind of feeding into it?
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Gord Knowles: Yeah, interest rates
are definitely playing a role in it.
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There is a little more chance
to access capital as well.
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As Canadians, we're a little more adverse
to risk than some other nationalities.
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So I think people are seeing now that
we've really come out of COVID, now
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that we're past the worst and, and
looking at what the future looks like,
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being able to make those decisions now
and understand that barring, you know,
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some sort of other global catastrophe
that we can actually start building and
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start getting back to those pre 2019
levels of travel, and understanding
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what our destinations are gonna look
like and kind of getting back on track
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and building for the future again.
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Michelle Samson: Right.
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So before we get into a bit more granular
information for investors I do wanna talk
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just kind of briefly about, you know,
if there are any business owners who
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are thinking of selling what can they
do to make sure that they're finding
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the right buyer for the right price?
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Gord Knowles: Yeah,
that's a great question.
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I think a lot of it gets down to really
committing to whether you're gonna sell
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or not, and what that's gonna look like.
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Starting to reach out to some stakeholders
in the community who might be able to
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assist you along with that process.
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There's a number of great opportunities
out there, even if it's something as
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simple as engaging with your Community
Futures office or with your bank or
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with some other community group who
might be able to provide some guidance
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as far as selling your business.
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It's not a process as simple as
putting a sign up in the window
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and hoping somebody comes by with
a big suitcase full of money.
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We really do have to have
a firm plan in place.
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Understand what your business is worth,
understand some of the challenges that
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might preclude you from getting what
you feel like your business is worth.
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Many of these businesses have, you
know, decades of sweat equity built
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into them which may or may not
have any value to a new purchaser.
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So understanding, you know, where you
might need to make some improvements if
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you're looking to sell your business,
and then how can you go about doing that.
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Or setting your expectations in
a way that make your business
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appealing to a potential investor
is really important right now.
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So just making sure that you're
kind of at that point and
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starting to build up those pieces.
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So when you are ready to put the
first sale sign up, you have a
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good idea what it's worth, and what
you're hoping to get out of it.
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what challenges might be in place as
far as selling your business and what
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the structure of your existing business
is now, whether it's a share sale or
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an asset sale could really play into
that or if it's incorporated or not.
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Just making sure that all that's in a row.
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If you're having questions about that,
please reach out not only to your
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Community Futures offices, but to
organizations like DNO because we do
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wanna try and help you move along as
best you can because it's really in
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everyone's best interest that these
businesses, when you are ready to sell,
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go into the hands of someone who's gonna
treat it as a tourism asset as well,
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and make sure that we're really keeping
these things going in our communities
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so that we continue to drive those
tourism dollars to this great region.
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Michelle Samson: Mm-hmm.
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Okay, so, I think you really did address
this question earlier, but I wanna ask it
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and get just a real on the nose answer.
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Is now a good time to invest in a
tourism business in Northern Ontario?
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Gord Knowles: I think if you're ready
to invest in a tourism business,
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this is the absolute opportune time.
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You will probably not see a
period in which there is so
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much potential for change.
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There's a lot of businesses that are
either for sale or looking to sell, owned
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by people who have had them for some
cases decades, if not multi-generational.
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You're seeing a lot of businesses
come onto the market, so you have
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your choice of opportunities.
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And the prices in Northern Ontario
continue to be exponentially lower
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than in other parts of the country.
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So there is an opportunity to invest and
get good value on your dollar, as well
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as have additional revenue to make the
upgrades necessary to potential properties
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to really bring these businesses into
current standards, into making sure that
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it's a five star experience for customers
and making sure that it's something that
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becomes a legacy that you can turn around
as an investment, and look to future
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generations to really continue on with it.
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So yeah, I think it really is a
great time to get into it and you
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have to have the right mindset
to get into the tourism business.
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It's not something I suggest
you do just because you may
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have enjoyed staying there once.
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It's a big thing to own a business.
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It's big challenge to employ multiple
people and to manage a property and to
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really put the time and energy needed to
make it work year in and year out, and
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work with some of the challenges that
come with being in the tourism industry.
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But I think for those who do it and
those who love it, and it's their
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passion, they make a great living at it.
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They are happy and they're some of the
the best people that you'll ever meet.
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Michelle Samson: This feels like
the opportune time to plug our
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entire first season, which was all
about what it looks like to buy a
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cottage resort in Northern Ontario.
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You know, most of them were either
newcomers to Northern Ontario or in some
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cases just first time business operators.
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So episodes two through four
in particular are case studies.
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So you can really see what that process
is like and get a feel for it, right?
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Gord Knowles: Absolutely.
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And those folks are still all operating
and I think they're doing quite well.
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And they came in at a really
challenging time, and are
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really making the most of it.
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So it's really good to see folks
step up to the plate and be
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able to handle those challenges.
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Right now is, is an even better
time to get into it, in my opinion.
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And there are opportunities out
there to access the capital.
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There are communities and
organizations that are willing to
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work to make those dreams happen.
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If you're able to bring some skin in
the game and to bring the right mindset
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and the right attitude towards running
it, then I think there's a really
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good opportunity if that's something
that you might be interested in.
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Michelle Samson: Can you go
a little bit deeper on what
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kind of capital is available?
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Gord Knowles: Well, there's a lot of
opportunity out there, like I was saying,
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through the Community Futures networks.
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They really do serve
all of Northern Ontario.
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They're run by local boards who
make decisions at that local
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level, and they have access to
regional pools of money as well.
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They're able to leverage that money
with other sources, such as banks and
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credit unions, and some government money
that may, may be out there at the time.
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So lots out there right now.
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And those organizations are willing to
work with you and give you that advice
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that you need and really build on three
decades of experience to be able to
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help you through some of those most
challenging aspects of either starting
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a new business, or buying an existing
business because it is very overwhelming
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for people who do that on a day-to-day
basis, let alone somebody getting into it.
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And the business side of it might
be a completely foreign concept
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to the actual operation of it.
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Michelle Samson: Mm hmm.
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And yet another plug: episode five
of season one was all about CFDCs.
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So you can go even deeper and figure
out what they do and who they work with.
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So, we've been talking about
the benefits of getting into
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this and investing right now.
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But what challenges maybe should
investors know about before they dive in?
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Gord Knowles: I think the biggest
challenge right now with getting into the
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investment is, as we were talking about
earlier, it's just some of the uncertainty
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that's happening on a large global scale.
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We don't really know what's
happening on a day-to-day basis.
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So, being able to pivot and have a little
bit of wiggle room to operate knowing
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that things may change drastically
based on a policy or rule put in.
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And the other part is just understanding
the seasonality of Northern Ontario.
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We know it's cold.
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There's some challenges as far as
transportation goes, and that's
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been spoken about as well at length.
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And just understanding the
market is not the same.
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If you're investing in a Northern
Ontario business, you're not comparing
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it apples to apples to investing in the
Okanagan Valley or to the GTA in the
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Niagara Region or to an urban center.
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There is some seasonality,
there's some challenges.
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But there's also opportunities.
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And there's also some cost savings.
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So it's just basically understanding
what the market is and having a keen
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eye for that, but also having a, a sense
of what you're actually getting into.
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And again, that gets out to reaching
out to your local stakeholders who
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can really help you understand that
real granular data beyond what you
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might see in a site selection report.
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Michelle Samson: Right.
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Okay.
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So, as someone with their ear to the
ground, barring any major sort of world
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level and whatever changes, I mean,
we never know what's gonna happen,
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but as someone with their ear to the
ground, what trends are you noticing?
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Where do you think tourism in
Northern Ontario is heading, or
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what do you think is kind of on
the verge of becoming bigger?
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Gord Knowles: Sustainable
tourism is a big item right now.
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As well as indigenous tourism.
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So businesses that are adapting
to that, it's very early days
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but there is great opportunity.
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Both are highly coveted by the
international markets, especially who
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are looking for what they consider
the genuine Canadian experience.
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And, and just the stories of what a
Canadian is to an international traveler.
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You know, outdoors, quiet, good food,
lots of nature, and the kind of pristine
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image that's projected out to the world.
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So tourism vendors and accommodations
that really lean into that I think will
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grow greatly over the next decade or two.
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As well as really tightening up
dependence outside of traditional markets.
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So in many cases that's looking more
at regional and provincial and national
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travel as well as international travel
versus the reliance on the US market alone
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to sustain a lot of these businesses.
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Some of them, you know, have upwards
of 100% reliance on the US market,
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and we've seen with the closures
of the border during the pandemic
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what that does to those businesses.
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So being able to diversify your
business is really important right
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now especially moving forward and
especially now that we understand how
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quickly volatile change can come along.
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Michelle Samson: Yeah, and this, I'm
just gonna keep going with the plugs.
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You know, this feels like a good
time to mention our episode in season
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two on how DMOs can really help you
stretch your marketing budget when it
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comes to reaching these new markets.
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They're already doing a lot of this
work and you can kind of tag on.
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Gord Knowles: Yeah.
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And the marketing is really key
right now because you are trying
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to cut through a lot of noise.
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Everyone is marketing right now.
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So how do you craft that message
that really appeals, and looking
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especially at the largest scale
travel options internationally.
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How do we engage folks to come to this
part of the world without having the sort
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of economic driver that you might have in,
say, a Toronto or Vancouver or Montreal?
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So how do we bring them to that
more smaller venue in a way that
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really cuts through the noise of
basically the urban travel habits.
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Michelle Samson: Right.
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So, in summary, you should basically
go, if you haven't already, and
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just download all of the episodes
from this podcast and binge them.
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Gord Knowles: Absolutely!
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Michelle Samson: Gord, any final
thoughts for any investors listening or
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any municipalities who are listening?
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Gord Knowles: I guess if I was to have
any final thoughts, I would say please
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reach out to us, anyone at the DNO team.
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We're happy to help.
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We're here, we're available.
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Whether you're a business, whether you're
a municipality, whether you're long in
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the industry or you're just thinking
about getting into it, we're here to help.
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We're here to help guide you.
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If we don't know the answer and I
know we don't know everything, there's
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a pretty good chance that we know
someone who does know the answer.
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So we really want to get out there
and make sure that we're helping
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our communities build and prosper.
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Tourism is closely linked to so
much happening in our communities,
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whether that's workforce development,
whether that's housing, whether that's
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homelessness and addiction issues, whether
that's just community building in general.
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Tourism plays an integral part in that.
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And any way that we can help tie that
in and make sure that we're building our
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communities holistically and in a way
that makes it easier for folks to want
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to come to our areas and want to stay
and want to participate in that, we're
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always here and willing to lend a hand.
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So please reach out to anyone on
the team whenever you have a chance.
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Michelle Samson: All right, we'll include
a bunch of links in the show notes to help
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you find all that contact information.
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And, all right, thank you very much, Gord.
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Gord Knowles: Thanks for having me.
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Michelle Samson: If you're a tourism
business operator, looking for more
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resources on product development, human
resources, marketing, or partnerships,
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visit DestinationNorthernOntario.ca
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or any of the links in the show notes.
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New episodes of this
podcast are coming soon.
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Follow us on your favorite podcast
platform to be notified when it drops.
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Destination: Northern Ontario is
produced by Storied Places Media
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and hosted by me, Michelle Samson.
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Thanks for listening.
