International boundaries and tourism strategies

Abstract

Niagara Falls, an acclaimed natural wonder straddling two countries, provides a convenient means of juxtaposing different tourism strategies. Canada focuses on providing 'activities' and adult entertainment while the USA has historically provided opportunities to view nature and (to a lesser extent) to participate in family-oriented festivals. The opening of a Canadian gambling casino in the area, coupled with currency fluctuations, has significantly undercut the US tourism industry. Using an econometric model, strategies for reversing the tourism decline in the USA are discussed. By offering family-oriented festivals, the US tourism industry can gain a differential advantage, because the growth of casino gambling in Canada carries an increasingly 'adult image'. Catering to gamblers is a 'niching strategy' in which other target markets tend to be discounted. By catering to under-served markets, the USA can avoid challenging the Canadians 'on their own turf' and, thereby, meet with minimal competition and risk when expanding its tourism industry.