Here’s the Conexión Florida ‘Let’s Talk about Tourism’ article for July…
About 20 years ago, it was predicted that workplace automation, the rise of the internet, and the ability to work from nearly anywhere would lead to a massive increase in leisure time. And as a result, we would see an increase in tourism worldwide. This was predicted to be good for everyone: more travel, more vacations, and a better-funded tourism industry with well-paid jobs for all… Well, the result has happened, and world tourism is at an all time high. However, the reason for that increase was not really as predicted.
Certainly workplace automation, computerization, and the ‘always on’ mobile Internet have had an effect; but the boom has come from other areas. The rise of the Boomer generation was the first driver. Those born after WW2 through 1964 have come to retirement age across the world. They may not actually retire completely…….
It’s Fall and so we’ve begun our traveling season. We tend not to escape from the Gulf Coast during the summer months. Yes, it can be hot and humid (although that doesn’t worry us too much) it’s more as Jimmy Buffett would say “You can’t reason with hurricane season”. The tropical wind event season isn’t over yet, but we’ve passed the peak and with forecasting the way it is these days, you seem to have a week or so warning of any tropical unpleasantness.
My chief researcher and frustrated travel agent (Beth, the First Lady) suggested that we escape to the Northern Georgia Mountains, where her family once owned a mountain lodge. The Development chosen is Big Canoe, a huge property about an hour or so north west of Atlanta. A simple seven hour drive from the coast.
We’ve rented properties before and have gone through property management companies and have also become familiar with VRBO and HomeAway. This time Beth found an ideal property through Airbnb. I’ve written about Airbnb in the past and have followed their progress over the years, but we’ve never actually used them.
The search and booking process was simple and very efficient. We were looking for somewhere that was suitable for the two of us and our two Smooth (short haired) Collies. Airbnb matched us up with a great property and the booking was made. As things happened we subsequently received an offer from American Express (who appear to work closely with Airbnb) which resulted in our extending the stay to take advantage of the offer. Yes, advertising obviously works!
As part of the booking we were put in touch with the owners, a charming couple (Cindy & Joe) who also own a bed and breakfast in Gainsville, Florida. Obviously they’re immersed in the hospitality business and their B&B (The Magnolia Plantation – http://www.magnoliabnb.com/ ) looks like its certainly worth a visit. As things transpire, they also own a Collie, so a mutual bond was established. That’s certainly something that can happen easily with the Airbnb type system, and the personal owner/guest relationship is rather more difficult with more traditional ways of renting. It does seem like a beneficial thing.
Simply put, the property is exactly as described and so far the exercise has been great.
While sitting relaxing I was reading an article in the Atlanta Journal Constitution (thanks once again to the Researcher-in-Chief) about how vacation rentals are being challenged in the North Georgia Lakes area. It’s something that appears to be happening in other parts of the USA and the world in general.
In the Georgia Lakes area, the move is being driven by Georgia Power who own most of the land around the lakes. They are invoking clauses in the leases of properties that are offered by the power company. These are usually 15 year renewable contracts, although according to the AJC, some of these properties have been in the leaseholders families for generations. Families have rented out their homes through rental companies and realtors, and later through VRBO/HomeAway and now Airbnb. The no-subletting clauses have been largely ignored in the past, but now Georgia Power has decided to change their policy. Regrettably some leaseholders who may be second home owners in the lakes or who have inherited the properties feel that the only way they can keep them is if they fund their upkeep through short-term letting.
Certainly Georgia Power have done a huge amount to keep the area pristine and very attractive. Their aims appear to be to avoid the region becoming an overcrowded tourist ‘resort’ area. That’s a very laudable policy.
The move against short term rentals, particularly of the peer-to-peer variety like Airbnb is not restricted to the Georgia Lakes. Many cities, resort areas, states and cities across the world have taken against the growing trend. The reasons appear to be many and varied and range from worries of over-tourism, through to the disappearance of affordable accommodation for locals. Cities like Barcelona and Venice have become places where locals, who service the tourist industry, simply can’t afford to live. Even if they could, property owners can get a substantial income by ‘buying to let’ and therefore the stock of property for permanent residents dries up.
In other case, the move against short-term rentals is driven by competitors in the accommodation markets – hotels, property management companies etc., who don’t like the change in the way business is done. You can’t really blame them, but then it may be a case of adapt to changing fashions or die.
Lastly there are are the folks who having moved into an area, perhaps to retire or to buy a second home, rather like the idea of being ‘the last newcomer in the village’, and wish to call an end to further arrivals.
I’m not judging all of these motives as they’re valid reasons, and I can identify with the emotions. However, there are consequences to not thinking through the whole process.
Let’s start off with the Georgia Lakes. These properties have been in the area for many years. The building of the actual houses provided work for the locals in the construction and later maintenance industries. Subsequent expansion brought in stores to service the new residents and as short term visitation – tourism – developed, so did the need for restaurants and all the business that service the transients. If the current leaseholders can’t short-term rent their properties, they may be forced to sell them. That will probably drive down the real estate prices, and with no transient visitors, the jobs that cater to them will also dry up. Tax revenue (from both income and sales tax from visitors) will reduce putting pressure on local communities to fund services, which in turn will increase local taxes and the vicious circle moves on. This is sounding more like an economics class that tourism observations!
The same sort of thought process applies to the over-tourism scenario. Tourism was attracted by the, well, ‘attractiveness’ of the destination. Rather like over-fishing which destroys the habitat and eventually the livelihood of the fisherfolk, badly managed tourism eventually destroys both the destination and the very people who rely on tourism for their jobs.
The only scenarios that I can’t reconcile are the actions of competitors who would rather legislate against changes in process (For example the taxi drivers versus Uber and Lyft in may destinations around the world) and the ‘Last foreigner in the village’ scenario. I have little sympathy for either group.
The rest? Well, it relies on compromise and sensible management from both sides. Regrettably letting the market decide, isn’t really an option. Like any good farmer will tell you, land management and animal husbandry over a long period are the policies that will result in a sustainable model for all concerned. The same is true of tourism.
Enough of this. The dogs need walking and we need to go and spend some money in local stores to stimulate the local economy. It’s a tough old life eh?
This article appeared in the Northwest Florida Daily News on Tuesday, May 2, 2017.
Like other parts of Northwest Florida, Okaloosa County could attract a lot more economy-boosting visitors by opening a portion of its beaches to dogs.
That’s according to Martin Owen, a Shalimar-based tourism industry consultant who regularly attends Tourist Development Council meetings.
“It’s niche tourism we can attract, particularly out of season,” he said Thursday. “A lot of dog owners tend to like traveling with their dogs. Our neighboring counties are addressing this, and so is Okaloosa.”
County Marine Economic and Tourist Development Resource Coordinator Erika Zambello shared information with the TDC on Thursday about dog-friendly beaches in Walton County and Pensacola Beach in Escambia County. But she said she has not had any discussions with other Okaloosa County officials about establishing a dog-friendly section of beach.
With the exception of service animals and police dogs, dogs are prohibited on the publicly owned beaches of Okaloosa County, Destin and Santa Rosa County. In Walton County, property owners and permanent residents can bring their leashed dogs on the beach during certain hours and with a permit.
People who violate Okaloosa County’s law pertaining to dogs on the beach could be cited with a fine of at least $100. But such citations are rarely given, county officials said.
Usually, sheriff’s deputies will ask violators to remove their dogs from the beach and the dog owners do so without a problem, county spokesman Rob Brown said.
For those not on our mailing list, here’s the March newsletter!
Last month, we discussed how some politicians in Tallahassee, the Florida State capital, were playing politics with the future of Visit Florida, the State’s destination marketing organization. That fight isn’t over as we’ll report.
This month other politicians both here in the USA and in other parts of the world are having influences on tourism in ways they cannot predict.
Good news however is that Culinary Tourism is booming. Read on….
The move by Speaker Corcoran to de-fund Visit Florida continues, although he has indicated that he no longer wants to close the organization down, merely to limit its ability to operate and drastically reduce its budget. Governor Scott is fiercely fighting this along with the Tourism Industry and it would appear, members of the Senate. The fight is not over and if you’re involved in the industry in Florida, I urge you to a) contact your representatives to support Visit Florida and b) attend Tourism Day in Tallahassee this month to lobby in person. Please contact me if you need details of how to attend Tourism Day.
In what promises to be a difficult year for international tourism, further obstacles are being dreamt up by politicians on either side of the Atlantic.
The strong US dollar has the potential for discouraging European tourists in particular from visiting the USA this year. Some of those European economies are not strong currently and the USA could be expensive for them.
We now have the three year-old dispute between the EU and the USA over visas. The EU parliament consider that the countries of the community should be considered as one (that has resulted in the UK wanting ‘out’ with their Brexit vote), although the US still recognizes individual states. The US has refused to allow some EU states access to the Visa Waiver Program which allows visa free travel into the US. Poland, Croatia, Bulgaria, Romania and Cyprus don’t meet the US security requirements. The EU has said that either the US accept these countries or all US Citizens will require visas to visit any EU country.
This is an old dispute and has now reached the ‘Who blinks first’ stage. Despite the strong dollar which makes overseas travel attractive, American tourists would be very discouraged if they were required to get a visa. Europe needs those US dollars after a lackluster 2016 tourist season following terrorist attacks, and although advance demand has been strong, it wouldn’t take much to scupper that.
Traveling the other way – east to west – is also potentially threatened. I mentioned the strength of the dollar being a hazard, but what has been called the ‘Trump Effect’ is apparently causing a softening of travel demand. I’m not making any political points, just reporting on figures coming from sources in the tourism industry.
It appears that first announcements of a travel ban had a detrimental effect on European tourists plans to visit the US. I’ve been asked why, say, a German tourist would feel threatened by a ban on travelers from certain middle east countries. I can’t answer that easily, but believe me they are worried. Even the UK tourists who believe they are part of a ‘special relationship’ with the US, are as a group being cautious. Suffice to say that enquiries for flights to the US are down an average of 22%. Tourism research firms are projecting a loss of 6.3 million visitors ($10.8 billion in lost revenue). The tourism board of New York City has predicted that 300,000 fewer tourists will visit than did in 2016. Previously New York was predicting an increase of 400,000. Philadelphia has already lost one conference worth an estimated $7m as a result of the proposed travel ban.
Even the Canadian market is seeing a drop in the number of tourists intending to travel below the 49th.
That’s International tourism of course and it’s been suggested that it won’t affect US destinations that don’t cater for Internationals (like Northwest Florida, where only 1% of tourists are from outside the US). That may be true, but of course the markets that attract overseas travelers are hardly likely to sit and do nothing. They will want to find domestic tourists to replace the foreigners and they are not averse to creating marketing campaigns and making offers to lure those domestic guests away from places like the Northern Gulf Coast.
As the old Chinese curse says “May you live in interesting times”.
It’s not all bad news though…..
95% of travelers have said that they engage in unique and memorable food or beverage experiences while traveling, according to the World Food Travel Association ( I guess that they would say that!). Another research organization, Destination Analysts, claim that 50.7% of Millennials won’t visit a destination that doesn’t have good restaurants – although they don’t define what makes a good restaurant.
Before you state that Millennials are just children, remember that the first Millennials turn 35 this year! Also important is that the Centennial Generation (Generation Z or ‘Post Millennials’) are now just beginning to enter the workforce, so are beginning to effect the market.
Certainly the younger generations are having a strong influence on their parents and grandparents when it comes to food. A recent report by the HAAS Center (part of the University of West Florida) was created to examine tourism trends in Okaloosa County (home to Destin, Fort Walton Beach and Okaloosa Island). They found that although tourist spending in restaurants in the county increased in 2015 more than 15% over 2011, its revenue per seat had grown only 12%, where peer and competing counties had grown by 28%. The competing counties are where most (but certainly not all) of the new and more creative restaurants are found. Interestingly, the area has seen an increase in the number of up-scale grocery stores (Whole Food Market, Fresh Market and Publix). Whereas in 2011 tourists spent twice as much in restaurants as they did in grocery stores, it’s likely that 2016 will see tourists spend more in grocery stores than in restaurants for the first time.
The take away (sorry!) is that those tourists are seeking culinary experiences, and finding them.
Which brings me to the really good news for my home area. I recently attended the Florida Restaurant and Lodging Association’s annual awards ceremony for the North West Florida region. The display of talent at that event was stunning. The quality of the areas chefs, wait staff and managers was exceptional and their depth of knowledge, experience and creativity was at least a match for more recognized tourist areas. A similar level of expertise was evident in the hotel, resort and accommodation sector.
That Culinary Tourism is growing makes really good news for the industry as a whole. It’s also great for The Northern Gulf Coast of Florida. The Tourism Industry worldwide is going for Culinary Tourism in a big way from the traditional destinations of Europe to the New World and areas like Australasia. Even Costa Rica getting in on the act. Don’t underestimate the Cruise lines either.
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This month’s newsletter is unashamedly aimed at my tourism colleagues in Florida. I’m not usually given to being political (This is not political on party lines) but recent proposals to discontinue State support for Visit Florida and local Destination Marketing Organizations is a major concern for anyone even remotely connected to the industry.
The proposals, by Speaker of the Florida House, go further than removing funding from Visit Florida but wish to dismantle and abolish the organization totally.
For those of you in other US States, and indeed in other countries, you should be aware of this issue as it could be coming to your area too. Many politicians, world wide, fail to recognize the benefits of tourism to both their economies and to the benefit of mankind generally. Not only does travel “broaden the mind” but tourism promotes understanding of cultures and enables peoples to just get on with each other.
But back to Florida.
In 2015 Florida welcomed 106.6 million out of state and international visitors. The international travelers came from 190 different countries. This means that one in five international visitors to the whole USA come to Florida.
Those visitor’s sending supported 1.4 million jobs in the state and every 76 visitors supports 1 job. They spent an average of $300 million per day in 2015 – a total of $108.8 billion, which in turn generated $11.3 billion in sales tax.
We have had six straight years of record tourism spending.
For every $1 that the state of Florida invests in tourism, $3.20 in tax revenue is generated. That’s a 320% return on investment. Where else could you legally generate that sort of return?
If the proposals to defund Visit Florida go ahead, then tourism figures will suffer. Just a 5% drop in visitors would mean a loss of $5.5 billion in revenue, $563 million in taxes and a loss of 70,000 jobs.
Local fishing and tourist related industries (which is virtually every business in Northwest Florida – Remember the effects of the Oil Spill?) would all suffer. The Destin fishing fleet alone brings in $173 million in after value dollars to Okaloosa and Walton counties and the city of Destin. 90% of those dollars come from out of state tourists.
Colorado tried this and they lost 40% of their leisure traveler market over three years and revenues declined by $134 million.
Without the state and local taxes generated by tourism, each Florida household would have to pay $1,535 just to maintain the current level of government services.
We would also have to have State Income Tax, which we avoid currently. Tourists pay over 24% of sales tax, which is the sole reason we don’t have a state income tax.
Pennsylvania cut their budget in 2009 from $30 million to $7 million. Every $1 cut from the tourism budget cost $3.60 in lost tax revenue. From 2009 to 2014 Pennsylvania lost more than $600 million.
Washington State cut their budget from $7 million to $0 in 2011. Their competing state, Montana grew their tourists 70% faster than Washington.
Colorado cut their $12 million budget to $0 in 1993 and lost $1.4 billion in traveler spending within one year. Tax receipts declined by $134 million from ’93 to ’97. 18 years later Colorado still hasn’t recovered their market share.
Increasing the tourism budget has increased travel spending in many states, for example –
California increased their budget $50.1 million and travel spending increased $32.4 billion.
Florida increased the budget $43.3 million and travel spending increased $30 billion.
Minnesota increased their budget $10.5 million and travel spending increased $3.5 billion.
New Mexico increased budget $4.6 million and travel spending increased $933 million.
(Figures from Roger Dow, Head of U.S. travel)
It is essential that the tourism industry in Florida – all members and all levels – get behind the action to save Visit Florida and indeed all the Destination Marketing Organizations. Failure to do so will result in critical loss of jobs, drastic loss of tax revenue, and severe hardship for tax payers in the State.
To cut funding to Visit Florida and other DMOs is bordering on insanity. No business person in their right mind would take this sort of action.
As a consultant to the tourism industry my advice – given free, gratis and for nothing – is to resist this move strenuously.
I’m not one for making resolutions, mostly because I change my mind so much! If you want to change something, better to just to get on with it than wait for some arbitrary date to start. That’s my excuse anyway. Similarly, looking backwards doesn’t help because we can’t change what has past – although as numerous people (apparently) are quoted as saying – if you don’t remember past mistakes, you’re doomed to repeat them!
So, in the interests of progress, let’s look forward.
I’ve read two articles over the end of the year break that I felt were right on point. I’ve attached links to these so you can read them yourself.
The first was by anti-aging & sports medicine pioneer, and futurist, Dr Robert Goldman (http://ow.ly/Akd9307C9Bt). Dr Goldman pointed out some of the changes that society will be subjected to over the next few years. What is most striking is the speed at which these changes will take place. I remember talking to a scientist with British Telcom back in the early ‘90s who said that they knew absolutely what developments would arrive within 5 years; they had a pretty good idea what would happen in the next 10 years but beyond that they were ‘wishing and hoping’! as Dr Goldman suggests we are now in the exponential age, where changes occur at an ever increasing rate. In many cases these changes happen faster than most businesses can adapt. If you read the article you’ll see that many developments will directly affect the Travel and Tourism Industry.
The second piece was by Christopher Elliott in the Washington Post (http://ow.ly/Hrvl307C9Ob). Chris is suggesting that 2017 is the year many people, especially Americans, won’t be traveling on vacation. He cites many reasons and offers suggestions of how as a tourist you can benefit (please go and read it!) but for those of us in the industry there are three main takeaways. That tourist will be looking for alternative accommodations, authenticity and satisfying their needs for instant gratification.
I’ve talked to many travel and tourism professionals over the past year and we’ve discussed the inevitable changes that are happening and I can’t think of anyone who has disagreed. After all, the signs are really clear – very ‘in your face’ as it were. However, many are not willing to accept the speed of changes.
Take ‘alternative accommodation’ – Airbnb in particular. Home sharing has expanded incredibly rapidly. Airbnb are now the largest accommodation provider in the world with over 2.5million homes (incidentally, they own no hotel rooms!) yet most of the vacation rental companies here in Northwest Florida’s Northern Gulf Coast seem to think think they are not a serious threat to their business model.
The past year the 1.5 million guest arrivals to Florida via Airbnb represent 114 percent year-over-year growth. This comes as Floridians increasingly embrace the home sharing platform as an opportunity to earn supplemental income and make ends meet. The Airbnb Florida host community grew 74 percent in 2016 to a total of 32,000 hosts.
Yes, the local industry says, but it’s in cities, not here.
This is the total supplemental income earned by Airbnb hosts in our local counties:
Bay County $4.9 million
Walton County $3.3 million
Okaloosa County $2.9 million
Escambia County $1.8 million
Santa Rosa County $683,000
That’s a total of nearly $13.6 million. True, it’s only 10% of the income from Miami-Dade alone, but its still remarkably significant.
People love the idea of either staying with a local host, or staying in the home of a host which they perceive differently than the relatively anonymous experience of a cookie cutter condo or a ‘standard’ hotel room.
This contributes to the ‘authenticity experience’ that comes from home sharing, boutique hotels and the like.
Chis Elliott also refers to ‘Instant Gratification’. I know I’m always talking about the attitudes of Millennials and younger Boomers but they do have have a seemingly out of proportion effect on our industry. Their behavior appears to affect the other sectors of our audience too. The ubiquity of smartphones and the ability to access information from wherever you are, makes the almost impulse decision to book a vacation all too easy.
You’ve bought things on Amazon. How many times have you been tempted by the ‘people who bought this also bought this’ suggestion?
Think what will happen when someone suggest “How about we go to The Gulf of Mexico next weekend?”. You look at your phone and up pops the local CVB websites – you see what events are happening, and guess what? You can book the Airbnb accommodation right there, and the concert tickets, and the Uber from the airport. Of course there was link to book flights too but you’ll probably want to do that with the airline because you get your miles there – and suddenly Delta Air Lines are offering 1 mile for every $1 you spend with Airbnb if booked through them – oh, and Uber credits too.
We have a change to the whole vacation booking experience, which is not taking 5 or 10 years to develop but is happening as we speak.
Put a note in your calendar to contact me at the end of 2017 and tell me if there have been no changes to your tourism business during the year. To be frank, I don’t think you’d be able to do that by June!
Whatever happens is going to be exciting. The evolution of the world’s biggest industry has always been fascinating and the near future won’t disappoint I’m sure.
Please follow the Owen Organization blog on www.owenorganization.com, sign up for the newsletter and follow us on Facebook at www.facebook.com/OwenOrganization. Lastly, check out the weekly ‘Talking Tourism’ column in the Northwest Florida Daily News every Sunday.
Back in 500 BC, tourism wasn’t much as we know it today. However, in Ephesus in what is now Turkey, a gentleman called Heraclitus was pondering, as ancients tended to do. “Change’ he said (in Greek) ‘is the only constant in life’.
We can’t look into the future with any certainty, and no matter how informed or clever we are, there’s always something ready to throw a wrench (or spanner, for my English friends) into the works.
This certainly applies to tourism, of course. We know that nothing will remain the same. The visitors of today will age, and with age comes changes in needs and changes in desires. Possibly also changes in circumstances. Different demographics emerge – see the rise of the Boomers and how as their children grew and left home, their vacation choices changed. The emergence of the Zoomers – Boomers with Zip – who seem to be mirroring (but with more money) the ways of the Millennials. This Millennial group are always touted as having completely different needs to prior generations, but research seems to be proving that generalization wrong, or at least to be too simplistic.
Then there’s the change from where visitors come. On a local level, that shows up when a neighboring state or country experiences a change in fortune (for better or worse) that increases or decreases visitation. On a world wide level the emergence of new economies has major impacts. Look at the enormous increase in world travel from China and India. Of course the ‘wrench in the works’ law comes into play, and the burgeoning Brazilian market (for the USA in general and Florida in particular) has taken a major hit with Brazil’s economic woes. Same applies to Russia. However in the long game, these are probably blips.
The thing is, tourism is increasing and has been for many decades. It’s an almost unstoppable effect as humans are forever inquisitive and of an exploring nature (even if it’s ‘soft’ exploring!).
The chart above (From the US Department of Commerce and National Travel and Tourism Office) shows the continuing rise in tourists to the USA since just 1999. Yes, the ‘wrench’ effect applied following 9/11 in 2001 and again with the global recession of 2008/9, but the overall effect is ever increasing numbers.
The Skift report chart above shows the trend and forecast for international visitors to the USA. Since the post 9/11 dip and the wobble 2007/9 the results and forecast are ever upwards.
The World Travel & Tourism Council (in their Economic Impact 2015 – USA report
http://ow.ly/N9lX3039BTN) show that recent years have seen travel and tourism growing at a faster rate than both the wider economy and other significant factors like automotive and healthcare sectors. Visitors from emerging economies are now a 46% share of international visitors, up from 38% in 2000. The problems in Russia and Brazil will have a slowing effect but falling oil prices (which affect living costs, increases disposable income and lowers air fares) will provide a contrary influence. So, expansion of tourism is predicted to continue at a stronger pace than last year.
Back to Heraclitus. Change is the only constant. We know that the future will not be the same as the past. If we rely on doing the same things as we always have – if we don’t at least look at the possibilities for change, we’re going to fail. We have to reinvent, and we have prepare for change.
‘Destination Think’ interviewed Jan Hutton, the Chief Marketing Officer of Gold Coast Tourism (The Gold Coast is famous and well established tourist region on the east coast of Australia), Jan said:
“Our world is precarious, many legacy industries are crumbling and amid this mayhem, tourism is flourishing. Tourism is a top priority for every country around the world now, as a means to grow revenue, grow job creation, grow industry, grow investment, grow trade – it is the sharp edge that can lead to so much more for a destination. This means that we now need to be agile, relevant and smarter than ever in an incredibly competitive landscape.”
The whole interview can be found here: http://ow.ly/1tJr3039FsS
Getting back to Heraclitus again, we must be preparing for the change to our business that will inevitably arrive. We must look at where our visitors not only traditionally originate and where they are starting to come from, but where they will come from in the future. We must be ready to adapt to the way people will think not only in the near future, but in 5 and 10 years. We may not be completely accurate in our predictions, but we can make pretty reliable guesses. The one thing we will know for certain – things WILL change.