Travel -Tourism – Marketing A Bright Spot in Rural America? John Keller.
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Transcript of Travel -Tourism – Marketing A Bright Spot in Rural America? John Keller.
Tourism Defined
A segment of the travel market that consists of individuals and groups that are known as "free and independent travelers" or FITThis definition distinguishes FIT travelers from business travelers or convention visitors who typically travel when and where necessary, rather than choose a destination based on its individual appeal. However, in assessing economic impact, business and convention travel are normally included
Tourism and Leisure Characteristics
Tourism is one of the most sensitive of all economic opportunities relative to public resources. Without public sector investment, most tourism sites remain at the same scale with limited seasonal duration. A major exception is gamblingTourism and leisure returns major investments to the public sector and is heavily taxed by the government. Generally, the more money the public pumps in tourism investment – the greater the return in taxes and receipts.
Who Benefits?
Governmental Cash FlowsTourist or Leisure tax Increased sales tax receiptsEnhanced property tax returnsCMB & Liquor taxEntertainment tax
Tourism Segmentation
VacationsHoliday TripsBusiness Trips Including SalesRecreation and Leisure TripsGambling and GamingSportsResearch and Information - GenealogyConventions/Conferences
Top Tourism Demand
1. Eating and Drinking Places2. Places of Accommodation3. Recreation and Entertainment Sports Golf Theme Parks and Cruises
4. Airlines5. Local transportation – taxis and rentals
Top $ Economic Returns
Transportation and [Arrangement?]
Lodging
Food/entertainment
Retail Sales – specialties
Beverage and liquor
Primary and secondary attractions
The Context: The Nation
Almost every state (46 out of 50) counts tourism among its top three revenue-producing industries. This does not include Kansas and Nebraska!
Nebraska!
“I even thought that I was dead till I found out I was just in Nebraska.”
-Clint Eastwood
in “Unforgiven”
In Parlance of Tourism
Its not where you go, its how much you spend
Its not how many people, its how many groups
Its not how much you spend in a day, its how many days you spend
Top 5 World Revenue Earners 2005 in Billions
84.5
36.733.5
2919.9
United States
FranceSpain Italy China
Let’s Get This Out of the Way
Tourism (generally a rural phenomena) in the U.S. can reach the very height of quality and plumb the depths of the disastrous
In other words – it can really suck
It can mine whole economies
It is generally not sustainable
It exploits cultures, people, workers, communities, and whole regions
Creating Amenities
“Asset theory of tourism” - successful tourism depends on the availability of some immobile attraction that people want to visit.
Popular tourist attractions are made rather than discovered.
Rural tourism is just not linked to outdoor activities. There is great diversity in tourism activities- ethnic, historic, special attractions, shopping, eco-tourism, religious events, etc.
And Yes – Kansas Land of Ahs
The fun started immediately when I crossed the Missouri River into Atchison, in the northeast corner of Kansas, and found that the town was named for a senator - from Missouri. In fact, David Rice Atchison was president of the United States for 24 hours, beginning at noon March 4, 1849. He snoozed for most of his term.
Home of the Black Squirrel
In 1987, the "Black Squirrel Song" became Marysville's, Kansas official anthem:
"Lives in the city park, runs all over town
The coal black squirrel will be our pride and joy
Many more years to come!"
Weirder & Weirder
Samuel P Dinsmoor at 89 & his 20 year old wife and year old son
Picture of embalmed Samuel Dinsmore in his Mausoleum at Lucas, Kansas here
Assessing Tourism Impact
Method 1 – Visitation Assessed monthly, quarterly, annually Repeat visitations are analyzed separately to
detect trends and patterns
Method 2 – Geographic Patterns Within 50 miles 51 – 100 miles Over 100 miles Out of State International
Tourism Impact - cont
Method 3 – Market Segmentation IndividualsCouplesFamiliesSchool GroupsTour GroupsOther
Tourism Impact - cont
Method 4 – Spending PatternsAverage Total per visitPer CapitaSegmented
Food and DrinkEntertainmentAccommodationsRetailTransportation
Economic Impact
Segmented Overnight ExpendituresAccommodations – 1.00 - $16,197,001Food/Drink .59 - $9,510,601Food Stores .07 - $1,062,098Ground Trans. .42 - $6,831,224Recreation .34 - $5,321,185Retail Sales .47 - $7,627,798
Analysis of Multiplier Impact
The Multiplier Effect A two percent increase in occupancy would
increase gross annual room revenues by $1,000,000
A five dollar increase in the average daily rent (ADR) would increase gross revenues by $1.5 million
Calculate how much the multiplier effect would increase revenues to other sectors, such as retail sales, for a increase in motel rooms?
Employment Impact
Employment Impact due to overnight stays Accommodation 1.00 – 278 Eating & Drinking 1.45 – 417 Food Stores 0.10 - 28 Ground Trans 0.60 –
167 Recreation 0.70 – 195 Retail Sales 0.60 – 167 Air Transportation 0.60 - 167
Tourism and Leisure Demand Factors
Population Increase If all other factors are held constant the demand
for a tourism commodity increases as the available population of potential consumers increases
Family Structure Changes Family oriented tourism and leisure is a major
demand factor in tourism. As the family structure changes demand shifts to meet the new reality of the family – its size, composition, age, culture
Demand Factors - cont
Distance to Source Tourism and leisure visits are distance sensitive. A
great many leisure and tourism visits will be within a day’s drive of the clients. Major example of decreasing distance is to build more golf courses
Transportation Rates Nearly all tourism and leisure is sensitive to
transportation costs. Transportation cost and time minimization is the key to increasing visitation. Conversely, increasing transportation costs will have a major impact on demand – just ask Australia
Demand Factors - cont
DemographicsAGE
The consumption of tourism and leisure goods is highly structured around age. Changes in age patterns impacts both demand and the type of leisure consumed
Economic Status - AffluenceThe ability to pay remains a major factor in the
type of activities, the amount of time spent in visitation, and the cost of accommodations
Factors the Influence Gross Spending
AgeFamily compositionLength of stayLocation of visit (NYC is a lot more expensive that Disney World or Vegas)Income level of clientType of transportation selected (if you fly you rent cars)Nature of opportunity at source (skiing is expensive – so is eco-tourism)
Tourism Diversity
Why Do You Choose A Destination? Have not been there Been there and liked it Cost Interest in particular place/activity Kids/family/partner want(s) to go Diversity of activities at source 2 fers – get your tourism around your business
events
Marketing and Advertising
Tourism marketing involves identifying local attractions, developing facilities and services to meet visitor needs, identifying the tourism market segment which applies to the attraction, and pursuing linkages within those market segments. Tourism marketing must consider complex factors – distance from population centers, availability of good transportation, cost involved, competition, etc.
Marketing Tourism
Identify the Target MarketDemographic (age, income, gender
education and occupation)Geographic Psychographic (enthusiasts such as
boating, skiing, gardening, history, military)
Position Statement
The Position Statement – “Positioning” Positioning is the place you occupy in your target
customer's mind The goal is that, when your customer decides
they're ready to consume tourism, they think of you first – or at least they think of you?
The positioning statement usually includes two elements: Your unique selling proposition (what makes your business special) and your target market (your most important customer segment).
Marketing Strategy
Marketing Strategy entails emphasizing key elements (Peeing) of your Marketing MixProductPlacePricePromotion
Marketing MixFor example, if you have a great array of desirable products (+), at very competitive prices (+), but a poor location (-) and a moderate amount of promotion (0), your assessment might look like this:
Your Enterprise
Product + advantage
Price + advantage
Place/Location - no advantage
Promotion 0 disadvantage
Marketing Objectives
The final part of the marketing plan is the creation of clear objectives for the amount of advertising required Must be specific (increase in visitation or an
increase in first time visitors) Must be measurable (increase profitability by 5.0% Must be realistic (objectives must be based on
reasonable criteria such as an increase of 5.0% in first time visitation compared to the previous 6 months)
Immutable Laws of Marketing
1. It is better to be first than it is to be better. 2. If you can't be first in a category, set up a new
category you can be first in. 3. It is better to be first in the mind than to be
first in the marketplace. 4. Marketing is not a battle of products, it's a
battle of perceptions. 5. The most powerful concept in marketing is
owning a word in the prospect's mind. 6. Two companies cannot own the same word in
the prospect's mind
Marketing Laws - cont
6. The strategy to use depends on which rung you occupy on the ladder.
7. In the long run, every market becomes a two horse race.
8. If you are shooting for second place, your strategy is determined by the leader.
9. Over time, a category will divide and become two or more categories.
10. Marketing effects take place over an extended period of time.
11. There is an irresistible pressure to extend the equity of the brand.
Marketing - cont
12. When you admit a negative, the client will give you a positive.
13. In each situation, only one move will produce substantial results.
14. Unless you write your competitor's plans, you can't predict the future.
15. Success often leads to arrogance, and arrogance to failure.
16. Failure is to be expected and accepted. 17. The situation is often the opposite of the way
it appears in the press.
Marketing - Conclusion
18. Successful programs are not built on fads, they're built on trends.
19. Without adequate funding, an idea won't get
off the ground. 20 When things go really Wrong it can get ugly
Marketing As Branding
“Marketing is building a brand in the mind of the prospect." "If you can build a powerful brand you will have a powerful marketing program. If you can't, then all the advertising, fancy packaging, sales promotion and public relations in the world won't help you achieve your objective."
Branding means creating an emotional association (such as the feeling of success, happiness, or relief) that customers forms with the product, service, or company
Last Step - Feasibility
The failure rate of rural tourism and promotion ventures without competent feasibility studies is 3.5 times as high as those with proper assessment
The core of the feasibility study is the assessment of the penetration rate