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Prepare To Hunker Down

Prepare To Hunker Down. Thanks for joining us today. Your phone is automatically muted. Our class will start shortly. Darryl Wilson Southeast Tourism Society. Hunker Down for 2009. Change.

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Prepare To Hunker Down

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  1. Prepare To Hunker Down Thanks for joining us today. Your phone is automatically muted. Our class will start shortly. Darryl Wilson Southeast Tourism Society

  2. Hunker Down for 2009

  3. Change “It is not the strongest of the species that survives, nor the most intelligent, but the one that is most responsive to change.” - Charles Darwin

  4. Judy’s View Buckle your seatbelts – it’s gonna be a bumpy ride! -- Bette Davis (All About Eve)

  5. RTM Projections for Revenues 2008: 1-3% 2009: 5-10% (have a back-up plan for 20% down) 2010: Could last into 2010

  6. Issues • Economy • Volatile energy costs – gas • Weather • Airlines – deregulation • Overbuilt lodging supply • Declining attendance to attractions • Population shifts • Changes in visitor behavior

  7. NOT a Great Depression! Multiple Factors: • Dust Bowl • 25% unemployment (6% today) • Lack of basic economic regulation • Following WWI - too much production, not enough purchase ability

  8. Disney & Vegas • Disney: Buy 4 nights, get 3 free • Las Vegas: Bargains & Value - room + show + dinner

  9. Consumer Confidence Index • Americans are worried • Oct. = Now at 38.0 (1985=100) down from 61.4 in Sept. 144.7 in 2000 • 2000 - 2007

  10. Ups & Downs in Stocks

  11. DOW since 1928

  12. Good Places to Ride Out a Recession • Arlington, VA • Baltimore • Durham, NC • Lubbock • Corpus Christi • Madison, WI • Boston, MA • Pittsburgh, PA • Baton Rouge, LA • New Orleans, LA • Philadelphia, PA • Anchorage, AK • Lexington, KY • Buffalo, NY • Lincoln, NE • Chesapeake, Va. • Albuquerque, NM • Seattle, WA Source: BusinessWeek Magazine • Diversity of Visitor Mix: • Government • Industry • Military • University • Medical • Leisure • Sports • Group • Wedding/Reunion • Meetings • VFR • Pass-through

  13. Places Likely to be Hurt by Recession • Darien, Conn. (near NY) • Bloomington, Illinois (near Chicago) • Hoboken, NJ (near NY) • West Des Moines, Iowa (near Des Moines) • Garden City, NY (near NY) • Summit, NJ (near NY) • Westport, Conn. (near NY) • University Park, Texas (near Dallas) • Mountain Brook, Alabama (near Birmingham) • Lake Forest, Illinois (near Chicago) • Urbandale, Iowa (near Des Moines) • West Hartford, Conn (near Hartford) • Newport Beach, California (near Los Angeles) • Westchase, FL (near Tampa) • Rockville Centre, NY (near NY) • Naples, FL (near Fort Myers) • Ridgewood, NJ (near NY) • Charlotte, NC • Sioux Falls, SD Source: BusinessWeek Magazine

  14. Lubbock, TX Share of jobs in strong industries: 39.4%Number of workers: 100,523 Metro area unemployment rate: 4.1% Agriculture jobs: 1.32%Professional, Scientific, and Technical jobs (legal, accounting etc.): 4.01%Education jobs: 14.81%Health-care jobs: 14.81%Public Administration (Government) jobs: 4.42%Lubbock is home to Texas Tech University and hospitals including Covenant Medical Center, and it could benefit from resilience in the higher-education, agriculture, health-care, and energy sectors.

  15. Predictions • TIA: Lakshman Achuthan, Economic Cycle Research Institute: • “Global Recession” - “Sell value” • PwC: • RevPAR to drop 5.8% in 2009 (0.8% in 2008) • 2009 occupancy = 58.6% (lowest since 1971) • Smith Travel Research STR for 2009: - Occupancy = 59.1% (61.2% for 2008) - ADR = $108.52 ($107.44 for 2008) - RevPAR = $64.10 ($65.75 for 2008)

  16. Downturn Threats • Decline in occupancy tax collections – funding to your CVB • “Blame” from lodging, attractions, etc. 3. Municipalities “needing” your occupancy tax because sales taxes are down 4. Closing of CVBs / merging with Chambers and EDC groups

  17. Hunker Down Tips First: Prove travel’s economic worth to your city/county: 2,000 Hotel rooms in your destination X 365 Days 730,000 Available room nights to sell X 65% Occupancy rate (from Smith Travel STR) 474,500 Sold room night X $100 Average room rate (ADR) (STR) $47,450,000 Total lodging revenues ***How many other industries in your community generate that much revenue annually? How do you calculate? Smith Travel STR Report….or survey of lodging properties

  18. Hunker Down Tips Second: Determine daily expenditures: • $100 Lodging • $ 50 Food/meals • $ 50 Shopping • $ 40 Transportation/fuel • $ 20 Entertainment • $260 TOTAL DAILY EXPENDITURES How do you calculate? Research to determine average daily spending (intercepts or survey)

  19. Hunker Down Tips Third: Multiply daily expenditures x sold room nights: $260 X 474,500 Sold room nights in your destination $123,370,000 Total Revenues Generated By Travel To Your Destination Thus, if you have 2,000 hotel rooms your tourism industry is generating $123 million EVERY year. How many other industries in your county/city generate that much?

  20. Visitor Mix • Conduct lodging survey in January of 2009 for calendar year 2008 • Repeat monthly • Buy Smith Travel (STR Report) monthly • Talk with your hoteliers monthly….ask about 2008 compared to 2007 monthly

  21. Currituck County, NC

  22. Shreveport-Bossier, LA

  23. Hershey-Harrisburg, PA

  24. Lodging Visitor Mix

  25. Visitor Expenditures Next, know how much revenues you truly generate….by knowing how much each type of visitor spends.

  26. Visitor Segments

  27. Daily Expenditures • This helps your determine exactly how much you’re making on each type of visitor. • You can then calculate which segment is your most profitable visitor. • You can also evaluate what your CVB is doing to attract each customer segment, and how you are serving their visitor information needs.

  28. Hunker Down Tips January: 1. Conduct 2008 Lodging Survey (visitor mix for 2008 – survey all lodging properties) • Begin Monthly Intercept Interviews - Match to lodging mix - Business visitors: what industries do they represent? - Meetings: what industries? - Leisure visitors: what activities?

  29. Hunker Down Tips February: 1. Conduct January 2009 Lodging Survey (compare to visitor mix for 2008) • Continue Monthly Intercept Interviews - Match to lodging mix - Business visitors: what industries do they represent? - Meetings: what industries? - Leisure visitors: what activities? • Prepare & Present Monthly Report: - Lodging Report: 2008 and January occupancy, ADR, RevPAR, Supply/Demand, Visitor Mix - Intercept Report: Behavior, industries, expenditures - CVB Activities: What actions the CVB is taking

  30. Hunker Down Tips March - December: 1. Conduct monthly 2009 Lodging Survey (compare to visitor mix for 2008) • Continue Monthly Intercept Interviews - Match to lodging mix - Business visitors: what industries do they represent? - Meetings: what industries? - Leisure visitors: what activities? • Prepare & Present Monthly Report: - Lodging Report: occupancy, ADR, RevPAR, Supply/Demand, Visitor Mix - Intercept Report: Behavior, industries, expenditures - CVB Activities: What actions the CVB is taking

  31. Lodging – Decline Data Source: Smith Travel Research STR Report • Growth in inventory – 5% more than 9/11 – 2% more in 2009 2007 2008 2009 Occupancy 63.20% 61.20% 59.1% ADR $103.64 $107.44 $108.52 RevPAR $65.50 $65.75 $64.10

  32. Hunker Down Tips - Lodging • Get Smith Travel STR Monthly Report for your county/city • Know YOUR destination’s: - Occupancy % - Average Daily Rate (ADR) - RevPAR ……compared to others in your state ……compared to other destinations like yours • Monthly survey & report

  33. Airlines • 2008: loss = projected at $5 billion • 24 airlines ceased Jan-May 2008 - 8 U.S. (Aloha, MAXjet, Big Sky, ATA, Skybus, Eos, Champion, Air Midwest) • Service cuts in over 100 U.S. destinations • Route cuts, capacity cuts, mergers, survival Source: Air Transport Association

  34. Hunker Down Tips - Airlines • Know what % of your visitors fly-in • Route cuts will affect convention recruitment, and business recruitment • It’s important to track and monitor air cost and convenience (compared to your competition) • Objective: Maintain air service capacity • Report Monthly

  35. Convention/Meeting/Reunions • Reconfirm meetings 6-9 months out • Encourage local companies to hold their meetings locally • Work SMERF (social, military, educational, religious, fraternal) • Reunion self-planner button on destination website • Encourage locals to hold reunions in home town

  36. Hunker Down - Attractions • Attendance to attractions down • Need to monitor monthly • Visitor mix for each • Help attractions think local & regional

  37. Leisure • Know who they are • Know where they originate • Know their activities • Know their expenditures • Renew your efforts to provide “orientation & facilitation” - - get them to the cash registers • Visitor centers = selling showcases • Maps & visitor guides • Build database & E-marketing

  38. Group Tour • Affinity, affinity, affinity • Huge growth in student travel • Good potential: students, seniors, church groups, youth groups

  39. Customer Segments • Business • Meetings/Conventions • Leisure • Sports • Group Tour • University • Military • Medical • Pass-through Know your segments, and what you’re doing for each! How does your core tools (website, visitor guide)work for each

  40. Other Hunker Down Tips • “Shoe-leather” marketing: Be visible to your constituents (lodging, attractions, etc.) • Inform your constituents: Newsletters, monthly reports, etc. • Prepare to adjust budget: Based on your monthly survey, tracking, etc.

  41. Other Hunker Down Tips 4. Hold frequent constituent gatherings: Benchmark, keep them reporting & talking 5. Talk to your state, regional peers: Know what is going on around you • Talk to your hotels/lodging properties: Prove you understand & care

  42. Other Hunker Down Tips 6. Know your customer: - Be out there talking to them 7. Remember: The most likely new customer you will get is one just like the happy/satisfied customer you have today.

  43. The three regions the country is dividing itself into are The New Sunbelt, The Melting Pot, and The Heartland New Sunbelt Melting Pot Source: William H. Frey, Brookings Institute Heartland States

  44. Summary • Know your numbers & stats • Prove your worth • Defensive and Offensive • Know your visitor segments & what you’re doing for each • Research & tracking • Communicate like your job depends on it • Be visible

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