Tourism will help save American retail, the oft-overlooked economic engine of the sector

We’ve known for years that shopping is one of the leading destination activities for leisure travelers.  No, it’s not usually a motivator of destination selection, but the siren call of tourism-driven shopping has always been a major economic stimulant of a local economy.  It may not be as sexy as the allure of food and beverage or as much of a generator of PR buzz, but retail has always been a major factor in the vibrancy of our downtowns and the tax coffers of local governments.

There’s been lots of attention paid to the fate of restaurants and bars during the pandemic, and with good reason.  Brick-and-mortar retail has also suffered, but traditional retail was already in decline before COVID-19 due to the convenience of online shopping, high rents, major chain store failures, and other factors.  The pandemic accelerated that decline as consumers gravitated increasingly towards e-commerce.  McKinsey reports that 73% of U.S. consumers have changed stores, brands, or the way they shop during the pandemic.

Now communities are faced with even larger numbers of retail vacancies.  Along Chicago’s famed Michigan Avenue Magnificent Mile, more than a fifth of retail space sits empty and sales tax generated by retail on the street declined by $90 million last year.  A recent UBS analysis found that one in 11 retail store locations may close in the next five years.  And national retail chains are no longer rushing to fill  vacant storefronts in prized locations.

So what, if anything, will fill these spaces?  We’re already seeing a surge in “non-store retail,” businesses operating out of former retail spaces that serve no purpose other than selling merchandise to consumers directly online.  That may be good for a landlord’s bottom line, but it does nothing to create a vibrant downtown that locals and travelers alike want to visit.  Some locations will be taken by e-commerce platforms wanting physical locations, but those will be relatively few and far between.  “Pop-up” stores hold some promise, particularly as incubators of start-up retail, but they’re just that–temporary solutions.

Experiential retail holds promise, but the investment may be too great for some mom-and-pop stores still recovering from the pandemic and struggling to attract and retain staff.  Experiential retail isn’t necessarily limited to big brands–new immersive retail venues like the soon-to-open Goo Goo Chocolate Company in Nashville may offer a model for smaller brands and communities with their own homegrown businesses.

Tourism is one proven generator of retail activity for small businesses.  This is true for downtowns both big and small; but the need for visitors to replace revenue lost from work-from-home, the slow recovery of international and business travel, and residents still skittish about returning to business as usual is especially acute in larger cities like Raleigh.  Travelers will still shop, but there have to be shops for them to keep doing so.

Destination marketing support is critical to the recovery of retail, and driving visitors to locally-owned independent retailers will be  important in both traditional tourism destinations and those that are not.  Those businesses are once again the future of a healthy retail sector, robust tax collections, and revitalized downtowns.  If elected officials are serious about their love of small business, they’ll also support a vigorous destination marketing and enhancement effort. It’s one of the only options cities have left to save retail.

 

This summer, be kind when you unwind

I just returned from a week-plus vacation trip across the American Southwest with my wife and daughter.  The journey was our first trip of any substantial length since the pandemic commenced, and we had a great time seeing the classic sights of the Southwest: Santa Fe, the Painted Desert, the Grand Canyon, Las Vegas.

But the trip was also a reminder of the continuing impact of the pandemic upon the hospitality sector.  As we witnessed over Memorial Day weekend, consumers will generate extraordinary demand for parks, attractions, and hospitality businesses as Americans hit the road (or even when they stay local) this summer and reconnect with friends, family, and places both familiar and strange.  And to put it bluntly, much of the sector isn’t ready for it.

Facing an unprecedented imbalance between the available supply of employees and business demand, many hospitality enterprises are already struggling to keep up.  To make matters worse, their guests are often difficult or just downright maniacal.  In a survey of hospitality-oriented businesses we performed for a leisure-oriented destination earlier this year, 1/3 of owners and managers said their guests had become somewhat or significantly more demanding during the pandemic.  And that was well before many Americans had been vaccinated and traveling again.

I observed many service breakdowns during my trip.  Some were the obvious result of a lack of staff, while others were due to the collapse of a hospitality culture at brands that traditionally sell themselves as delivering extraordinary service. I also saw numerous instances of businesses already limiting capacity (and their own revenue) due to staffing shortages and not because of health and safety mandates.

This summer will be trying for many businesses and their employees. You can help by preparing accordingly–doing your research to avoid surprises, making reservations, buying tickets in advance. But you can also help by treading lightly when things go awry. Don’t take out your frustrations on your server, the front desk agent, your housekeeper.  Most frontline staff are working harder than ever, and many employees are in new surroundings.  Some may even be management not accustomed to a front line job.  Go out of your way to tip for great service and compliment staff who are doing an extraordinary job under difficult circumstances.

I watched one young employee at the El Tovar Hotel at the Grand Canyon who had been at her post since before dawn patiently tell guests about long waits for breakfast and inform them of their options, knowing it wasn’t her fault she had been put in that position and recognizing she was in for a long day of frustrated customers. She was grateful for a kind word of encouragement, more than the perfunctory “thank you” said in passing. If you want to complain, speak to management, send an email, make a phone call. But don’t take it out on the frontline staff. They’re in for a rough summer.

And a word to hospitality businesses…yes, it is a very challenging hiring environment but there are little things you can do to help minimize the stress upon your staff. For example, too many places still don’t update their hours of operation on their websites, Google listings, and social media platforms.  If you’re running a reservations-only business, make it clear that walk-ins are unlikely to be served. Reward guests whom you think have been justifiably wronged with a glass of wine or a free appetizer.  Tell  staff to provide honest wait times and not what they think the customer wants to hear. Be clear about what your rules are about masks.  After all, expectations are the root of all disappointment, and we need to manage those expectations as best we can.

Patience should be the buzzword of the summer for all of us. If you can’t be patient, take a trip somewhere you’re more likely to get a table, reserve a room, and escape the crowds.  Be smart and plan ahead. And always be kind.

 

What I Learned at My Summer (and Fall) Job

Before most of us worried about paying the rent or saving for a child’s college education, there was the summer job.  Many of us worked summer jobs in high school and college that may not have been relevant to our future careers, but which still shaped our lives for many years to come.  Whenever I talk to someone about the formative lessons learned during their youth, one of the first things they reference is a summer job.  A summer spent lifeguarding or delivering balloon bouquets (my first summer job) can be just as influential upon our life experiences as an internship at a Fortune 500 company.

I don’t know, however, that I’ve ever had a “summer” job as formative as my most recent one: serving as interim CEO for the Explore Asheville Convention and Visitors Bureau in Asheville, NC for five months, from July through November 2020.  Yes, during the global pandemic and a period of national social unrest.  But I was lucky–I was surrounded by a talented team and grateful stakeholders in a remarkable place that made the experience of running a destination marketing organization (DMO) relatively painless.

While I learned a host of lessons that will make me a better consultant, manager, and person, the greatest lesson learned is that the job of DMO CEO (or any CEO, for that matter) is a constant daily struggle between the desire for long-term strategic planning and the need to extinguish short-term brush fires.  While the role of chief executive has continued to evolve in communities and DMOs of all sizes, with a greater emphasis upon leadership, vision, and collaboration than ever before, most CEOs still ricochet like a pinball from one “crisis” du jour to another.

A key skill for any CEO is to keep their “eyes on the prize” and avoid succumbing to the tyranny of the present.  There’s no substitute for clear-eyed commitment to the discipline provided by a good long-range plan, despite the many brush fires that burn around us.  Those brush fires will never completely go away, so you’d best learn to fight them and keep moving through the forest.  That’s a summer job lesson I’ll never forget.

And on this National Tourism Week, I salute those DMO CEOs who continue to fight the same good fight in every season, every day.  You have my respect more than ever.

Another Reason to Market the Mask

While my own fair city of Asheville has been under a mask wearing mandate for the last month, many states and cities are just now beginning to implement similar restrictions within their jurisdictions.  These requirements have added another element to the already fine line many destination marketing organizations and hospitality entities are walking right now–the one located between community health and commerce, marketing to local customers and visitors, and promoting responsible behavior as well as a consistent brand image.

There are plenty of reasons to wear the mask.  What might not be as obvious is whether to communicate your city or state’s mask wearing policies to your customers and visitors before they arrive at your front door, via social media, advertising, email, and/or your website. I realize there may be a reluctance to do so–masks are a stark visual reminder that life has changed and that the party came to a screeching halt.

But with so many cities and states leaving it up to businesses to enforce the mask mandate (and with so much confusion around the differing levels of restrictions from city to city), the obligation to communicate via our marketing platforms has never been so clear. Beyond the obvious need to protect their health, we’re literally asking our frontline employees to act as nightclub bouncers for mask miscreants.  This requirement, while necessary, puts an already beleaguered labor force in a difficult position. Most frontline staff, ably trained in providing hospitality and guest service, didn’t sign up to be the muscle at retailers and restaurants.

So we owe it to our employees–the people who deliver upon your brand every day–to do what we can to market the mask.  And I believe there are many savvy travelers and customers out there who are looking for places where they feel safe and in control of their surroundings.  Marketing the mask will help them make informed decisions about where to spend their time and money.

 

 

How Much Will Your Visitors Feel in Control?

New Las Vegas television adWhat happens in Vegas doesn’t always work in places that aren’t Vegas, but I often look to the smart people out in the desert for clues to trends in consumer behavior and then watch how they respond.  I don’t think any destination pivots as well as Las Vegas does.

You may have seen the new Las Vegas Convention and Visitors Authority (LVCVA) television ad that debuted last week.  Themed as “a new Vegas for a new reality,” the ad emphasizes a variety of intimate experiences available in the destination.  You won’t see more than two or three people in any one shot–no artist-in-residence concerts, no crowded clubs, no imagery of a packed Strip. Some of that is likely by necessity, until more is known about how those quintessentially Vegas experiences will look and feel as they reopen.

But I think the ad is also reflective of a need to communicate the perception of personal control and safety. Even as America reopens, we know that not everyone is ready to venture into casinos, restaurants, and arenas.  And it’s impossible for any destination or tourism partner to promote or guarantee safety, especially with an unseen virus.  But you can communicate the perception of safety by showing intimate experiences, wide open outdoor spaces, and time spent with loved ones.

It’s also the perception of personal control over travelers’ surroundings.  This latest research from Destination Analysts shows that activities that travelers most prefer right now are those where the individual has a great deal of personal control (or at least the perception of control)–outdoor activities, road trips, and visiting friends and relatives. And staying at a beach resort is considered among the top three most relaxing travel experiences, along with visiting friends and relatives and taking a road trip.  Despite viral stories like the guy dressed as the Grim Reaper visiting a Florida destination, it’s likely most people feel pretty comfortable about the beach because it’s viewed as an easy place to socially distance.

So yes, the perceived safety of a destination, attraction, or activity is important. But a feeling of personal control over their circumstances may be even more critical to the traveler right now. That’s why the selection of effective imagery and being able to curate personalized and intimate experiences for the visitor (depending upon their level of comfort) is more vital than ever.

Dazed and Confused

Alright, alright, alright.

We get it. There are all kinds of people who want to flaunt their scorn of social distancing, masks, and other coronavirus-related restrictions.  Their videos and photos make for good social media fodder that spreads virally (pun intended).  They spark outrage and distrust of our fellow humans.

But I still believe most Americans want to do the right thing.  Yes, as a nation we’ve done a poor job of educating the citizenry about what that right thing is and why it’s important, hampered by a fragmented media, a complex message, and a lack of cohesive leadership.  Now America’s visitor economy begins its slow return and our destinations, restaurants, retailers, attractions, and accommodations start to welcome travelers again.  Those same Americans who want to do the right thing will leave their homes and travel to places that in some cases look very different from their own cities.

America is currently a patchwork quilt of different stages of reopening, rules, and regulations. It’s one thing for a traveler to know the limits of what they can and can’t do in their hometown.  It’s another thing for them to know what the current law of the land is two states away. Confusion will be the order of the day unless we take steps to help potential visitors understand what’s open and what’s expected of them as guests in our communities.

My home city of Asheville, North Carolina is just one example of Covid-19 confusion. The State of North Carolina has mandated one set of regulations in its reopening phases.  Buncombe County (where Asheville sits) has regulations that are slightly different and much tougher regarding masks (it’s generally mandatory to wear them in most indoor public places). To add to the befuddlement, a suburban neighbor of Asheville–the charming town of Weaverville–has opted out of Buncombe County’s mask requirements.  How’s a visitor from, say, Illinois supposed to keep up with all of that?

I’m not blaming local officials for the differences in restrictions.  That’s a different, complex issue.  And following local health guidelines is essential. But this is where destination marketing organizations and their partners must fill the information gap.  That gap includes everything from hours of operation to the status of dining options to mask requirements. It’s bewildering enough for residents, but at least they generally know their local sources of news and where to find information.  Tourism organizations and hospitality businesses have to step up their flow of easy-to-find, updated, reliable information and assume that, no, not everyone knows. Otherwise the confusion becomes just one more barrier for the industry to overcome.

 

 

The Hospitality Sector’s Next Big Challenge: Everyone Else’s Hospitality

One of the more insightful pieces of coronavirus-related tourism research I’ve read in the last few weeks comes courtesy of the folks at Destination Analysts,  as part of their ongoing surveys of American travelers about their intent to travel.  These findings are a couple of weeks old and while I’m sure the indicators continue to improve modestly, they should be a caution flag to anyone in the travel and tourism sector.

When travelers were asked April 24-26 about their level of agreement with the statement, “I do not want travelers coming to visit my community right now,” 64% of respondents said they agree or strongly agree.  This finding is an improvement from mid-April, but it’s still concerning that only about a third of Americans want visitors in their cities and towns, even while many of those same people increasingly want to travel themselves.  It’s a legitimate concern, of course.  And while the result may differ by region, demographic, a destination’s anticipated source of visitors, population density of the community, etc., it’s still something every destination marketing organization and their partners should be thinking about how to address.  You can have the best recovery marketing plan possible and still be met with community opposition.

Destination Analysts also asked the question, “How would you feel if you saw an advertisement today promoting your community as a place to come visit when it is safe?”  The results are better here–only 36% said they would be unhappy or very unhappy to see such an ad which, if we’re honest, may not be much different from many communities’ pre-pandemic sentiments.  But combined with the first result above, it’s another indication that not everyone in town is going to be happy about seeing visitors, even if they want the benefits they bring with them.

Time–and a continuing decline in deaths and hospitalizations–will help, but likely won’t be enough given expectations for a second wave of coronavirus at some point.

So what can you do?

  • Demonstrate empathy, for starters.  You’re as much a resident of your community as everyone else. You’re just as concerned about your own health and that of your neighbors, children, grandchildren, and parents.  Your progress in rebuilding your community’s visitor economy is dependent upon a successful reopening, even if achieved in phases over a long period of time.  You’re not going to jeopardize that deliberately.
  • Regularly communicate what you and your partners are doing to keep the community safe, via pre-visit communications, enhanced hotel room cleaning processes, the maintenance of social distancing at attractions, restaurants, and retailers, and other stringent procedures intended to protect both residents and visitors. It’s also important to dispel myths and stay on top of misperceptions.
  • Build trust with local officials.  Chances are, some of them think inviting visitors to your community is the worst possible thing right now. Be completely respectful of their decisions, but reach out to be a resource and provide accurate information.
  • Collaborate with other local organizations.  Tourism needs to make the tent as big as possible right now.  More than ever, this is no time to be an island.  James Meacham and his team at Visit Rowan County, NC are doing a nice job of preparing both the community and industry partners for a gradual reopening of Salisbury and other communities through activities like creating best practices for reopening and operations with the local chamber of commerce and economic development commission and then sharing them with partners and the public.
  • Be flexible and adapt accordingly. Every American community is regrettably still one mass outbreak away from returning to a complete lockdown.

Six Steps for Planning a Post-COVID Marketing Recovery

As a planning consultant who’s hired to offer counsel to my valued clients, it pains me to say this, but…

I don’t know any more than you or anyone else does about what the future looks like.  My crystal ball is hopelessly broken. As I said in my last blog post, we all need to be comfortable with ambiguity for a while.  Anyone who says otherwise is either pushing an agenda or is just naive.

But I think my advice below works for any significant shift in the external environment.  While we’ve never had to deal with a global pandemic like this one in our lifetimes (and hopefully never will again), this is a time-tested approach to adapting to marketplace shocks big or small.

I need to make one thing clear, however. Only you know when the time is right to begin the return to normal business in your community. Do nothing to endanger yourself, your employees, or your destination, and please abide by the most current guidelines offered by public health officials.

  1. Review pre-pandemic drivers of demand.  What audiences were delivering revenue before the pandemic?  What segments were the most profitable? What markets are dependent upon an attraction or a particular business being open and at full operation? And what markets are likely to be the most loyal to you?  Those consumers are probably the lowest-hanging fruit in assessing demand for a recovery period.
  2. Determine the likelihood of each driver to return and in what proportion.  What markets are still likely to be in lockdown even after a lockdown is relaxed?  For example, older consumers are likely to be among the last to venture out for anything beyond the purchase of basic supplies, healthcare, and other essential products and services.  What audiences will have the discretionary time and income available in a recessionary (at best) environment?  And what segments may be unprofitable (e.g. requiring deep discounts or incentives to lure back) for you to pursue at the start of a recovery period?
  3. Assess potential motivators for each driver. We don’t yet know what’s going to release any pent-up demand or stimulate new spending by consumers on dormant categories such as travel.  Some of the elements that need to be present to generate market demand may include the return and general acceptance of frequent air passenger travel; the reopening of a large corporate entity in your community to stimulate business travel spending; the availability of a critical mass of dine-in restaurants; or  a full lifting of all lockdown restrictions in the destination.  Every community and every market will be driven by different factors.
  4. Identify potential new markets.  Are there markets that weren’t significant contributors of revenue prior to the pandemic, but which may now be more attractive or feasible due to the seismic changes in the external environment?  One example is family reunions.  Once it’s safe to do so, many families may want to reconnect in places that are easy to reach and offer value and convenience.
  5. Audit messaging and media.  Imagery that may have been appealing before–large events, a party atmosphere, etc.–won’t resonate for many destinations in the new environment. Images of families enjoying time together, romantic getaways, or outdoor activities performed at appropriate distances are more likely to appeal to consumers.  What’s open and what’s still closed? Avoid the temptation to talk about how safe your community is or how few COVID-19 cases you’ve experienced. It could all change tomorrow. Carefully consider the best ways to reach your best audiences–old and new–in a media marketplace where consumer behavior and patterns of consumption have changed.
  6. Monitor, adapt, and proceed with caution.  Be prepared to adjust on the fly. There’s a lot we don’t know right now and the unexpected will become the expected. Plan to be flexible and build in escape ramps wherever possible for messaging, media, and target audience. Remember, too, that your mileage may vary.  Every community’s experience in the recovery period will be different, and what works for one destination won’t necessarily be appropriate for another.

Planning in an Ambiguous World

Once upon a time during job interviews I would ask one question without fail: “Are you comfortable with ambiguity?”  Naturally, the job candidate always said yes.  But the point of the question wasn’t to solicit a response that was better than another candidate’s.  No, it was to make the candidate realize they were entering a world that didn’t always offer easy answers and rote work assignments.

Welcome to 2020, the ultimate ambiguity.

The irony, of course, is that we’re supposed to live in an age of more data (and more answers) than any time in history.  I’ve embraced the supposed certainty of data as much as anyone.  And if you’ve paid any attention to social and traditional media in the last month, we have more so-called experts than ever.  We’re drowning in data and “expertise”…yet still thirsting for easy answers.

Get ready for more of the same.

Many of us are already just trying to get by from day to day.  The idea of planning for the future seems preposterous when so many people face such uncertainty almost literally every hour.  But great leadership always takes center stage in the absence of certainty.  If you’re waiting for less ambiguity to plan for the future, you’ll be waiting awhile.

But what does that future look like?  Again, no one can say with absolute confidence but I know this–we’re going to be responsible for shaping it.  Every one of you will be sought out to help lead the recovery from a crisis this great in scope and magnitude.  Given that, it’s not too early to think about what steps  to take once the all clear is given and the health risks have diminished.  Many of you are already doing great service in support of your communities.  Keep it up–but get to work planning your community’s recovery, too.  Here are six ways to help shape that response:

Stay in touch with your team.

Like most of us, they’re worried about their health, their families, and their livelihood.  Many are furloughed or laid off.  But if it’s financially feasible to bring some or all of them back at the right time, they will be needed. Badly.  Establish regular communication with your people so they know what’s going on and can hit the ground running at the appropriate time.

Build, rebuild, and curate your networks.

The recovery will require all the local and state government and private sector support you can muster, with everyone rowing in the same direction. Now’s also the time to reach out to small businesses and other key parts of the visitor economy to let them know you’re still here (don’t assume they know that–they have a lot going on), remind them of the resources available to them, and that you’ll want to work with them even more once the crisis has passed. There’s still going to be a lot of misinformation and confusion once we begin to emerge from this. It won’t be as easy as flipping the sign on the door to say “Open.”

Take a long hard look at your target audiences.

Regardless of whether the economic recovery is V-shaped, U-shaped, or a long Nike swoosh, we know from past economic downturns that travel does not bounce back equally for all people and in all places.  One of the limitations I see in some of the national market research being conducted during the crisis is thinking of the market only in the aggregate and failing to recognize that travelers are not a monolithic audience.  Although some of it is intuitive, we’re going to need to know about who is more likely to get in a car or board an airplane to travel for work or leisure.  Since you’re likely to have fewer financial resources once the economic recovery begins, understanding the audiences who are most likely to travel and those who are not is going to be critical to making your dollars work harder than ever.

The road to recovery is going to be very uneven, and segmentation of audience is vital for effective media and messaging.

Take a long hard look at your messaging.

Some of the words and imagery we have used just aren’t going to work in a post-lockdown world.  There will still be many people who are hurting, grieving, and suffering financially.  That’s not to say we shouldn’t sell ourselves when the time is right.  We should.  But now is the time to think about what works and what doesn’t.  For example, images of people gathering in large groups will probably be uncomfortable for a while even after we emerge from our collective cocoon.

Focus all your resources on your strengths.

The recovery is the time to avoid distractions. All it does is water down your remaining precious financial resources.

Take care of yourself.

Seriously.  Your community needs you in the days and weeks ahead.