Michael Gehrisch: Numerous Challenges Bring Huge Opportunities

The destination marketing industry is large, and it continues to evolve as travel and tourism do. There is a heck of a lot of change going on, and many challenges out there, but the opportunities have never been better.

Sure there's competition, but that creates the need for marketing. And that's the primary responsibility of DMAI's members - destination marketing organizations (DMOs) who number nearly 700 from around the world. Given this, we see DMOs playing an even more critical role over the next several years, making sure their destinations' attributes are marketed and sold appropriately.

DMAI is in the final stages of conducting its upcoming Futures Study, to be released mid-summer. We engaged Karl Albrecht International (KAI) to identify key trends, events, and developments that will shape the destination marketing sector over the next five to 10 years. The research team investigated a broad range of information sources, including KAI's TrendBank of more than 500 business trends, CEO working groups, expert interviews, and online surveys of more than 150 DMO CEOs, evenly spread from small to medium to large destinations.

The report identifies a number of challenges that are shaping the industry's future. I would like to comment on just a few.

Top Five Challenges - and Opportunities - for DMOs

1. Preserving destination marketing funding. In the United States, the majority of the funding - for our members, it's 85 percent - comes through the destination occupancy or marketing tax, also referred to as the hotel tax. There are different groups (within the government), particularly in times of weak economy, that want to use those monies collected for traditional purposes and other municipal activities, unrelated to tourism. It's a constant threat and the No. 1 issue for our members.
2. Enhancing Web site design and implementation, particularly for the leisure traveler. DMOs that have a great Web site design and implementation are ahead of their competitors.
3. Shifting content to the Internet. Traditionally DMOs would provide information via pamphlets and brochures. People now expect to go to the Internet and get that information immediately.
4. Adapting to the fact that consumers are comfortable ordering online, particularly for travel.
5. Removing the perceived barrier to entry into the United States for travel.

Looking Into the Future

Five or 10 years down the road, the DMO will have four core functions revolving around the visitor, who is either a leisure traveler, business traveler, or group meeting attendee. The functions include:

1. Informing, educating, and advising the visitor (through advertising, travel writers, and the like).
2. Delivering services to the visitor (through airlines, hotels, tour operators, attractions).
3. Marketing and selling the destination (this function is critical) to the visitor through convention centers, third-party event management firms, and the group tour packagers.
4. Development of the destination. This is truly one of the key areas of the future, and DMOs must be intricately involved with local government, community leaders, and supporting and developing the destination strategy.

The future of a destination is within the DMO's purview. DMOs must be at the table with the economic development group and the chambers of commerce to develop the products - from the local traffic infrastructure, metro service and bus services, to building a new arts center, or supporting the community - that add to the overall ambiance of the destination.

At this moment in history, DMOs have huge opportunities to solidify their value proposition, increase their visibility to the visitor and to their community (offline and online), and strengthen their relevancy within their communities - all important and interconnected undertakings.

Editor's Note: DMAI will provide further leadership on these themes with the release of the Futures Study. Look for coverage in Convene in the fall.

What is the No. 1 industry issue that most concerns you?

How are you handling this challenge, and in what ways will this change the role of your CVB going forward (i.e., the way you may see CVBs evolving)?

CVB Execs Respond

Visibility, Funding, and Destination Development
I'm most concerned about the "Rodney Dangerfield" syndrome from which tourism has always suffered. It includes:

• Having to labor to ensure that DMOs have a "place at the table" in the betterment of our communities. Chambers of commerce and economic development organizations seem to be guaranteed their spot. What are we: chopped liver?
• Lack of respect at the federal level. We're the only modern country in the world without a federal tourism marketing plan. Greece spent more than $150 million promoting international travel to their country. America has yet to spend a dime.
• Having to fight for funding at the local level. The marketing that DMOs use to promote our destinations brings our communities to the world so that the world may come to our communities. Is it because people think marketing isn't important? Is it because much of our work is done outside of the destination and is therefore not very visible?

How to turn this challenge around is problematic. For my part, I plan to "signal the value" of what we're doing as much as possible by visiting with our local stakeholders regularly; communicating electronically with e-newsletters; emphasizing the economic benefit of every event we sell; and haranguing all friendly customers to do the same. Perhaps if they speak on our behalf, our stakeholders will listen. We've been doing this to an extent already, but we're all going to have to step it up several speeds. I, for one, am tired of always having to explain and justify what we do.
Cole Carley, CDME, President/CEO,
Fargo-Moorhead Convention & Visitors Bureau

Within the past three to five years, CVBs have gone from the role of simply marketing and selling a destination to being a change agent for development of that destination. Entertainment districts and mixed-use developments with new retail, dining, and hotel products are being built all over the country. To remain competitive, a destination must be not only constantly improving existing product, but developing new, unique, and cutting-edge product.

To overcome this challenge, the CVB must work closely with economic development and become actively involved in the community's master plan and vision for the future. In addition, the CVB needs to take a lead role with their stakeholders to communicate the value of tourism to the community and the importance of investing in this sustainable industry. Local government leaders, who face continued pressure from the community to justify the need for public/private partnerships, look for the support of the CVB to communicate why this type of development is a necessity.
James Ricketts, Director,
Virginia Beach Convention & Visitors Bureau

Over the past few years, CVBs have experienced a change in the competitive landscape and within distribution channels. CVBs are now faced with educating both meeting professionals and local citizens about our value. For meeting professionals, we need to demonstrate how our efforts can greatly affect the success of a meeting or convention. For our local citizens, we need to qualify how our efforts can greatly affect the economic success of our city. We continue to take an active role in educating them about the local hospitality industry - which provides an economic impact of $1.3 billion and more than 57,000 jobs in Fort Worth alone.

One way we are taking an active role in working with meeting professionals is by creating new and innovative partnerships. A great example is our three-city partnership with Baltimore and Sacramento, which allows one-stop shopping for meeting professionals who rotate their meetings around the country. We are also participating in aggressive marketing and other industry initiatives with groups such as DMAI.
John Cychol, FCDME, Vice President of Meeting Sales,
Fort Worth Convention & Visitors Bureau

We are working hard on getting the message to planners that we are an attractive, affordable, and desirable destination in which to hold their meeting or conference.

Our new president, Greg Ayers, is heading up a strategic planning session for focus groups throughout Kalamazoo to get the community partners' perspective on where are we going and how do we achieve even more success moving forward in this ever-changing environment. This county has made a commitment to a great quality of life for the resident and the visitor alike. I am so excited that times like this force change and people to think outside the box to reach for bigger and better opportunities.
Mary Ridderman, Director of Sales,
Kalamazoo County Convention & Visitors Bureau

The No. 1 concern we have is funding, and in particular the ever-broadening use of lodging tax funds.

What are we doing about that? Building relationships with our community from private businesses to elected officials, and underlining the importance of continued tourism marketing.
Tammy Blount, Executive Director,
Tacoma Regional Convention & Visitor Bureau

Marketing What Makes Your Destination Unique
The loss of the American Main Street may not be the biggest issue facing our industry, but it changes the way we view travel. In days of old, you enjoyed the unique differences of each city's restaurants, shops, and sites. As much as trolley cars "said" San Francisco, and Disney "said" Orlando, Macy's was New York City, and Starbuck's was Seattle. But with the mass globalization of today's marketplace, it is more important than ever that we redefine our "Main Street" as those places that make us unique.

It is our vital role to become the guides for Rochester and all that makes it exclusive, to make a new "footprint" of Main Street in the 21st century.
Matt Peglow, CMP, Convention Sales Manager,
Greater Rochester Visitors Association

Rising Fuel Costs; Green Movement
The trend we're watching as a central Northeast destination is the rising price of fuel, which will have an impact on air travel, and could focus planners on driveable destinations for their offsite meetings. Also, as planners consider the environmental policies of their selected hotel and conference properties, they'll look favorably on truly green and walkable destinations (like Saratoga Springs). Destinations in the Northeast should compete favorably for meetings based on these trends, and given the population density in our part of the country.
Kathy Denkenberger, Convention Services Director,
Saratoga Convention and Tourism Bureau

Economy/Perceived Barrier to Entry
Our No. 1 issue of concern currently involves the national and international economies. Although Seattle traditionally lags behind the country in any previous economic downturns, we're also one of the last areas to come out of a downturn once the economy has stabilized. Some of the current TSA [Transportation Security Administration initiatives] make it challenging for travelers who want to visit our country and, in particular, Seattle. For global companies such as Microsoft, Starbucks, Amazon, Costco, Boeing, and others here, entry/visa requirements can make it difficult to hire the best.

To handle this, first and foremost, we are having frequent strategic conversations with many of our larger corporate and association customers to ensure that Seattle remains in their planning cycles. In certain cases, we discover that in order to meet the ongoing demand and growth of their organizations, we need to establish the next generation of our convention center to remain competitive.

On the issue of working with the federal government and TSA to balance safety and security concerns, along with business growth objectives, we have joined the board of the Travel Industry Association of America (TIA) and are actively working with our lawmakers to again make our country welcoming to first-time or frequent visitors.
Don Welsh, President and CEO,
Seattle's Convention and Visitors Bureau

Our biggest concern is the economy. I've been around long enough to have witnessed what a recession can do to our industry, and it puts all other concerns in their place. To cope with that possibility, our whole marketing approach must adjust to assure that we are promoting our value proposition to the inevitable value orientation that will sweep the market for some years to come.
Paul Astleford, President and CEO,
Experience Columbus

The No.1 concern for the short term is the economy. If it continues to soften and becomes a recession, then the great attendance we are seeing now at conventions will erode. The companies that pay for a lot of the attendees as well as exhibiting at conventions will tighten their belts. Many corporations have already issued an order to cut travel and entertainment budgets, and this trickles down to meetings and convention attendance. Ways to overcome this trend are to work more closely with the planner to make sure that attendance boosters are an integral part of the strategy and assisting the planner in every way possible. These downturns are cyclical, and the hope is that this is just a correction for the economy.
Tom Caradonio, President/CEO,
Northern Kentucky Convention and Visitors Bureau

Changes in Communication
Pollyanna that I am, I wish you were ask- ing what are the greatest opportunities ahead for CVBs rather than issues, but I suppose one issue we all face is the challenge of finding the right way to communicate with both the public and clients because of the variety of expectations of the different generations. The difference in how younger and older people gather and interpret information, and how they make decisions, challenges us to find ways to react to those different styles.

Today, organizations need a staff representing diverse age groups, individuals who do not shy away from experimenting with new ideas and people who understand the concept of customer service. For the customer today, it is all about "what's in it for them," and we need to accept that this is how they think - and buy.

I think the future for bureaus is great because when I ask the question, who would promote and sell this city if we did not, I come up with the answer - no one.
Bobbie Patterson, Executive Director,
Boise Convention & Visitors Bureau

I believe that THE next wave of technology will be one of the most dynamic changes to the visitor industry. With the advent of Web 2.0 and social media, we are finding that broadcasting is out and aggregating is in for the long term. Social media platforms such as MySpace, Facebook, Wikipedia, YouTube, and a host of other social sites are ruling cyberspace. They are now and will continue to be utilized by the next wave of customers. Since the early adopters are readily taking hold of this mode of doing business, we will see new buying patterns and new demands for destinations. Because of social media, prospective customers will get first-hand experiences of a destination from postings they trust. Social media is a nascent view of how we will all do business. Our marketing efforts will change in bringing in customers, and we can expect to see booking and servicing costs go down precipitously. Destination marketers and managers should pay close attention to these developments in order not to be left behind.
Leon Maisel, President & CEO,
Mobile Bay Convention & Visitors Bureau

International Destinations: Getting North American Groups to Come Over

One of our major concerns is the strong Euro. It is the No. 1 argument for meeting planners not to consider Europe and Germany. On top of that, Germany has a high-price image because of its high-quality products and luxury cars. However, it is the price value we have to look at, not just the exchange rate. I just recently had to go to Boston and the following week to Berlin. I stayed the same amount of time in both destinations and paid 20 percent less for my trip to Germany. With high hotel rates, high airline fares, and tight meeting space in the United States, an international destination can be more affordable, even with a weak dollar. Another concern is security in international travel. Security measures at European airports have always been tight long before Sept. 11. Boarding a plane in Frankfurt, you have to pass two security points and every passenger is screened twice if carrying the right documentation to enter the United States.
Richard Rheindorf, CMP, Regional Director USA & Canada,
German Convention Bureau

As the lead government agency for the business events sector in Singapore, the impending U.S. economic slowdown affecting international business travel or long-haul travel for American companies is a definite key concern. This coupled with increased fuel prices and the weakening U.S. dollar all signal potentially higher meeting costs. Companies may well cut down on the number of employees attending meetings or move them closer to home as a result of belt-tightening. However, on the bright side, global economies continue to send more and more MICE (meetings, incentives, conferences and exhibitions) business our way as companies and associations seek new business opportunities in Asia Pacific. We have to move away from the price game and focus on the value of still having events and meetings, such as offering potential business opportunities in Singapore for business events and attractive financial assistance for groups to hold their events here.
Kershing Goh, Regional Director, Americas,
Singapore Tourism Board

We feel that the most important challenges for the European tourism industry in the years to come match the stakes of the overall WTO industries. The trade gravity is shifting to the Asian continent, and we expect the same trend to occur in our industry. Increased trade implies increased travel, business meetings, and tourism activity. Likewise, the construction of the European Economic Community led to gradual political stability and the creation of the European Union. We expect a similar trend to occur in Asia with increased competition in a global market.

There is no choice other than to play by the new rules of a global market. Strategic marketing activities should include a European identity (including national specifics), reinforcement of traditional alliances with North American CVB partners, and acute reactivity to "emerging needs of emerging markets." Patrick Maison, Hosting Strategy & Development,
Brussels International Tourism & Congress

The biggest challenge we see is the ongoing change of the layout of meetings. We can see that the traditional format of meeting sessions is reducing, and informal sessions, ad hoc meetings, and networking meetings will increase. Organizers have to develop easy and simple technological matching software allowing delegates to connect, prepare, and then physically meet during the event.

As a convention bureau, we have to proactively educate centers as well as hotels that the behavior of delegates change and by that also layouts of meetings will change. We [must] help to support initiatives of meeting planners to move in this direction.
Christian Mutschlechner, Director,
Vienna Convention Bureau

[Our biggest challenge] is getting the message out that we are available to assist meeting planners with all their needs. It is very hard to reach meeting planners by e-mail since they block us. We are reconsidering our approach, but [we don't have a solution] yet! Visits are also very complicated but rewarding. We try to invite meeting planners to discover our destination with a special budget, but it's hard to compete with the rest of the world.

Belgium/Brussels is not as expensive as U.S. meeting planners expect in spite of the value of the Euro. Accommodations are discounted by 50 percent in Brussels during weekends and in July and August because no EU meetings are held during this time.
Annette Choynacki, Director,
Belgian Tourist Office USA and Canada