Travel -Tourism – Marketing A Bright Spot in Rural America?

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Travel -Tourism MarketingA Bright Spot in
Rural America?

• John Keller

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Tourism Defined

• A segment of the travel market that consists of
  individuals and groups that are known as "free
  and independent travelers" or FIT
• This 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

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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
  gambling
• Tourism 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.

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Who Benefits?

• Governmental Cash Flows
• Tourist or Leisure tax
• Increased sales tax receipts
• Enhanced property tax returns
• CMB Liquor tax
• Entertainment tax

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Tourism Segmentation

• Vacations
• Holiday Trips
• Business Trips Including Sales
• Recreation and Leisure Trips
• Gambling and Gaming
• Sports
• Research and Information - Genealogy
• Conventions/Conferences

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Top Tourism Demand

• 1. Eating and Drinking Places
• 2. Places of Accommodation
• 3. Recreation and Entertainment
• Sports
• Golf
• Theme Parks and Cruises
• 4. Airlines
• 5. Local transportation taxis and rentals

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Top Economic Returns

• Transportation and Arrangement?
• Lodging
• Food/entertainment
• Retail Sales specialties
• Beverage and liquor
• Primary and secondary attractions

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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!

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Nebraska!

• I even thought that I was dead till I found out
  I was just in Nebraska.
• -Clint Eastwood
• in Unforgiven

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Redneck Institute
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Stonehenge
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Nebraska Car-Henge
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Top 10 Tourist Destinations
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50
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Top Five World Tourist Destinations
Spain
Italy
France
USA
China
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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

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Top 5 World Revenue Earners 2005 in Billions
84.5
36.7
33.5
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19.9
United States
France
Spain
Italy
China
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Lets 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

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At the Same Time We Really Enjoy It!
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It can be Marginal
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Flat Dumb
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Or Faux Cultural
Genuine Amish County Store
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The Old Standbys
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The Who Gives A Damn Category of Tourism
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Always Looking For the Can or Parking Space
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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.

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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.
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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!"

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Twine in Kansas
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Near Insanity
Goodland
Rocket Fest at Argonia
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Weirder Weirder
Picture of embalmed Samuel Dinsmore in his
Mausoleum at Lucas, Kansas here
Samuel P Dinsmoor at 89 his 20 year old wife
and year old son
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Smaller and Smaller
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Kansas Prairie Dog
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Missouri Home Grown Tourism
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International Tourism
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Eco-Tourism
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Designer Tourism
Worlds Most Expensive Tourism - Antarctica
From New Zealand
By Russian Ice Breaker
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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

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Tourism Impact - cont

• Method 3 Market Segmentation
• Individuals
• Couples
• Families
• School Groups
• Tour Groups
• Other

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Tourism Impact - cont

• Method 4 Spending Patterns
• Average Total per visit
• Per Capita
• Segmented
• Food and Drink
• Entertainment
• Accommodations
• Retail
• Transportation

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Economic Impact

• Segmented Overnight Expenditures
• Accommodations 1.00 - 16,197,001
• Food/Drink .59 - 9,510,601
• Food Stores .07 - 1,062,098
• Ground Trans. .42 - 6,831,224
• Recreation .34 - 5,321,185
• Retail Sales .47 - 7,627,798

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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?

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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

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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

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Demand Factors - cont

• Distance to Source
• Tourism and leisure visits are distance
  sensitive. A great many leisure and tourism
  visits will be within a days 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

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Demand Factors - cont

• Demographics
• AGE
• 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 - Affluence
• The ability to pay remains a major factor in the
  type of activities, the amount of time spent in
  visitation, and the cost of accommodations

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Factors the Influence Gross Spending

• Age
• Family composition
• Length of stay
• Location of visit (NYC is a lot more expensive
  that Disney World or Vegas)
• Income level of client
• Type of transportation selected (if you fly you
  rent cars)
• Nature of opportunity at source (skiing is
  expensive so is eco-tourism)

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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

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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.

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Marketing Tourism

• Identify the Target Market
• Demographic (age, income, gender education and
  occupation)
• Geographic
• Psychographic (enthusiasts such as boating,
  skiing, gardening, history, military)

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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).

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Marketing Strategy

• Marketing Strategy entails emphasizing key
  elements (Peeing) of your Marketing Mix
• Product
• Place
• Price
• Promotion

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Marketing Mix
For 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
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Plotting Price/Quality
Quality
A
high
B
C
D
Price
high
low
E
F
Sweet Spot
G
low
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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)

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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

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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.

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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.

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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

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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

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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

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Penetration Rate
P x F PR where P Penetration Rate F
Frequency of Penetration PR Penetration
Rate Example Market Area Participation
Rate Frequency PR A 20 2.5 50 B 20 1.0
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