5 Things Keeping Today’s DMO CEOs Awake at NightDecember 6, 2019

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December 6, 2019

5 Things Keeping Today’s DMO CEOs Awake at Night

2019-DEC-CIT-Col1-Fair,Chris-Resonance-Consultancy-110x140A futurist, marketing strategist and facilitator, Fair has married his marketing expertise with futures methodologies to help clients envision and create development strategies, plans and brands that shape the future of places, communities, cities and regions around the world. As president of Resonance Consultancy, Fair leads a team that has completed more than 120 visioning, strategy, planning and branding projects for developers and destinations in more than 40 destinations. Visit Resonance.com.

The job of leading a Destination Marketing Organization (DMO) can seem quite glamorous at times. As the chief salesperson for the city, you have the opportunity to travel to many different places in the markets you’re seeking to attract. Back home, you lead a team of people charged with highlighting and promoting the best places, people and experiences your city has to offer. What’s not to like?

But just as the role of the DMO is evolving, so too is the role of the CEO within each of these organizations.

I recently had the opportunity to facilitate a panel discussion between the CEOs of the DMOs in Los Angeles, San Francisco, San Diego and Aspen to pick their brains as to what they saw as the key issues and opportunities for their destinations in the years to come.

Debbie Braun, Aspen Chamber Resort Association; Ernest Wooden Jr., Los Angeles Tourism & Convention Board; Joe D’Alessandro, San Francisco Convention & Visitors Bureau; and Joe Terzi, San Diego Tourism Authority all knew each other well, so the conversation was convivial and entertaining. But it was also quite serious when it came to discussing the new and emerging issues each of their destinations are facing. Based on our conversation, it seems there are five key themes foremost for these CEOs into the future.

1. GROWTH

While hitting each year’s goals for hotel bookings has always been top of mind for every CEO of a DMO, rising visitor numbers since the Great Recession are beginning to create a series of new issues as some of these destinations begin to contemplate whether there’s a limit to how many visitors each destination can accommodate.

“We’ve enjoyed 10 years of growth, and there are now 250,000 more people coming into San Francisco a day than five years ago — this includes people who visit; who work. We’re at capacity,” D’Alessandro says. “Some of our neighborhoods are feeling the crush of visitors.”

While some of this growth is the result of a secular shift in consumer spending from purchasing goods to experiences such as travel, much of it is simply a numbers game — both demographic and economic — that is driving exponential growth in the absolute number of people traveling around the world.

“Demographics of the world are changing. When you look at the number of people traveling today versus 10 years ago, it’s double. In the next 10 years, it will double again,” Wooden explains. “Today we have 30,000 airplane seats a week, up from three flights a week five years ago.”

2. DEVELOPMENT

As a result of the rise in the number of visitors and projected increases, DMOs are no longer just thinking about sales and marketing, but how to develop their destinations — making sure that this growth and the economic benefits that come with it don’t come at the expense of quality of life for local residents.

“Whereas, 10 years ago it was website and visitor brochures, I spend more time at city hall talking about land-use code or talking with businesses than I do on marketing or websites or visitor guides,” Braun says.

In Los Angeles, our team at Resonance is working with the city and L.A. Tourism to create a Tourism Master Plan that not only identifies infrastructure and product development needs to accommodate future growth, but how and who should manage and fund them.

“In the past, all of these collective issues around zoning, tourism investment and protection of our assets would find their way to my desk. And we were not ready to act on them. So L.A. created the City Tourism Development Department, charged with protecting the hard assets of tourism,” Wooden says. “This tourism development group helps us think about how we are going to evolve and protect the assets through a master plan.”

3. HOUSING & HOMELESSNESS

More heads creates a need for more beds. It’s the growth of leisure travel that led to the rise of Airbnb. And while Airbnb has affected the average daily rate achieved by hotels in some markets due to reduced compression in peak periods, the rise of home-sharing has been even more disruptive to the rental housing market as residences that historically would have been rented long-term to people like those who work in the tourism industry are now being rented short-term to visitors.

In Aspen, like many resort destinations, policies were created and investments made years ago to create workforce housing. What no one in Aspen anticipated was that people would continue to own and live in this staff housing after they retired.

“Workforce housing is a massive issue for ensuring there are candidates to fill jobs. We are learning that rentals may be better than the ownership that we allowed hospitality workers to obtain in the past. The retired workers are staying in place, exacerbating the problem,” Braun says. “But we also look at housing to be helped by transit, as well as other perks.”

And while the affordability and availability of housing is important to every destination, the CEOs of large cities like San Francisco and L.A. are even more concerned about homelessness.

“We have 55,000 people living on the streets in L.A. It’s the No. 1 non-tourism related issue for us,” Wooden says. “Our core reasons for why homelessness exists are often wrong. Sure there are so many macro issues — elements of drugs or crime or young people running away — but most of these people are one paycheck away from losing a roof over their head. And once they’re out, it’s almost impossible to get back in. For us in tourism, it’s starting to bleed into areas that we never before saw — in and around the convention center for instance. There is seldom crime, but it’s the No. 1 threat to tourism.”

4. ADVOCACY

With issues such as over tourism and homelessness becoming top of mind for DMO CEOs today, probably the most significant change they’ve experienced in their roles is the need to become more engaged politically.

“Years ago we played less political roles and were focused on membership and advertising and marketing,” Terzi explains. “Today, you’re missing an opportunity if you’re not politically active. You have to be the person who is repping not just the hotel industry, but the entire tourism industry. It’s critical for your council and mayor to know how valuable tourism is.”

5. LABOR

The last issue on these CEO’s minds may not be a crisis today, but with the working-age population expected to shrink significantly in the next decade as boomers age into retirement, attracting talent to work in each of these destinations may turn out to be one of the most important functions of a DMO a decade from now.

With billions being invested and a significant new number of hotels coming online in L.A. in the next few years, Wooden is well aware of the need for workforce development in his city.

“Today we employ 575,000 people in tourism. We project by 2028 that number will be close to a million. We’re working with the city’s workforce development group to find and identify candidates for all these upcoming jobs. ”

Of course we discussed a range of other issues and opportunities as well, but based on our conversation and work with other destinations around the world, I believe these five issues are going to be a priority for destinations large and small in the years to come. C&IT

 

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