Thursday, January 24, 2008

Glib Response

If he was quoted accurately, Senator and Presidential candidate John McCain responded to a voter in Florida with concerns about the need for more marketing of the US for tourism abroad with the answer that “that is best done by the private sector.”

With that response, Senator McCain illustrated a very common misunderstanding of the difference between “destination marketing” and “product marketing.” The private sector does do a good job of marketing airline seats and hotel rooms etc., but that is the marketing of products.

The “destination” is the first decision a visitor makes, whether domestically or abroad, and marketing destinations isn’t something the private sector can do efficiently or as just part of product marketing. An organization, usually a public/private partnership, is necessary to get the destination on the list for consideration by potential visitors, and then the private sector can help harvest that interest.

It is important to keep in mind that government has an even bigger stake in tourism than private companies. The amount generated in taxes is usually far greater than the gross margin generated by any private company. For instance, Global Insight calculates that the Federal government’s “take” from Durham visitors in 2006 was $78 million, or 11.7% of the gross spending, or roughly twice the average gross margin in the private sector.

If “leaving it up to the private sector” worked, the US wouldn’t have lost so much market share with international travel in the time since the Republican Senate and House in the mid-’90s disbanded the US effort to market itself as a destination. We also need to pay heed. The most successful destinations at drawing international travelers always have destination marketing organizations.

On top of that, the US image abroad is at a historic low, and tourism is one way we can restore that image.


LarryB said...


I understand your basic premise and I agree with it, but your statement that the US image is "at historic lows" is inaccurate. News reports state that the US has gone from #7 to #1 as most admired nations. They say it is a historic jump. And I think it has to do with the McCain opposite now in charge of our gvmnt.

Reyn said...

You're correct Larry, it really turned around this year. This post dates back to last year when it was at #7.