Wednesday, June 23, 2010

New School Focus “Feet On the Street,” and “Butts In Seats” Supplants Narrower Old School “Heads In Beds!”

First, congratulations to both management and elected bodies for local Durham city and county governments for the courage, responsibility and leadership demonstrated by raising the property tax rates.

Of course, it isn’t that simple for organizations like the Durham Convention & Visitors Bureau (DCVB,) self funded by a State authorized levy on the rate charged the 16% of visitor stays here overnight.Durham Visitor Volume-Spending

When the economy constricts, DCVB is among the first to feel it, curtailing its mission to pump visitor revenues through the local business climate resulting in $40 million annually to fund local governments and lightening the burden on residents.

Fortunately, DCVB’s long term mission and strategies aren’t self-servingly hamstrung by the catchy but always extremely narrow and old-school view of “heads in beds” that would focus on only 2% of Durham’s 3,000+ visitor related entities and a much smaller yield.

At times like this, when so much is beyond the influence of a destination marketing organization, two long term DCVB strategies are mitigating the near term downturn as well.

One, DCVB is a destination marketing leader in addressing all visitor stays, day trip and overnight with a focus on what’s best overall for the destination over any particular component. So for DCVB and other contemporary DMO’s, it’s not just “heads in beds” but the higher yield “feet on the street” and “butts in seats.”

Two, DCVB isn’t preoccupied with only the 10% of travelers attending conventions and meetings, a segment where Durham already over-performs. More than a decade ago DCVB shifted to hold that share while diversifying more into leisure travel where there is far more potential to increase market share and yield.

It is a delicate balancing act, especially when hobbled by the downturn.

But as evidence the strategies are working, while national visitation fell another 4.3% in ‘09, Durham’s visitation increased 4.4%. While nationwide leisure travel fell 1.9%, leisure travel to Durham increased 9.2% overall. Business travel which includes conventions was down nationwide 5.4% and in Durham 6.2% both because it draws a greater proportion of travel by air, a segment hit harder and because overnights shifted to day trips.

Both daytrip and overnight stays fell overall more than 4% nationwide but in Durham while overnight fell off too, day trip stays increased overall by 6.5% giving a much needed lifeline to the 3,000 + visitor related businesses here.

While day trip stays, nationwide, fell 11% for business and 2% for leisure, day trip stays in Durham fell just half as much for business, some due to overnight business travelers making day trips here instead, while leisure day trip stays in Durham increased nearly 12% .

Overnight stays nationwide fell nearly 12% for business but only about 2% for leisure. Similarly, overnight stays in Durham fell 12.7% for business and 2.7% for leisure but not disproportionate for communities similarly drawing a larger share of travel via air compared to nearby destinations and others nationwide.

Day trip stays of less than 50 miles is a category Durham is a leader in measuring and pursuing along with a handful of other destinations that shifted a few years ago to mining this critical but neglected part of the day trip market. Eventually, national measurements will catch up to this trend made possible by contemporary methodologies to exclude those traveling for school or work.

Last year Durham was up 8.6% in drawing day trip stays from within 50 miles but the real story is that day trip from this radius for business fell 9.1% while day trip stays for leisure increased 15.3%.

These patterns are never due to anecdotal changes, e.g. one group or event or facility but instead, broad changes like more universal shifts in overall destination appeal, and broader downturns, upturns and shifts in consumer behavior.

But for those wedded to finding an anecdotal reason, if you took for instance, all of the visitors who attended DPAC events, a new facility, and assumed they visited just for the shows, which isn’t the case or they were all leisure stays which isn’t the case, or they all came here for the first time, which isn’t the case, or that they all came from 50 miles or less, which isn’t the case, then under this hypothesis, they would represent:

  • 5% of day trip leisure stays of 50 miles or less and about 1/3rd of the overall increase in day trip leisure stays from 50 miles or less, leaving 2/3rds of the overall increase under this hypothesis, drawn for other purposes and activities.

That’s what I mean by it’s difficult to attribute changes over a time span to just a particular convention, event or facility or other anecdotal occurrence. Changes destination wide are almost always about broader indicators of collective destination appeal and consumer behavior, e.g. marketing strategy as well as activities like shopping, dining, sports events, conventions, festivals, theaters, historic sites, nature areas, museums etc.

Durham and DCVB and particularly thousands of small businesses and local governments must be grateful and relieved that the community drew 6.31 million visitors in ‘09, a very complex and difficult environment in which to do so.

This includes not only more than a million overnight stays but 5.2 million visitor day stays, 4.8 million from surrounding communities and rural areas, the highest market share of any community.

Durham also drew a healthy business to leisure ratio of 29%/71% and an overnight to daytrip ratio (50 miles or more) of 46%/54% and an overnight business to leisure ratio of 32%/68%.

And for overnight stays and related businesses, in 2010, Durham is beginning to regain the 90,000 visitors lost over the last 2 years.

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