Wednesday, November 05, 2014

The Underlying Fallacy of More and More, Bigger and Bigger

It should have been no surprise to, at least, tourism marketers when airlines serving Brazil attributed a drop in revenues due to the World Cup.

The paradox of mega-sports events is that they displace more economic impact than they create.  A classic illustration of that is when an economist measured tax revenue collected in a community that hosted the Super Bowl.

It varied little from collections over that same period the year before and the year after.  How can this be when input-output measures taken computed value-added?

The answer is displacement and it’s why sustainable community marketing is not about more and more or bigger and bigger but how to feather sports groups or conventions or festivals in a way that doesn’t create displacement or increased public services or inconvenience.

It is also the little known secret to why communities that carefully do this, outperform or perform equal in the proportion of visitors they draw for those segments compared to those that go “big game hunting.”

Economic impact models struggle to measure the economic activity that huge events override or dislocate such as the economic activities people would have been doing anyway or those they didn’t or couldn’t or chose not to do because of the event.

It is possible, but they would be costly to run.

If fact, if these analyses went beyond just the local or even metro or state levels, the events may turn out to have a negative impact when taking into account their impact on a national, continental or even hemispheric level.

Sure, there is value added from people who bought snacks and beverages to throw home parties for friends to watch on television or from people who went to sports bars or drank more or stayed longer who wouldn’t have otherwise or who traveled to see the event in person.

But that amount would need to also net out the activity these consumers would have generated anyway had then been out shopping or buying vehicles or attending performances or taking trips they postponed to avoid perceived crowds or to watch the event on television instead.

Ironically, the net effect of mega-events can be negative overall.

Does that mean mega-events are bad?  Nope.  Just that communities and nations shouldn’t be deluded by those who use economic impact as a rationale for hosting the events.

It is also why visitor-centric economic development organizations such as those I ran over a four decade career can, if data and results-driven, be frustrating to stakeholders who don’t understand their purpose or who make up their minds and then take interest only in information to support their opinions.

Such organizations, called community, state or national destination marketing organizations are often given only one of two choices by powerbrokers.

Just go along to get along while withholding critical information from the public or get steamrolled and disparaged including as one official threatened me once misusing a metaphor, being forced to “fall on your own petard.”

People aren’t rational by nature, especially fanatics, but the role of a community destination marketing organization, while it involves bringing popularity to a particular place, isn’t to be popular but instead, rational.

Many years ago, I had a chair of my governing board who worried about my personal welfare, dismissed the high regard for our organization and me personally in scientific residents polls or anonymous opinion polls of community stakeholders.

His was overly concerned with the opinions of a trio of people who wanted my head and seemingly hated the community marketing organization  I led and therefore lobbied whoever would listen to undermine us.

So I spent an inordinate amount of time and energy meeting with these individuals in an attempt to better understand where they were coming from, even hiring a consultant who was an insider in their circle to coach me.

They were nice enough in person but what got under their skin was simple.  We made decisions based on data, not who’s asking.  When the data didn’t make our case we were as likely to distribute to inform community decisions as we were when it did.

My job though, was to continue to try in every way possible to show even detractors how they could also achieve their objective using data and sustainable tourism.

I was lucky to have governing boards who stood behind me as long as we were following the data, resisting special interests and doing what was best for the community overall.

It is also why I have empathy for former peers who weren’t so fortunate and who, instead, were forced to surrender their community’s welfare to powerful forces, a slippery slope from where there can be no return.  “But for the grace of God, go I.”

In one community, a cabal of five people collectively came after me, ostensibly over my “style” which has definitely always been a work in progress.  I survived there on a 10-7 vote, a veritable landslide in political terms.

In my two other communities, similar votes under even heavier-handed circumstances, though less publicized, were far more favorable, a testament more to my heart than style.

But that’s all part of the job.  Politics is personal, not logical, but in community marketing you can never make it the former.

The job of community destination marketing is to reap a community’s full share of visitor-centric economic and cultural development.  That requires four things not generally understood as part of marketing:

  • Strategically deciding what not to do;
  • Disqualifying events, groups and segments of potential visitors that don’t fit or cost more than they can deliver;
  • Pursuing visitation in scale that will complement and appreciate things distinct to a particular place; and
  • Seeking to do no harm to the things that make a community worthy of love.

In summary, without surrendering to more and more, bigger and bigger, the organizations I led were able to statistically outperform or keep pace with those that did, even if it didn’t make the news or appease special interests.

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