10 Ways Tourism can Earn the Respect it Deserves

At least since at least the 1960s and including my now-concluded four-decade career, many in travel and tourism have repeatedly whined that this sector of the economy doesn’t get the respect it deserves.

Some are individual businesses who just want a pat on the back.  Others feel they need special treatment or shouldn’t have to pay their fair share of making places visitor-worthy.

It can be annoying and proposals rarely seem to go much beyond chest thumping.  Later in this essay I’ll take a stab at some more systemic ideas for how the travel and tourism sector could earn more respect.

But primarily, complainants are referring to the fact that most elected officials and administrators don’t grasp that the function of visitor centric economic and cultural development is to drive tax revenue.

Focus in government is typically only about dividing up the pie with the mistaken view that generating it comes only from a political decision to levy taxes.

The validity of the tourism sector’s concern is often visible when elected officials, often pushed by developers and advocates, are all too eager to drain resources shouldered for that purpose away from tourism promotion for their own uses instead.

These folks are better known as TINOs or “tourism in name only” and identifiable by their siren song of “build it and they will come.”

It is true that worldwide the travel and tourism sector now generates nearly 10% of the world’s gross domestic product (GDP) including 1 in every 11 jobs.  It is projected by economists that this sector alone will generate 3% of the GDP in America this year.

That’s bigger than the automotive sector, to add perspective, or for that matter agriculture, education and mining too.

Even down to the county-level, visitor-centric economic development generates a similar percentage of GDP in places where it is actively promoted, such as Durham, North Carolina where I live.

Instead of incessantly complaining that officials just don’t get it or care, here are 10 simple behaviors professionals in the travel and tourism sector could adopt to earn the respect it deserves:

Deep Six the widespread misuse of the term “industry.”  Tourism has never been an industry.  It is an economic sector composed by as many as seven very different industries that happen to rely in part or in whole on a common consumer, visitors.  Remember: industry is small, sector is many industries together.

Distinguish demand-driven visitor centric economic and cultural development from more traditional forms of supply-based economic development.  Tourism is on the demand side and truly generates value-added to a community.

Adopt an all for one and one for all approach.  Too often tourism tolerates actions and positions that throw one industry under the bus while protecting those that don’t want to pay their fair share.

Grasp that respect isn’t won or demanded, it is earned, not from tooting your own horn or chest thumping but by patiently and continually explaining how the economy and tax generation works and how travel and tourism is a means for community destination and cultural development

Stop killing the things visitors love.  Avoid cookie-cutter architecture that only homogenizes communities and adopt zero tolerance for use of tools such as long-obsolete roadside billboards that create sign blight (aka litter on a stick,) desecrate scenic vistas and mar sense of place.

Embrace design thinking beginning by performing a “Drano” operation on tourism organizations and models that having achieved their purpose have become obsolete given changes in the tourism ecosystem.  These only serve as a drain on resources and engagement.

Respect and encourage preservation of the unique sense of place in each destination beginning with place-based assets, traits and values.  Encourage communities to differentiate rather than become generic.  Protect them from being hollowed out by mainstream events and mega-facilities.

Root out intra-sector hypocrisy.  Remember that the tourism sector flourishes as a public-private sector partnership.  Discourage public subsidies of mega-events and facilities that will not generate a return on investment to the public treasury.  Refrain from win/lose issues such as forcing restriction of local school calendars.

Take a prominent lead in solutions to societal inequities such as business models based on paying less than a livable wage, vestiges of institutional intolerance and bias as well as gentrification that is insensitive or imbalanced.  Earn a reputation for win/win facilitator.

Encourage widespread adoption of best practices.  Demand that destination marketing organizations earn accreditation.  Cross populate best practices across all industries in the sector including special assessments such as Tourism Improvement Districts or prepared food taxes dedicated to self-funding promotion, wayfinding, cultural landscape and destination clean up and beautification.

It is complicated to form one voice over an entire sector of multiple industries but it can be done and one of the first steps should be to develop a reliable metric.

It all begins by acting like a sector not just an industry.  It is possible only when the sector is as concerned with the overall ecosystem (including the pubic sector) as it is with individual bottom lines.

If these 10 areas are not of interest, just stop whining about respect.

The Folkloric Key to Telling a Community’s Story

My former field of community marketing is storytelling that involves weaving the history and culture as well as the inherent and distinctive traits and values of a place into a coherent narrative.

The objective is to safeguard a community’s unique sense of place by giving it prominence while helping prospective visitors, which includes more than 8-in-10 newcomers and relocating executives decide if it is a good fit for them while secretly shopping a community.

The trick is not just to be appealing but appealing to the right prospects.  There are several reasons a grasp of folklore comes in handy.

Folklore involves much more than legends and myths.  It begins orally but a good deal of folklore eventually makes it into news stories and sometimes even contaminates any official record before being re-injected back into folklore once again.

This process may be the result of our need as humans to, adapting the words of journalist Bill Moyer, harmonize or re-harmonize our lives from time to time with our stories.

Shaping a community’s story requires not only understanding this process but then relentlessly drilling down through layers of modifications and contemporized revisions to get at the most authentic roots of the story of a particular place, an almost temporal strain.

At about 10 p.m. on October 27th, a mutual friend emailed me with the news that former Durham City Council member, Chuck Grubb, had passed away unexpectedly a few hours earlier.

Chuck and I were only eight months apart in age in 1989 when he was elected to office a few months after I came here to jump start the community’s official marketing organization.

We continued to work on projects from time to time for another two decades during which he repeatedly made me promise that one day I would tell the real story of how Durham saved the Bulls.  More recently, our contact was via social media.

I could never find a time that was right but it will have to come soon.

Now there are only two of us left who really know how much that narrative has been truncated over the years, who know the full story first hand.

Over the years, It always gnawed at him when accounts including those in news reports would neglect to mention this essential piece of the story or when some who were only later involved would have so much to say.

But we also knew that, in part, we were to blame.

Once the turnaround had been achieved, the three of us agreed that first and foremost, it was vital to moving forward for us to help people save face.

Each of the three of us took an assigned role and mine was to absorb any fallout or retribution but we didn’t realize that wouldn’t be entirely possible or how long those resentments would last.

Keeping my promise to Chuck is for another essay.

Patti Sanchez, who graduated from college about that same time, has spent the last 25 years helping organizations such as Apple, Adobe and Oracle tell their stories.

Last summer, she blogged on Harvard Business Review that like the storytelling organizations I led on behalf of three different communities, all businesses and organizations need a designated folklorist on staff.

She describes folklore “in a cultural sense” as “the sum total of anecdotes, artifacts, and rituals that unite a group of people – the common language that creates shared meaning.”

As you can tell, I am not much of a storyteller myself but during my now-concluded career, I led organizations officially tasked with that mission and I had a knack for how to ferret out a community’s story.

In January of 1972, I took an upper level English course in folkloric research at BYU where I studied, in depth, and documented a specific seven month period in 1969 and 1970 and how variations of a story had flowed through a society in the west, even migrating into news reports and back again.

It also works the other way around.  When editors establish a premise before assigning a reporter, even when the facts don’t seem to fit, the story and subsequent headline will still echo the original premise leaving only the few consumers who read in-depth to ferret out the full story.

When I studied folklore, I had my sights on being a lawyer, but it is a course I would highly recommend for anyone who by intent or serendipity finds themselves in a career in community marketing as I did.

There are many ways an understanding of folklore is useful in that career besides finding the common threads that tie contemporary community traits back to their distinctive roots.

One example where understanding folklore came in handy in Durham was unwrapping image issues driven by word of mouth in rival communities or water-cooler myths dispensed by commuters.

These people were literally hijacking Durham’s story and holding it hostage.

A decade before I took that course, a folklore researcher named William Hugh Jansen coined the term “Esoteric-Exoteric” factor.

Esoteric refers to the mystical, subjective conception we have of ourselves [or our community] vs. the exoteric or objective, external conception we have of others.

Another influence in that class were some writings by Joseph Campbell who was just then retiring from Sarah Lawrence College and would continue until his death the year before I came to Durham to write about mythology, the human impulse to create stories.

By the way, last summer Sanchez posted a series of interviews with Christopher Vogler, the author of The Writer’s Journey: Mythic Structures for Writers and Memo from the Story Dept.

He is a Hollywood veteran and disciple of Campbell who lectures and consults on organizational stories.  The videos are approximately 2 to 6 minutes each and a great introduction to consistent elements in folklore.

Sanchez would probably point to a documentary commemorating the 10th anniversary of the adaptive re-use of the old Lucky Strike Factory in Durham, which aired last week on the Raleigh TV station owned by the same company.

It is an excellent example of a firm that fully understands the importance of folklore.

I am amused now from the vantage point of retirement as I read or hear of things that happened long before being repurposed and attributed to contemporary actors, events or developments.

It is very natural for people to reweave narratives to fit current perceptions.  An example is when the story of Yankee soldiers writing back for resupplies of the tobacco they had used while waiting for the culmination of the surrender here that effectively ended the Civil War.

The story about the letters was later rewoven into the story of a person who later came to prominence.  That is an example of one generation reweaving a legend to give contemporary meaning to events and people.

The era we’re in now isn’t the first time this has happened during the course of Durham’s history, nor will it be the last.  But I remember how confusing it could make distilling the community’s narrative.

Maybe that’s why, occasionally with these essays, I try to leave “bread crumbs” for future Durham generations trying to drill down through these conflicting narratives for a longer view.

A Distant Genesis of Durham’s Renaissance

Long before he became the single most important person in the revitalization of downtown Durham, North Carolina, he did the same for another community that often suffers the abuses of misuse of a hyphenated airport name.

It is also why he already understood the vast difference between a polycentric region such as the one Durham is often linked to, from one that is centered around one dominant city.

Polycentric means there is no dominant center.

Before coming to Duke University as Executive Vice President,  Dr. Tallman Trask III had served in that position for the University of Washington in my native Pacific Northwest (PNW.)

Having that in common when we met about that same time along with an enjoyment of sports cars, especially Porsches, we struck up a friendship.

From 1986 until mid-1995, Tallman oversaw $400 million of construction for “UDub,” as it is nicknamed including a satellite campus in south-Sound Tacoma, Washington that ignited revitalization of its historic downtown in 1990 (image below.)

It wasn’t until catching up in passing recently at a neighborhood restaurant where we both frequently dine that he told me my counterpart there in community destination marketing is the one who drew his attention to Tacoma’s downtown for the 4,500-student, 302-faculty member campus, one of three for the University of Washington.

This was happening just as I was jumpstarting the one in Durham and a few years before Tallman would follow me here.

Coincidentally, Wanetta Ayers, my counterpart who drew his attention to that historic district and who is now head of Business Partnerships for her native Alaska.

She had cut her teeth with me at the community destination marketing organization in Anchorage which I headed for most of a decade before jumpstarting the one in Durham.

My most vivid memories of Wanetta is that she was “killer” at Trivial Pursuits and was the first person to introduce me to Apple’s Macintosh computer when right after they were released she brought hers into our office of IBM personal computers.

The campus Tallman developed in Tacoma is in its historic Union Station District with century-old brick buildings built in the 1880s and early 1900s, much as the old tobacco warehouses were in downtown Durham.

There is where his partnership began with Scott Selig, who fresh from a degree at the University of Washington was managing a real estate portfolio for the school.

Today that 46-acre campus in Tacoma is in a historic district pinned by a steep bluff and Commencement Bay along the edge of its downtown, next to museums and the beautifully restored Union Station surrounded by restaurants, shops, parks and historic architecture with a spectacular view of Mount Rainier.

Another coincidence is that my nephew and his family now live in the historic Proctor District just to the north along the bluff above.

Tallman and Scott started the Tacoma campus by giving life to the 8-story, 1907 Perkins building, now residential condos, while establishing the permanent campus several blocks further south.

The master plan for the UDub’s Tacoma campus will eventually involve the adaptive reuse of at least 22 historic buildings with new facilities integrated as though they have always been there.

The effort has been widely acclaimed including a 1999 National Trust Historic Preservation Honor Award for initial renovation of the project’s first six historic warehouses.

But, then as now, Tallman’s respect for sense of place isn’t limited to historical buildings.

At the same time he was developing the Tacoma campus for UDub, he developed another satellite in Bothell, north of Seattle, which is just south of Mill Creek where my one of my sisters and brothers-in-law live.

Only the north-Sound Bothell campus is designed to fit in with its natural setting incorporating the restoration of a 60-acre wetland, winning accolades from the National Wildlife Federation.

During Tallman’s first years in Durham, we formed a mutual respect beyond our PNW connection, perhaps because I wasn’t always panhandling him for something as most others were.

He also saw me take some intense heat while standing firm behind a Duke decision to pass on a big event in the late 1990s even though others there would later reverse direction leaving me twisting in the wind.

After earning an MBA at Duke in the early 1990s, Scott served a stint with the family real estate business in his native Arkansas before returning to Durham in 2001 to reunite with Tallman as head of the school’s real estate and capital assets at Duke.

Together with Nan Koehane who was then serving a decade as Duke’s president, the three hatched a different approach to revitalizing downtown Durham.

This time they helped leverage even larger scale adaptive reuse of downtown historic buildings by being an anchor tenant including leasing a full fourth of the complex centered around the former Lucky Strike Factory giving lenders confidence its adaptive reuse was feasible.

It is a more nuanced approach: part major anchor, part for renovation and leasing, part facilitation and all done through partnering, shifting portions of 16 campus units to downtown Durham, in turn lessening pressure to cannibalize the school’s incredible natural setting.

Scott was also coming on my governing board just as I retired five years ago, further immersing himself in the importance of sense of place and the demand-side of visitor-centric economic and cultural development.

Duke has now done this by taking nearly a million square feet of space in downtown including several other historic districts including the recently announced Durham Innovation District, 1.7 million square feet incorporating 15 acres of historic downtown adaptive reuse.

Tallman isn’t much for small talk and much of the work he has done to revitalize downtowns over nearly three decades now is an externality to his job and the missions of the universities he has managed.

He and Scott may agree with me that there is much Durham could learn from the more strategic approach Tacoma has taken while embracing historic preservation rather than viewing it as a hindrance as some here have begun to do.

It is impossible to say that revitalization wouldn’t have taken place without his intervention nor probably will Duke ever seek or be adequately recognized for the pivotal role it plays in Downtown Durham’s resurgence.

Even the template established in 1981 with Brightleaf Square reveals earlier Duke fingerprints, both in the backgrounds of its developers and as tenants for 50,000 square feet.

Should future historians, unfettered by hyperbole, ever drill down into this second renaissance of downtown Durham to identify the pivotal factor, I’m pretty sure the answer will be Duke University and Tallman Trask.

7 Things To Look For In Feasibility/Impact Studies

Supply-side economic developers often latch on to tourism as a rationale for mega-facilities such as theaters, stadiums and civic/convention centers, even though that demand-side form isn’t remotely their forte.

They do this as a means to siphon off visitor-related taxes as a means of financing things that will avoid voter scrutiny, masking that the real purpose for the facilities is to prop up nearby private property values so as to better enable development.

Flattered to have tourism acknowledged at all, in some places, demand-side community destination marketing organizations have played along, or worse, failed to grasp the inherent supremacy of demand-driven economic development.

Fortunately, as was almost pathetically apparent recently at the 100th annual conference of DMO execs, this clique is a dying breed.

It is easy to find fault with feasibility consultants, who in a perfect world, should be brought in to do a needs and impact assessment unfettered by the “push and pull” agendas of advocates and local officials who have already made up their minds and only seek cover.

So increasingly, the ability to dissect feasibility studies both to keep them objective and as probing as possible, and then later, to further dissect reports for news outlets, concerned residents, neighborhood groups and any still-objective officials, is a requirement of being a demand-side DMO exec.

The importance of learning to fulfill this thankless task first emerged as a “best practice” nearly three decades ago (1985) when a handful of DMOs began to circulate a ground-breaking essay coining the term sense of place.  They also began to grasp the risks inherent in mega-facilities.

Central to what had become a movement a decade ago is the increasingly irrefutable mountain of evidence that if mainstream mega-facilities such as these are not proportional in scale and very delicately feathered into the ecosystem of what makes a community distinct, they rapidly hollow out its appeal.

Why does this responsibility fall to demand-side destination marketing organizations?  First of all, it’s because they must be intimate with sense of place to craft appeals to visitors, including more than 8-in-10 newcomers and relocating executives.

This also makes them, by default, responsible as the guardians of sense of place.

The second reason this responsibility falls to DMOs is that this is the organization in a community charged with spearheading overall visitation, including any portion necessary to pay off the debt on these facilities, as well as that which can be harvested by these facilities to make them sustainable.

Here are 7 things I learned to look for during my now-concluded four-decade career when assessing feasibility/impact assessments for mega-facilities:

Residential Burden from Visitor-related Taxes

Just because they are called visitor or tourist taxes does mean there isn’t a cost to residents and other local businesses.

This is far more than the small amount economists have identified through research that will be absorbed by the businesses collecting these taxes (e.g., lodging, prepared food, admissions, car rentals or special business districts’ property taxes.)

The impact is also far more than the visitors who will be lost at the margins due to the tax, something economists can also compute.

Far greater is the fact that any time a tax is assessed on a visitor, it subtracts from funds they have to spend in local businesses during the trip, an amount that adds up very quickly.  It can also be computed in advance during feasibility/impact analysis.

If spent on marketing to draw more visitors to a community, a visitor-related tax is offset by more than a 6-to-1 increase in visitors, and tax revenue generated from their spending that can offset the local tax burden through more visitor spending.

But when spent on debt service to finance a facility, that amount immediately leaves the local economy to pay off bonds.  Even the amount ineligible for marketing will still take away from availability to fund roads, trails, wayfinding, and the operation of other cultural facilities and events underwritten by local government.

The public has a right to know how much this will remove from the local business climate.

People who say financing something is painless because a visitor tax will pay for it may not realize it, but unless it is reinvesting in community marketing, they are deceiving local businesses and residents.

Insist On Estimates of Downstream Improvement Costs

Also beware of studies that cite the impact of similar facilities in other cities without showing the differences between what was projected by consultants on those projects and how hey have actually performed.

Studies should also reveal ongoing costs for renovation and upfit, which will ultimately far transcend the original construction costs.

An example is the Charlotte Coliseum.  It opened in 1988 but was demolished and replaced by another in 2007 before its original construction cost, $104 million in today’s dollars, had been paid off.

Now just nine years old, the newer $265 million facility is already in need of a $28 million upfit.  While a bit extreme, this example isn’t unusual for other mega-facilities there and elsewhere.

The downstream costs should be estimated in preliminary studies of feasibility and impact.

Don’t Settle Just For Estimated Activity

Be sure the study reveals three trend lines:

• Percentage of visitor participation across the nation over time in the related activity as a proportion of overall visitation;
• National estimates of the time Americans devote on average to the related category; and
• Percentage of their income spent on that activity.

Economists know that these three factors rarely change over time.  They may keep pace with population but not capacity.  Time devoted to leisure today for example is the same as it was in 1900.  In fact, “pure leisure” has declined since 1965.

About 1-in-10 hours on weekends is available for events.

Instead, new facilities create a transfer or substitution within a category, e.g. leisure, not detectable in direct competitors but at more vulnerable levels.

This is why performances in non-profit theaters increased by 5,000 annually between 2004 and 2007, but attendance declined as the number of theaters doubled.

Often this effect is masked as it is in commercial touring Broadway shows where playing weeks and revenue increased during a similar span, but attendance, while up and down, is essentially what it was twenty years earlier.

This is why mainstream facilities are always a two-edged sword.  There may be a visible bump in participation, but the hollowing out at other levels that are even more distinct to a community’s identity are barely detectable, until it’s too late.

Most developers and related consultants dismiss this because many depend on “churn” to justify their developments.  But a community that ignores this is destined to lose its soul, if it hasn’t already.

A staggering number of cultural facilities were built in the United States between 2000 and 2007, especially performing arts centers, and yet the percentage of visitors participating in and/or prompted by these events along with overall attendance remained flat.

The index for ticket sales to commercial concerts increased from .73 to 1.38 driven by the 5% of performers who are driving 90% of concert revenues.  But it was flat to slightly down when compared to the index for capacity.

Good studies for a new theater, for example, should show not only how capacity has increased overall through the years but that the percentage of adult Americans attending various types of concerts collectively over the past decade has been flat to down at 22%.

Yet of the nearly $16 billion spent by communities on 725 new cultural facilities between 1994 and 2008, most were spent on performing arts centers during just five years between 1999 and 2004.

Look Carefully At Trend Lines

A decade is not enough to spot decline.  For example, a chart of the last 15 years for attendance at conventions will show only a valley, a peak and a slightly lower valley.

Some consultants for convention centers add a trend line at the end going straight up.

But to see the long, slow decline in this segment of visitation requires zooming out to at least 1974.  Suddenly, it becomes clear that over the past three decades, both the valleys and peaks gradually each became lower and lower than those past.

Of course, conventions and meetings are still an important visitor segment, but any community looking at a convention center must also ask to see the corresponding trend line for the number of groups using convention centers.  This is about 30%, broken down further by cohorts of average size by both overnight and daytrip, e.g. 80-85% are 2,000 or fewer in size.

Charts should also overlay a trend line for capacity, showing the more than doubling of convention space during that decline as well as the explosion of major convention hotels with meeting space.

Durham and Raleigh are a case study of comparison.  The former built what we call a “boutique convention center” as the decline became apparent, while Raleigh erected a mega-convention center several years ago.

Yet during the five years they have co-existed, Durham and Raleigh have continued to draw the same proportion of overall visitors to each community who attend conventions, with Durham actually exceeding Raleigh during some years in the proportion attending other types of meetings.

Similarly, Durham opened a new performing arts center during that period—its twelfth—which supplanted one in Raleigh for touring Broadway and other performances.

Yet, this has not decreased the proportion of visitors to Raleigh who take in that activity or changed the proportion of residents so inclined in either community.

Mega-facilities increase supply, but not necessarily demand.  Those that succeed are often due to anomalies.  Make sure feasibility studies detail downside risks beyond those that are merely financial.

Beware Of Including Resident Impact

Research economists uniformly disregard resident spending as part of a facility’s economic impact.

This is not only because a new facility will result in a transfer, or substitution of leisure time use and spending rather than an increase.  It is also because residents would have been spending the same amount of discretionary income somewhere else in the economy if not there.

Still it isn’t uncommon for downtown advocates or local officials to shop for consultants until they find one that will inflate projected impact by including residents.

This may because downtowns have a win/lose inferiority complex born of years of neglect, but it may also have to do with adopting the “churn” mentality of some developers.

But anyone credibly evaluating a feasibility study should back out resident spending or show it merely as “economic contribution” but not value-added.

However, a growing trend is to try and compute “retained tourism” which is “locals willing to travel” for similar events but because of the proposed facility, will now keep that spending local.

We attempted to calculate it in Durham for facilities during the last decade.  It must be customized to each community because “locals willing to travel” will fluctuate greatly on how close or far away alternative communities and facilities may be.

It is a legitimate calculation if very carefully done based not on conjecture, but sound research.  Of course, as with visitor impact, this should distinguish between attendees prompted by events from those who take them in on trips for other purposes.

New Visitors Attributable To Vs. Required For A Proposed Facility

Consultants usually make an attempt to quantify the number of visitors who will travel for the main purpose of taking in events at a proposed facility either in lodging room-nights or admissions or car rental days or meals, versus those who may happen to take in events during trips for other purposes.

But it is just as important to also make sure there is a calculation of how many additional visitors the destination overall will be required to draw to make up the amount needed to pay for the facility either by direct subsidy or from revenues fueled into government coffers.

A good estimator will suggest, based on this calculation, a corresponding increase a community should simultaneously invest in community marketing to generate this increase in visitation.

A good performing arts venue hosting a mix of concerts and touring Broadway productions may generate up to 15,000 hotel room-nights from cast and crew, which to officials, may seem like a lot.

But remember that the tax is paid on the rate paid for the room, not the room itself.

Even for a destination such as Durham, where rates are the highest of its comp set, this means that such a facility will generate less than 1% toward a debt service requirement of $1.5 million.

So good business dictates an increase to overall community marketing of $250,000 to $500,000 annually to generate the rest of the revenue needed.

ROI

A good feasibility study won’t just calculate the raw impact of a facility but also the return on investment to local government from non-resident visitor spending.

This should be net the cost of the land and any costs related to relocating existing businesses or services as well as the cost of construction.

This will include taxpayer return on investment from any parking and concessions or revenue-sharing.

Local governments are notorious for accounting practices that make it difficult to trace revenues related to expenses but especially beyond just operations.  A study might go so far as to recommend a special account to do this.

The ROI should include related visitor spending broken down by prompted vs. those taking in the event on trips for other purposes as well as the induced value added to the economy.

The best practice economic model will also calculate unavoidable “leakage” specific to a community; e.g., supplies that must be ordered from vendors outside the community.

It should also make it practical for a community to institute policies and metrics that encourage use of local vendors and the hiring of employees who live in the community or otherwise deduct that from the impact of the facility.

A “best practice” community destination marketing organization can re-calculate these numbers annually using the same model.

In summary, communities that value the importance of sense of place not only for appeal to visitors and new business relocation or expansion, but also for resident attachment and passion should carefully evaluate any proposal for mega-facilities.

Preservation of sense of place and community revitalization require strategic decisions as much or more about “what not to do” as they do about “what to do.”

Those most appealing in the future will be communities that learn to say “thanks but no thanks.”

Durham Could Become Detroit If It Doesn’t Adapt

There is much for Durham, North Carolina, where I live, to celebrate in The New Geography of Jobs.

While the author often jumps from metro areas to multi-metro consolidated statistical areas in search of data without distinguishing, it is clear Berkley economics researcher Dr. Enrico Moretti finds Durham one of a handful of centers of innovation.

But the book is more than that.  It is an excellent primer to remind policy makers what is and isn’t economic development and why.  It also pinpoints how some cities avoid decline while others don’t.

They continually and strategically economically adapt.

Detroit was once like Durham is today, a center for research, technology and innovation but it became complacent and peaked in 1950.  Instead of patting themselves on the back, Durham leaders should be running scared.

The community is where it is today because it has economically adapted at least four different times during its history, five or six if you count transitions by Native Americans here.  That this is an almost temporal part of its personality is no guarantee.

Most communities. such as nearby Raleigh, another emerging innovation center, have been lucky to do it once.

When one examines Durham’s economic transitions, they were both gradual and farsighted but each took root long before its then-current economy peaked.

Durham’s status as a center of innovation today is rooted in a time more than a hundred years ago when it was a bustling center for tobacco and textile manufacturing, fifty years before they would dissipate and nearly ninety years before they would disappear.

Architects for new developments around the historic American Tobacco Complex elected to ignore truly historic elements dating back more than a century and emulate instead a building erected in the 1950s.

Those erected by the City ignored even that, defying its own design guidelines.

American Tobacco’s founders, though, began re-thinking Durham’s economic future a little more than 20 years after the final addition to the Old Bull Building was completed in the 1880s (now a National Landmark, it dates to 1874.)

This strategic foresight began to evolve just before the far more distinctive Neo-Romanesque portion was erected in 1900, also reflected in several other thriving historic districts such as Brightleaf.

These historic buildings and more than a million square feet of others of that vintage or earlier are filled with innovation workers today.  But the foundations of that transition were laid in 1892 when Durham’s tobacco and textile generation facilitated the relocation of Trinity College here.

The school was transitioning to the German university model with an emphasis on research over recitation.  This was less than two decades after Durham’s adaptation from agriculture to manufacturing.  Within a decade, seeds for the next adaptation were already being sown.

In 1907, Republican President Theodore Roosevelt moved to break up the massive Duke trust, one of two forged by Durham natives, one tobacco and the other fertilizer created from tobacco byproducts.

Its fall from grace began because of its complete monopoly of licorice, a flavoring used in tobacco.

Two years earlier his father, Washington Duke, had died just as J.B. Duke was founding The Southern Power Company, an entrepreneurial endeavor to help North Carolina adapt economically.  It’s now known as Duke Energy.

He would fight the breakup of his tobacco trust all the way to the Supreme Court four years later, but I think he had already seen the “writing on the wall” based on breakups of similar trusts.

In spite of their differences with Roosevelt, both father and son were also ardent Republicans, subscribing during its last few years to a wing committed to the downtrodden.

After breaking up his trust on behalf of the government, J.B. Duke walked away from tobacco for good just as the Republican and Democratic parties traded places on the issue of social justice during the election of 1912.

Roosevelt didn’t break up the Republican Party.  In fact he won every presidential primary but one that year.

But the party’s Wall Street wing used backroom tactics to block his nomination anyway, leaving the social justice wing no choice but to follow Teddy to a third party and to finally convert to Democrats.

The Party of Lincoln had become one that would have shunned its first President, just as today’s version would probably shun President Reagan.

J.B. Duke spent his last decade setting up another kind of trust, this one to create and endow Duke University from its Trinity foundations with one of the foremost goals of establishing a research-driven nationally recognized medical school.

By the end of WWII, Durham and Duke leaders were at the forefront of pushing a proposal by a UNC-Chapel Hill professor to forge a university park out of southeast Durham pinelands.

It would be solely dedicated to research and development. It’s known today as Research Triangle Park, “triangle” emblematic of the first three of now four universities involved, half of them also based in Durham.

The Park’s tenants are corporations, but employees have always spun off to launch another economic transformation, this time smaller innovation concerns.

By 1987 when time American Tobacco abandoned its plant in Durham for good two years before I would arrive to jumpstart the community’s first destination marketing agency, innovators were already beginning to gravitate to downtown to live and work alongside artists in converted lofts.

Even the city center district of Downtown Durham was receiving positive reviews for sense of place and authenticity long before it began trying to earn them.

Moretti cites research in his book for why innovators like to congregate in Durham besides the fact they like authenticity in their surroundings.  “Geography matters for the spread of knowledge, and knowledge quickly dies with distance.”

He cites research that the transference and synergy important for innovative ideas falls off dramatically between zero and 25 miles.  In fact Harvard researchers have correlated it to being less than a kilometer away or just over a half mile.

RTP is four miles from downtown Durham and Duke ranges from being adjacent to two miles from downtown.

Similarly, he notes that it is equally important to venture capitalists to be in very close proximity to their investments.

Clearly Raleigh developers and realtors who beginning in 1960 hoodwinked so many newcomers into commuting to Durham by disguising the location of RTP, undermined more than the housing market and philanthropy here.

In his book, Dr. Moretti also explains another reason innovation centers are very geographically compact.  Innovation concerns not only locate in clusters for the exchange of ideas, but like Facebook has recently admitted, they also buy other concerns and close them down.

This isn’t to eliminate competition but because the true objective of the transactions was to secure more talent.

Durham leaders, especially those responsible for economic development would do well if they haven’t really read and re-read The New Geography of Jobs, not to reinforce self-perceptions of exceptionalism but to see and understand broader influences.

For example, it may take decades before we know whether downtown revitalized because of shifts in macro-psychographics nationwide including whether it would have happened even without massive subsidies.

But far more important is that Durham learn from its adaptive past and also the past of great cities now in decline.

Other than accredited community destination marketing organizations, economic developers are not known for strategic thinking, especially on the supply-side.  Often this is because governing boards and stakeholders limit them to just “shoveling more coal on the fire.”

But for continuing and never-ending economic adaptation to perpetuate, strategic thinking is imperative, especially among elected officials.

It isn’t enough to celebrate today’s accolades, really a credit to preceding generations of Durham leaders.  But we can learn from their example and be inspired by their witness.

Judging by how far ahead past economic transformations took root in Durham, today’s leaders need to be focus on 2050 and beyond or risk Durham becoming another Detroit one day.

Finding Myself Still Alive At 30 - Part 1 of 2

When I landed in Anchorage, Alaska thirty-six years ago this summer, I knew what I was in for.  I also knew the reason I had been recruited to complete its fledgling DMO startup.

Still facing my 30th birthday, I had cut my teeth as a DMO exec in Spokane, where business executives had tasked me with separating that startup from the Chamber of Commerce then under a very powerful executive who took it personally and made it personal.

I jumped at the opportunity when Anchorage made the offer for many reasons.

As a good friend put it once regarding something similar that happened to him - once a struggle like that is concluded it is very complicated for anyone in the room who has “blood splattered all over them.”

Possibly this is also what led a later successor to apparently whitewash the history of that organization leaving himself at the center or possibly I failed to leave a folklorist in place (smile.)

But I had already exceeded the average tenure nationwide for DMO execs surprised to find myself still alive at 30 five years seemed like an eternity.

Anchorage found me appealing that due to my Expo ‘74 experience I had a grasp of the far greater potential of tourism beyond just conventions, rare at the time for peers in that profession.

The governing board in Anchorage also knew I had proven to have grit and they tasked me with something even more difficult.  They wanted me to pursue Anchorage’s full share of tourism economy.

That meant gently weaning it out from under the control of then interlocking tourism interests in Seattle and Southeast Alaska but without taking anything away from what had long been the Alaska tourism “establishment.”

As we left the room after our first meeting, I remember telling a member of our governing board who happened to head a major Seattle-based Alaska-focused tour company (who became a good friend,) that to achieve that end, it would take between two and five years, but I might not survive that long.

The easy part was exceeding Anchorage’s fair market share for regional and national conventions.  But even adding in state meetings that segment would be but a small fraction of Anchorage’s visitor potential.

Even back then, the convention and meetings segment was showing some signs of losing steam, what we know today was in fact a long, slow decline as a proportion of overall travel.

The real potential for visitation to Anchorage would be doing something Alaska had never done.

We strategized that the real potential was going after travelers who, with only a few days to visit, wanted to experience the full breadth of what Alaska had to offer without spending two or three weeks jumping all over the state as had been customary.

This was an untapped segment focused on minimizing costs and logistics in what would be the equivalent of a long weekend’s stay but it meant breaking with the tradition.

Instead of the way each community had traditionally been identified for tourism with a particular feature to maximize tourist frequent movement and stay, we would reveal to this untapped segment that all of these could be done in day trips around Anchorage.

Analysis showed if carefully communicated to target markets, this new segment would be value-added to Alaska, and Anchorage could still serve its assigned role as an overnight stop for escorted tours or as a jump-off point for expensive fishing and hunting lodges.

The strategy also included tapping into visitation from Asia and Europe, working to develop stopover visits from air passengers refueling during flights over the pole and opening up winter tourism.

We also sought to persuade cruise companies to add itineraries that came all the way from Seattle and Vancouver into the Port of Anchorage without sacrificing their traditional itineraries limited to Southeast Alaska.

The reason I told our governing board I probably wouldn’t last very long is that back then Alaska tourism was very incestuous and heavily under the influence if not the thumb in some ways of a few Seattle-based businesses.

Alaska tourism had always been primarily about Southeast Alaska because this historically originated with cruise excursions to Glacier Bay organized by naturalist John Muir in the late 1800s.

We knew that when Anchorage ventured outside its designated role as an overnight, it might set off alarms in other parts of the state which would cause some to appeal for protection to powerful allies further south.

We had to try even more than Anchorage already had to simultaneously fulfill our role in traditional Alaska tourism promotion while repeatedly making the case that what we were doing differently was a win/win for Alaska.

Many understood, but suspicions of Anchorage motives ran deep, some with good reason, thus the pejorative at the time that its best attribute was that it was 10 minutes from Alaska (insinuating it wasn’t really Alaska.) 

To build good will, I spent a lot of time on projects that, while they didn’t benefit Anchorage that much, they did other parts of the state.

I tried to make friends and alliances all over Alaska and took time to call and meet with them frequently to allay any concerns burning up the grapevine.

But I also made more than my share of mistakes, many of them really stupid.

“Suffering fools gladly” is not my default, and I made a mortal enemy one day when I told a senior Alaska tourism operative in front of his friends that I didn’t appreciate his off-color jokes, especially those denigrating people of color.

Telling or listening to these jokes back then was a sign of fraternity, at least for the “good ‘ole boys.”  Regardless of how offensive it was, I could have handled that much more smoothly and without humiliating him.

Twice the age I was then, I know now that people can often read what I’m thinking on my face anyway.

But it also didn’t take long for us to begin tapping into Anchorage’s fair share of tourism which we confirmed with research.  The findings contradicted long established “conventional wisdom,” unavoidably stepping on some toes.

The more we tapped into a fuller share of visitor-centric economic and cultural development, the more the Anchorage community wanted us to do even more.

It was difficult not to cross the line, even in a state as gracious and accepting as Alaska.

So sure enough, in my fifth year, right on schedule, cabals of Alaska and Seattle interests began cornering me in private to press for us to step back.  Way back.

Often they would drop the name of a local constituent intimating it was someone over which they felt they had influence or insinuating the threat of losing lucrative contracts.

In hindsight, I should have raised an alarm more vigorously with my board as a whole, but instead, my low key summaries were designed to reassure them I had it under control.

That was a mistake.  Never underestimated the power of gridlock on personal relationships as a trump logic and metrics.

I went to great lengths each time one of these sessions took place, to review the data and how what we were doing was both/and, and not a threat to Alaska’s traditional tourism infrastructure.

But it was compliance not reassurance they wanted.  It only further alienated me from them.  Fueled by success and feeling threatened, looking back I’m sure my intensity and frustration came across with more than a little hubris.

Within little more than a year, a handful formally threatened my board with resignations of membership support (a small part of our funding) if I wasn’t fired and a course change made.

If not they would smear us in the news media.

To be continued…

When Cultural Facilities Become Means Not Ends

In the mid-1970s as a newly minted community marketing exec for Spokane, Washington, one of the first people to drop by my office was an ad rep named John Kelly.

We couldn’t afford what John was offering, but in the process he gave me a peek at his parent company’s new research: one of the first, if not the very first, in-depth breakdown of the entire marketplace of conventions and meetings.

The next year John joined Alaska Airlines but our paths would cross several more times.  He was head of marketing there when I was running Anchorage, my second DMO.  Shortly after I was recruited to Durham he became head of Horizon Airline and then head of Alaska Airlines.

But the day of our first meeting sticks in my mind because the sixteen subsequent reports commissioned by M & C Magazine that I utilized before I retired from that profession, were something for which I found an alternative use.

Even more important than rationalizing how to reach convention decision makers,  I somehow saw them as a way to zero in on metrics that would help us calibrate market share not only for Spokane, but for the two other community DMOs I ran during my career.

Market share is a way to set realistic goals and allocation of resources based not only on generating demand but calibrated to changes in supply.  It is also a means by which a community can assist developers and avoid the churn that comes with overbuilding.

It also helps a community avoid over-reliance on any one market segment of visitors.

As John and I talked that day, Spokane was spending $2 million to convert what had been the state pavilion during the just-concluded World’s Fair into its intended after-use as a convention center, for which it had been carefully designed.

It was also from these reports and warnings from the sentinel heads of a few major hotel chains, that a few DMO execs began to detect in the early 1980’s that the meetings market was losing steam.

But for fits and starts, it has declined now to about 10% of overall visitors potential.

A consultant isn’t needed to compute a community’s fair market share or potential. Roughly it goes as follows:

Take the gross number of meetings and attendees nationwide.  Separate corporate and small association/government meetings from the 1% that are major conventions.  Separate the groups that rotate across the nation from groups that stay within a region or state.

Take size breakdowns and calibrate them for the roughly half or more that are day trippers from those who use hotels e.g., 57% market-wide and match it against overall community capacity.

Discount for the proportion that meet in a community’s peak season for transient business or leisure leaving the percentage that meet in a given community’s “needs” seasons.

Narrow down potential by those rotating to any given region during a given year, e.g. 23% in the South Atlantic.  Separate the proportion that use convention centers e.g. 30%, from those that use hotels, broken down by downtown, suburban and airport etc.

The result will help calibrate reliable goals for that segment of visitors as well as inform any discussion about facility needs.

In the 1890s when destination marketing organizations first evolved to shape community identities as a means to leverage visitors, conventions were not only a purpose for which people traveled but the easiest to pursue.

Back then few hotels had meeting space and most meeting facilities were privately owned.  In the 1910s, cities began building public civic centers and auditoriums.

They were first a qualify of life amenity for residents and second a way to potentially appeal to conventions as value added.

Thus they were called civic centers.  That may be the last era in which convention centers truly made sense.

By the 1920s and 1930s mass leisure travel gave cities far greater and broader potential for visitation but many communities and their DMOs remained fixated on conventions, as many do today.

They imagined that segment as an ever expanding lake of potential, never making adjustments for the fact that even when and if that were true, the number of cities competing was growing far faster.

They also failed to account for the explosive growth and popularity of major convention hotels as an alternative or that improvements in transportation meant that attendance at conventions gradually began to skew based on the region and state in which they were meeting.

Failing to grasp that the genius of visitor-related economic development is that it is meant to be “demand-driven,” ironically, many cities and their DMOs have fixated on the supply side of facilities instead, emulating old-school, Industrial smoke-stack chasers.

The unfortunate result has been erosion of the sense of place and community distinctiveness that DMO’s are sworn to defend, making their communities less and less differentiating and less and less appealing or worthy of affection.

Following World War II, officeholders, downtown developers and their allies cities stopped viewing convention centers, stadiums and performing arts facilities for their inherent potential and began to coopt them as a means for the public sector to prop up private property values.

After researching nearly nine decades of documents in scores of cities, in a new book public policy expert, Dr. Heywood Sanders has followed up his controversial  2005 study for the Brookings Institution with a much more in-depth analysis of these phenomena and the history behind convention centers.

For neighborhood activists, officeholders, policy makers and expecially DMO executives, Sander’s book belongs on the shelf of required reading of this nature such as Dr. Mark Rosentraub’s Major League Losers and the follow up Major League Winners.

And out next year, Building Cultural Facilities in U.S. Communities by Drs. Joanna Woronkowicz and  Norman Bradburn, an elaboration on the study Set In Stone they authored along with five other researchers for The University of Chicago Cultural Policy Center.

Convention Center Follies is a page-turner for anyone who has witnessed or be party to the backroom processes and copy-cat techniques so often used to rationalize these facilities along with stadiums, ballparks and performing arts centers.

Some in my former profession along with feasibility consultants are quick to quibble with details of these studies but a few are having a  critical-thinking epiphany.

First, if they are half right, the problem is just as big.  Second, it DMOs and consultants want clearer information, they need to become less defensive and far more reflective and critical themselves.

The communities I served may have dodged the bullet but that doesn’t mean they have been immune to the group think that has led to so many billions of dollars of public facilities being spent less effectively than it could have.

During my career, I witnessed first hand many of the things Sanders reveals, both as other communities followed this path but to a lesser degree in my own communities as well.

The formula hasn’t varied for almost 90 years.

Hatch the plan in private.  Find a way around voter approval.  Shop for data to support proposals rather than build proposals based on data.  Avoid factoring in macro overbuilding or long term trends.

Let the ends justify the means.  Never go back and recalibrate expectations based on performance or admit things that didn’t work. Hope memory fades before the even bigger down stream costs come.

As business professor friend of mine has written.  Communities are in denial that initial constructions costs are only a tiny fraction of the ultimate cost of facilities.  Officeholders rotate off, developers flip, community memories fade.

Seldom does the outcome endure.

Sanders reminds us that in 1956 when Booz and Allen conducted the first independent feasibility assessment of a convention center in the nation, it concluded the new facility was not feasible.

Developers and officeholders insisted that the head of the DMO in that community, probably with a gun to his or her head, insisted that it crunch numbers more favorable.

Today, it happens in reverse but that is probably when the ugly business of consultant shopping was born.

As feasibility consulting rapidly grew lucrative, many acknowledged that the accuracy of the reports was made irrelevant because community’s had already made up their minds by that time they were engaged.

If a DMO’s research was felt too conservative or one consultant’s numbers didn’t work, another would hastily be contracted as happened more than once during my career.

In 1984, when a new convention center was built in Anchorage as part of Project 80s (along with a sports arena and a performing arts center) the total amount of convention center space nationwide was closing in on 32 million square feet.

By the time my career ended two and a half decades later, that amount more than doubled during a time when it was clear that demand was in a long, slow decline, especially as a proportion of overall travel.

A look at the data shows the same thing has happened with sports facilities and performing arts theaters, far outstripping demand.

Cultural facilities are important, especially when they are carefully evolved as part of a diverse ecosystem designed to differentiate communities and foster unique sense of place but built in response to demand, not as a means to create it.

As Rosentraub cautions, cities need to do a whole lot more planning and a lot less hoping.

Nurturing Authenticity of Place

On a warm Sunday morning twenty-five years ago I was sitting on the ledge of what was then a Duke Power appliance store near my temporary office in the restored Kress Building looking down Main Street in Durham, North Carolina.

This was my first week of spearheading what was my third and final community-destination marketing start up.

I felt an incredible sense of urgency but I also knew by that half-way point in my career, that to leapfrog much more established competition we had to do things differently.

To me that meant not only differentiating Durham as place to visit but differentiating the very way we marketed it to potential visitors,  It would need to be very different or highly evolved from anything I had done in my previous two communities.

Peers then, and far too many now, thought that this was weird. The prevalent mantra was an approach best described as hyperactive, cookie-cutter follow the leader.

But two resources I had read a few years earlier kept ringing in my ears - an essay on “sense of place” by Dr. Wallace Stegner, who coined that term, and the definitive primer on strategy by Dr. Michael Palmer.

Later I would conduct studies to drill down more completely into Durham’s personality, but to begin with, start ups have to skim characteristics on the fly.

Running through my mind that day as I looked down Main Street were Durham values and personality characteristics I had already sensed.  In marketing parlance this is called honing in on a community’s brand, the nexus of internal and external perceptions.

The first apt descriptor to come to mind regarding Durham was genuine, real.  Quickly following that came diverse and eclectic which morphed to textured and finally, authentic, the core trait.

Few communities back then valued, let along exhibited those traits, preferring instead, a rush to replicate others in the geography of anywhere.  If they did any branding at all, they confused it with aspirations.

But I didn’t have to be in Durham but a few hours and days to know these were among Durham’s core, almost temporal values.

Later research confirmed and deepened snap judgments made when that’s all time would allow.

Being able to discern those traits probably came from pre-school explorations around our ancestral ranch, or perhaps gleaned while earning a degree in history.  Maybe it was just plain luck or a combination of all three.

While I quickly tested these descriptors on two community elders, individuals with roots going back before Durham’s founding, I already had some idea of what they meant in other contexts such as when a decade earlier the late Dr. Christopher Lasch had written about authenticity in a social context.

But I became a student of “authenticity,” particularly Durham’s, where it was so deeply rooted compared to other communities.  There had to be a reason they did things so differently from its founding, such as those neo-Romanesque chimneys on historic warehouses here.

In 1992, a paper I wrote at BYU for a folklore class in 1971 was footnoted in more serious studies, and while alerting me, my professor faxed me a copy of an article written that year by Dr. Regina Bendix entitled, “The Scientific Search For Authenticity.”

Five years later, I snapped up her new book, In Search of Authenticity, to learn more about the “longing” for it spurred by cultural influences such as modernization.

This led me to believe that is what motivated Durham’s founders to embed it so deeply here.

It was a counterbalance to the tobacco, textile and other factories we are repurposing today for the creative class.

It also explains why, after creating some of the world’s largest trusts and revolutionizing North Carolina’s economy after the Civil War, Durham turned to the preservation of historic sites only a few decades after the founding.

I knew that if we couldn’t trace authenticity, we wouldn’t be able to explain it, nor would we be be able fulfill our organization’s charge to be the guardian of that essence of Durham’s sense of place.

The term “authentic” wasn’t applied much to other places until a decade after my insight when at the end of that century, historical novelist Dr. Michael Crichton inserted a prescient line in his 1999 book Timeline, about a team of historians and archeologists who time travel back to 1357.

The billionaire Robert Doniger, a character in the novel who facilitates the expedition as a means to infuse authenticity into a tourist attraction utters the line:

“Authenticity will be the buzzword of the twenty-first century.”

Two years later, as if on cue, authenticity surfaced in research published by Dr. Richard Florida describing places most appealing to the creative class, a bellwether to community economic vitality.

I still remember the blank stares I got from two economic developer friends when I read them the passage about the creative class being drawn most to “authentic…experiences” in “authentic, indigenous and organic venues.”

Back then, while fronting for business interests, supply-side economic developers (tourism is demand-side) were in the midst of a more than two-decade frenzy to push for public cultural facilities such as convention centers and particularly performing arts centers as a a means to, in turn, more easily leverage capital from lenders.

In the pretense of spurring development, nationwide they pushed through $16 billion in arts facilities alone during this period, more than half on performing arts centers, with the greatest increase occurring  in the four years between 1998 and 2001.

Analysis shows that it paid off handsomely for adjacent developments but had negligible impact beyond.  Later I will explain why this binge had the unintended consequence of hollowing out so much community authenticity across the country.

In the 2000s, “oh-that-too” marketers ubiquitously tried to obliterate the meaning of authenticity with phony applications.

To the rescue came a 2006 speech/essay entitled The Geography of Somewhere by Dr. Scott Russell Sanders, followed a year later by the definitive book entitled, Authenticity: What Consumers Really Want, by James H. Gilmore and B. Joseph Pine II.

They summarize why it is so hard to communicate authenticity, because it is often perceived by what it isn’t.  It isn’t commercial. It isn’t fake.  It isn’t monetary, etc.

But derived from Shakespeare’s Hamlet, Gilmore and Pine distill what they call the two principles of authenticity, applied here to communities:  An authentic place is true to itself and strives to be always true to what it says it is.

Authenticity isn’t created, its nurtured.  Working with researcher John Henry of H2R Market Research, PGAV Destinations, a company that has created or revitalized attractions visited by 75 million people each year, has conducted the definitive analysis of perceptions of authenticity.

This included in-depth, nationwide research into the two-thirds of visitors who participate in attractions, which tourism textbooks define as:

historic sites/museums, parks/preserves/botanical gardens, performing arts, zoos/aquariums, art galleries/museums, amusement/theme parks, sports (spectator and participatory,) festivals/events, gaming and of course shopping and dining.

By nearly 4-to-1, travelers prefer destinations that are real and authentic over those that are fantasy, but fewer than 1 in 3 destinations visited in the previous year met those qualifications.

However, people view authenticity on a continuum with historical and natural attractions most authentic and, for example, performing arts (especially musical theater-sorry Broadway) as least authentic, with things like science centers and botanical gardens in the middle.

Each type of attraction also fits on an authenticity continuum with independent-locally owned stores most authentic while malls and formula stores least authentic.

Local-chef owned restaurants serving locally grown foods including heirloom veggies are most authentic whiled national restaurant chains are least authentic.

Those least authentic must strive to let a community’s authenticity rub off, such as The Streets at Southpoint, a super regional mall in Durham did with faux architectural details.

Of course, communities need a mix but to retain appeal as authentic, they must vigilantly manage the mix so that things most real and authentic are never taking a back seat to things fantasy.

That is, if like Durham, they are fortunate to have any left.

Trying to straddle is a sure way to becoming Anywhere, USA.

The Proverbial Conundrum of Community Revitalization

A good example of what I mean when I say that community marketing is 2/3rds “lowering barriers” is an aspect we backed into during my final startup 25 years ago in Durham, North Carolina.

Even today, this part of the job is under the radar of or considered an inconvenience by far too many destination marketing organizations.

We came to earn a franchise for this aspect while leveraging data or information-based strategy-making and marketing decision-making, somewhat novel at the time, and it seems still only given lip service by many economic development organizations in general.

Not only did that approach help us much more quickly leapfrog much more established competitors but a side effect was that within a few months of startup we had earned a “go to” reputation with financiers, developers and those seeking commercial tenants.

I noted it when a week or two after start up out-of-town appraisers began to drop by up to several times a week and were extremely impressed with the results of even our initial metrics.

It was particularly clear that our perspective and back up was reversing negative impressions volunteered about Durham while they were conducting similar appraisals in other parts of the state, especially in a nearby rival community.

Word quickly spread among local businesses and soon I was assisting four or five appraisals or reappraisals a week and did so until I retired more than two decades later.

Reappraisals are the updated value computations required by lenders before renewing or extending finance for existing developments.

Soon new project developers caught on and we became the “go to” place to inform appraisers and financiers on the front end of projects while at the same time, we were earning a reputation for developing reliable estimates of community impact for local officials.

None of this had fit under the customary heading of community marketing unless as I did at the time, you put it under the heading of community relations and do it on the side as a way to further leverage information we had developed to inform promotional decisions.

Promotion of existing assets and community development always go hand in hand.  Community-destination marketing organizations are involved in what economists call “demand-driven” economic development.

This is the process where marketing fuels demand for existing developments and the market responds by generating new or adaptive reuse of existing developments.

But lowering the barriers to sustainable financing is a function of information which is best leveraged from destination marketing organizations where the data is already gleaned to shape and measure their primary task of telling the community’s story.

As I would soon learn from earning this franchise, unusual for the time, parallel redistribution of marketing data for uses such as these may be equal in importance to the role of many traditional promotion techniques.

As word spread, DMOs in other communities began to call because they were being asked for similar information.  But what was easy for us because data was a strategic pillar to our marketing, seemed overwhelming and foreign to many peers.

Seemingly effortless to some, distilling and applying perceptions and insights from data must be cultivated.  It is a way of thinking about and shaping action that doesn’t derive from titles or position.

The value was confirmed to me during the early 90s evolution of an adaptive reuse project in downtown Durham that subsequently triggered and continues to trigger a chain reaction of of millions of square feet similar projects.

Leaving a presentation, a banker told me in front of others that in his opinion we had stumbled onto the answer to the proverbial conundrum of “chicken or egg” in community revitalization and development, at least for Durham.

He went on to make me self conscious in front of strategic partners by lavishing praise on the data we had provided, both hard data and analysis.

To him, it had removed any obstacle to providing the financing, but I knew that was only part of closing any deal, aspects of which were the forte of economic development partners on the supply-side.

To me, it confirmed the time we had been devoting to communication and data to lower barriers to financing was as important to un-inhibiting visitation as this same communication and data was to promoting Durham to prospective visitors.

The barriers to lower went far beyond correcting misimpressions.  When millions and millions of dollars are at stake, data-driven insights also proactively put the community narrative in a perspective necessary for the financial markets.

His and subsequent words from lenders and appraisers over the year also confirmed the wisdom of the North Carolina General Assembly for legislation restricting the diversion of dollars meant for community marketing into product development to no more than a third.

The meaning of marketing was also stipulated.

Durham’s community organization is so fortunate that my successor has an even better ability to distill data into insight.  This qualification for succession even rivals the indispensible grasp of and and ability to convey both the organization’s story as well as the community’s.

Hopefully these observations are useful to a new generation of community marketers.

Nurturing an Indigenous Festival Ecosystem

Spurred by a headline in the local newspaper, I had a flashback to Paul Jeffrey and the former World Jazz Festival here when a new indigenous jazz festival launched in Durham, North Carolina last weekend.

It was one of more than a dozen indigenous but nationally-acclaimed annual festivals including several smaller jazz festivals I found waiting for me when I was invited here 25 years ago to to foster the community’s marketing organization.

Then City manager Orville Powell and the late Jack Bond, who was the Durham County manager at the time, asked us to incorporate a far more in depth and comprehensive community-wide calendar into our work, something still far too rare among other destination marketing organizations.

It made sense to expand our inventory to include not only visitor-ready events including annual festivals, but to each and every event in the community.

This way organizers would be fully aware when selecting dates to avoid any that would compete for audience, but more significantly avoid competing for sponsors, volunteers and even hotels rooms.

There were already a couple of thousand Durham events back then.  Today there are about 5,000 events each year but the ecosystem in which festivals and events thrive is extremely fragile.

It is reliant not only on respect by other organizers and the supply and demand for sponsors and volunteers but for sustainable capacity.  By that I mean that the core organization, group or cluster of individuals upon whose energy and passion indigenous festivals grow and thrive.

It is not an area of a community’s sense of place that can survive churn.

Pile on too many and the capacity to create and sustain indigenous events—only ones that make a community distinctive—and a community can go generic or from “somewhere” to “anywhere” in a hurry.

This new jazz festival was quick to reach out and incorporate several others that have been in existence in Durham, most fostered by jazz instructors and study areas at Duke and North Carolina Central universities here.

The former Durham World Jazz festival created and produced by Professor Jeffrey from the early 1980s until he retired many years later was also a multi-day, multi-venue festival.  It drew participant jazz performers from around the world.

When consultants created a master plan for Durham’s downtown, without checking the inventory of events held downtown or elsewhere, they included an off the shelf recommendation for more events.  Unfortunately, this may have undermined some existing events.

I recall many years ago when one of our strategic partners asked me if we would support the City spending $200,000+ to import a jazz festival from another city.  “No,” I said, because to his surprise we already had two or more indigenous jazz festivals that could use that underwriting.

The idea of an import was quickly extinguished and traditional supply-driven economic developers very wisely consulted with those of us on the demand-side of economic development for an understanding of the organic way sense of place evolves.

In many communities, supply-siders seem so numbed by the concept of churn created by commercial developers that they end up destroying sense of place which sadly once gone cannot be restored or reinvented.

Sense of place is organic.

Adaptive reuse of historic buildings are no guarantee of sense of place if they are populated with formula restaurants, formula retail and formula festivals and events.

Things such as indigenous festivals and indigenous restaurants and truly locally-owned, independent businesses are the crucial software that prevents historic preservation from becoming just another Disneyland, a simulation of sense of place.

To her credit, the organizer of the new Durham jazz festival that occurred a few days ago, reached out and incorporated others that had been struggling, bringing much needed oxygen and a dose of crowdfunding to a cast of corporate sponsors for underwriting.

Festivals can age out when the people with the original energy move on or because they need to be retooled or because of some temporary dislocation beyond their control. Volunteers can burn out too.

Two here that have seemed to struggle in recent years to find their original vibrancy and chemistry are Centerfest and the Bull Durham Blues Festival.  Neither is due to lack of trying or community enthusiasm.

More likely is that a delicate and fragile festival ecosystem had been disturbed making it difficult to find the original magic.  Money is often not the answer if internal capacity, vision or passion has been compromised somehow.

Watching a video at Durham’s Annual Tribute Luncheon which was tucked between our Full Frame Documentary Film Festival and the new jazz festival, I was struck by the audience’s reaction to images of Centerfest and the Bull Durham Blues Festival in their heyday.

Reminded of how vibrant they once were, the audience probably recalled the role these two festivals and many others played in downtown’s resurgence.

Some communities may need more festivals.  However, fortunate for Durham, our festival ecosystem is entrepreneurial and self-perpetuating and needs no “big game hunting.”

Instead, its health needs to be nurtured and given capacity.

When festivals inevitably begin to age out and lose steam, equally indigenous replacements need to be nurtured just as Dr. Cisely Mitchell, a trained bio-statistician and her partner trumpeter Albert Strong did with the Art of Cool Fest.

She also not only created an indigenous festival but gave exposure to scores of local performers as well as name acts, established as well as up and coming, something also at the heart of the Durham Blues Festival in its heyday.

Community sense of place is never about “big game hunting” for culture. It is always about careful gardening.

Short-selling Community Destination Marketing Returns

The City Council in Durham, North Carolina where I live has been wrestling with the idea of a 1% set-aside of property tax revenues to fund parks, something another council briefly tried to do to fund the arts back in the 1990s.

I had a front-row view of the struggle elected officials have with ear-marking during my now-concluded, four-decade, three-city career in community visitor-centric economic development, a function which is funded by earmarking a special tax assessed on visitors.

I find it interesting that most local officials seem to have mastered the idea of providing incentives for supply-driven economic development projects, even if only on the back end when the project is assured and increases in property taxes likely.

But when it comes to funding meant to fuel demand-driven, visitor-centric economic development, they seemingly try to siphon as much as possible away on the front end, essentially robbing their communities of 4 to 6 times the revenue they would generated if used as intended.

Like many, at first I thought the resistance to earmarking was about power based on the rhetoric of a few.  But more and more I came to realize that it is more often due more to a failure to think strategically.

Not because local elected officials can’t think strategically.  Most actually do.

But they are trapped in organizations where strategy-making is “inside-out.”  By that, I mean it is focused almost entirely on dividing up how resources are spent, with only the most general understanding of what drives revenues beyond merely voting to raise the tax rate from time to time.

Many businesses are similarly trapped in “bean-counting” cultures.  A great book that explains this and a much more effective alternative is entitled, Strategy from the Outside In.

Coincidentally, it happens to have been co-authored by Dr. Christine Moorman of The Fuqua School of Business here at Duke University, one of the very best.

The way visitor-centric economic development is supposed to work is revenue-based strategy-making.  A special tax on visitors is assessed and earmarked for the purpose of community marketing to attract and serve visitors. 

Local government then reaps a return of 6-to-1 in revenues from these visitors, mostly in the form of the portion of sales tax revenues that are returned to the City and County for general use.

Even if the return is restricted to only the ratio reaped from specific marketing efforts specifically and not from what it is able to spearhead overall, the return is 4.5-to-1, using Durham as an example because it is driven by analytics.

Yet even here, officials have always siphoned half of the funds up front before they could be put to work, effectively, in today’s dollars, trading $20 to $26 million for only $4.4 million up front.

This is the result of being resource rather than revenue focused as nearly all local governments are, more adept at dividing up the pie vs. growing the pie.

At Fuqua, Professor Moorman also directs the insight-laden CMO Survey, in partnership with the American Marketing Association and McKinsey & Company.  Click here to view the results of this year’s survey in slideshare.

There are always some interesting findings to glean from the survey, such as the portion of a marketing budget devoted to research is now benchmarked at 12%, about double what even data-driven community destination marketing organizations (DMO) such as Durham’s devote.

There is also some good information that could be used to help calibrate community destination marketing to a achieve a fuller share of visitor-related community tax revenues from the tourism sector, the way an individual business or corporation would.

From the survey, the percentage of overall revenues invested back into marketing to fuel more, varies depending on business to business or business to consumer activities (5.8% to 11%,) both of which are integral to community marketing to achieve demand-driven economic development.

Using this approach, the amount a community such as Durham would reinvest in community destination marketing should be 6.6%.

The percentage of marketing if Durham was a business with $842.4 million in sales from visitors varies depending on whether the markets are business to business or business to consumer, Durham marketing is a mix.

Using the formula of 6.6% the amount reinvested in community destination marketing to optimize the growth of local tax revenues back to Durham should be between $18 and $55 million, compared to the $2.9 million it does now.

The smaller amount is calibrated to a percentage of sales restricted to only what its marketing agency drives directly.  The larger amount is expanded to take into account the amount of sales it spearheads (spending by Durham visitors only in Durham, not coming to and from.)

Instead of $40 million, local governments here would reap $81 and $330 million to help fund not only tourism-related improvements but many other local government services.

This is what can happen when local government strategy-making is as much about optimizing revenues as how to divide them up.  It is also reliant on having a metrics-based, data-driven, best practice, highly accredited, leading-edge and sense-of-place driven community destination marketing agency as Durham does.

If your community doesn’t or you’re not sure, that is where to start.  A good indication there is a problem is if your local community marketing agency is hooked on subsidizing events or facilities or both rather than fueling revenues from which such needs can be addressed.

A preliminary analysis from a report that will be jointly published later this year by the IBM Institute for Business Value and the Economist Intelligence Unit asks the question whether marketers are leading and innovating or following.

Only 20% of the CMO’s surveyed were focused on “ROI accountability” as Durham's marketing agency is so the problem of being resource vs. revenue focused is not unique to local governments.

The more frequent Duke survey of CMOs finds that astonishingly 15% don’t measure marketing ROI at all and 27% go by “manager judgments” (another word for flying by the seat of the pants.)

It isn’t just local governments that can be trapped in “inside-out” strategy-making.