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.

The Pivotal Bitterroot Event That Still Shapes America

Today I’m headed up to Appalachian State University (ASU) nestled near North Carolina’s border with Virginia on the western slopes of its namesake range.

Durham, where I live, lies in the foothills of the Appalachians which gives way to the Eastern Coastal Plain just east of Raleigh.  Whoever wrote on Wikipedia that Durham is flat doesn’t walk much.

In just a quarter of our two and a half mile walks each morning, we climb up and down the equivalent of nearly a 15 story building.  I kid my friends down in Raleigh that based on what the legislature is doing there, Durham will be beachfront in a couple of hundred years (smile.)

Invariably, I gravitate to Southern Rock during this twice yearly three hour drive (with stops) up and over the Eastern Continental Divide to ASU where rivers run west toward the Mississippi.

It is a fusion of rock, country and blues, with gospel and jazz that falls under the genre of Americana or “roots” music. East of Blue Ridge, think Marshall Tucker Band and Allman Brothers.

Knowing I am the only son of an only son descending from generations of Idaho ranchers with roots back to before it became a territory may hint at the country music in my genes.

But the truly common thread through my seemingly eclectic taste in music is “roots” music.

On arrival, I’ll be speaking for two hours about strategic thinking and insight to seniors completing a “capstone” course in the ASU business school, with majors evenly divided into accounting, management, marketing and hospitality.

Road construction will prevent a jog in my route along a portion of the Pisgah National Forest set aside in 1912 three years before it was given that name and just two years after a horrible calamity ignited public opinion.

When I arrived here in 1989, less than 30% of its trees dated to that time because industrialists had logged it so heavily before the 1891 act creating forest preserves was finally adjusted to allow set asides in the east.

By then they were forests in name only on lands nobody wanted.  In photographs taken two decades later to document construction of the Blue Ridge Parkway, the devastation is still apparent.

Forestry education first took root further south along these ranges in North Carolina, but conservation didn’t.

President Theodore Roosevelt and Gifford Pinchot, who got his start working on the Biltmore Estate near Asheville, made Conservation a national overarching strategy.

But strategic preservation of forests is an idea that took shape in 1876, a year before the dawn of the “Gilded Age” and four years after Yellowstone was created as the first national park during a fifty year period dating from the Civil War when Republicans were in control.

Things weren’t gilded for 9-in-10 Americans getting by on less than $1,200 a year and most had a sense that deforestation beyond clearings required to make a home didn’t make sense.

John Muir echoed this sentiment that year with one of his first op-ed newspaper essays entitled “God’s First Temples: How Shall We Preserve Our Forests” but scientists were also worried and sounded alarms to Congress based on a paper by Dr. Franklin Hough.

“On the Duty of Governments in the Preservation of Forests,” outlined a case for government action based on a study of the fate of countries that ignored the overuse of forests.

Three years later, a month after dispatch riders reached my ancestor’s Idaho settlement and telegraphed word of Custer’s Last Stand, Congress finally responded.

Hough was embedded as a government researcher where he would conduct five more years of forest and timbering analysis.  It would take another another ten years before the forest preserve act would be enacted.

President Benjamin Harrison, the great-grandson of one of the signers to the Declaration of Independence, showed his independence from powerful special interests in his party by setting aside the first 12 million acres of national forest, including a portion of Yellowstone Park.

The same year, John Muir and some friends formed the Sierra Club, modeled after the Appalachian Mountain Club which in 1876 had been formed in the northern reaches of the range I will cross today by vacationers seeking to preserve forests.

The time of Harrison’s bold move was also when Gifford Pinchot went to work for a branch of the Vanderbilt's at their vacation estate in the North Carolina mountains tasked with rehabilitating deforested land following earlier advice from Fredrick Law Olmstead.

Teddy Roosevelt was serving as Governor but a naturalist by inclination he had already cut his teeth on conservation as a New York State Assembly member during the mid-1880s debating the Adirondacks as a forest preserve.

Today’s trip across the Blue Ridge is a warm-up for a cross-country trip I will soon take with Mugs, my English Bulldog.  The route each year is different, with one segment always in common.

After collecting my grandsons and daughter we all head up into the Bitterroot Mountains, an iconic northern Idaho range that suddenly cuts east behind our ancestral ranchland to touch the Tetons.

Regardless of where we cut through these forests, I can’t help but think about the fact that 104 years ago next month, it would have been a scene similar to the aftermath of an Atomic bomb blast.

In 1910, 3,000 fires combined into one and burned 3 million acres, an area the size of Connecticut including a fifth of the entire forest area of northern Idaho.

In the aftermath, the image shown in this essay was taken along Idaho’s St. Joe River, depicting the devastation across the state’s panhandle leading to the destruction of several towns and killing nearly 90 people.

Led by a Republican Idaho senator, Congress had been trying to decapitate the fledgling National Forest Service by starving it of funding.

This forced Rangers to pay for their own supplies including firefighters out of their own paychecks.  Adding insult, special interests and their Republican allies blamed these public servants for the devastation, a tactic often deployed today when funding cuts results in dysfunction.

As a final insult they even stiffed those who were grievously injured but not killed their medical costs and then denied a proper burial for the nearly 90 who died.

A recent book about the event is The Big Burn, written by journalist Timothy Egan, but it’s more than a riveting account of the massive fire. (For any non-readers who made it this far or those who want to see images click here for a documentary.)

Egan’s book weaves accounts of the event with its impact on the American public and a turning point in public policy. As he documents, “conservation was no longer an abstract debate.”

Outraged, Americans turned against the Republican Party and its special interest wing, many leaving for the Democratic Party which found its voice for social justice.

The forest I see carpeting the Bitterroots today began to come back three decades later later after persistent nurturing and experimentation by the Forest Service.

But the impact was still clearly visible in my early years.

Forest products today are turning more and more to commercially grown forests, leaving National Forests for recreation and tourism.

But urban and roadside forests which are even more crucial to tourism, especially in states such as North Carolina, are now under threat of desecration from a different set of special interests

These include insatiable clear-cutting-enabled Billboard companies and developers who are too lazy too lazy to get off their mechanized assets to bother with sustainability.

It isn’t clear when enough will be enough and the American public will rise up again.

An Unlikely End-Run

So much of what is wrong with society today can be traced back to about the time I was just graduating from college in 1972.

Back then there were just 175 registered lobbying firms according to an incredible article published this month by Stanford professor Dr. Francis Fukuyama, one of the neo-conservative founders of the magazine, The American Interest.

Roadside billboard barons back then were busy gutting the Highway Beautician Act but they stood out as exceptions and now I know why.  Today, having pacified virtually any enforcement of that act, a group such as this has become the rule at every level of government.

It is no coincidence that Americans now rank Congress next to last among professions regarding honesty and ethical standards.  Even lower is the ranking for lobbyists.

Reading that the number of lobbying firms increased 14-fold alone during just the first decade of my now concluded four-decade career in sense-of-place economic development before reaching a whopping 13,700 by the time I retired years ago, brought to mind an eloquent rant I listened to on the return leg of a cross-country road trip last fall.

One of the advantages of being a long-time political independent is being free to glean insight from all along the ideological spectrum.  The End Game for Democracy by progressive-leaning journalist and commentator Bill Moyer goes hand in hand with Dr. Fukuyama’s article on the other end of the spectrum.

The conservative columnist, David Brooks recommends that strengthening the executive branch is the solution.  A moderate Republican friend of mine and former local official would probably agree.  He speculates that regulations have become cumbersome and rigid primarily because so many executives fail to enforce them.

Fukuyama’s article appeared a few days after New York Times coverage of a new report by investor-inspired CDP showing that nearly 30 of America’s largest corporations including five major oil companies are not waiting for Congress to break free of special interests blocking it from taking action to control global warming.

Realizing that a market based cap and trade system such as that working so well to reduce Acid Rain will ultimately be the most cost effective way to reduce emissions, these corporations have already begun to incorporate a price on carbon in long range plans.

This hopeful news followed a report a week earlier in The Atlantic magazine about a community of more than 830 businesses across 28 countries and 60 industries worldwide enrolled in B Corps, a way to use market-based, scalable solutions “to compete not just to be the best in the world but the best for the world.”

The authors of the book Nudge: Improving Decisions About Health, Wealth and Happiness, who categorize themselves as libertarian paternalists, would likely agree.  These efforts are nudges to do the right thing.

Many states (20 have passed laws including Delaware and 18 more are working on it) are even establishing a new category of business incorporation called Benefit Corporations.  Unfortunately, North Carolina, where I live, lagging behind its neighbors to the north and south, is still one of 15 states failing to make progress, if not moving backwards.

The designation recognizes in a corporation’s legal DNA a signal to investors and consumers that this types of business considers what’s good for the earth and its inhabitants as good for good for business, a new style capitalism.

Together with certification programs such as Durham, NC-based Green Plus and a ground swell toward social entrepreneurism, I have hope that democratic institutions will one day be reclaimed from the stranglehold of “winner-take-all” special interests.

If reading all of this makes you feel as optimistic as it does me, click here for a report disclosing corporate and investor exposure to deforestation in terms of “operational, reputational and regulatory risks and opportunities and the value creation and erosion.”

Deforestation today contributes as much to greenhouse gas emissions as all of the cars, trucks, motorcycles, ships, airplanes and trains put together.  Look soon for “deforestation-free” designations in the marketplace.

And one day soon, this report will also help corporations understand their contribution to deforestation and value erosion from marketing departments that still condone roadside billboards.

Just sayin!