Self-Gifting Delusion

In late 2011 television news outlets signaled that paid newspaper circulation (total weekday and Sunday) was close to slipping below 40 million, a decline of 32% over two decades.

But less than 24 months later, those same outlets gave little notice when cable TV, now known as “legacy television subscription” slipped below that same threshold, having dropped more than 10% in less than three years alone.

When we cut the cord entirely in our house in 2010, television executives were arguing that the phenomenon was economic in nature, not the result of disruptive technology.

But by the end of 2011, 11% were considering doing so and a study in 2012 showed that 25% of legacy television subscribers planned to drop that service over the next five years.  Taking cord-shavers into account, the drop is becoming more precipitous than what hit newspapers.

Newspaper executives were astonished at the speed with which their business model was undercut by the Internet in the 1990s but not nearly in as much denial as landline telephone services were when the smartphone did the same to that technology less than a decade later.

It took less than a year after Netflix began streaming in 2007 for cord-cutting to move from fad to an accelerating trend.

Having good data is not an antidote for being delusional, nor is television the only industry in such gross denial.

In my former profession of community marketing, there are still far too many obsessed with visitor segments that have long been in decline such as conventions, pushing or enabling cities to build mega-facilities and then spending huge subsides on out of town groups that typically displace more tourism than they could ever create.

Evidence that this is a form of insanity has been available since the 1980s.  Similarly, community marketers and television executives often collude to subsidize huge sports events which also displace more economic impact than they create.

Corruption is rarely involved, unless it is lobbying, a form of legal corruption.  Just denial.

New media is at its worst when covering news media.  Listen in the build up to the Super Bowl as an example.  No it isn’t more popular than ever.

No the ads aren’t a turn on.  They turn off 1.2 viewers for every one viewer motivated to search for more info or buy something or feels made more aware.

The hugely expensive ads have a negative return.  So who is in denial?  Denial is a cooperative enabler and in this case, it includes the news media, advertising agencies, advertisers and about half of viewers.

One of the above is being ripped off,  But television may be the one being ripped off by convoluted data regarding the huge disruption now underway.  Instead of forewarning executives and stockholders to take significant action, it is full of mixed signals, in part, to desperately cling to the status quo.

All of this came to mind recently as I watched a presentation by arborists working for one of the nation’s largest utilities.  The presentation was quick to assign the costs of outages to trees but not to the fact that the utility lines should have been undergrounded decades ago.

The presentation was also clear that the lower lines running from pole to pole desecrating neighborhoods, home values and community scenic stature did not belong to the utility.

They belong to cable and land-line telephone companies and other utilities that are as obsolete as running the lines above ground.

It is the free market at its most irresponsible, unless you also factor in the obsolete use of coal to generate the power.

Free or freeloading?

These businesses are trapped in antiquated and unsustainable business models.  But waiting for them to adopt full-cost accounting or to write off stranded infrastructure is about as feasible as expecting lawmakers to see past the obfuscation created by billboard lobbyists, on behalf of another dead business model.

A new study indicates that nearly 6-in-10 shoppers in the US are self-gifters.  Maybe our only hope is to gift our communities the infrastructure to put these obsolete technologies underground.

We’re paying through the nose anyway.

Charlotte DNC Study Raises The Bar and A Few Questions

Charlotte, North Carolina, down-state from where I live and once practiced visitor-centric economic and cultural development has raised the bar for communities still obsessed with facilities and mega-events.

Independent economic assessments, some conducted over a period of more than 30 years and looking at 50 different host communities and areas have found no discernable net impact from mega-events.

So Charlotte followed the example of analysis released last summer for Indianapolis after hosting the Super Bowl and had a similar input-output analysis conducted of the impact of the Democratic National Convention (DNC) hosted there last September.

Though executed by extremely reputable companies using a well-proven methodology with which I am very familiar and have used for many years and executed by individuals I know and respect, neither micro-analysis is enough to refute the earlier longitudinal analysis.  These studies do, however, provide additional details.

While input-output is very reliable when measuring impact over time, such as the annual impact of tourism on a community, experts caution when applying it to events of very short duration.  Still Indianapolis and Charlotte are to be commended for raising the bar several notches for future hosts considering these and similar mega-events.

Released last week, the Charlotte analysis of the DNC also raises some questions that weren’t probed in news reports.  In fact, it took a little digging to find the actual report.  Answers to these questions can better illuminate future efforts by other destination communities.

But first an observation.

Charlotte has always benefited from superb community-destination marketing (DMO) professionals.  However, a seemingly odd kind of co-dependency with business and civic officials there has made the organization seem trapped in an old-school, sales-driven and facilities-obsessed model.

This is usually symptomatic of when a community becomes captive to downtown interests rather than left free to pursue the broader, community-wide objective of reaping a community’s full share of visitor-centric economic and cultural development through holistic marketing.

As noted by the nation’s preeminent expert in marketing, Dr. Philip Kotler, it is rare to find even business people who understand marketing, let alone civic officials.  So they often turn to sales instead of marketing or glitzy advertising campaigns, which are ironically sold by people working in sales.

There was some speculation that the joint study on the DNC was conducted because the DMO had used inflated estimates to secure the event but this seems unlikely.  The organization has long been familiar with the methodology used in the DNC study and has deployed it many times to measure the overall impact of visitors on that community.

However, sales-driven DMOs may feel the need to override their research departments to make a proposed event appear greater than unsubstantiated estimates made by past host communities.  However, more often than not, this is a result of pressure from business and government interests eager to host the event.

Sales-driven DMOs are also often guilty of failing to re-calibrate the formulas used to benchmark mega-events with local variables easily obtained from their marketing research arms and various secondary studies on length of stay and spending patterns.

In this day and age, there is simply no excuse for a significant gap between the pre-booking estimate of impact and the post-event analysis of a mega-event, but if there is a culprit it is most likely a combination of booster hubris and political pressure.

The DNC analysis recently conducted for Charlotte is excellent and much more intricate than what was trumpeted by the news media.  All but one business publication seemed to fall into the trap, possibly set by the news release, of leading with the combined figure of direct, indirect and induced impact rather than putting the focus on direct spending and noting the other impacts later in the coverage.

Here are a few questions the study raised in my mind:

• It is natural that the study tries to measure impact not on individual counties but by lumping six counties together.  Doing an analysis on each county would have been far more accurate but probably cost prohibitive.  This is important because there are no regional tax structures, only county and state.

The study makes a valiant attempt to estimate economic leakage and existing business dislocated by the huge event. It seems that lumping the counties made that task impossible.  Would it be far more revealing to conduct an analysis on each county and then add the impacts while fully accounting for leaking and dislocation?

• The study notes that lodging businesses benefit the most by far and deducts 15% of those revenues for the amount redistributed to non-resident owners and for various fees.

However, that is the average under normal circumstances.  The huge DNC event increased occupancy by 63% over those dates the previous year and expert yield management increased the average rate for a rented room by an exorbitant 180%.

According to my friends in that business, isn’t it far more likely that under those circumstances the 15% deduction from impact should be more like 30-40%?

Also, is it really realistic to assume that existing visitor and resident spending was merely postponed?  In my experience it is usually forgone.

• The estimate of direct spending includes $34.5 million in visitor-related spending and $42.2 million spent by three host organization to cover meals and upgrade facilities etc.

However, since a third or more of those donations were extracted from the local economy making them unavailable for other uses there, isn’t there a case to be made that this portion should be deducted from impact rather than added to it?

• It is noted that many services were provided to the event in-kind by local governments including not only security for increased solid waste removal etc.

Shouldn’t the dollar estimate for these services be deducted from the direct impact?

• Much was made by officials announcing the impact about the visibility generated by coverage of the event and the impression on delegates, news media and others attending.

However, shouldn’t the estimate of this impact be adjusted by estimating what the local private donations and in-kind public expenses could have generated if invested directly by the DMO into a longer-term, more sustainable earned media campaign?

There are many good reasons to host events, especially of the size that would be complimentary with existing business. But studies have long shown that mega-events themselves have little or no residual impact on community visibility and image, even if repeated every 18 months or so.

Sales/facilities-driven DMOs and communities are often not open to these questions. They seem locked in a perpetual and co-dependent dance - glorifying facilities, then subsidizing mega-events in hopes of masking performance gaps.

Then using these events as a rationale for an “arms race” with other communities for new or expanded facilities, all the while failing to fully exploit their community’s potential for visitor-centric cultural and economic development.

This is what makes these sales-driven DMOs highly vulnerable when in turn their communities try to passively-aggressively chain them to specific facilities rather than enabling fulfillment of their community’s broader tourism interests.

Once trapped in this cycle, it is very difficult to evolve instead to a far more productive market-driven approach but Indianapolis and Charlotte must still be commended for raising the bar.

If others follow and the measurement of impact becomes more and more strict, it will add greatly to the measurement of the one in ten visitors who attend events such as these.

Old-School Sales Isn’t Extinct, but it has Migrated

Studies show that on average half of every job is project management. Another 40% is sales if you define sales like Daniel Pink does in his new book entitled To Sell Is Human – The Surprising Truth About Moving Others. I guess that leaves 10% of the average job for getting coffee, water-cooler gossip and hopefully catching up on “best practices.”

Pink is defining “sales” as any action to move others to exchange resources such as money or time or behaviors such as attention or effort for something you have.

Doctors, for instance, are selling when they try to persuade us to eat right or exercise.  More than 1 out of 9 people still work in jobs defined as traditional sales.  However, Pink’s entertaining and fact-filled book makes an excellent case that the other 8 in 9 are still involved in some type of selling.

Customary sales is only one small slice of the pie when it comes to the full range of communication activities that fall under the umbrella of marketing.  However, in some ways, every element of marketing, especially advertising, fits Pink’s definition of sales as “moving others.”

In 1895, with only four motor vehicles registered in the entire United States, the first community-destination marketing organization (DMO) was organized.  However, in those days it was really only a sales organization, as far too many DMOs are still stuck today.

Within a year the first automobile dealership opened becoming the basis for a caricature of what many people have used to stereotype sales over the years.

However, today, the stereotypical sales-type is much more likely to work in politics including many working as lobbyists for special interests or on behalf of political action groups and some even in elected positions.

Many of the best examples of sales people working in politics are now found in traditional local downtown/economic development, particularly in communities where those organizations rely heavily on lobbying favorable treatment from local government.

Rather than becoming extinct, traditional sales people have found refuge in politics because that interplay between special interests, campaign donors, lobbyists and elected officials is one of the few areas still functioning as though access to information is still asymmetrical (where one party has more or better information than the others.)

This is why politicians and even some working in public agencies seem to prefer being spoon-fed rather than to read, eschewing data for anecdotal opinions and far too often for ego massage.

There too, these throw-back sales archetypes stand out because they specialize only in zero-sum, power-politics. To them, someone always has to lose if someone wins.

You are either on “their team” or you’re not.   For them, special interest is a calling card and conflict of interest a myth.

They are likely extreme extroverts, the kind who never listen because they dominate every conversation and stop only to think of what they will say next.

Nearly all are men, many thinly veil a disdain of women in power. They tolerate technology but almost exclusively prefer the telephone or face-to-face conversation.

When they get a response to a request via email, they almost always telephone back to have it repeated verbally. When they send emails, they almost always widely copy others. They practice cornering someone as an art form. Their expertise is self-proclaimed.

They can appear very successful but only in the absence of full-cost, triple-bottom-line accounting.  Many seek every means possible to handcuff community DMOs to facilities subverting their obligation to benefit the overall community.

Despite fitting a stereotype, these sales-types have always been rare but they will probably never be entirely extinct.

In his book The Honest Truth About Dishonesty, Duke behavioral economist Dr. Dan Ariely, while noting that we are all dishonest at some level, cites experiments revealing that those involved in jobs that require creativity, such as marketing where I spent my now-concluded career, are the most likely to be tempted to be dishonest because they are good at story-telling.

That being true, then the most tempted of the creatives are probably those in sales including many now working in politics because they are the most supreme of story-tellers, especially those who still mistakenly think of sales as synonymous with marketing.

According to experts such as Dr. Philip Kotler at Northwestern University, traditional sales is about unloading something you have while overall marketing involves “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit.”

Professor Kotler also notes that marketing is “terribly misunderstood in business circles and in the public’s mind,” and nowhere is it more misunderstood than in political circles, making them even more susceptible to sales pitches from special interest lobbies.

The most effective community DMOs embraced holistic marketing long ago while a few merely changed words around to mask that at heart they remain primarily sales-driven and conspicuous because they are facility-obsessed.

Those that remain sales-driven lock their communities into a perpetual and co-dependent dance - glorifying facilities, then subsidizing mega-events in hope of masking performance gaps.

Then they use these events as a rationale for an “arms race” with other communities for new or expanded facilities, all the while failing to fully exploit their community’s potential for visitor-centric cultural and economic development.

This makes these sales-driven DMOs highly vulnerable when their communities try to passively-aggressively chain them to specific facilities rather than enabling fulfillment of their community’s broader tourism interests.

More in the future on how to discern sales-driven from marketing-driven communities.

Stripper Economics and Mega-Event Hype

Strip club owners in Tampa, FL and Charlotte, NC, where the two major political party conventions were held recently, revealed a lesson in economic impact in a piece I heard my NPR affiliate recently that alluded to a rule of economic impact that would be instructive for powerful political and business interests bent on ego-driven pursuit of mega-events, aka “Big Game Hunting.”

Mega-events displace as much or more in resident and visitor consumption as they generate.

In fact, according to strip club economics they definitely generate a loss due both to misguided renovations fueled by absurdly unrealistic expectations and even more so from the loss of regulars who stay home rather than navigate the hassles (in these two cases, it was not only increased traffic but elaborate security) created by the event and felt as much as seven miles away from any venue.

I saw this with my own eyes during the 1984 Summer Olympics in Los Angeles, when I was doing some preliminary scouting on behalf of Alaska, where I then worked in destination marketing, for what eventually became a successful effort to win the nomination as America’s choice for the 1992 Winter Games before losing out to Albertville, France and probably dodging the proverbial bullet.

The seed of my suspicion about mega-events was planted when it was so easy to find last minute hotel rooms and restaurant reservations in LA during an otherwise extremely successful Olympics.  This was confirmed by reports from Atlanta in 1996 and comments from bewildered retailers during a 1999 mega-event that, even though this was inconvenient to the participants, was spread over dozens of cities and towns and three counties including Durham, where I live.

I am not exactly sure when during my now-concluded forty-year career in community-destination marketing that I began to collect studies and clippings about the real impact of mega-events.

I also attribute much of my informal education about the vagaries of mega-events to generous tutoring from researchers and economists such as Dave Dittman in Anchorage as well as Mike Walden, Larry Gustke, Gene Brothers, Larry Long and Mitch Javidi both during and after their tenures at NC State University.

Ultimately, though, beginning in 1999, the economist who really helped me drill down into mega-events using very reliable input-output economic impact methodology was Ken McGill, then with Global Insight and now managing director of Rockport Analytics where a few months ago he performed an incredibly, in-depth analysis of the Super Bowl held last February in Indianapolis, which was the best by far that I’ve ever read.

It is best for host cities (and states) as well as the NFL to commission independent impact analysis.  Indianapolis is wisely using the post-event report as the basis for future decisions.

Unfortunately, most communities that are addicted to “Big Game Hunting” usually let far too many egos get attached before they seek economic impact estimates and then, instead of using them to inform open-minded decisions, these estimates are almost always sought purely as justification.

I was fortunate that the last decade of my career overlapped with Ken’s 30 years in economic and market research.  He was always patient in explaining the answers to my barrage of questions and he shared with me a 2001 op-ed piece in which Dr. Philip Porter, an economics professor at the University of South Florida, unwrapped how and why the impact promoted by organizers for the Super Bowl that year didn’t make any sense.

Porter pointed out the pitfalls involved with “using long-run models to predict the impact of a short-duration event.”  Because of how sales tax reporting is done, it is also very difficult to look at sales over the specific days of the event and compare them to the same days the year before and after.

It is now further complicated because the NFL asks for many expenditures to be tax free during the Super Bowl period.  Porter did his analysis by looking at sales reported for the month previous to when other Super Bowls were held and compared these to the collections for that month, the year prior and the year after hosting a Super Bowl.

The impact was nil.  Like the political conventions just held, events this big literally displace as much visitor and resident impact as they generate.  There may be a lot of reasons to host such an event, but if communities want to be assured of the economic value-added necessary to recoup the tax dollars required, they are best advised to eschew “Big Game Hunting” in favor of smaller events and visitor segments that augment rather than displace.

Even the vaunted “halo” effect that is used to justify hosting mega-events is over-hyped and must be weighed against the exposure the underwriting required could generate in more sustainable promotions.  A classic study in Sweden after a decade of hosting mega-events showed negligible impact on community image.

This may not assuage egos, but the safer alternative of focusing on smaller events and other visitor segments is always far better for the bottom line while greatly minimizing any risk of tax dollars.  While the Rockport report for Indianapolis is a “best practice” and documents any displacement of tourism, economists are still trying to find ways to fully account for displacement of resident spending and retained tourism.

Clearly though, Rockport’s report for Indianapolis illustrates that both the NFL and host cities are much better served when the Super Bowl is held in regions where it will occur during low season, a lesson that applies as well for other mega-events.

An Unfortunate Byproduct of City “Big Game Hunting”

The Durham Convention & Visitors Bureau (DCVB), where I worked until a few years ago, has always been very conservative with economic impact calculations.

Frequently, when I would explain to friends of mine why we were so careful to net out leakage, resident spending and displacement, one or two would inevitably ask: “why would we do that?”  Unfortunately there are also still some feasibility consultants around, many disreputable, who don’t grasp why and should.

A quick glance at some unfortunate, recent headlines in Charlotte sheds light on the reason it is important to be very careful and conservative with economic impact estimates as written about in a post last week on this blog entitled, Reputational Risk – The Foundation of Ethical Society.

I haven’t spoken to friends at DCVB’s counterpart, the visitors authority in Charlotte, but I am almost certain the newspaper there failed to connect the dots to the real underlying cause of this type of problem.  It all begins with what another friend and former elected official calls “big game hunting.”

The term describes communities where powerful politicians and/or business leaders in a particular community become addicted to the fallacy that the only way for them to build their city’s reputation is to compete to become less distinct and more similar to other cities by building huge facilities to lure, usually with subsidies, extremely expensive mega-events.

To justify the extravagance, pressure is applied to those who crunch economic impact numbers, and if they don’t add up to be high enough, they find some schmo who will give them what they want.  There is no excuse for what the community-destination marketing organization (DMO) purportedly did in Charlotte, but believe me the pattern didn’t surface in a vacuum and it isn’t unique to Charlotte, even in this state.

This ego-fueled cycle is enabled by unvigilant news coverage and/or when attempted investigative journalism settles for answers for “what” and not “why” and any exploration of “who” usually stops short of exploring “who” when sated just enough by throwing some scapegoat or organization under the bus.

“Big game hunting” in my experience is a symptom of what happens when a community has a fragile sense-of-self.  But just as self-esteem in an individual is about so much more than receiving adulation, a community’s self worth or status in the eyes of others cannot be generated by huge facilities and events.

In a 1997 essay for Time Magazine entitled Sweet Home, Minnesota, Garrison Keillor gets at the bones of the type of fragile community sense-of-self that leads to “big game hunting” when he took the then-governor to task for telling folks there, as he argued for a new stadium, that “without major league sports,” Minneapolis and St. Paul “would be like Des Moines.”

Keillor goes on to explain that “Des Moinesity (or Omahaness) is a bigger issue in Minneapolis than in St. Paul” and then goes on to hilariously describe how some cities are unpretentious while others go what my friend calls “big game hunting.”

He ends the essay by writing “I personally favor building a golden stadium in Minneapolis encrusted with precious gems, but only for our own amusement, not to make us major league, which we’re not and don’t want to be.  We’ve seen major league places, and that’s one reason we live here instead.”

I’m saddened about what apparently happened at the Charlotte DMO.  They had good research staff and they knew better than to use raw national averages for a local event without calibrating them to local specifics or without netting them out for displacement and leakages, even if it would make that city seem less major league.

But I truly do understand the pressures both from within the community or often from nearby that often fuel such a scenario. “Big game hunting” is addictive and addicts get mean.

While fortunate during my career to always be selected by and serve communities which were averse to “big game hunting” I came close enough to the flame to be singed a time or two.

Whenever something like this happens my reaction is “There but for the grace of God, go I”, to use a phrase coined by English reformer John Bradford in 1555 before he was also burned at the stake in London and whose image is shown in this blog.

And no, for anyone as unfamiliar as I was, the phrase goes back much further than the 1966 adaptation by Simon & Garfunkel in Kathy’s Song.

Antidotes For Mega Facility/Event Addiction

Riding past the Charlotte Convention Center early Sunday morning on my return to Durham along NC 49, I didn’t realize that within 48 hours I would be reading another op-ed asking whether it is finally time to stop building convention centers?

I remember when Harvard-trained public policy professor, Dr. Heywood Sanders, asked that question in a 2005 report for the Brookings Institution, and the convention-industrial complex indignantly responded by throwing up 44 more of the monstrosities while shouting down the few voices, such as my own, who felt his alarm timely.

Charlotte is a city, similar to Raleigh, long in the habit of “paying” groups far more to hold events there than the events actually bring in return to the bottom line.

Many in Charlotte may finally be questioning the wisdom of that strategy in light of the recent scandal related to the CIAA Tournament and the mega-cost of hosting the upcoming Democratic National Convention.

Numerous analyses, conducted over many decades, have soundly refuted anecdotal prophesies that mega-events are a strategy to accrue either fame or fortune to a community with the most recent analysis of political conventions confirming that any benefit is “elusive.” 

If bringing enduring publicity to Charlotte is the goal of the $37 million being raised by the local organizing committee for the Democratic National Convention, there are far less convoluted as well as far more enduring ways to leverage that amount of publicity or “earned media” as it is now known.

Lest this be misconstrued as a partisan issue, Tampa is raising $50 million to host the Republican National Convention and local fundraisers in both communities will tap into lots of corporate and special interest money.

The two parties also receive $18 million each in public funds which if you agree with New York Times columnist Gail Collins, is sufficient if the conventions were shortened to one day business meetings.

Overall conventions and meetings began a long, slow decline as a form of tourism less than half way through my now-concluded 40-year career in community-destination marketing, accounting now for just 10%.

Only 25% of convention and meetings use convention centers and as noted yesterday by associate editor Amanda Erickson in The Atlantic Cities, attendance at the 200 largest conventions peaked in the mid-1990s.

The frenzy of overbuilding was spawned nearly a hundred years ago and it has been kept on life support by combinations of “old school” destination development, hijack-economic development thinking and hubris-fueled seduction of civic and business leaders.

Once the egos are locked in, all energies become fully invested in justification and rationalization.  Only when a new mega-facilities trend comes along and the former supporters are no longer in control will the full story usually emerge.

No community is immune from this addiction but the antidote is a cocktail including:

• Data-driven destination marketing insight
• Embedded policies against “buying” events
• Depoliticized economic impact analysis
• Unwavering commitment to unique sense of place

And yet even a place such as Durham, where all four antidotes are firmly in place, can fall victim to a seductive perfect storm now and then.

Painful Lessons At Charlotte’s Expense

It’s been painful and sad but not very surprising to witness the tragedy that has unfolded in Charlotte, North Carolina over the last year.

Community/destination marketing organization (DMO) executives there should have known better but the full story is merely masked by scapegoating an individual, throwing him “under the bus” or reassigning him and then adding another layer of management, probably along with a good amount of micro-managing.

The Charlotte Regional Visitor Authority (CRVA) is the umbrella organization created to essentially strap Charlotte’s DMO, Visit Charlotte, down with the operation of several mega-facilities there.

Some well-intended executives fell down an extremely slippery slope; but as one blogger notes, it is only symptomatic of a broader community culture that includes other downtown and business-related organizations.

Hopefully that community’s newspaper will keep digging and revealing until it makes fully transparent the entire toxic cocktail of hubris, envy, and special interest pressure at the root of this problem which has become embedded in the nature of so many communities and which ensnared CRVA.

This should also be a warning to many other communities including several others in this state that are similarly addicted to a blend of mega-facilities, mega-events and the so-called business development funds or subsidies and kickbacks required to sustain them. Those where local news media are complicit or complacent and choosing to sit back and relish in Charlotte’s drama, would be better served by real scrutiny such as that exhibited by the Charlotte paper.

Obsession by many cities with mega-facilities and mega-groups all begins, when in the immortal words of Charles Dickens, a city’s “nosiest authorities insist on being received, for good or for evil, in the superlative degree of comparison only.”

A Raleigh scribe once coined the term Charlotte-envy to describe that condition in his community. It was noted in turn that Charlotte has Atlanta-envy, and Atlanta…well you see the drill and the condition certainly isn’t limited to just these three communities.

Even communities such as my adopted hometown of Durham aren’t immune just because it has a stronger and more outspoken commitment to being genuine and authentic and focus on building on a strong sense of place and the evolution of place-based assets rather than worrying about replicating other communities.

During my now-concluded four-decade career and especially during the two as Durham’s DMO exec, I was fortunate to be insulated by a prudent legislated directive to market the community as a whole: a policy stating that facilities and events should be market-driven not ego-driven, and another prohibiting a focus on the thin slice of external events where subsides or underwriting are required to “buy the business.”

That didn’t prevent special interests and even a few public officials from attempting to corner me from time to time. At first the pressure was only from nearby Raleigh interests or sycophants when, from time tome, that community would go “big game hunting” and then try to guilt-trip or corner Durham into betraying its well publicized policies.

But the pressure later came from a handful of Durham-related interests including government or development officials who would frequently try to corner me into underwriting a pet event or to make decisions based only on “who’s asking” or to redirect marketing to favor one facility over the community-at-large or on more than one occasion to “enhance” economic impact estimates to be more impressive just as it appears to have happened in Charlotte.

They were never successful but the pressure was unrelenting and “but for the grace of God,” I too could have fallen into or been drug into the same trap as my counterparts in many other communities.

From statements in the news media and in an internal audit it appears Charlotte may have felt pressured to exaggerate projected attendance at the NASCAR Hall of Fame which may in reality only be half of what was projected. The shortfall appears to be in the anticipated one-third from resident attendance within 50 miles of the facility.

From personal observations during many visits to Charlotte, on many Saturday’s one can shoot a cannon through the community’s museums and sports venues and not hit anyone, not to mention find a restaurant that is open at lunchtime. It is a classic case of supply has outstripping demand and as a New York Times headline once read, “Build It And They Will Come - but Not For Long.”

Ironically, that NASCAR facility is one of the mega-facilities in Charlotte to be truly place-based. While Charlotte isn’t home to a NASCAR race or a speedway, it is very close to several other communities where race teams are based as well as to the town of Concord, North Carolina which is the true physical location of a NASCAR raceway and several race events including those at the so-called Charlotte Motor Speedway.

Charlotte is also the largest city in the state where much of NASCAR’s storied past is anchored.

I suspect it was while investigating the dramatic attendance shortfall at the Hall of Fame that reporters were able to spot that part of the public underwriting (state and local) provided to land and produce the CIAA basketball tournament had been kicked back to the DMO as a bonus for the event’s planner who also worked there.

The pressure to do something like that can be very subtle and veiled and entitled but nonetheless intense.

I don’t know anything firsthand about the Charlotte situation, but over several decades I’ve witnessed how a downfall like this has all too often come to occurred in other communities. Here is a scenario.

• Individuals with power or money or both, typically business leaders, are able to drown out the voices of people who truly love and value community for its inherent and distinct sense of place by persuading elected officials and community organizations that, in order to be “major-league,” the community needs to build facilities that make it like other communities.

• Instead of waiting until it can organically warrant facilities, a community falls under the spell of “build it and they will come” and begins to lure major sports teams, major museums and other cultural interests by promoting facilities.

• Soon the facilities are cannibalizing one another and so often community and business leaders begin to pressure the DMO to table or downsize its community-wide mission and begin focusing on filling only the mega-facilities that have been built.

• Ultimately, as happened in Charlotte, officials may strap the DMO with responsibilities for operating several of the facilities to further restrict its focus in selected mega-facilities and away from its true mission on behalf of the community as a whole.

• Still unable to fill the facilities because projections have been over-stated, the DMO then begins to lobby for a “business development fund,” aka “a slush fund” to lure mega-events that nearly always require far more in underwriting than the events generate as a return in local tax dollars needed as a return on investment.

• Boosters suppress or “neglect to inform” proposals to pursue mega-events with third-party event analysis especially when it is negative and economic impact estimates are careful to direct attention to gross vs. net figures, guaranteed to delight some local businesses, enthusiasts and special interests while primarily blinding local officials and news media to the true return on investment and displacement.

• As individuals, some officials and special interests begin to “lean” on the DMO to direct business their way or to hire certain people or to contract with certain companies and when or if they refuse, the same or more energy and often money is used to try to get the executive fired.

• Eventually a suction is created because the “build it and they will come” theory rarely, if ever, works and the slice of mega-events that can be bought dries up or the churn of facilities begins to create a suction as the supply of facilities outpaces any possible demand from visitors or residents.

• As stress increases or elected and other government officials turn-over, someone protests or posters for the public to distance themselves. A search for a scapegoat begins while others complicit hope the community and the news media will tire of the “story” after a few months or become sated by the sacrifice of a few reputations or or organization so that the co-dependence and dysfunction can resume.

Of course, the answer is for communities to stay focused on leveraging what makes them indigenous and unique vs. carbon copies; and for economic and cultural development interests to stay focused on their job and sober their communities to the lure of so-called “major-league.”

DMOs need to have incredibly strong codes of ethics that that apply to boards of directors, management and staffs alike and insulate them from special interest pressure and discourage ego-marketing. Any focus on events, where they make sense, is best restricted to those that will complement and not displace other visitor segments and that don’t require subsidies.

But the real problem as it is in so much of society is the money in politics that can so easily compromise local interests and surrender community interest to special interests.

Hopefully Charlotte, a great community, learns a lesson and returns to fostering the things that make it distinct and the individuals involved will be redeemed. Hopefully other communities will also take heed and turn more intently to protecting and defending and organically fostering a distinct sense of place.

How “Fort Worth” Stole The Show Without Selling Its Soul!

Fort Worth and Durham have a lot in common and it isn’t bull.

While Durham is known as the “Bull City,” it isn’t because prize-winning bulls were indeed bred here at one time nor is it because the a research station for cattle is based in North Durham.

Durham’s legacy moniker is because “Bull Durham” tobacco originated here late in the century before last and the nickname, while it is no longer associated with that product, still fits.

It is Fort Worth that has a more direct claim to livestock in its heritage but both communities have a great deal in common.

• Durham and Fort Worth each co-anchor poly-centric regions where there is no dominant city at the center.

 

• Durham and Fort Worth each co-own major airports often confused as the name of a city and the identities of both communities are undermined by “hyphenation.”

 

• Durham and Fort Worth value being unpretentious and have proudly anchored their present with a faith in being historic, genuine and authentic while others have sold their soul to be “slick and big.”

 

• And apparently both communities understand that economic development is more important than “big game hunting.”

While Dallas pretends to host the Super Bowl and actual-host Arlington hopes to recoup a fraction of return on some of the more than $300 million in resident- and visitor-taxpayer-backed bonds it put up toward a new billion dollar stadium where the game takes place, it is Fort Worth that truly grasps that even without storms, mega-events like the Super Bowl are big “media events” at best while “super hyperbole” in terms of economic impact.

Two years ago, Fort Worth very quietly and successfully out hustled and out maneuvered others to be the host for all ESPN radio and television coverage for the weeks leading up to the event.

So for two weeks, 24/7 on broadcast, cable, FM, AM and Satellite, scores of shows and program hosts have repeated heralded Fort Worth…not Dallas, not Dallas-Fort Worth, just FORT WORTH!

While the sheer size of the event, even without disruptive weather events, has been shown to displace as much or more than it adds to the net economies of the communities or nearby communities where it is held…Fort Worth has cashed in on the true value of the Super Bowl as a media event.

Sheer repetition of the name Fort Worth along with descriptive commentary about the community by on-air talent lauding the iconic character and identity of the community will lower the barriers that organizations like Fort Worth’s official community-marketing organization will face as it tells the community’s story and harvests interest in that community’s brand for many years to come.

Communities Pursue Mega-Events For The Same Reasons There Are So Many “R” Rated Movies!

Why is it that 13 times as many “R” rated movies are made each year as there are “G” rated?

It isn’t about money. On average “G” rated movies rake in $47.6 million more per movie that “R” rated films according to recent studies both at Brigham Young University and the Dove Foundation.

In my opinion, the reason more “R” rated films are made, even though they make less money for investors, may have far more to do with ego and hubris.

It is the same reason some community-destination marketing organizations persuade or enable their respective communities to build mega-venues typically to host events requiring more in subsidies than the community reaps in tax revenue.

Or maybe in some cases, it is that DMOs fail to dissuade their communities and/or elected officials from falling under the spell of “big game hunters” for whom no mega-event is mega-enough.

Maybe it’s news reporters and editors who, if aware at all, find it just too complex to explain to residents in these communities that the more mega an event is in size, the more negligible the economic impact becomes.

Others, I’m sure, get caught up in the hype often steam-rolled by media business management because, well, mega-events are huge money makers for news media organizations.

Mega-events have long been shown to render even otherwise reliable input-output analysis ineffective because such events displace or disrupt normal economic patterns.

If aware, this hasn’t inhibited communities from using the data while making sure to never reveal that the events, while good for hotels, don’t live up to expectations for other types of businesses because they displace as much spending by residents and other types of visitors as they generate.

Post-event analysis has even long ago dispelled the notion that mega-sports or political events generate awareness for the host communities.

There are very astute communities, sometimes led by persistent destination marketing organizations, that have exceeded market-share and made out like bandits by precisely avoiding mega-events and, instead, going after events large and small that are more about impact than ego.

My adopted home, Durham North Carolina, is one of these but it isn’t immune.

These are the same communities that would be producing “G” rated films if they were in the movie business because they don’t let their egos or the egos of “big game hunters” distract them from the bottom-line.

Some Recent Signals From Texas Are All Smoke

I haven’t heard much from Texas Governor Rick Perry since his Fed Up! book tour touting states as incubators for great ideas and that his state hadn’t been hit by the recession and now come some oversized reports of Super Bowl impact.

Perry makes a good point, but the Federal Healthcare Reform Act he hates so much was patterned after one pioneered in Massachusetts by another Republican Governor.

So who said you couldn’t shoot yourself in the foot while making your point?  Be sure to buy the book online, by the way, so you don’t have to pay state sales tax.

I noticed in the New York Times last Sunday that the Texas state budget is short 13.4% for 2012 but as a percentage of its current budget it is short more than 30%.

Don’t brag to me when you’re relying on reserves funded from oil production, the cost of which is born by everyone in the nation who buys gas or uses petroleum.

His state ranked 35th on national standardized tests of 4th and 8th graders while Massachusetts and Vermont ranked first and second respectively.  Given the philosophy of his book, I assume the Texas governor is on the phone to those liberals up in Vermont and Massachusetts right now. 

The tests include math, but unfortunately for some in Texas, they don’t include geography.  Officials in Dallas didn’t sound very astute  on either count last week.

They crowed that the Super Bowl would pump $600 million into their economy and generate $10 million in tax revenue.  That may or may not be accurate, they didn’t reveal the methodology.  Regardless, what the news media didn’t report or maybe failed to realize is that those figures are “gross,” not “net,” and it isn’t valid or “value-added” unless reduced by the amount the mega-event displaces.

The game will actually occur in Arlington, Texas not Dallas but even so, research for years has shown that the huge event displaces as much impact as it generates, for a net impact of, well “negligible.”  The Game and attendees may generate taxable spending but it will displace as much as it generates.

The game will displace visitors who would have been in the area anyway, it will disrupt resident consumer habits etc.  Studies of “sales” related tax receipts on dates the year before, the year of and the year after hosting a Super Bowl show no increase.

The article lamented that the “outer suburbs” (I guess Dallas is an inner suburb to Arlington) wouldn’t feel the impact.  Lucky them!  Ironically though, if any of the visitors who would normally be traveling to that part of Texas still dare to go, they will probably be dislocated out into those very “outer” suburbs. 

President Eisenhower may have put his finger on the “military-industrial” complex in his gutsy speech delivered 50 years ago yesterday, but that complex is rivaled by today’s “mega-event-industrial” complex including many cities and counties, destination marketing organizations, facilities, consultants, sports-advertising reliant news media, and major sports organizations.

There may be good social and cultural reasons for communities to host big events like the Super Bowl but it isn’t to add value to their economies or to generate visitors or future visitors or billboard effect.  There is just too much established research now to the contrary.

Such delusions aren’t limited to Texas though.  If Tea Partiers want something to get their anger “fix,” they need look no further than the smoke screens put up around major sports events.

Another Blow To Big Game Hunting For Mega-Events!

It is getting harder by the year to ignore the reality that meg-events such as the Super Bowl, World Cup and conventions like the Republican and Democratic party events just don’t add statistically significant impact economically or in terms of image.

The most recent of many to come to my attention is this excellent analysis of major political conventions from the 1960’s through the ‘04 events was conducted in 2008 but only came to my attention recently.

There may be other cultural or political reasons to pursue them but it is impossible now with any credibility to play the economic impact or image cards, at least with a straight face.

I understand why many in the tourism-industrial complex remain loathe to acknowledge these well proven realities but what puzzles me is the number of DMO execs who still appear oblivious.  Hubris may be a factor but how far will that get you.

Growing the number of visitors to a destination has never been about more, more, more, bigger, bigger, bigger.  It is about prospecting for those visitors or visitor related events that can be feathered in to complement existing demand without dislocating (or distracting in the case of resident consumption) more impact than they generate.  Pure and simple.

But those subtleties are also lost on far too many in corporate American and far too many elected officials, especially if they live on a “one way street.”  So I know it isn’t always easy to have the courage to stand up to big game hunters.

But that’s part of the job and sooner or later, there won’t be room for DMO execs to remain in denial.  It will be a step forward when we get to the point where even internally we can have an honest and open discussion of these findings.

Regardless how you feel personally, you owe it to your community to read reports like the one linked above.