TDC Report

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A Whiff of Panic in the Air?

The Lee County Tourist Development Council  (TDC) met Thursday, April 13 for a normal monthly update. This is where the Visitors and Convention Bureau reports to their government body (TDC) on normal activities. Everything appeared normal this month at the beginning of the meeting, A normal looking agenda, but it was obvious immediately that the agenda included one unusual guest.

Before the fireworks began, Guests First participants earning the American Hotel & Lodging Education Institute’s Certified Guest Services Profession (CGSP) designation were honored first. Special kudos to Diana Italiano of Pink Shell Resort and Anna Pope of Lani Kai Resort for earning this designation. This designation represents significant effort and commitment to customer service that is crucial in the tourism industry.

Public comment before the regular agenda featured Jeff Webb, owner of Hampton Inn, Fort Myers who diplomatically reminded the attending TDC Board that Jan and Feb tourist tax and occupancy numbers were negative compared to same months last year. This has not happened in a number of years, as the local lodging industry has managed a steady increase over the past several years. Mr. Webb’s commented that the VCB should not be resting on its laurels, competition is fierce for Lee County tourists and the TDC should not hold back on spending for marketing and advertising the region as a leisure destination.

 

Where Does the Money Go?

The VCB collects 5% Tourist Tax on room rentals 30 days and less, and generated a record $39 million for the fiscal year ending Sept 2016. That $39 million is allocated by statute as follows:

-53.6% – advertising and promotion (VCB operations and Lee County Sports Development operations)
-26.4% – beach and shoreline improvements and maintenance
-20.0% – stadium debt service (includes debit payments for the Lee County Sports Complex and JetBlue Park, as well as major maintenance for both)

After Webb’s comments, VCB Executive Director Tamara Piggott then revealed a planned change to the printed meeting agenda. Several normal agenda items were scratched, and the meeting was turned over to VCB Marketing Director Brian Ososky and Clayton Reid, CEO of MMGY Global. Normally representatives from two regular market research firms, MMGY Global and Davidson Peterson give quarterly reports, but this was not a quarterly meeting. Thus Mr. Reid’s presence as CEO of the largest market research company used by the VCB, represented a serious agenda shift, as MMGY Global HQ is based in Kansas City, MO.

This move was obviously a response to concern from hotel and resort partners about Jan and Feb performance of their businesses. Ososky and Reid then did a marketing presentation on their take on the latest figures that Mr. Webb referenced, and their future implications. The presentation did not deny the negative tourist tax collections for January and February 2017 vs 2016. January was down 9.6% and February was down 3.4%. February occupancy was down 1.8% but was still a very respectable 83.6%. Average Daily Room Rates for February were down 2.7% over February 2016, indicating some discounting did take place. Revenue per available room, was down 4.4% reflecting both rate and occupancy factors.

 

Why a Dip in Peak Season?

So why the negative figures?  Why a softer Peak Season? Mr. Webb commented in his remarks, and the marketing gurus confirmed there are multiple reasons to blame for 2017’s decline. Worries about the Zika virus, the November election, the travel ban, coastal water quality, the European Brexit, crime news, road construction, AirBnB growth and milder weather across the Midwest and Northeast all are explanations for the weakness in paid lodging, caused by travelers’ uncertainties. Many within the industry including VCB staff predicted in 2016 a negative reaction to coastal water quality and some general negative publicity would most likely result in visitors not returning in 2017.

Reid said their quarterly survey data of travelers’ intent and plans, a project that MMGY has conducted for over 20 years does not suggest any of these factors are long term or an indication of any negative trend. Low rainfall in January and February 2017 resulted in lower releases from Lake Okeechobee into the Caloosahatchee River, and thus the best coastal and bay water conditions in many years. Reid also referenced their travel data reflected a decline in international travel in general. Western Europe and Asia were down about 14% over the same period a year ago. Predominately Muslim countries listed in the travel ban were off over 30%. However, no data indicated a decline in domestic leisure travel.

Reid and Ososky reviewed the aggressive marketing and advertising campaigns funded and in place for 2017. Test marketing of a joint effort with Allegiant Air and Punta Gorda Airport are in place, after realizing that 10% of 2016 summer visitors came via this airport. Test marketing is also being aimed at Scandinavia. Expansion of National Seashell Day – June 21, is planned after a successful kick off in 2016, which included national TV coverage. The Islandology campaign encompasses a broad theme within print, digital & social media channels with content emphasizing more personal and direct messages to target groups and geographical areas identified by historical experience and new research.

The question remains, will it work? All stakeholders in the $3 billion annual economic impact of tourism in Lee County hope so. Several things were apparent from this particular meeting. More than just a few within the Lee County tourism sector are worried, and the efforts and results of the heavily funded VCB will be watched closely throughout the rest of 2017.

 

Bob Layfield