April 1, 2008

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Travel and Tourism

April 1, 2008

We’d like to give a special thank you to Mark White, vice president of Salt Lake Convention and Visitors Bureau, for moderating the discussion and Holland & Hart for hosting the event. Although late, the state’s famous snow finally settled in, bringing with it visitor’s from around the world. Due to a solid snowpack and increased funding, key players in tourism say the industry in Utah has never been stronger. Our panel of experts suggest that the teamwork occurring across the state is creating an economic engine that the state has never seen. Topics during this year’s discussion touched on the challenges tourism faces, the effects of a strong economy, and the draw from conventioneers. Please note: the roundtable occurred during the 2008 legislative session. Participants: Sara Toliver, Ogden/Weber Convention and Visitors Bureau; Barbara Riddle, Davis Area Visitors Bureau; Mark White, Salt Lake Convention and Visitors Bureau; Nan Anderson, Utah Tourism Industry Coalition; Nathan Rafferty, Ski Utah; Leigh von der Esch, Utah Office of Tourism; Scott Lunt, Davis Conference Center and Hilton Garden Inn; Debbie Huddleston, Christopherson Travel; Martin Lewis, Utah Business; Joel Racker, Utah Valley Convention and Visitors Bureau; Chad Linebaugh, Sundance Resort; Britt Mathwich, Homestead Resort; Onno Wieringa, Alta Ski Area; Becky Potts, Morris Murdock Travel; Dirk Beal, Deer Valley Resort. Let’s start by discussing some of the positive things you are seeing in the tourism industry. MATHWICH: We are seeing tremendous growth in the hospitality and tourism industry in our little county, and a lot more on the horizon with the development in the Jordanelle area. VON DER ESCH: We are seeing our tourism dollars going up. Governor Huntsman was committed to this industry when he came in three years ago and wanted to see 20 million visitors at the end of four years. We were starting at about 17 million and are happy to report that we did see 20 million this year. Despite what we saw at the beginning of the year last summer, with all the fears about gas prices, we are seeing the state’s tourism continuing to be robust. It is an exciting time to be in tourism. WIERINGA: We are sort of a mature part of the tourism industry and don’t look for a lot of growth. We have small, incremental growth and replacement of people that fade out of our industry. But it is going well on our side of the street. POTTS: At Morris Murdock Travel, not only do we bring people in, but we send them out of town. Preliminary results show at least a 20 percent growth this year in travel, so we are very excited about that. LUNT: We are undergoing an expansion, thanks to our success, which will open in April. We are doubling the size of what we have right now. It has been interesting, because we budgeted for 4 percent growth in revenue this year and we are so far above that. It will be a phenomenal year. LINEBAUGH: We love everything we are seeing at Sundance. It was a record breaking year in 2007 despite challenging snow in the first part of the season, and we are now going into this year with phenomenal snow. As you walk around the village of Sundance, in the 14 years I have been there I have never seen the snow banks and the snow melt on the rooftops quite like it is now. RIDDLE: I love hearing this around the table. Measured through tourism numbers, Antelope Island growth is over 12 percent; Lagoon is over 15 percent. We are also looking forward to a very exciting year this next year. ANDERSON: UTIC helped to spearhead, along with other industry groups, the successful tourism marketing performance legislation which hopefully has helped all of you elevate those numbers. So we are simply delighted to be in the current legislative session. RACKER: I like when I hear Chad say what he says, because his success is my success down in Utah Valley. I can attest to what a great year we are having. A lot of our attractions’ numbers are up. We are excited about this year with incredible things going on. A lot of it is possible because of our partnership with the Utah Office of Tourism through co-op monies. We are looking forward to another great year. BEAL: At Deer Valley, we’ve seen a little challenge with the snow arriving late, but now that it is here we are doing great and almost on par with the record year last year. We’re really looking forward to the momentum that will build for the remainder of the season and next year. RAFFERTY: If you’re a skier or snowboarder and you’re not happy this year, you should give it up because this is the best year ever. Our state is experiencing growth over the last couple of years. We moved up in the notch of states for ski days. Colorado is obviously the biggest with 12 million skier days. California is around 8 or 9 million skier days. We hover around the 4 million mark and just passed Vermont as the third most skied state in the nation. There are a lot of happy skiers and snowboarders out there, but there could be more. WHITE: We measure our success primarily in terms of the number of room nights that we book associated with group business; whether it be ski group tours, motor coach tours, but primarily conventions. We have seen our room night bookings increase the past couple of years, and the average daily rate that those people are paying for those rooms has consistently gone up. Last year was the highest year that we have seen across the entire county. So from our perspective, things are looking very good. When we concluded last year, the closing question that we all discussed was, “What do we see in the coming year?” For the most part everyone said continued strength of the industry, and it sounds like that has been the case. What are we going to do to manage that? WIERINGA: We need to keep promoting to bring people back to meet objectives for growth. Everybody has capacity for growth, but if we don’t try and see what problems we are going to generate out of this growth and work on solving them, we can create some problems for ourselves. The problems associated with the pieces that people are making money on will get taken care of by themselves. If we don’t have enough lifts or Sundance doesn’t have enough housing or Deer Valley doesn’t have enough restaurants, we will take care of that. We will build. But I worry about the transportation. I would like to make mountain transportation a budget line item for our company, but my company doesn’t want me to do that. As I said last year, there’s tremendous study for transportation in the valleys. We are fixing up everything down here, and the mountain transportation corridor doesn’t have any study or any plans for what to do. We have watched Colorado suffer mightily from the growth and how it affected I-70. They are having to go all around the world to find replacement skiers because a lot of people are not happy with the product. They like the skiing once they get there, but they deal with the roads and the congestion. If we sit back and just keep filling these up, we will see the same problem. How affected is the traffic issue by our visiting tourists? Is it a tourism issue or a population issue? BEAL: The Park City area is interesting. We just had a huge holiday weekend, and with the complimentary shuttles and people using buses and effectively carpooling as families, we really didn’t have many traffic issues. A lot of the issues come from locals and employees and huge increases in staffing levels in the Park City area. There are some grassroots efforts; we have an employee bus with the other two ski resorts. But it needs to be addressed on a bigger level. In Park City, specifically the Kimball Junction area, it is getting close to failure, and with the limitations and geography of the town itself, there’s only so many solutions there. VON DER ESCH: I’m not hearing that we need to stop bringing in visitors. Fortunately for us, the proximity of the Denver airport to those ski resorts will never change. It will always be much further than ours. I think it’s important that we look at all these issues from a holistic standpoint; not only what is good for the tourists, but what’s good for those of us who live here, because so many of us around the table are transplants, and quality of life was an issue that brought us here. That’s something that we want to carry forward with the tourism industry. We are selling quality of life through a tourism experience which is leading to people relocating here. LINEBAUGH: One of our selling strengths in Utah is our proximity to everything. You fly in to Salt Lake International and you are so close to world class resorts, hotels, and conference centers. Because it’s a selling feature, if we don’t do something to protect that, it could work against us. It would be nice if we could get everyone to believe that all of us who live here really are the hosts and we want all the visitors who are our guests to have the best experience and be able to travel at ease. ANDERSON: The tourism industry finally now has an opportunity to address what were, in years past, considered ancillary issues, such as public land issues and long-term strategic development, which haven’t really been a huge part of the industry. Transportation is just one of those issues. I love the fact that finally the tourism industry seems to be becoming more cohesive and therefore may be ready to take a place at the table of those other ancillary issues. It’s a great time to be in this industry. It seems as though there has been much more cohesion and collaboration within the industry. Is that a safe observation? VON DER ESCH: It certainly was touted by the Governor at our tourism conference in Price. His message to the group was a reaffirmation that he felt that the tourism industry and those around the table had never been as united as they are today. The other thing he acknowledged was the stewardship that is incumbent upon us for what we have in the state. It’s nice to be in the top 10, if you will, of the Governor’s vision. RIDDLE: It seems that tourism finally is being recognized as a strong economic engine for the state, and it’s exciting that it has finally come to that. There’s room to grow even still. But at least we are moving in a positive direction. RAFFERTY: I think we originally had this cohesion in terms of funding. We wanted to pull together with cash and we are finding all these efficiencies for other issues that are working out pretty well. Is it just the economy and we are lucky victims, so to speak, or is it all of our great minds that are making these things happen? RIDDLE: It’s all our great minds. BEAL: And the snow. RACKER: We have to realize the rest of the country is slowing down and Utah continues to have a fairly strong economy. From my 20-plus years in the industry, tourism is always the first to go and one of the last to come back. I think a reality all of us face is that it could change quickly, and we are fortunate that people are continuing to travel here. RIDDLE: Don’t you think, too, that people are more cautious with how they are spending their dollars? You have people traveling closer to home and spending their dollars here within a local community or regional area, so potentially it could be helpful for us in the next year. What are we seeing regarding out-bound travel, particularly as it pertains to the slowing economy? POTTS: We are seeing a tremendous increase. We just had our travel show this last month and we saw at least a 20 percent growth over last year. We were pleased to see that. Whether it’s tour packages or people going abroad, or it’s cruises, all the different elements are up. We are seeing a ton of people coming in with high end luxury needs. We are seeing college folks coming in wanting to ski. We are seeing families that want to come in. We are seeing growth in all the areas, which is exciting. VON DER ESCH: The trends I have read in recent years indicated that after 9/11 our priorities shifted. There was a need to create more family time together, have more experiences together. In this day and age, we don’t want to give up that time with our family creating good memories. Even though the money from the tourism marketing performance fund is to go out of state, it is new dollars. If the number of Utahans traveling out of state decreases from 60 to 40 percent, that is new dollars into our state. The St. George dollar spends the same at the Antelope Island experience as the Butte, Montana dollar spends at the Antelope Island experience, which is why concurrent with what we have done out of state is to introduce Utahns to their own state, because it is such a rich product. It is crazy to think that at the age of 40, I had friends that were born and raised here who I took to Moab and Lake Powell for the first time. There’s a lot more to discover. And I think we are targeting that. The latest trend that came out in January is what is called the stay-cation, which is staying around home. There is not a better place in the world to stay around and hang out in than Utah. Think of the bandwidth we have with symphony performances in Deer Valley in the summer to the Shakespeare Festival, and all the events that go on in Sundance and Ogden. We really have a lot we can offer ourselves on a daily basis. We continue to see our tourism dollars go up in that 50-mile trip. BEAL: I think the Yankalovich study calls it “the birthright is the vacation.” It’s one of the last things to go, and definitely a shift to the family and the multi-generational – the grandparents taking the kids skiing, more condo product being sold because they want to gather. We are limited on capacity specifically by the number of children’s lessons we can do because we have so many families that want to do that. We are also seeing that a lot of our growth has been in revenue, not transactions, which is a little bit concerning after two really good snow years. There was a real rate increase especially in lodging product. What are your feelings about the potential merger between airlines we are hearing about? HUDDLESTON: The possibility of a Delta Airlines and Northwest Airlines merger could be huge for Utah because it would open up a gateway to Asia. That Northwest Airlines hub is Minneapolis, so there’s a huge benefit for Utah if that happens. I don’t think United would be great because of the hub. The Denver airport is much more sophisticated and they would look at closing down this hub. How are the rising gas prices affecting us? VON DER ESCH: Nationally a year ago we were hearing from TIA, which is the national tourism organization, that no one could guess what the tipping point was. We thought it was $2.50 and then we thought it was $3. At times it was $3.50 last summer. Because of this, national park visitors were projected to be off by 4 percent. We have seen national park increases in some areas up 4 percent. So that’s a net gain of 8 percent. If you have an RV and you have invested thousands of dollars into it, the fact that your gas tank topping off is $15 more probably doesn’t have an effect. From what we have observed on a state level, we haven’t hit that tipping point yet. And we’re optimistic about it going forward. ANDERSON: Overall, particularly when you look at the valve of the dollars, for Europeans this is an incredible value, and it just keeps getting better and better. Our traditional markets are strong and I think it’s exciting that some of the ski resorts have seen tremendous gains in South American markets. Japan is not back to previous records, but China opening up is a new opportunity for Utah. I know the Governor is interested in that. It was exciting years ago, when the Japanese first started coming en masse particularly to Bryce Canyon, it was great to see the private sector vendor step up to the plate and put sticky rice on the menu. That was a huge step for the industry in the state. In addition to fabulous scenery, we have great resorts coming on line, the Aman Resort in Kane County is going to be an extraordinary addition to our product offering. BEAL: I think another great thing about the international ski industry is that the length of stay is longer. They are also booking at times when we have some capacity. A lot of the South American families come up for the Easter holiday and stretch that out to 10 or 14 days. What kinds of changes have we seen from the visitors? Have their expectations changed? MATHWICH: I think the expectations of the visitors are definitely increasing. They expect more. They want nicer rooms, larger bathrooms, so the amenities are definitely there. I think, too, that they want the multi-generational experience. Our condominiums on Christmas and holidays go first, and it’s grandpa, grandma bringing their children and grandchildren. And they all expect to have something to do. Some want to golf, some go to the spa, swim, horseback ride. It’s not just a golf experience for us anymore. VON DER ESCH: One of the biggest single drivers of the change is the health and longevity of people today. In today’s world, older vacationers aren’t just looking at the scenery through the windshield because they are not sedentary. The 60- or 70-year-old wants to get out and be able to walk and see and experience. One of the things that we look at from a marketing trend is how we show that. This came from our guides and outfitters: Don’t just market white water. Market the flow trip that anybody can access, and my mother did access it at 76. We are seeing people who used to be sedentary and saw the park once through the windshield, now they are saying, “That was a great hike but I missed another hike I want to come back for.” WIERINGA: Alta gave free ski passes to nearly 300 skiers over age 80 last year. A lot of them were just for day passes. LINEBAUGH: I think part of the reason the length of stay is extending is people aren’t just vacationing. They are on a vacation but also working. They check into their room and don’t care about how the bed is or the amenities. They want to know if there is high-speed wireless Internet access. If that’s not working then they are not happy. So we always need to make sure that they have that. That allows them to vacation longer. They are bringing their families, first of all. Second, they are bringing their jobs with them. It’s not a bad thing because it is keeping them here longer. It’s been unfortunate that they can’t really just vacation anymore, but I think that’s part of the trend, as well. RAFFERTY: If you are in a job where if you have to get back in a day, you can do that here, where mountain weather might make that impossible other places. You are rarely going to get stuck here and not be able to get out of it. I was joking with somebody the other day that sometimes it would be nice if we had some kind of catastrophic airport closure for a day so we could get press out of it. Denver gets it all the time and we never get that. There was some talk of visitors expecting a much higher-end dining experience at the end of an adventure-filled day. Are we meeting those needs? VON DER ESCH: We are finding more of that throughout the state. That’s been one of the surprising introductions with the amenities that have been added in Ogden over the last couple of years. It’s always delightful to see the five star ratings and the four star ratings and the special articles that pop up about Rural Utah because someone has gone to an unexpected area. The owners of Hell’s Backbone on Highway 12 specifically said when they moved into a community of 187 people, “We are not going to rely on the locals to make it or break it for us. We are going to rely on the outdoors.” I think people like to hike or ski really hard during the day and then say, “Now where do I get a massage?” TOLIVER: Not only do they want to have a massage and sit in the hot tub after skiing all day, they want to go out and be entertained. With the addition of the Salomon Center, we are seeing them go skiing all day and then come down and do indoor skydiving or surfing at night. Then they wander over to 25th Street for a nice dinner and go back to the hotel. They are filling the value of their vacation time and utilizing every moment that they have to take advantage of. Are there areas in the state that are perhaps not fulfilling that yet? ANDERSON: Absolutely. There’s room for quality private sector growth, particularly in the rural areas of the state. We still do have some challenges in rural Utah in regards to infrastructure. I live in Wayne County which is about three hours south of here, right near Capital Reef National Park. One of the complaints at the visitor’s center is, “My cell phone isn’t working. Where can I get coverage?” Several areas of our state are extremely fortunate because they have had new young entrepreneurs locate in these rural areas because of the quality of life. They have opened up successful businesses slanted toward the high end. This is indicative of what future development in the rural areas next to these fabulous scenic wonders is going to look like, and we hope it continues in that vein. How has the branding campaign developed since its launch two years ago? VON DER ESCH: I think Life Elevated captures the “ahh” factor of the state. Not that I’m prejudiced, but we have been enthusiastic about how well it has been received. LINEBAUGH: It’s just my opinion, but it seems the beginning of tourism in Utah, up until the Olympics, we were in a dating stage. We had some good dates, bad dates, we didn’t get asked out a lot. In 2002 we host the Olympics. The engagement began then. I think about the time Life Elevated was launched, five years after the Games the state became married to the industry. Now the challenge is we have to maintain that marriage, and that’s all of our jobs. From UTIC’s perspective, what is the vision of where this industry is going? ANDERSON: I truly believe this product is second to none. We have tackled our biggest problem, which was getting the funding. I think we would all agree that we are cautiously optimistic looking at the outcome of this year’s legislative session in regards to the $15 million appropriation request. At one point, UTIC is going to have some challenges dealing with the fact that what isn’t going to work in Davis County is going to work in Utah County. I think the best that we can do is stick together, keep going, keep the pressure on in regards to elevating tourism as economic development in every one of Utah’s 29 counties. As long as we continue to tell that story, we will hopefully get the kind of funding that we need to continue the brand development. Then hopefully we will have time, energy and cohesion to have the industry address some of these other issues. VON DER ESCH: As part of a business equation, the tourism industry should have a seat at the table at water rights planning, land protection planning and transportation planning because that is a voice that should be heard as a united group. Certainly what happens with the Forest Service affects the canyon. Coming out of this meeting we should assert that and say it is time. The quality of life is what we are selling, and quality of life is what business is selling, too. It goes hand in glove. RIDDLE: In Davis County we feel we have the seat at the table now, and tourism is recognized as an economic engine for our county. It needs to be recognized in every single one of the 29 counties. This industry has great legs. We are so far-reaching and could have such a powerful voice. It is just getting people organized and speaking as one. We have come a long way in that synergy in working together, and bureaus and tourism organizations working one with another. We need to continue that momentum in helping to drive the issues that touch tourism in the state. Northern Utah, geographically and geologically, in many ways is different than southern Utah. And the needs of the ski resorts are quite different than the needs of a convention center. So with such diversity, is it realistic that there can be one voice? ANDERSON: Yes. I think you have seen that already. We are, I think, currently married. The whole state, all 29 counties, is married underneath Life Elevated as the brand. We are married to the necessity of the tourism marketing performance account. I think we are maturing enough to the point where a county like Wayne has infrastructure challenges which are very different than Utah County. We are inclusive, and I’d like to think strong enough to be able to weather some of the little bumps and differences in regards to product development or stands on different political issues. We will always have the strong core marriage underneath the tourism marketing performance account. As we talk about collaboration and speaking with one voice, do you believe that the administration recognizes the spin-off benefit of tourism? VON DER ESCH: Absolutely. And I think the Governor’s Office of Economic Development has honed in on the importance of outdoor recreation. Mayor Godfrey in Ogden is one of the best examples in the state of identifying a business and saying, “I want my brand to be attached to this business. How do I expand it going outward?” Our travel guide cover last year was a mother and daughter overlooking a canyon in southern Utah. Our travel guide this year is a family in a tent in northern Utah. We want to acknowledge that there is a lot that families are doing in the outdoor recreation industry. That’s the Governor recognizing it. And it doesn’t hurt for Nathan to be able to schedule the governor to mountain bike in a Warren Miller film. Not that many people can sit around with 50 state tourism directors and say, “How does your governor promote your state,” and have him actually participating in that. So it’s coming from the top down, and it’s nice to see. TOLIVER: Mayor Godfrey’s vision was to make Ogden the ski manufacturing hub of Utah because currently our cost of living and our real estate prices are lower than Park City or the other places where a lot of the ski companies would be looking to locate. Being spearheaded by Descente, and bringing on Amer, which houses Atomic, Salomon and Suunto, we have a manufacturing facility there for Rossignol and Scott and Head. There’s a lot of momentum coming in and the companies are bringing all their employees with them. These companies are bringing in their fairly young demographics and becoming committed members of the community. You need a little outside perspective to realize what you have in your own backyard. It’s been great for our area as a whole to see that there is a reason why we live here and why people want to live here. RAFFERTY: There were two stories on skiing in The New York Times last week. One of them was about Colorado and how horrible I-70 is getting, and the other was about skiing from Snow Basin into Ogden. It’s a pretty good deal we have here. People are now coming to Utah to drive by East High School, the site of Disney’s “High School Musical.” What is the film industry doing for tourism in the state? VON DER ESCH: It’s apostasy to say that no state can afford to buy a billboard like a film, which is what I used to say as a film commissioner. The Germans, the French, the Italians are in southern Utah because they saw John Wayne and they wanted to see that gorgeous landscape. “High School Musical” is the Trifecta of a film made in this state. By that I mean the values in it align perfectly with the values we have in the state. It is Disney, and the power of Disney behind it; and it’s a musical film and a cable production that hired locally. Within the first 10 years of the “Field of Dreams” release, 250,000 people a summer visited that baseball diamond. We are not hitting that yet. But we are seeing hundreds of people coming in from all over the world. The governor likes to tell the story about being in a very, very remote area of India on a trade mission and asking a young girl there if she had ever heard of “High School Musical,” and she practically broke into song. WHITE: It’s interesting that as we go out and pursue the large national conventions for the Salt Palace, the reality is we are competing against cities that are typically better known; the perception very often is there is more to do in the other cities, which is not reality. We really try to sell the recreational opportunities that are just beyond the hotel door; and then we talk about the caliber of the people who work here, the people that will serve their conventions. If we lose that selling point, we lose a lot. LUNT: As you have gone out and sold the city, has the Life Elevated thing had an impact as you compare city to city? We all have a lot of the same amenities. WHITE: It is beginning to have an impact. We have learned that as fantastic as our convention center is, as nice as our hotels are, as wonderful as our accessibility is, for most conventions at the core of their destination decision is the question, “Is this a city that my attendees will want to visit?” If there are things for them to do, if there’s a natural draw, they will gravitate toward the city. In the past, there has not been much awareness of Salt Lake. A convention planner may say, “Mark, you and your sales team have convinced me that it’s a wonderful place to do business, that you have people that will serve me well, there’s great value, great accessibility, but I don’t think my people will want to go because they fear they can’t get a drink, that there’s nothing to do, that it is flat, boring, dull, and brown.” The Life Elevated branding is speaking to that. So when someone who sits around that board table and they are deciding whether it’s Salt Lake, San Diego, San Francisco, or Seattle, and they have seen an ad with a mother and daughter standing on the rim of the canyon looking in, they start to identify with that. RIDDLE: Speaking of brand awareness as it transcends over to meetings and conventions, we are really excited to see five different bureaus and tourism organizations coming together as one and partnering with the Utah Office of Tourism, and create a “Meet in Utah” brand in promotion of the meeting product throughout the entire state. This is all in anticipation of hosting Meeting Professionals International in 2009. The branding component is a lot like the Life Elevated component, and I think it will do a lot toward getting the Life Elevated brand out to the new market area. That is incredibly exciting.
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