fall | Owen Organization

Conspiracy theory?

I received a comment recently from a visitor who was asking if there was a ‘coalition of local Hotel/Motels that controlled prices during the summer season’. The gentleman thought that as rates were as low as $120 in the winter season and as high as $600 in the summer it must be a plot to rip off tourists. His suggestion was that such summer prices were beyond the resources of less affluent travelers and that such rates would discourage visitors from out of state.

Naturally I told him that such collusion was illegal and was very much discouraged within the industry. The Florida Restaurant & Lodging Association actually read out an anti-collusion statement before each meeting just to make sure that everyone is aware.

Not only that but to actively jointly raise prices would take away the element of competition that drives the tourism industry. I’m not saying such practices haven’t happened, but it doesn’t seem logical.

In fact I think there is a case here in Northwest Florida, and in other very seasonal destinations, where the low rates of winter are actually subsidized by the higher summer rates. Accommodation providers suffer from a difficulty in employing enough staff for the summer peaks. They don’t want to loose good year round employees by laying them off during the winter so in many cases use the profits generated in the summer to keep everything running during the winter. I think that applies to many restaurants too.

Basic economics would indicate that the law of supply and demand is working well. Winter rates are low to encourage whatever business can be attracted. Summer rates are high because there is a finite amount of stock and a limited amount of time when the majority of tourists can be here – essentially Memorial Day to Labor Day, although with schools breaking later and returning earlier that window is getting shorter.

Ideally our tourist season would be spread out allowing for a greater spread of rates. That would also encourage year round employment and less of a scramble for high season staffing.

All of us in the industry know this. If there is any collusion it’s to try and encourage tourists during the periods outside of the peak summer months. Various attempts have been made to rename this as ‘the best season’. That’s fine as a customer facing branding exercise but within the industry we must call the seasons what they are: low, shoulder, peak and (July 4th week) Super Peak.

Of course by attracting tourists in April, May, September and October we’re in danger of alienating our locals who consider these periods of perfect weather and low traffic as ‘their own’ and reward for putting up with gridlock traffic and no restaurant space in June, July and August. Not to mention Spring Break – so I won’t mention it.

A similar situation exists in Europe where school holidays (vacations) govern package holiday and flight prices. Another case of supply and demand. Airlines and tour companies have been accused of artificially raising prices during the vacations making travel for families beyond affordable. Some parents in the UK have been taking their kids out of school in term time to get lower prices. They are fined by the schools, but just factor the cost of the fines into their vacation costs.

The solution? Many little things I fear, each of which would have a small result but the culmination would be sizable.

Encourage the school systems to stagger their break periods. Some do this, but not enough.
Work with school systems to stop shortening summer breaks.
Go after markets that have different school vacation periods – Canada and Europe for example. UK Schools don’t break until July and don’t go back until September. They also have longer ‘half-term’ breaks in October and November and around Easter. Our weather in those times is perfect for the Northern Europeans.
Expand our marketing to those sectors that aren’t governed by school timetables. Millennials, younger boomers, empty nesters, the list is almost endless.
Actively promote lower rates outside summer. Many do this already.
Strengthen weekend break and short break marketing, out of high season, to places like Atlanta, Birmingham, Tallahassee and new markets thrown up by the likes of Allegiant Air and Southwest.

We also need to have some regional agreement on marketing. Continuing to market as just South Alabama, Escambia, Santa Rosa, Okaloosa, Walton, Bay, etc., etc., and ignoring the fact that for some marketing a regional approach is more effective can be counter productive. Some work is being done in this direction and should be applauded and encouraged.

Of course we also have to get the message out to our visitors, like the gentleman who contacted me, that the reason the prices are high in the summer is exactly because we attract so many tourists at those times. Far from being put off they come anyway, and that lets us put up prices, subsidizing the less busy seasons.

As I say, basic economics. …..or perhaps there is a conspiracy that I haven’t been told about!

Have you thought this out?

It’s Fall and so we’ve begun our traveling season. We tend not to escape from the Gulf Coast during the summer months. Yes, it can be hot and humid (although that doesn’t worry us too much) it’s more as Jimmy Buffett would say “You can’t reason with hurricane season”. The tropical wind event season isn’t over yet, but we’ve passed the peak and with forecasting the way it is these days, you seem to have a week or so warning of any tropical unpleasantness.

My chief researcher and frustrated travel agent (Beth, the First Lady) suggested that we escape to the Northern Georgia Mountains, where her family once owned a mountain lodge. The Development chosen is Big Canoe, a huge property about an hour or so north west of Atlanta. A simple seven hour drive from the coast.

We’ve rented properties before and have gone through property management companies and have also become familiar with VRBO and HomeAway. This time Beth found an ideal property through Airbnb. I’ve written about Airbnb in the past and have followed their progress over the years, but we’ve never actually used them.

The search and booking process was simple and very efficient. We were looking for somewhere that was suitable for the two of us and our two Smooth (short haired) Collies. Airbnb matched us up with a great property and the booking was made. As things happened we subsequently received an offer from American Express (who appear to work closely with Airbnb) which resulted in our extending the stay to take advantage of the offer. Yes, advertising obviously works!

As part of the booking we were put in touch with the owners, a charming couple (Cindy & Joe) who also own a bed and breakfast in Gainsville, Florida. Obviously they’re immersed in the hospitality business and their B&B (The Magnolia Plantation – http://www.magnoliabnb.com/ ) looks like its certainly worth a visit. As things transpire, they also own a Collie, so a mutual bond was established. That’s certainly something that can happen easily with the Airbnb type system, and the personal owner/guest relationship is rather more difficult with more traditional ways of renting. It does seem like a beneficial thing.

Simply put, the property is exactly as described and so far the exercise has been great.

While sitting relaxing I was reading an article in the Atlanta Journal Constitution (thanks once again to the Researcher-in-Chief) about how vacation rentals are being challenged in the North Georgia Lakes area. It’s something that appears to be happening in other parts of the USA and the world in general.

In the Georgia Lakes area, the move is being driven by Georgia Power who own most of the land around the lakes. They are invoking clauses in the leases of properties that are offered by the power company. These are usually 15 year renewable contracts, although according to the AJC, some of these properties have been in the leaseholders families for generations. Families have rented out their homes through rental companies and realtors, and later through VRBO/HomeAway and now Airbnb. The no-subletting clauses have been largely ignored in the past, but now Georgia Power has decided to change their policy. Regrettably some leaseholders who may be second home owners in the lakes or who have inherited the properties feel that the only way they can keep them is if they fund their upkeep through short-term letting.

Certainly Georgia Power have done a huge amount to keep the area pristine and very attractive. Their aims appear to be to avoid the region becoming an overcrowded tourist ‘resort’ area. That’s a very laudable policy.

The move against short term rentals, particularly of the peer-to-peer variety like Airbnb is not restricted to the Georgia Lakes. Many cities, resort areas, states and cities across the world have taken against the growing trend. The reasons appear to be many and varied and range from worries of over-tourism, through to the disappearance of affordable accommodation for locals. Cities like Barcelona and Venice have become places where locals, who service the tourist industry, simply can’t afford to live. Even if they could, property owners can get a substantial income by ‘buying to let’ and therefore the stock of property for permanent residents dries up.

In other case, the move against short-term rentals is driven by competitors in the accommodation markets – hotels, property management companies etc., who don’t like the change in the way business is done. You can’t really blame them, but then it may be a case of adapt to changing fashions or die.

Lastly there are are the folks who having moved into an area, perhaps to retire or to buy a second home, rather like the idea of being ‘the last newcomer in the village’, and wish to call an end to further arrivals.

I’m not judging all of these motives as they’re valid reasons, and I can identify with the emotions. However, there are consequences to not thinking through the whole process.

Let’s start off with the Georgia Lakes. These properties have been in the area for many years. The building of the actual houses provided work for the locals in the construction and later maintenance industries. Subsequent expansion brought in stores to service the new residents and as short term visitation – tourism – developed, so did the need for restaurants and all the business that service the transients. If the current leaseholders can’t short-term rent their properties, they may be forced to sell them. That will probably drive down the real estate prices, and with no transient visitors, the jobs that cater to them will also dry up. Tax revenue (from both income and sales tax from visitors) will reduce putting pressure on local communities to fund services, which in turn will increase local taxes and the vicious circle moves on. This is sounding more like an economics class that tourism observations!

The same sort of thought process applies to the over-tourism scenario. Tourism was attracted by the, well, ‘attractiveness’ of the destination. Rather like over-fishing which destroys the habitat and eventually the livelihood of the fisherfolk, badly managed tourism eventually destroys both the destination and the very people who rely on tourism for their jobs.

The only scenarios that I can’t reconcile are the actions of competitors who would rather legislate against changes in process (For example the taxi drivers versus Uber and Lyft in may destinations around the world) and the ‘Last foreigner in the village’ scenario. I have little sympathy for either group.

The rest? Well, it relies on compromise and sensible management from both sides. Regrettably letting the market decide, isn’t really an option. Like any good farmer will tell you, land management and animal husbandry over a long period are the policies that will result in a sustainable model for all concerned. The same is true of tourism.

Enough of this. The dogs need walking and we need to go and spend some money in local stores to stimulate the local economy. It’s a tough old life eh?

August Newsletter

Welcome to August!

Here on the northern coast of the Gulf of Mexico, the peak of the summer tourist season is drawing to a close as the schools begin to return for the new academic year. The majority of the summer tourists to the area that stretches from Apalachicola on the Forgotten Coast through to Orange Beach and Gulf Shores in Alabama (actually also further through Mississippi to Louisiana) relies heavily on the family market and draws from the whole of the South East and now up into the mid west. So, now comes the time to reflect on what we did well and what we can improve for 2018.

Of course, the best part of the year is yet to come, as the weather cools slightly and humidity drops, we start to attract both local tourists and the visitors who are not tied to school vacations. A time for festivals and events that draw in an audience that tend to spend more and have an emotional attachment to the Gulf Coast.

How do you reach out to these guests to your business? What’s the secret to getting under their skin? I recently wrote a blog post about the impact that the iPhone and other smart devices have had on the travel, tourism and hospitality industries. In many cases we don’t recognize how things have developed over the past ten years or the major impact changes have had. We’ve seen how the music industry moved through cassettes, CDs and into downloads (possibly back to vinyl too!) over a relatively short period of time but the changes brought about by smart devices have been more rapid and continue to evolve. Fingerprint recognition on phones is now commonplace for unlocking and payment systems but now it’s rumored that Apple will introduce facial recognition on their next iPhone. At the same time Delta Air Lines who have been using electronic boarding passes on flyers phones are now experimenting with identifying passengers with fingerprints and iris scanners.

Does this have an impact on you? If you’re involved in the accommodation industry, how long before the move to door locks that react to smartphones is common place. Major hotel groups are rolling those out and even cruise companies are fitting out their ships with them. This is at a time when many condo owners resist even installing free wi-if for their guests.

How about payment systems take Apple Pay and the Android equivalent? Is that becoming pervasive and does your restaurant/attraction/hotel (insert the appropriate business!) accept it? I was surprised at a fairly high end restaurant recently to be told they didn’t accept American Express cards for payment, let alone any phone based payment systems. That seems to me to be alienating a whole sector of high spending guests.

We are seeing grocery delivery to condos an beach homes taking off with companies like Destin Grocery Girls and now Whole Foods, Fresh Market and Publix offering similar services. This could well have an effect on how many times tourists visit restaurants during their stay. The delivery of very high quality food to your own vacation kitchen, means you don’t have to go out to fight traffic, find parking or restrict alcohol consumption. The tourist may then just go to restaurants for their ‘amazing’ experience.

These are all changes that are happening faster than we care to admit, and need fast reactions from those of us in the industry.

Traffic, tourists and tourism employees.

One of the things that agitates us locals about the summer season is traffic. Believe me it affects the tourists too. The great danger is that the visitors, particularly those coming for the first time may be put off returning if they spend a lot of time stuck in traffic jams. It’s a phenomenon that affects the whole of the Gulf Coast to a lesser or greater extent, although the actual manifestations vary from area to area.

For some destinations traffic issues are pure access. The Saturday snarl-ups at the mid-bay bridge for example, or the lines along 98 around the Navarre bridge. On 30A there are certainly some bottle-necks but the issue there appears to be where to find a parking space. Okaloosa Island and Fort Walton Beach suffer from the bridge with junctions at both ends, while Destin is in grid lock for various reasons from Destin Bridge all through to the county line in the east. The ‘season’ for this is of course from Memorial Day to Labor Day. The rest of the year there is not such an issue. This all stems from our infrastructure which was not planned to cope with the volume of traffic during the peak season. No person or entity could have foreseen such growth when the road system was planned (or happened!) years ago.

The apparently obvious solution is to build more roads, elevated highways or even ban traffic, but none of this makes sense in the short term. Roads take years to plan and authorize, and highways cost upwards of $1 million a mile to build. I’ve been looking at what tourists destinations worldwide are doing to solve such issues in the short term, making best use of the resources they have available, plus how they are planning for 5, 10 and 20 years ahead – giving the time it takes to plan and build infrastructure changes. It’s vital to factor the demographic and attitude changes we can foresee or guess. For example, fewer people are learning to drive and many are not considering car ownership. Ride sharing and acceptance of efficient and pleasant public transport is growing. Autonomous vehicles are coming faster than many are recognizing. Building infrastructure based on current attitudes and technology may be inefficient and frankly redundant. Added to that we need answers now, not in five or ten years time.

Walton County have a parking issue. Those visitors who visit 30A need somewhere to park, so the county has used bed tax to purchase a total of 12.66 acres of land to provide for beach access, parking and a future trolley hub. This seems, to this tourism guy, an eminently sensible move.

I mentioned that Walton County have recognized that parking is their major problem and they have taken steps to address this immediately. The County has spent $24.1 million of bed tax on 12.66 acres of land including 697-feet of beachfront. This will primarily be used for parking but critically also for a future trolley hub.

Visitors, who we should recognize are increasingly familiar with ride sharing (Uber and Lyft), and public transport in their urban home environments, are happy to use trolleys on vacation if those are comfortable, efficient an either free or cheap. They will give up their cars for a more stress free experience. Indeed with the drop in people learning to drive, and in car ownership particularly in urban environments (where most of our visitors originate) they may be attracted by the availability of trolleys. Subsidizing these services may prove cheaper than building roads (at a cost of upwards $1 million per mile) or maintaining them. It’s also something that can be done now, for next season, rather than in 5 or 10 years.

How about 98 through Destin? Well, much of this traffic is visitors driving through the area, and we need to encourage a lot of this to transit through and around the area on I-10. However, a great deal of the volume is getting from accommodations to the beach, the stores, events and restaurants. Not only does this traffic clog the roads but needs parking at either end. Many destinations are solving this issue by providing park-and-ride services. Acquiring parking areas is invariably cheaper than building roads and certainly more immediate. Subsidizing trolley services is again cheaper than building and maintaining roads. Importantly, the trolley service must be attractive, so it must be efficient, pleasant and crucially be a better experience than using your own vehicle.

This means the trolley must have priority over other road users, either by creating bus lanes (possibly only during peak traffic periods) and by making the ride cheaper. Free trolley travel, and charging for parking, except at the park-and-ride stop is a good start and is being used in many destinations across the country and around the world. Providing trolley transport and park-and-ride would also help workers in the tourism and hospitality industries get to their jobs too. They need all the help they can get!

Remember that these concepts can be implemented quickly not over many years. They’re also in use in many other places. They are measures that can be switched on only at peak times, either during particularly heavy traffic hours, days or certain months. They can be flexible in that we can adapt to changing demographics and fashions and we won’t end up covering the whole coast in tarmac!

Our solutions to these challenges need to be radical and inventive. We don’t need to reinvent solutions. Many others have already proved they work.

A further traffic issue we have in the area from Fort Walton Beach through to 30A is how the people who work in the tourism and hospitality industry get to and from work. Comparatively few industry folk actually live in Destin or on 30A. They travel in from Fort Walton Beach, Crestview, Niceville and further out. The cost of gas alone makes a dent in their income and their presence on the road increases congestion. Many travel across the Mid Bay Bridge and get no break in the tolls. It makes no sense if these workers have to work for an hour just to pay their Bridge tolls. Surely the Bridge Authority could engineer a 5 day pass for these vital workers as a starting point. Again, cheap or free park and ride using public transport to could not only make our strategic tourism worker’s lives better and more cost effective, but could reduce traffic congestion particularly during high traffic months.

These aren’t socialist ideas or anti-capitalist suggestions. These are sensible ways of maximizing our infrastructure, making the area both better to visit and to live in, and remarkably cost effective. Roads cost $1 million a mile to build and years to plan and implement. Bridges cost even more and take even longer. Public transport, even subsidized, costs less and can be put into place right away or at least by next summer.

We have to take into account as I’ve said before, the changing demographics. Just because people drive here now and have dome for years, doesn’t mean they will continue to do so in the future.

In case you were wondering…..

….what happened to my weekly column in the Northwest Florida Daily News, here’s the scoop. Actually, I hear mutterings of “what column” and “what’s the Daily News?”, but I’ll ignore those for the moment!

Despite being asked to write the Talking Tourism column and being assured that both the newspaper and the readers enjoyed the piece and it was everything that had been asked for, it appears that I mentioned travel and tourism suppliers like Uber, Lyft, Trip Advisor, TripShock, Airbnb etc., but failed to give sufficient coverage to destin.com. destin.com is a website owned by the Daily News and is apparently the source of all tourism information in the area. Mea Culpa. I was referring to sites and companies who actually sold travel and tourism products, as opposed to just collecting tourism related stories.

No matter. The content of Talking Tourism will still be published on owenorganization.com/news, and there will also be a monthly Tourism Topics column in Coastlines, the publication brought to you by The Greater Fort Walton Beach Chamber of Commerce.

Keep your ears and eyes open for some other developments around the Talking Tourism subject over the next few months.

Until next month……

Please follow Owen Organization on Facebook, Twitter, Instagram, LinkedIn and 500px and on owenorganization.com.

The BEST season is just around the corner. Time to shout about it.

Can you believe that next Tuesday is August 1st? Labor Day is just a month away, and schools go back around August 10. Traditionally the summer tourist season here on the northern Gulf Coast runs from Memorial Day to Labor Day, what was called the 100 days of summer. These days, with schools breaking later and returning earlier, it’s almost the 60 days of summer. From the industry’s point of view, there’s a big weekend for Memorial Day, then a pause until the schools have been out for a week. Independence Day is huge, although the real success depends on which day the 4th actually falls. Then the season continues until the schools return when there’s a breather until the big Labor Day weekend.

As we locals know, the passing of Labor Day brings one of the two best parts of the year (the other being between spring break and Memorial Day) when the humidity disappears, the heat backs off just a tad, and the large numbers of tourists (those with their young families) are absent. It’s the time we all love, the ideal time to live here.

It’s also the time to attract those tourists that we really love. The higher spending, lower party size, Boomers and Millennials who come for the festivals, life style, food and culture. Not that we don’t love the families who fill the beaches in the summer of course.

Successful tourism maximizes income during the Summer Season, so that the fewer numbers of higher spending visitors during spring and fall provide the icing on the cake. A small increase in these guests provide a thankfully disproportionate increase in income. How to attract this small increase?

Obviously we need to keep our attractions, restaurants and experiences open. We need to plan our concerts and cultural events for this time of year. We need to heavily promote what we feel is the best season of the year.

Many of my fellow industry professionals want to ban the term ‘shoulder season’ when referring to Fall. The move is to call it the Best Season. I understand where they’re coming from. To those in the industry, between ourselves, it will always be a case of high, shoulder and low seasons. That’s inescapable. But to the tourists renaming Fall ‘The Best Season’ maybe simplistic. Best for what?

This is where really clever marketing will come in. Tailoring our message to individuals or personalizing, is where tourism marketing is succeeding now. If you love fishing then the Fishing Rodeo is YOUR season. Music, seafood, arts all appeal to small but high spending individuals with the opportunity to travel. I will say that if you Google ‘Fall Festivals Florida’ you’ll be hard pressed to find many in our area. That’s something that can be solved with creative search engine optimization of course. The Alabama coast has cracked that.

The Best Season, Your Season, Festival Season whatever. Let’s get the word out that Fall is the absolutely greatest time to be here.