I’m not only hooked on traveling, I’m hooked on watching travel programs on television.
I’m not talking about the shows that are trying to get you to book a vacation with the sponsor, but the real behind the scenes, genuine and authentic versions.
There’s been a great series over the past couple of years called ‘Amazing Hotels – behind the front desk’. The concept behind the series is that a chef and a restaurant and hotel critic travel to various hotels around the world and actually work in them. Well, I say work in then but really, it’s a case of shadowing various members of staff in their day-to-day tasks. While this is happening, they gain insights into not only how those hotels work, but what the front-line workers think about the industry and the effect that tourism has on their lives.
They’ve featured huge spectacular hotels in Singapore and Dubai, safari lodges in Africa, small and very expensive hotels in remote parts of South America and very remote lodges in Iceland. Over the past two years they’ve visited a wide variety of extremely different locations. Without exception they’ve found that working in the hospitality and tourist industry has had a profound effect on the local workers and……….
This article appeared in the Northwest Florida Daily News on Sunday, June 19, 2017
By this time of the year, we are usually in a good position to know what sort of success the tourism industry is having not only locally, but nationally and internationally, as well. At the midpoint of 2017, the state of the tourism market is throwing up all sorts of conflicting results.
Here in Northwest Florida, where only 1 percent of our tourism is currently of international origin, we think that our domestic, drive-in visitors make us immune from trends in other sectors. Strangely what happens in one market does have an effect on the other areas.
First, the good news. Our local hospitality professionals are reporting excellent advance bookings for the summer season and bed tax collections have been up for the first quarter of the year. Important also is that bookings for attractions and experiences have been very strong in the first quarter and advance bookings are ahead of last year.
Visitors to Florida were up by 2.5 percent for the first quarter of the year over 2016 with 3.1 million visitors arriving. Visitors from Canada and UK were down but an increase in domestic visitors more than filled the gap.
Statistics from credit card companies for Northwest Florida show an increase in spending from cards with Canadian, UK and German addresses. Okaloosa County’s DMO (Destination Marketing Organization) feels this can be put down to Canadians preferring our area to central and south Florida, and that new flights into New Orleans from London and Germany may be bringing visitors here.
On the other side of the coin, the strength of the dollar against overseas currencies and other factors may discourage Europeans from heading to U.S. destinations. Some areas of Florida are seeing drops in online inquiries from the UK by as much as 60 percent. Foursquare, a location technology company, says that America’s market share of international leisure tourism declined an average of 11 percent between October 2016 and March 2017. However, the financial attractiveness of traveling to Europe has seen a huge increase in Americans heading east across the Pond with an 80 percent jump in U.S. to UK bookings reported by Expedia, an on-line travel agent.
So, nothing really conclusive, but the trend is currently good for Northwest Florida, which relies on domestic tourists. But with fewer internationals coming to the U.S. and more Americans traveling to Europe, the U.S. destinations that usually welcome overseas guests may start looking at attracting “our” domestic visitors. That’s not a good portent for 2018.
If the proposal to close Brand USA and the cut to Visit Florida’s budget from $100 million to $25 million goes ahead, then the Sunshine State will loose out to California and other domestic and foreign places. Areas like Orlando and south Florida may use their budgets and publicity to try to steal “our” visitors. It’s a distinct possibility.
It’s essential that the Gulf Coast destinations redouble their efforts to keep our exiting visitors and develop new markets as soon as possible. Nothing is definite, and we look set to have a really good 2017, but 2018 … who knows?
Martin Owen is an independent consultant to the tourism industry and owner of Owen Organization in Shalimar. Readers can email questions to martin@owenorganization.com.
It should be noted that since this piece was written, the Florida Legislature have authorized a $75million budget for Visit Florida, albeit with severe restrictions on their ability to operate effectively.
This article first appeared in the Northwest Florida Daily News on Sunday, April 16, 2017.
I’ve discussed recently the many changes that are coming to our local tourist business — generational changes, increases in fly-in visitors, a demand for better level of service and value, etc. I think we’re all surprised by the speed of these changes, thinking that it will take years for them to actually affect our daily lives. However, look how fast Uber, Airbnb and similar new products have altered the landscape.
Back at the end of March, British Airways started to fly non-stop to New Orleans from London, bringing four flights a week. Later in May, Condor, the German airline, will have two flights a week from Frankfurt. While British Airways is banking on a mix of business and leisure travelers, Condor is aimed squarely at the vacation market. These two new routes add to the already existent Toronto flights, routing vacationers into the northern Gulf of Mexico region. There may be no immediate effect on Northwest Florida, apparently giving plenty of planning time.
No one can underestimate the effect that the 9/11 terrorist attacks had on global tourism. Travel patterns changed across the world. The USA tourism market suffered and not only from the reticence of tourists and business people to get on a plane, but also from the perception of travelers from outside the country that the USA had become unwelcoming. The understandable (to US minds) restrictions that were placed on incoming travelers did nothing to alleviate those feelings. The loss of income to the industry has been estimated at $600 billion. Some in the industry have referred to the subsequent 10 years as the ‘lost decade’. The US tourism industry has only recently recovered.
Recently, things have been looking much better for incoming tourism, however 2017 has the potential to be a disaster.
Firstly the strength of the US Dollar, while wonderful for those of us here who want to travel overseas, is a big problem for inbound tourism. Suddenly it’s expensive for most inbound travelers no matter how attractive our destinations and how welcoming our inhabitants. In fact, currency markets are volatile and are affected by many things – interest rates, global politics to name but two. Perception outside the US is that things are more expensive here than they used to be, but that doesn’t really dampen tourism plans too much. It’s a ‘swings and roundabouts’ thing. While writing this, the Chinese Yen has strengthened against the Dollar making it more attractive for the tourists who are spending more on traveling than any other nation. Who knows what the announcement of a British election, the results of the French election or dozens of other local events will have.
The main drivers of people’s decisions about where they take their vacations in any one year are based on simple human emotions. I can’t tell you the number of fellow Americans who’ve asked me (born a Englishman and a European) if I think it’s safe for them to travel to London following the Westminster Bridge terrorist incident, or if Paris, Amsterdam or Stockholm are dangerous. As a life long traveler my answer is yes, of course it’s safe. You’re more likely to be injured in your own kitchen than involved in a terrorist attack. But that doesn’t satisfy the average US traveler. I may not agree with their rationalization, but I do understand it.
So, traveling in the other direction – into the USA – what are the worries of potential leisure travelers?
Without doubt if it’s on the ‘bucket list’ of someone from overseas to visit the Grand Canyon, go shopping in New York, eat in New Orleans or drink wine in Napa Valley then that’s something they will still want to do. They just may not do it right now if their gut instinct is telling them this may not be The Year.
In the dim and distant past we could only judge intentions to travel by looking at actual bookings, or cancellations. The Industry would rely on the buzz from call centers or apocryphal information coming from travel clerks. These days we can see at an instant what people are looking at and what is turning that looking into booking.
Since the beginning of the year we are seeing distinct patterns in what people are looking for and that gives a pretty good indication of what will eventually happen. It does seem that travelers from many destinations are thinking seriously about reviewing their plans to come to the USA.
Obviously the proposed travel bans that came out early in the year would impact potential travelers from the countries affected directly, and indeed bookings from the Middle East fell by around 30% in February. The strength of the Dollar at the time may also have been a contributing factor.
According to Marriott, the largest hotel chain, bookings from Mexico are down 15%. Given the political rhetoric regarding US/Mexican relations that’s understandable too.
What’s not so understandable, particularly for a great number of US Citizens is why bookings and intention to book, from Canada, Europe and Asia are also way down.
Their perception appears to be that the United States is no longer a welcoming place
The travel bans are not in place and they only affect a limited number of countries, so why would Canadians and Europeans be put off from coming? Why would Chinese or Indian tourists not wish to come?
Again it comes down to perception. Let’s take the UK. I can speak to that nation having been born, grown up and spent most of my adult life there. The US is seen by most Brits as a bastion of democracy with legal system developed largely from the English model. The two nations share much history and struggles. They also share a common language – pretty much. However, many Britons are second, third or fourth generation immigrants from counties of the Commonwealth. They have names and religions from those countries and may have visited family traditional homes many times. Their worry is they will be subject to intense vetting, and may be turned back. The news that Mohammad Ali’s son – a US Citizen sharing the name of his US Hero father, has been twice detained in the US while traveling just because of his name and religion, has done the rounds of the UK media. That not unnaturally has an effect.
Although there is a Special Relationship between the US and UK, it’s been rumored that incoming travelers may be asked to hand over their cell phones and social media passwords for examination. Even if that’s not the case, many Britons are thinking that this may not be the year to travel, just to be on the safe side.
From a Florida perspective, we’ve seen on-line enquiries for travel from UK to Florida destinations reduce by between 12% and 60%. Britain is the second largest market (after Canada) for travelers to Florida. Places like Miami, Orlando, St. Pete and Fort Lauderdale are down close to 60%. The phrase ‘bookings are falling off a cliff’ has been used.
What does this mean for Northwest Florida, a region where international leisure travelers account for only 1% of the total visitors? It would appear to be a potential knock-on effect where destinations that have significant numbers of internationals will try to replace the lost tourists with domestic travelers. The marketing budgets of places like Orlando and Miami not to mention New York, Los Vegas and the whole of California are way in excess of those of Destin or Panama City Beach. To those destinations, filling an hotel room with a shorter staying, spending less domestic tourist is better than leaving it empty. They will do anything and everything to entice those travelers away from NWFL.
What to do?
It may be too late for this year. Those internationals have probably decided that 2017 is not the year to Visit USA. Some other destination is going to benefit from their Yen, Rupees, Pounds, Euros, Canadian and Aussie Dollars. But next year it’s all to play for. We have to get the message out that although the USA is prudent in who it admits, the country is still welcoming, friendly and open for business. We have destinations that are incomparable with other countries and a population who are welcoming and friendly. We must stress the emotions shown in a Brand USA video of a few years ago, which you can see here. https://www.facebook.com/OwenOrganization/posts/1318630581555982
No one can underestimate the effect that the 9/11 terrorist attacks had on global tourism. Travel patterns changed across the world. The USA tourism market suffered and not only from the reticence of tourists and business people to get on a plane, but also from the perception of travelers from outside the country that the USA had become unwelcoming. The understandable (to US minds) restrictions that were placed on incoming travelers did nothing to alleviate those feelings. The loss of income to the industry has been estimated at $600 billion. Some in the industry have referred to the subsequent 10 years as the ‘lost decade’. The US tourism industry has only recently recovered.
Recently, things have been looking much better for incoming tourism, however 2017 has the potential to be a disaster.
Firstly the strength of the US Dollar, while wonderful for those of us here who want to travel overseas, is a big problem for inbound tourism. Suddenly it’s expensive for most inbound travelers no matter how attractive our destinations and how welcoming our inhabitants. In fact, currency markets are volatile and are affected by many things – interest rates, global politics to name but two. Perception outside the US is that things are more expensive here than they used to be, but that doesn’t really dampen tourism plans too much. It’s a ‘swings and roundabouts’ thing. While writing this, the Chinese Yen has strengthened against the Dollar making it more attractive for the tourists who are spending more on traveling than any other nation. Who knows what the announcement of a British election, the results of the French election or dozens of other local events will have.
The main drivers of people’s decisions about where they take their vacations in any one year are based on simple human emotions. I can’t tell you the number of fellow Americans who’ve asked me (born a Englishman and a European) if I think it’s safe for them to travel to London following the Westminster Bridge terrorist incident, or if Paris, Amsterdam or Stockholm are dangerous. As a life long traveler my answer is yes, of course it’s safe. You’re more likely to be injured in your own kitchen than involved in a terrorist attack. But that doesn’t satisfy the average US traveler. I may not agree with their rationalization, but do understand it.
So, traveling in the other direction – into the USA – what are the worries of potential leisure travelers?
Without doubt if it’s on the ‘bucket list’ of someone from overseas to visit the Grand Canyon, go shopping in New York, eat in New Orleans or drink wine in Napa Valley then that’s something they will still want to do. They just may not do it right now if their gut instinct is telling them this may not be The Year.
In the dim and distant past we could only judge intentions to travel by looking at actual bookings, or cancellations. The Industry would rely on the buzz from call centers or apocryphal information coming from travel clerks. These days we can see at an instant what people are looking at and what is turning that looking into buying.
Since the beginning of the year we are seeing distinct patterns in what people are looking for and that gives a pretty good indication of what will eventually happen. It does seem that travelers from many destinations are thinking seriously about plans to come to the USA.
Obviously the proposed travel bans that came out early in the year would affect potential travelers from the countries affected directly, and indeed bookings from the Middle East fell by around 30% in February. The strength of the Dollar at the time may also have been a contributing factor.
According to Marriott, the largest hotel chain, bookings from Mexico are down 15%. Given the political rhetoric regarding US/Mexican relations that’s understandable too.
What’s not so understandable, particularly for a great number of US Citizens is why bookings and intention to book, from Canada, Europe and Asia are also way down.
Their perception appears to be that the United States is no longer a welcoming place
The travel bans are not in place and they only affect a limited number of countries, so why would Canadians and Europeans be put off from coming? Why would Chinese or Indian tourists not wish to come?
Again it comes down to perception. Let’s take the UK. I can speak to that nation having been born, grown up and spent most of my adult life there. The US is seen by most Brits as a bastion of democracy with legal system developed pretty much from the English model. The two nations share much history and struggles. They also share a common language – pretty much. However, many Britons are second, third or fourth generation immigrants from counties of the Commonwealth. They have names and religions from those countries and may have visited family traditional homes many times. Their worry is they will be subject to intense vetting, and may be turned back. The news that Mohammad Ali’s son – a US Citizen sharing the name of his US Hero father, has been twice detained in the US while traveling just because of his name and religion, has done the rounds of the UK media. That not unnaturally has an effect.
Although there is a Special Relationship between the US and UK, it’s been rumored that incoming travelers may be asked to hand over their cell phones and social media passwords for examination. Even if that’s not the case, many Britons are thinking that this may not be the year to travel, just to be on the safe side.
From a Florida perspective, we seen on-line enquiries for travel from UK to Florida destinations reduce by between 12% and 60%. Britain is the second largest market (after Canada) for travelers to Florida. Places like Miami, Orlando, St. Pete and Fort Lauderdale are down close to 60%. The phrase ‘bookings are falling off a cliff’ has been used.
What does this mean for a Northwest Florida, a region where international leisure travelers account for only 1% of the total visitors? It would appear to be a potential knock-on effect where destinations that have significant numbers of internationals will try to replace the lost tourists with domestic travelers. The marketing budgets of places like Orlando and Miami not to mention New York, Los Vegas and the whole of California are way in excess of those of Destin or Panama City Beach. To those destinations filling an hotel room with a shorter staying, spending less domestic tourist is better than leaving it empty. They will do anything and everything to entice those travelers away from NWFL.
What to do?
It may be too late for this year. Those internationals have probably decided that 2017 is not the year to Visit USA. Some other destination is going to benefit from their Yen, Rupees, Pounds, Euros, Canadian and Aussie Dollars. But next year it’s all to play for. We have to get the message out that although the USA is prudent in who it admits, the country is still welcoming, friendly and open for business. We have destinations that are incomparable with other countries and a population who are welcoming and friendly. We must stress the emotions shown in a Brand USA video of a few years ago (https://youtu.be/X35rvweRNsg )
In regions like Northwest Florida, we have to step up our game in attracting new domestic markets, and stay on track with long term plans for International guests. After all, NWFL is The Deep South, known for its charm, good manners and welcoming locals.
Tourism is and always has been at the whim of changes to the global scene. It’s success is due to it’s ability to change direction and adapt. As long as we’re aware of trends and move fast we can still welcome our guests in increasing numbers.
But it’s not all gloom. One country is showing huge increasing interest in visiting the USA. Searches for flights to the USA have surged 60% since January – from Russia!
I recently had the opportunity to participate in a podcast called Lodging Leaders with Jonathan Albano.
Lodging Leaders brings together the best and brightest minds of the hotel industry to share their stories, insights and actionable advice. Each week, LodgingMetrics.com founder and entrepreneur Jon Albano interviews inspiring hoteliers and leading industry professionals that have produced amazing results.
Did you know that just 14 percent of Snapchat users are over 35 years old, where as half of Facebook users are over 35? If you asked what Snapchat is, then I guess you must be nearly as old as I am. The thing is that in tourism the digital world is where everything is happening. It’s been that way for a while and digital, particularly mobile devices, are leading the way. Google has seen a 50 percent increase in travel-related searches over the past year on smartphones — not tablets and laptops, but smartphones.
The younger travelers, millennials and centennials are committed to their phones and their influence on old travelers is very strong. Parents and grandparents are going to the youngsters for advice and research. These groups also love images and video. Instagram is the favorite social media channel for 33 percent of U.S. teenagers compared with only 14 percent for Facebook. YouTube reaches more people between the ages of 18 to 49 than any network TV or cable provider. YouTube reports that interest in travel-related video is up 60 percent in the last couple of years.
What does this mean for tourism?……
Some time ago, I wrote a blog about how I learned to love tourists called, “I’m not a Grockle, I live here.” (You can find it at http://ow.ly/Ps7k308ciuD, if only to find out what a “Grockle” is!). Having grown up in a small, historic country frequently visited by camera-wielding tourists, you quickly learned to embrace, rather than fight, human curiosity.
One of the major factors affecting world tourism in the coming years will be what’s termed “over-tourism.” We’ve seen the 300,000 residents of Iceland struggling with 3 million tourists a year. It’s almost impossible to buy a home in Venice and the city has almost become a tourist theme park. Machu Picchu, the Inca city situated 8,000 feet up in the Peruvian Andes, has been forced to restrict tourist numbers at certain times of the year to avoid destroying the world heritage site.
These are extreme examples, but there is a need to manage tourism. It’s a process called Sustainable Tourism, which aims to ensure that development is a positive experience for locals and tourists while helping to generate future employment and……..
This article was published in the Northwest Florida Daily News on Sunday January 14, 2017.
When I was 16, one of my greatest goals was to learn to drive. I bought an old car to do up when I was 15 and had my first driving lesson the day I became legally eligible. My friends did the same. During my late-teens and twenties (in the UK), my friends and I thought nothing of driving all over Europe for our vacations. Evidently it was the same here in the United States, and that had a particular effect on the Emerald Coast tourism business.
Well over 90 percent of Emerald Coast leisure visitors drive to our piece of paradise, with many loading up the car and driving 10 or 15 hours to visit. It’s been that way for 40 years.
Like everything else in tourism, things are changing. My children live in New Zealand – one is 28, the other 24 – and neither can drive or have any wish to learn. The same thing is happening in the U.S. The Federal Highway Administration reports that every demographic is losing interest in driving. Between 2011 and 2014, two particular age groups – 16-year-olds and those in the 20-24 range – stopped getting driver’s licenses. For 17-year-olds, the percentage of licensed individuals fell from 45 percent to 44.9 percent. Similar reductions happened across all age groups.
I’m not one for making resolutions, mostly because I change my mind so much! If you want to change something, better to just to get on with it than wait for some arbitrary date to start. That’s my excuse anyway. Similarly, looking backwards doesn’t help because we can’t change what has past – although as numerous people (apparently) are quoted as saying – if you don’t remember past mistakes, you’re doomed to repeat them!
So, in the interests of progress, let’s look forward.
I’ve read two articles over the end of the year break that I felt were right on point. I’ve attached links to these so you can read them yourself.
The first was by anti-aging & sports medicine pioneer, and futurist, Dr Robert Goldman (http://ow.ly/Akd9307C9Bt). Dr Goldman pointed out some of the changes that society will be subjected to over the next few years. What is most striking is the speed at which these changes will take place. I remember talking to a scientist with British Telcom back in the early ‘90s who said that they knew absolutely what developments would arrive within 5 years; they had a pretty good idea what would happen in the next 10 years but beyond that they were ‘wishing and hoping’! as Dr Goldman suggests we are now in the exponential age, where changes occur at an ever increasing rate. In many cases these changes happen faster than most businesses can adapt. If you read the article you’ll see that many developments will directly affect the Travel and Tourism Industry.
The second piece was by Christopher Elliott in the Washington Post (http://ow.ly/Hrvl307C9Ob). Chris is suggesting that 2017 is the year many people, especially Americans, won’t be traveling on vacation. He cites many reasons and offers suggestions of how as a tourist you can benefit (please go and read it!) but for those of us in the industry there are three main takeaways. That tourist will be looking for alternative accommodations, authenticity and satisfying their needs for instant gratification.
I’ve talked to many travel and tourism professionals over the past year and we’ve discussed the inevitable changes that are happening and I can’t think of anyone who has disagreed. After all, the signs are really clear – very ‘in your face’ as it were. However, many are not willing to accept the speed of changes.
Take ‘alternative accommodation’ – Airbnb in particular. Home sharing has expanded incredibly rapidly. Airbnb are now the largest accommodation provider in the world with over 2.5million homes (incidentally, they own no hotel rooms!) yet most of the vacation rental companies here in Northwest Florida’s Northern Gulf Coast seem to think think they are not a serious threat to their business model.
The past year the 1.5 million guest arrivals to Florida via Airbnb represent 114 percent year-over-year growth. This comes as Floridians increasingly embrace the home sharing platform as an opportunity to earn supplemental income and make ends meet. The Airbnb Florida host community grew 74 percent in 2016 to a total of 32,000 hosts.
Yes, the local industry says, but it’s in cities, not here.
This is the total supplemental income earned by Airbnb hosts in our local counties:
Bay County $4.9 million
Walton County $3.3 million
Okaloosa County $2.9 million
Escambia County $1.8 million
Santa Rosa County $683,000
That’s a total of nearly $13.6 million. True, it’s only 10% of the income from Miami-Dade alone, but its still remarkably significant.
People love the idea of either staying with a local host, or staying in the home of a host which they perceive differently than the relatively anonymous experience of a cookie cutter condo or a ‘standard’ hotel room.
This contributes to the ‘authenticity experience’ that comes from home sharing, boutique hotels and the like.
Chis Elliott also refers to ‘Instant Gratification’. I know I’m always talking about the attitudes of Millennials and younger Boomers but they do have have a seemingly out of proportion effect on our industry. Their behavior appears to affect the other sectors of our audience too. The ubiquity of smartphones and the ability to access information from wherever you are, makes the almost impulse decision to book a vacation all too easy.
You’ve bought things on Amazon. How many times have you been tempted by the ‘people who bought this also bought this’ suggestion?
Think what will happen when someone suggest “How about we go to The Gulf of Mexico next weekend?”. You look at your phone and up pops the local CVB websites – you see what events are happening, and guess what? You can book the Airbnb accommodation right there, and the concert tickets, and the Uber from the airport. Of course there was link to book flights too but you’ll probably want to do that with the airline because you get your miles there – and suddenly Delta Air Lines are offering 1 mile for every $1 you spend with Airbnb if booked through them – oh, and Uber credits too.
We have a change to the whole vacation booking experience, which is not taking 5 or 10 years to develop but is happening as we speak.
Put a note in your calendar to contact me at the end of 2017 and tell me if there have been no changes to your tourism business during the year. To be frank, I don’t think you’d be able to do that by June!
Whatever happens is going to be exciting. The evolution of the world’s biggest industry has always been fascinating and the near future won’t disappoint I’m sure.
Please follow the Owen Organization blog on www.owenorganization.com, sign up for the newsletter and follow us on Facebook at www.facebook.com/OwenOrganization. Lastly, check out the weekly ‘Talking Tourism’ column in the Northwest Florida Daily News every Sunday.
The Economist recently published an article about tipping in the USA. The main thrust was that we Americans are as confused about tipping as the rest of the world is confused about our tipping habits. It made me remember an incident that happened to me way back……
I’ve been in the travel industry since Methuselah was a boy, and have been fortunate to have traveled to a great many places, including here in the US. On this particular occasion I was the host to a group in a New York restaurant. A great meal, good service and an enjoyable if not spectacular experience. I left a tip of 15%, which would be considered very good in the UK. Imagine my surprise at being approached by the Maitre d’ who asked what had been wrong with the meal. I told him nothing was wrong, it had been a perfectly good evening. I was told in definite terms that I should be tipping at 20-25%.
In Europe, 10% is pretty much the norm. In some places in Scandinavia, and certainly in New Zealand, tipping is considered an insult, and may result in a tirade from the person tipped – just don’t do it!
It’s true that we should be aware that different cultures around the world expect different behaviors and we should be aware of that when traveling. But should we be as guarded traveling in our own country? Surely a tip is a tip, wherever we are in the USA?
I’ll let you read The Economist piece yourself (it’s at http://ow.ly/xStZ303ZhdX). It’s worth a look if only to add to your confusion.
This also let me to consider something that’s been happening here on the Northern Gulf Coast of Florida, particularly the piece known as The Emerald Coast.
The area has traditionally drawn tourists from the whole of the South East, anywhere within a 10-15 hour drive to Destin, Pensacola and Panama City Beach. The tourists tend to peak during the period between Memorial Day and Labor Day – the ’90 Days of Summer’. This, due to schools breaking later and going back earlier, has been reduced to about ‘The 60 Days of Summer’, but that’s another story. Suffice to say, the market is mainly families who drive in. They are traditional in their approach and the families have in the main, been doing the same thing for up to 40 years. Things are changing though…
The shortening and concentration of the family travel period has opened up the rest of the year to new markets – people who can travel without kids, and at short notice. Primarily Millennials and Zoomers (Younger Boomers, Boomers with Zip!). These groups have different requirements than the families. They want experiences, great food, the ability have what they want when they want it – now. They also behave differently. Zoomers tend to have more disposable income, and Millennials tend to do more physically demanding experiences – although those are both very much generalizations.
The local Destination Marketing Organizations (DMOs – Tourist Boards, CVBs etc.) have been consciously aiming their marketing up market. Going after more affluent sector of tourists. Their efforts appear to have worked. For the 30A area (South Walton) this has certainly worked. Their area has been inundated with high spending customers. In fact, let’s face it, they’ve been inundated with all types of customers!
The same appears to be true of all the areas along the Gulf Coast. Tourist Development Tax (Bed Tax) is up across the region, and Okaloosa in the center of the region, appears to have had bigger tax growth than other neighboring DMOs. However, many local restaurants, particularly in the Destin area are complaining that tourists are not spending like they used to. Is this a justifiable view?
I’ve spoken to a number of restauranteurs and to accommodation providers. The later have said that their occupancy has been up, and their ADR (Average Daily Rate) is also up. One hotelier told be he goes out into his parking lot on Memorial Day and checks out the kind of vehicles that are there. He said that this year, there were far fewer trucks and many more upscale SUVs. That would surely show that the income group is probably rising. He also said that on the beach there were far fewer cut-off T-shirts and many more upscale bathing suits. There’s no real science in this approach, but he’s been doing this for many years an he can see a distinct correlation to the amount spent.
Pushing the restauranteurs on if they are actually seeing a decrease or stagnation in the amounts visitors are spending led to a revelation. It’s not the amount of the bill that’s declining, but the amount of the tips.
Tips in Florida generally (in restaurants) have been around 14% for some years. That’s a marked difference from other parts of the US. The North East is closer to 25%. The reason for this is possibly due to the number of overseas guests visiting Orlando, Miami and the other internationally visited areas. Remember that overseas visitors are used to tipping less. Up here in the Panhandle though, tipping has been closer to 20% traditionally. Not too many international guests up here, so what’s going on?
Digging further and doing some research I’ve found that there are other factors in play. It appears that Millennials tend not to tip at the same rate – check out the following articles (http://ow.ly/Xd9u303Zprh. http://ow.ly/26Vo303ZpBs) and try Googling ‘Tipping and Millennials’ and see how much confirmation you get.
It also appears that Zoomers will not just tip at 20% regardless. They modify the tip depending on the service received.
…and it’s not just those groups who are modifying their tipping habits. Locals, family groups and The Military are all reviewingtheir habits, subtly and subconsciously.
It’s not as simple as ‘we’re attracting the wrong people’. It appears we’re attracting the right people, but those visitors are not behaving in the way they used to. Another indicator that the tourism market is changing and it’s changing rapidly.
.