sustainability | 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!

Pretentious?

I was flicking though a newspaper the other day, the UK’s Daily Telegraph, and article caught my eye – ‘Why it’s cool to be a tourist, not a pretentious traveler’ (Read it HERE). It got me thinking….

Firstly I have to confess I wasn’t physically flipping through a newspaper made out of crushed up trees, I was reading the on-line version. I suppose therefore I was simply bothering a bunch of electrons, but that added to pondering as to how our perceptions have changed.

For example, does reading an on-line newspaper make me less of a reader? When we were actually reading a ‘paper’ paper, our eyes would fall on stories that wouldn’t immediately be our target interest. That expanded our reading list and maybe we found opinions that we didn’t agree with, or subjects that weren’t initially in our wheelhouse. It did give us a wider knowledge and leave us open to new thoughts and opinions. It broadened our view. These days we tend to select our interests and have the electrons present us with just what we expect and with which we are comfortable. Maybe we sit in a little bubble of our own making? Only exposed to our own interests and views.

How does this relate to the traveler versus tourist issue? The article pointed out that some folks consider themselves to be more sophisticated than the average and therefore their wanderings were in some way superior to your run of the mill tourist. The ‘travelers’ (actually it was a British article, so they were ‘travellers’ with two Ls!) considered that their experience was somewhat superior to a tourist. Along with the author, I initially thought this attitude was pretentious in the extreme.

As an aside, a number of areas around Florida have names like The Forgotten Coast, The Space Coast, The Emerald Coast etc. There’s one area I’ve always called The Pretentious Coast. Any ideas where that may be?

While it’s true that someone who travels, is a traveler, and a tourist is by definition “A person who is visiting a place for pleasure and interest, especially when they are on vacation”, there do appear to be a whole bunch of different types of tourists.

There are those who visit an area to gain extra knowledge, cultural tourists, eco-tourists, adventure tourists, even health tourists traveling to seek medical attention they can’t get at home. One assumes these all gain something from their experience and hope that they also contribute to the local economy or culture. Certainly the hope is that they do not purposefully detract from the place they are visiting.

There is a type of tourist that actually does little or nothing for either the area that they visit or for themselves it would appear. I’d suggest that these are folks that travel to a destination but then behave just as they would at home or possibly even behave in a way that wouldn’t be accepted at home. These would be the ones that bring everything with them. They experience nothing of the local culture, and contribute little to the local economy. They may be the ones that just come to party uncontrollably, ending up in jail, hospital or worse.

Now, each to his own and I wouldn’t dare to suggest that what one person finds fun is the only way, but it does strike me that there are various levels of tourism. Some are more desirable to a destination than others. I’m sure The Machu Pichu Tourist Board wouldn’t target bachelor or bachelorette parties, but on the other hand would Panama City Beach expect to receive too many groups studying the works of da Vinci?

Without a doubt some travelers get more out of their experience than others but would we term them Travelers as opposed to Tourists? What’s wrong with being a tourist?

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?