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Travel -Tourism – Marketing A Bright Spot in Rural America?. John Keller. Tourism Defined. A segment of the travel market that consists of individuals and groups that are known as "free and independent travelers" or FIT

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tourism defined
Tourism Defined
  • A segment of the travel market that consists of individuals and groups that are known as "free and independent travelers" or FIT
  • This definition distinguishes FIT travelers from business travelers or convention visitors who typically travel when and where necessary, rather than choose a destination based on its individual appeal.
  • However, in assessing economic impact, business and convention travel are normally included
tourism and leisure characteristics
Tourism and Leisure Characteristics
  • Tourism is one of the most sensitive of all economic opportunities relative to public resources. Without public sector investment, most tourism sites remain at the same scale with limited seasonal duration. A major exception is gambling
  • Tourism and leisure returns major investments to the public sector and is heavily taxed by the government. Generally, the more money the public pumps in tourism investment – the greater the return in taxes and receipts.
who benefits
Who Benefits?
  • Governmental Cash Flows
    • Tourist or Leisure tax
    • Increased sales tax receipts
    • Enhanced property tax returns
    • CMB & Liquor tax
    • Entertainment tax
tourism segmentation
Tourism Segmentation
  • Vacations
  • Holiday Trips
  • Business Trips Including Sales
  • Recreation and Leisure Trips
  • Gambling and Gaming
  • Sports
  • Research and Information - Genealogy
  • Conventions/Conferences
top tourism demand
Top Tourism Demand
  • 1. Eating and Drinking Places
  • 2. Places of Accommodation
  • 3. Recreation and Entertainment
    • Sports
    • Golf
    • Theme Parks and Cruises
  • 4. Airlines
  • 5. Local transportation – taxis and rentals
top economic returns
Top $ Economic Returns
  • Transportation and [Arrangement?]
  • Lodging
  • Food/entertainment
  • Retail Sales – specialties
  • Beverage and liquor
  • Primary and secondary attractions
the context the nation
The Context: The Nation
  • Almost every state (46 out of 50) counts tourism among its top three revenue-producing industries. This does not include Kansas and Nebraska!
nebraska
Nebraska!

“I even thought that I was dead till I found out I was just in Nebraska.”

-Clint Eastwood

in “Unforgiven”

top five world tourist destinations
Top Five World Tourist Destinations

Spain

Italy

France

USA

China

in parlance of tourism
In Parlance of Tourism
  • Its not where you go, its how much you spend
  • Its not how many people, its how many groups
  • Its not how much you spend in a day, its how many days you spend
top 5 world revenue earners 2005 in billions
Top 5 World Revenue Earners 2005 in Billions

84.5

36.7

33.5

29

19.9

United States

Spain

France

Italy

China

let s get this out of the way
Let’s Get This Out of the Way
  • Tourism (generally a rural phenomena) in the U.S. can reach the very height of quality and plumb the depths of the disastrous
  • In other words – it can really suck
  • It can mine whole economies
  • It is generally not sustainable
  • It exploits cultures, people, workers, communities, and whole regions
or faux cultural
Or Faux Cultural

Genuine Amish County Store

creating amenities
Creating Amenities
  • “Asset theory of tourism” - successful tourism depends on the availability of some immobile attraction that people want to visit.
  • Popular tourist attractions are made rather than discovered.
  • Rural tourism is just not linked to outdoor activities. There is great diversity in tourism activities- ethnic, historic, special attractions, shopping, eco-tourism, religious events, etc.
and yes kansas land of ahs
And Yes – Kansas Land of Ahs

The fun started immediately when I crossed the Missouri River into Atchison, in the northeast corner of Kansas, and found that the town was named for a senator - from Missouri. In fact, David Rice Atchison was president of the United States for 24 hours, beginning at noon March 4, 1849. He snoozed for most of his term.

home of the black squirrel
Home of the Black Squirrel

In 1987, the "Black Squirrel Song" became Marysville's, Kansas official anthem:

"Lives in the city park, runs all over town

The coal black squirrel will be our pride and joy

Many more years to come!"

near insanity
Near Insanity

Goodland

Rocket Fest at Argonia

weirder weirder
Weirder & Weirder

Picture of embalmed Samuel Dinsmore in his Mausoleum at Lucas, Kansas here

Samuel P Dinsmoor at 89 & his 20 year old wife and year old son

designer tourism
Designer Tourism

World’s Most Expensive Tourism - Antarctica

From New Zealand

By Russian Ice Breaker

assessing tourism impact
Assessing Tourism Impact
  • Method 1 – Visitation
    • Assessed monthly, quarterly, annually
    • Repeat visitations are analyzed separately to detect trends and patterns
  • Method 2 – Geographic Patterns
    • Within 50 miles
    • 51 – 100 miles
    • Over 100 miles
    • Out of State
    • International
tourism impact cont
Tourism Impact - cont
  • Method 3 – Market Segmentation
    • Individuals
    • Couples
    • Families
    • School Groups
    • Tour Groups
    • Other
tourism impact cont39
Tourism Impact - cont
  • Method 4 – Spending Patterns
    • Average Total per visit
    • Per Capita
    • Segmented
      • Food and Drink
      • Entertainment
      • Accommodations
      • Retail
      • Transportation
economic impact
Economic Impact
  • Segmented Overnight Expenditures
    • Accommodations – 1.00 - $16,197,001
    • Food/Drink .59 - $9,510,601
    • Food Stores .07 - $1,062,098
    • Ground Trans. .42 - $6,831,224
    • Recreation .34 - $5,321,185
    • Retail Sales .47 - $7,627,798
analysis of multiplier impact
Analysis of Multiplier Impact
  • The Multiplier Effect
    • A two percent increase in occupancy would increase gross annual room revenues by $1,000,000
    • A five dollar increase in the average daily rent (ADR) would increase gross revenues by $1.5 million
    • Calculate how much the multiplier effect would increase revenues to other sectors, such as retail sales, for a increase in motel rooms?
employment impact
Employment Impact
  • Employment Impact due to overnight stays
    • Accommodation 1.00 – 278
    • Eating & Drinking 1.45 – 417
    • Food Stores 0.10 - 28
    • Ground Trans 0.60 – 167
    • Recreation 0.70 – 195
    • Retail Sales 0.60 – 167
    • Air Transportation 0.60 - 167
tourism and leisure demand factors
Tourism and Leisure Demand Factors
  • Population Increase
    • If all other factors are held constant the demand for a tourism commodity increases as the available population of potential consumers increases
  • Family Structure Changes
    • Family oriented tourism and leisure is a major demand factor in tourism. As the family structure changes demand shifts to meet the new reality of the family – its size, composition, age, culture
demand factors cont
Demand Factors - cont
  • Distance to Source
    • Tourism and leisure visits are distance sensitive. A great many leisure and tourism visits will be within a day’s drive of the clients. Major example of decreasing distance is to build more golf courses
  • Transportation Rates
    • Nearly all tourism and leisure is sensitive to transportation costs. Transportation cost and time minimization is the key to increasing visitation. Conversely, increasing transportation costs will have a major impact on demand – just ask Australia
demand factors cont45
Demand Factors - cont
  • Demographics
    • AGE
      • The consumption of tourism and leisure goods is highly structured around age. Changes in age patterns impacts both demand and the type of leisure consumed
    • Economic Status - Affluence
      • The ability to pay remains a major factor in the type of activities, the amount of time spent in visitation, and the cost of accommodations
factors the influence gross spending
Factors the Influence Gross Spending
  • Age
  • Family composition
  • Length of stay
  • Location of visit (NYC is a lot more expensive that Disney World or Vegas)
  • Income level of client
  • Type of transportation selected (if you fly you rent cars)
  • Nature of opportunity at source (skiing is expensive – so is eco-tourism)
tourism diversity
Tourism Diversity
  • Why Do You Choose A Destination?
    • Have not been there
    • Been there and liked it
    • Cost
    • Interest in particular place/activity
    • Kids/family/partner want(s) to go
    • Diversity of activities at source
    • 2 fers – get your tourism around your business events
marketing and advertising
Marketing and Advertising
  • Tourism marketing involves identifying local attractions, developing facilities and services to meet visitor needs, identifying the tourism market segment which applies to the attraction, and pursuing linkages within those market segments.
  • Tourism marketing must consider complex factors – distance from population centers, availability of good transportation, cost involved, competition, etc.
marketing tourism
Marketing Tourism
  • Identify the Target Market
    • Demographic (age, income, gender education and occupation)
    • Geographic
    • Psychographic (enthusiasts such as boating, skiing, gardening, history, military)
position statement
Position Statement
  • The Position Statement – “Positioning”
    • Positioning is the place you occupy in your target customer's mind
    • The goal is that, when your customer decides they're ready to consume tourism, they think of you first – or at least they think of you?
    • The positioning statement usually includes two elements: Your unique selling proposition (what makes your business special) and your target market (your most important customer segment).
marketing strategy
Marketing Strategy
  • Marketing Strategy entails emphasizing key elements (Peeing) of your Marketing Mix
    • Product
    • Place
    • Price
    • Promotion
marketing mix
Marketing Mix

For example, if you have a great array of desirable products (+), at very competitive prices (+), but a poor location (-) and a moderate amount of promotion (0), your assessment might look like this:

plotting price quality
Plotting Price/Quality

Quality

A

high

B

C

D

Price

high

low

E

F

Sweet Spot

G

low

marketing objectives
Marketing Objectives
  • The final part of the marketing plan is the creation of clear objectives for the amount of advertising required
    • Must be specific (increase in visitation or an increase in first time visitors)
    • Must be measurable (increase profitability by 5.0%
    • Must be realistic (objectives must be based on reasonable criteria such as an increase of 5.0% in first time visitation compared to the previous 6 months)
immutable laws of marketing
Immutable Laws of Marketing

1. It is better to be first than it is to be better.

2. If you can't be first in a category, set up a new category you can be first in.

3. It is better to be first in the mind than to be first in the marketplace.

4. Marketing is not a battle of products, it's a battle of perceptions.

5. The most powerful concept in marketing is owning a word in the prospect's mind.

6. Two companies cannot own the same word in the prospect's mind

marketing laws cont
Marketing Laws - cont

6. The strategy to use depends on which rung you occupy on the ladder.

7. In the long run, every market becomes a two horse race.

8. If you are shooting for second place, your strategy is determined by the leader.

9. Over time, a category will divide and become two or more categories.

10. Marketing effects take place over an extended period of time.

11. There is an irresistible pressure to extend the equity of the brand.

marketing cont
Marketing - cont

12. When you admit a negative, the client will give you a positive.

13. In each situation, only one move will produce substantial results.

14. Unless you write your competitor's plans, you can't predict the future.

15. Success often leads to arrogance, and arrogance to failure.

16. Failure is to be expected and accepted.

17. The situation is often the opposite of the way it appears in the press.

marketing conclusion
Marketing - Conclusion

18. Successful programs are not built on fads, they're built on trends.

19. Without adequate funding, an idea won't get off the ground.

20 When things go really

Wrong it can get ugly

marketing as branding
Marketing As Branding
  • “Marketing is building a brand in the mind of the prospect." "If you can build a powerful brand you will have a powerful marketing program. If you can't, then all the advertising, fancy packaging, sales promotion and public relations in the world won't help you achieve your objective."
  • Branding means creating an emotional association (such as the feeling of success, happiness, or relief) that customers forms with the product, service, or company
last step feasibility
Last Step - Feasibility
  • The failure rate of rural tourism and promotion ventures without competent feasibility studies is 3.5 times as high as those with proper assessment
  • The core of the feasibility study is the assessment of the penetration rate
penetration rate
Penetration Rate

P x F = PR where

P = Penetration Rate

F = Frequency of Penetration

PR = Penetration Rate

Example

Market Area Participation Rate Frequency PR

A 20% 2.5 50%

B 20% 1.0 20%