FINDINGS SHOW DESTINATION MARKETING AS UNEXPECTED CATALYST FOR
EMPLOYMENT, ECONOMIC DEVELOPMENT AND QUALITY OF LIFE
CLEVELAND (Nov. 13, 2014) - Destination Cleveland, along with six other destination marketing organizations (DMOs) participated in what is being called a landmark study. Conducted by leading tourism economic analysis firm Oxford Economics and released by the
Destination & Travel Foundation of the Destination Marketing Association
International (DMAI), the study shows the broad economic development affects fostered
by destination marketing. The study,
released on Nov. 10, found destination marketing to be an unexpected catalyst
for employment, economic development and quality of life within local
communities.
The study looked at destination marketing organizations of Asheville, California, Chicago, Denver, Louisiana
and Phoenix to
compile the research and these organizations also helped in-part to fund the
study along with DMAI. In addition to Destination Cleveland, the Cleveland
Department of Economic Development
and TeamNEO also shared case studies and participated in
interviews for the research.
"We were proud to have been a
part of this landmark study for the travel and tourism industry as a whole,"
said David Gilbert, President and CEO of Destination Cleveland. "Traditionally
the economic impact of the travel and tourism industry has been measured by
direct spending by visitors and job creation within the sector. What this study
proves is that destinations that place a high priority on marketing their
brands and amenities realize significantly greater employment and economic
growth as a whole, well beyond just the travel and tourism sector."
The statistical analysis utilized
case studies, interviews and literature reviews from more than 200 cities over
the span of more than 20 years. The key findings
reveal the broad economic benefits reaped by US destinations who spent an
estimated $2 billion on promotion and marketing to encourage leisure and
convention travel.
The study showed that the travel and tourism has a great influence
on the site selection process. It was found that 13% of executives with site
selection responsibilities state their perceptions of an area's business
climate were influenced by leisure travel and 37% reported influence by
business travel.
"With the gap in perception of what people think about Cleveland
before and after visiting being so wide, this is where Cleveland stands to gain
so much more than other cities through travel and tourism promotion," added
Gilbert. "We know we don't have a product gap, we have a communications gap,
and changing that perception through travel and tourism promotion will
ultimately change the narrative on Cleveland and drive economic development
within the region."
A correlation analysis between the importance of a metro area's
visitor economy and subsequent job growth shows destinations with a higher
concentration of visitor-related activities and employment have historically
grown faster. Specifically each 1.0 percentage point increase in the share of
visitor economy jobs corresponds to total job growth over a nine year period
that is 3.0 percentage points stronger. Currently the tourism industry in Cuyahoga
County supports more than 63,000 jobs.
Some of the initiatives for
which Cleveland was cited in the study include:
-
With roughly half of all passenger demand for
Cleveland being generated by visitors, according to OAG bookings data for 2013,
city and community leaders worked with Frontier Airlines, a low-cost carrier
which recently entered Cleveland, to continue to expand its schedule from the
city. Frontier is now building on leisure business and offering direct flights
on routes that are key for business travelers, such as Dallas Ft. Worth.
-
The alignment of strategy and shared content
by the City of Cleveland's Department of Economic Development and Destination
Cleveland which results in unified messaging on the brand promise and assets of
Cleveland being pushed out to potential visitors and business investors alike.
-
The financing and incentives put forth by the
City of Cleveland to help spur investment in six hotel projects within the
city.
-
The building of the Global Center for Health
Innovation and its connectivity to the FirstMerit Convention Center of Cleveland helping to
spur medical and bio-science related meetings, conventions and tradeshows in
Cleveland and growing the destination's perception as a hot bed for creativity
and innovations within these sectors.
-
A citywide wayfinding initiative, led by Destination
Cleveland will benefit residents, business and leisure travelers alike.
"Tourism has always been a top
driver of jobs and taxes," said Destination Marketing Association International President and CEO Michael Gehrisch. "And, as an
industry, we are setting our sights on understanding how and why destinations
with devoted visitor economies - who treat tourism as a locally-produced export
- realize even greater economic and social benefits, job growth, investments,
workforce development and quality of life."
The visitor economy was found
to drive broader economic growth through four primary channels:
1.
Transportation Infrastructure Development - Destination promotion supports development of
transportation infrastructure, providing greater accessibility and supply
logistics that are important in attracting investment to other sectors.
-
A study on the
role of airline traffic in urban economic development analyzed 91 metro areas
in the US and estimated that a 10 percent increase in passenger enplanements
leads to a 1 percent increase in employment in service-related industries.
2.
Attracting New Investments and Residents - Destination promotion builds awareness,
familiarity, and relationships in commercial networks (institutional,
companies, individuals) that are critical in attracting investment. Similarly,
destination promotion raises the destination profile among potential new
residents, supporting skilled workforce growth that is critical to economic
development.
-
In a 2011 survey
by Development Counsellors International, 13 percent of executives with site
selection responsibilities state that their perceptions of an area's business
climate were influenced by leisure travel and 37 percent reported influence by
business travel.
-
By securing
meetings, conventions and trade shows for local facilities, destination
marketing organizations (DMOs) create valuable exposure among business decision
makers and opportunities to deepen connections with attendees.
3.
Creating Awareness Amongst Business Professionals - By securing meetings, conventions and
trade shows for local facilities, destination marketing organizations
(DMOs) create valuable exposure among business decision makers and opportunities
to deepen connections with attendees.
4.
Enhanced Quality of Life and Amenities - Destination promotion supports amenities and a
quality of life that are integral to attracting investment in other sectors in
the form of human capital, corporate relocations and expansion.
"The data substantiates the
link between destination marketing and economic growth and why today's visitor
economy warrants investment," says Destination & Travel Foundation Chair
and Executive Vice President of the Louisville Convention & Visitors Bureau
Cleo Battle. "What this study continues to demonstrate is that those markets
which coordinate destination marketing and economic development realize even
greater gains as a result."
One-on-one interviews with DMOs
and economic development agencies revealed opportunities for economic
development agencies and destination marketers to work in concert to promote a
place to national and international markets. Best practices include
coordinating efforts on new investments bids, jointly leveraging trade shows
and conferences, and building a consistent destination brand to appeal to both
investment and travel audiences.
"Statistical analysis over the
past two decades shows that destinations with substantial and growing visitor
economies have outperformed their peers in the general economy," said Adam
Sacks, Director, Oxford Economics. "Cities and states that coordinate destination
marketing and economic development are generally better positioned to compete
for new investments and corporate relocations."
KEY JOBS DATA:
-
A 10 percent
increase in a destination's visitor-related employment (relative to the US
average) causes a 1.5 percent rise in broader employment through catalytic
channels.
-
Since 1998,
hospitality and tourism employment has expanded nearly 10 percent, while
aggregate employment in all other traded clusters shrank 1 percent.
-
As the visitor
economy has recovered, it has contributed job growth since the end of the
recession at a faster rate than the US average. As of July 2014, employment in
key sectors of the visitor economy was 7.9 percent ahead of its June 2009
level, compared to a 6.1 percent gain for the broader economy.
-
There were a
total of 2.5 million jobs in the sub-sectors that make up the hospitality and
tourism traded cluster in 2012, representing 7.2% of total employment in traded
clusters in the US. On a national basis, 1- in-14 jobs in traded clusters are
in the hospitality and tourism sector.
KEY VISITOR ECONOMY DATA:
The research also demonstrates
that across the US, economic trends have supported above average growth in the
visitor economy. As income levels rise, consumers are dedicating a greater
share of spending to travel and tourism. Specifically:
-
As incomes have
risen over the past three decades, consumer spending on travel has grown at an
even faster rate.
-
As income levels
rise, consumers are dedicating a greater share of spending to travel and
tourism. For example, in the span of slightly more than a generation, per
capita consumer spending on hotel stays in the US has increased 200 percent
since 1980, even as per capita GDP - as a measure of income levels - has
increased only 75 percent.
-
Destination
marketing plays an integral and indispensable role in the competitiveness of
the visitor economy by pooling resources to provide the scale and marketing
infrastructure to promote a place to national and international markets.
"Looking ahead, destinations
are poised to capitalize on future growth even more, as consumer spending on
travel continues to outpace other sectors," said Gehrisch.
ABOUT THE DESTINATION & TRAVEL
FOUNDATION:
The Destination & Travel
Foundation is a complementary organization to Destination Marketing Association
International. The foundation's mission is to enhance the destination marketing
and travel professions through research, education, visioning and development
of resources and partnerships for those efforts. As a 501 (c)(3), the
Destination & Travel Foundation engages industry leaders and experts in
various fields to determine innovative and creative strategies to prepare the
DMO industry for the rapidly changing business environment.
ABOUT THE STUDY:
States and cities across the US
recognize the importance of the visitor economy and collectively invested
nearly $2 billion in destination promotion last year. The massive value of the
US visitor economy warrants these investments, which enable destinations to
compete effectively in both leisure and group meetings markets. Indeed,
destination promotion has been consistently proven to yield significant returns
in the form of incremental visitor spending driven by sales and marketing
campaigns.
However, the dividends of destination promotion extend far
beyond the benefits accruing to visitor-related industries and their suppliers.
This Oxford Economics study on behalf of the Destination & Travel
Foundation, is based on a combination of case studies, interviews, literature
review and statistical analysis. It finds that destination promotion fuels
economic development across the entire economic spectrum. The study was funded
in part by destination marketing organizations of California, Chicago, Cleveland,
Denver, Louisiana and Phoenix.
ABOUT DESTINATION
CLEVELAND:
Destination Cleveland is Cleveland's convention
and visitors bureau. This private
non-profit organization's mission is to drive economic impact and stimulate
community vitality for Greater Cleveland through leisure and business
travel. Cleveland welcomes more than 16
million visitors annually. For more information, visit ThisisCleveland.com.
Scott Peacock, Destination Cleveland
216.875.6628 speacock@destinationcle.org