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Terrorism's Toll on Tourism
Industry strategizers are far from vacationing as a hurting industry tries to drum up in-state business
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Business New Haven
10/29/2001
By: Susan Cornell
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It seems like only yesterday that Connecticut's tourism industry pros could so easily flaunt their successes. The state's tourism and travel industry, they reported, contributed roughly $5 billion in gross revenues to Connecticut's economy and $521 million in state and local taxes, employed nearly 90,000 residents statewide, and had one of the highest regional-purchase coefficients (82 percent) supporting local business. Further, Gov. John G. Rowland identified tourism as one of the emerging industry “clusters” driving job growth and economic development.
Since then, however, the industry has experienced a best-of-times, worst-of-times kind of year. Seven months ago, at the governor's annual Conference on Tourism, travel industry pros pow-wowed with the Connecticut Tourism Council, the state's Office of Tourism and sponsors who explored opportunities to draw on past successes as tourism continued to develop into a competitive economic contributor.
Today, however, in the weeks since the September 11 terrorist attacks, many in the industry are facing dire circumstances.
In response, the public-relations experts and officials of the state's Office of Tourism held a pep rally, the Connecticut Tourism PR Summit, earlier this month. The purpose of the event was to psyche travel agents, restaurateurs, hoteliers and representatives of regional convention and visitor bureaus in the wake of the attacks. Naturally, they accentuated the positives - after all, if the purveyors aren't upbeat, tourists won't travel.
Barbara Cieplak, marketing director for the state tourism office, says that the vacation/leisure sector, particularly auto/drive, is rebounding quickly. Cieplak says that the welcome centers are seeing “tremendous increases in spontaneous travelers.”
However business travel, which was down even before the terrorist attacks, continues to decrease and group travel continues to be down. Meetings and conferences, Cieplak says, are beginning to rebook, and those that did not cancel are experiencing drops in attendance by one-third to one-half.
She adds that Connecticut tourism is faced with “unique marketing and PR challenges” - overcoming “new psychological barriers in the minds of consumers,” she says. “Communicating with the marketplace requires a careful and sensitive approach. Frequent course corrections will be essential.”
The state's strategic consultant, Bill O'Neal, says that the marketing strategy of concentrating on easy drive markets and positioning Connecticut as an ideal quick getaway makes even more sense in the aftermath of the attacks. He, too, believes that the state is presented with an “opportunity” - that people who may never have previously considered Connecticut as a destination may now regard the state as getaway spot.
Ed Dombroskos, executive director of the state's Office of Tourism, acknowledges that it is essential to rebuild public confidence in travel overall. And, he notes, “It's really hard to predict when the industry will be back to normal.” What the tourism industry is confronting, Dombroskas says, is how to get people to feel more comfortable about traveling again. Drive sectors seem to be “holding up,” he reports, while air travel is hurting the leisure and meetings markets.
“The okay news is on the economy-business side - the Super 8s, for example - although it is not where it was last year. Where we're really hurting is in the upper-end business travel. And, the urban centers such as New Haven seem to be hurt the most. Leisure travel to that area is holding there, but the composite is heavily weighted on business travel and it's showing some stress in New Haven.”
Dombroskas met with New Haven Mayor John DeStefano Jr. recently to discuss the situation. Also discussed was trying to help by encouraging packaging and increasing leisure travel into the area by offering attractive rates and incentives.
“Economy business travel trended up pretty quickly,” reports Dombroskas, although it's only at 80 to 90 percent of where it was before, while “high-end [meetings and conventions] is only coming back two to three percent at a time.”
“The total recovery plan can't be grown at home - it's a national effort. We're supporting legislation to Congress to jump-start the industry, including tax credits,” says Dombroskas. Additionally, what is needed are “local efforts talking at the highest levels to businesses asking them to not forget the travel industry. If they're not traveling long distance, consider local.”
The public relations summit attendees were encouraged to hightail back to their attractions, sites, etc. to develop getaways, overnight packages and special added-value offers such as two-for-ones.
Many attractions report that attendance is holding steady, of course, perhaps to reassure the consumer and to counter any apprehensions about visiting. However, some attractions such as the USS Nautilus and Museum in Groton, an attraction that draws some 800 visitors per day, closed for security reasons.
The Mashantucket Pequot Museum & Research Center's manager of public relations, marketing and development, David Holahan says: “We had a dip in attendance, but we're doing fairly well. The impact wasn't great - it feels normal now based on the number of cars in the parking lot.” Holahan also says that the marketing plan is being reevaluated based on “new realities.”
“We've always hit the metropolitan area but we're going to do a bit more in Rhode Island and Boston instead.” But, if attendance feels “normal,” why reevaluate?
Similarly, Richard Bisi, director of marketing for the Lake Compounce amusement park, comparing last year's attendance to this year's, says, “We've come out okay.”
“We took our cues from Broadway - they were dark two or three nights [following September 11]. They decided the show must go on. Our feeling was the same.”
Nevertheless, the attacks did come after the height of the season. “The dynamics change for us in September,” Bisi says, when Lake Compounce is open only on weekends. Further, the attraction's target market is within the state of Connecticut - a “drive” market that Bisi says is “holding up.”
Not everyone agrees. Dave Greco, director of sales for the Greater New Haven Convention & Visitors Bureau, doesn't share the rosy outlook. “The events of September 11 have impacted this area as a whole, and the nation. We're feeling a definite crunch. People aren't staying in hotels as much and layoffs [in the tourism industry] have already occurred.
“A lot of the hotels are complaining of the crunch,” says Greco. “A lot of companies have cancelled bookings and put restrictions on travel until the end of the year. They're in a wait-and-see mode. This hurts the economy greatly.”
Greco emphasizes that visitors also purchase gas, go shopping, go out to dinner, buy prescriptions, and so on. “A lot of peripheral spending takes place by people who stay in hotels,” he says.
How much the hotels' bottom lines have been impacted by the events of September 11 is impossible to calculate. As Greco says, he is “trying to get to that answer. But many won't share rate or revenue information.
“Definitely both business and pleasure travel is down,” says Greco. Group business is a particularly hard hit and “individuals aren't travelling that much. People just want to stay home.”
So the game plan is adjusted. “We've always gone after national business, but we're changing to regional and local type meetings. We're contacting local corporations and hope they will stay in our backyard and help our own hotels.” Additionally, the plan entails targeting individual weekend travelers to stay locally - as opposed to going to Florida, for example. “It's a more regionalized approach,” Greco explains.
Greco notes that many people “don't realize that [tourism] directly impacts a lot of other businesses in the area. When hotels are down, what they begin to do is to eliminate their landscaper, they don't send out as much laundry, and they don't buy as much food from the vendors. Also, when hotels are laying off, [former employees] aren't stopping at Dunkin Donuts to buy coffee, and they're not gassing up.” Finally, Greco says that a lot of people simply don't realize that tourism is Connecticut's third-largest industry. Its economic impact is particularly significant.
At the 305-room Omni New Haven Hotel, for example, bookings last month were 40 percent below what the hotel logged last September, and 50 percent lower than projected for the month. Moreover, a group just canceled bookings of 900 rooms in November.
Omni General Manager David Jurcak points out that, according to a PricewaterhouseCoopers study, revenue per room is estimated to be down 25 percent in the last four months of 2001 from a year earlier, and is expected to fall by ten percent yearly for the industry. The implication is that state and local tax monies (remember the $521 million from 1999?) will be significantly lower. Plus, a Smith Travel Research report of six hotels in Connecticut illustrates a 37-percent decrease in room revenues from September 2000 to September 2001. The Omni has laid off ten employees and reduced hours, Jurcak acknowledges.
Closer to New York, the problem is the reliance on business travelers coming from or going to Gotham. Group-business bookings dropped 20 percent and corporate travel dropped 50 percent in the immediate aftermath of the attacks, reports the general manager of the Sheraton Hotel in Stamford, David King. As a result, the facility has reduced staffing by roughly 20 percent.
The precipitous drop in business travel is a major issue both in Connecticut and nationwide. The National Business Travel Association (NBTA) found in a survey of 200 corporations nationwide that 70 percent anticipate that the recovery in business travel will take three to six months. Another 12 percent expect recovery in nine months, and 18 percent anticipate that it will take ten months or more.
The NBTA survey reveals that corporate travel managers say that the ability to ensure traveler security would be their most valuable tool over the next six months if business travel is to return to previous levels. This is particularly true of smaller businesses, those with annual air spending of less than $5 million.
The state's tourism campaign targeting New Yorkers seeking short getaway vacations won't change as a result of the September 11 terrorist attacks, but will adapt with the theme “Connecticut Cares.” The goal is to give wary vacationers reasonably priced getaways, especially holiday trips and those that are tinged with patriotism and history.
That's the type of approach that should benefit attractions such as the New England Air Museum in Windsor Locks. According to spokesperson Michael Speciale, “October has traditionally been one of the busiest months, and it's been down. We usually get people from Pennsylvania and New Jersey - retired people and people looking at leaves. Just looking at the parking lot, there aren't as many cars out there.”
Says Beardsley Zoological Garden director Greg Dancho of his Bridgeport attraction, “We saw a spike in attendance and it's still going up even though our season, in a sense, ended the first week in September.” Danco notes an increase in families on weekends and in “stroller moms” on weekdays. Overall, Beardsley attendance is up three to four percent over the same time last year.
Explains Dancho: “We feel that a lot of people want to get out of the house to get the kids away from the television and it gives the parents time-outs.” Also, he notes, the zoo is inexpensive (“less expensive than the price of a movie ticket”) - which “doesn't fare badly in an economic downturn.”
Nonetheless, Danco explains, “The bad part for us is any fundraising. Dollars from corporations have dried up completely when we're going into a season when we're looking for dollars.” Further, he says, since corporate travel is down, fewer will be exposed to the zoo's advertising this fall so “We will see the drop next season.” Lastly, “We may see a drop in marketing dollars because the districts' tourism funding comes from heads & beds.”
Mystic Seaport, one of the state's top draws, may benefit from the adjustment of the marketing campaign as well. Explains Mystic Director of Communications Peter Glankoff, “As a Museum of America and the sea, our role is more important than ever before.” Attendance, he said, “has been less severely impacted” [than that of more remote attractions].
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