How important is tourism and hospitality from an economic development standpoint?
The numbers would suggest it should be a critical economic development component in any number of places, from Orlando to Nashville to Las Vegas to Los Angeles.
A new analysis shows the leisure and hospitality sector has not only recovered from the recession but is in high gear in adding jobs. Employment at venues ranging from hotels to casinos to theme parks, museums and Broadway productions topped 13.6 million in August, an all-time high, according to the U.S. Bureau of Labor Statistics.
If you are in the hospitality sector in California, Texas, New York, New Jersey, Pennyslania, Illinois, Florida or Indiana, you can be especially pleased. Each of those states gained at least 10,000 hospitality jobs from August 2011 to August 2012. California added more than 56,000 and Texas nearly 48,000 jobs in the sector.
But economic development professionals are divided on the role that tourism and hospitality plays in marketing their region for new business investment and whether there is enough overlap in potential audiences to leverage tourism as part of the marketing strategy.
A recent discussion thread on the International Economic Development Council’s LinkedIn group page underscored the divide. (You need to be a member of the LinkedIn group to see the comments.)
Bruce Hoch, managing director at DCG Corplan Consulting in New York asked: “Why is tourism so often an independent element and not considered an essential component of an overall economic development strategy? Hotel, restaurant and retail industries promote occupational multipliers similar to traditional industries, so why not merge these departments?”
Spirited responses from economic development professionals noted the disparate target audiences (business to business vs. business to consumer), the divergence in stakeholders and that tourism functions most often have dedicated revenue streams (such as bed taxes) to fund them that EDOs don’t usually have, and different accountability measures and metrics.
But EDOs and tourism and hospitality groups are essentially in the same business – promoting a community’s assets and generating new investment – and can work in each other’s interest.
Tourism brings outside dollars to a community but also can be a driver in other parts of the economy as well. Think about how many businesses – food service, lodging, uniform supply, waste management, legal, finance, engineering to name just a few – touch a major attraction.
Building strategies around the support and growth of the tourism and hospitality sector would be no different in many communities than any other key component of the regional economy. The tourism organization may be trying to recruit more visitors but the EDO can be working to recruit more hospitality business and it can certainly leverage the tourism and hospitality assets when it comes time to makes its quality of place case to prospects.
And tourism organizations are often in front of major corporate prospects, trying to draw conferences or events to their community. Could promotion of a community’s business assets and advantages be a part of their message?
A number of communities large and small have created working relationships that serve both the economic development and tourism strategies. In Cabarrus County, NC, a community of 181,000 just outside Charlotte, economic development and tourism organizations heavily promote the region’s motorsports industry. The community is home to dozens of NASCAR teams and racing venues such as Charlotte Motor Speedway that draw not only thousands of visitors but dozens of other businesses that support motorsports.
In Nashville, tourism and hospitality is a key economic development focus that has spawned initiatives such as a coordinated collaboration among local govenrment, economic development and tourism entities to support the region’s music industry by enhancing education programs and supporting music professionals in the community.
EDOs and tourism organizations might have different audiences and different tactics but neither should be working in a silo. In the end, both can benefit from the efforts of the other.
What’s it like in your community? Is tourism and hospitality part of your economic development strategy and what are examples of ways you work with tourism organizations that help promote business investment in your community? Share your thoughts.