CVB looks to educate outsiders

ColoradoSprings-11Tourism is a tough business. There’s no way to determine success, no way to tell whether the message is resonating with the target audience, no way to measure the return on the millions invested in advertising, marketing or other publicity.

Tourism experts use a bunch of different messages and a lot of different media, hoping to be heard above the cacophony of every other tourist destination. And the Colorado Springs Convention and Visitors Bureau is doing it with a lot less money than competitors.

The local CVB lives in the shadow of Denver, overcoming ever-present stereotypes of Colorado Springs and covering more ground than most city-based CVBs.

“When we’re manning a booth at a trade show,” said CEO Doug Price, “the first two questions we get are always the same. Can you guess what they are? The first question is: ‘Where is Colorado Springs?’ We tell them we’re about an hour south of Denver, so that locates us in their mind. The second question is: ‘Do you have an airport?’”

Price’s point was simple: In past decades, the CVB put a lot of effort into correcting misconceptions, such as Colorado Springs being ground zero of the anti-gay movement and right-wing preachers roaming the streets proselytizing to one and all. And no, the city didn’t go up in flames last June 26 — in fact, we’ve rebounded very nicely.

Correcting such misconceptions may loom large to those of us who live here, but the CVB’s most important job, Price has learned, is to build awareness of the city among potential visitors who know almost nothing about it. It’s not as easy as it may seem, since it’s competing with hundreds of similar organizations, all with the same message: We’re great! Come visit us!

Scores of such “Destination Marketing Organizations” compete directly with Colorado Springs, all focused on increasing visitor numbers and thereby enhancing local and regional economies.

Since 1980, approximately 80 percent of the CVB’s budget has been funded by a two-thirds share of the city’s Lodgers and Automobile Rental Tax (LART), consisting of a 2 percent lodging and 1 percent automobile rental tax. Such visitor-paid taxes are almost universally used to fund municipal or regional DMOs, but Colorado Springs tax rates are far lower than those of its competitors.

In the 2013 city budget, the CVB received $2.6 million, including a special allocation of $100,000 for the post-Waldo Canyon fire “Welcome Back” campaign.

“(Low lodging taxes) help the industry in one way,” Price said, “because they lower room costs. It does present a challenge for us, though, so we learn to do more with less.”

That may be, but competitors have much more money.

In Omaha, the CVB is a city department that receives about $3.8 million annually from a lodging tax. The major marketing tool there, said Executive Director Dana Markel, is the city’s large convention center.

“We market to that,” she said. “We have a national reach when it comes to the convention center, and we have three sales managers who travel at least two weeks a month to travel shows and event planners meetings. It’s a big part of what we do.”

That’s easy to track, but the group also markets to families, which is a little harder to tally.

“And we just have no way of knowing who is here with their families to visit,” Markel said. “It’s not like they check in with us.”

Markel says CVBs must know their strengths and market to a target audience. In Omaha’s case, she says, “we focus on Kansas City, Des Moines and Sioux Falls, Iowa.”

Colorado Springs focuses on states, not cities. Amy Long, vice president of marketing and partnerships, says the local targets are Kansas and Texas. “It’s a drive-in market,” she said. “So that’s where we focus.”

Relationships

The CVB’s relationships with other in-state DMOs are curious hybrids of competition and cooperation. Denver and Colorado Springs are dedicated to increasing overall visitation to the state, but they’re more fiercely determined to get their share of the pie.

Denver’s domination of regional air traffic benefits that metro area, but substantially disadvantages Colorado Springs. And Denver marketers have the firepower to mount sustained, powerful and targeted marketing efforts.

Visit Denver, the Denver Convention and Visitors Bureau, describes itself as “contracted by the City & County of Denver to act as the official marketing agency for Denver.” With more than 60 full-time employees, it had a 2012 budget of more than $18 million, of which nearly 80 percent came from a dedicated share of Denver’s 10.875 percent lodging tax. Part of the remainder came from fees paid by more than 1,200 business members.

These are big numbers — but as every Coloradan knows, the visitor industry is big business. Estimates by the Colorado Springs CVB suggest that tourism supports more than 14,000 jobs in the Pikes Peak region, with an annual economic impact of approximately $1.25 billion.

A study commissioned by Visit Denver in 2011 found that Denver’s 12.7 million overnight visitors in 2010 spent $3 billion while supporting nearly 50,000 jobs.

Statewide, the visitor industry supports nearly 138,000 jobs, generates $8.8 billion in visitor spending and produces $364 of tax revenue per household.

What do DMOs do?

How do DMOs measure the effectiveness of what they do? The short answer is that they don’t — at least not directly. They look at website traffic, do search engine optimization, use social media and seek direct and indirect connections to specific visitors and visitor groups. Yet the data is often murky.

“At a trade show someone might come up and say, ‘Tell me about Colorado Springs,’” said Price. “So I give him information, he gives me a card and the group eventually books the Elegante (Hotel). Did I make the sale? Or did the Elegante’s sales team? Or was it from a completely different source? It doesn’t matter — the result matters.”

But in an era of measurable, quantifiable results, how do DMOs justify continuing public funding? Isn’t the CVB just another industry association, with no more claim on public funds than the Housing and Building Association or the Pikes Peak Association of Realtors?

The Colorado Experiment

It’s easy to make that argument, but thanks to what happened in Colorado during the early 1990s, we know exactly what happens when public visitor marketing funds are cut off.

When Colorado voters approved Doug Bruce’s Taxpayer’s Bill of Rights initiative in 1992, the Legislature no longer could levy new taxes nor extend existing taxes. One such tax, a 0.2 percent levy on travel-related products and services, provided much of the Colorado Tourism Board’s $12 million annual budget.

In the 10 years the tax had been in effect, Colorado moved to first among U.S. states in the summer resort category, up from 14th previously. The state’s overall market share of travelers grew by 50 percent, representing more than $1 billion in additional annual spending.

That cut no ice with the voters, who refused to extend the tax by a 55-45 margin. Colorado became the only state without an official tourism office. The results, according to a detailed analysis by Longwoods Travel USA, were devastating and immediate.

Within two years, Colorado lost 30 percent of its tourism market share, a revenue loss of $1.4 billion annually. By the late 1990s, those losses would increase to $2.4 billion — but in 1994 alone, Colorado collapsed from first to 17th in the summer resort category.

Partial funding was restored eventually, but the state continued to lag until 2006, when public funding was increased from $5 million to $19 million annually.

The Colorado Experiment has served as a talking point for every DMO pleading its case to tight-fisted elected officials. It has been telling and effective — except in Colorado Springs.

Visit Denver receives about $16.8 million annually. The convention center has its own marketing budget. And Denver focuses solely on the city limits, with surrounding areas fending for themselves.

The Springs CVB, on the other hand, has much less money and must market attractions in Teller and Fremont counties, which pay nothing for the CVB’s efforts. Attractions that are members pay only a membership fee and get premium spots on the CVB website.

“We’re under contract to do that,” says Price, “and it makes sense. We’re the start of the mountains here, so everyone comes through here to get to Woodland Park or Cripple Creek or the Royal Gorge.”

The challenge, says Price, is to market the city so that tourists stay longer in the Springs, visiting Pikes Peak and Garden of the Gods before heading to the Arkansas River rafting tours or a weekend of gambling in Cripple Creek.

Convention centers

In the past 20 years, cities large and small have erected taxpayer-funded convention centers. Despite warnings that such facilities would neither be viable nor contribute to regional visitation, cities throughout the West and Midwest built or expanded convention centers. So pervasive are they that almost any metropolitan area similar to Colorado Springs already has a convention center.

For years, city leaders tried unsuccessfully to fund a downtown convention center, only to have voters reject such plans. And thanks to a successful initiative championed by Broadmoor CEO Steve Bartolin in 2004, the city now is barred from spending public funds to plan such a venue.

Although The Broadmoor has more than 100,000 square feet of meeting and event space, the lack of a convention center means that the CVB’s focus differs from that of competing DMOs.

“We have to fish in shallow water,” said Price. “We only go after events and meetings that we can accommodate — we’re a particularly strong destination for military reunions, for religiously themed events, and for active, participatory events. Now that Pikes Peak is open to cyclists, and the Incline is legal, we’re seeing a lot of visitors who want to challenge themselves on one or the other.”

The art of marketing, Price says, is to promote what the Springs has.

“We can’t focus on what we don’t have,” he said. “It’s easy to sit around and say it would be nice to have something different. We can’t worry about that. We have to market the city, and we do that by focusing on what we do have here. That’s all we can do.”

By the numbers

5 million: Annual visitors to Colorado Springs and the region

$1.35 billion: Annual economic tourism impact

14,000: Number of jobs created by tourism

$295 million: Tourism wages and salaries in El Paso, Teller and Fremont Counties

100,000 square feet: Broadmoor Hotel convention space

770: Number of hotel rooms within walking distance of convention space

5: Number of restaurants within walking distance

2.2 million square feet: Denver’s Colorado Convention Center

8,400: Hotel rooms within walking distance

300: Restaurants within walking distance

300,000 square feet: Omaha’s CenturyLink Center

35: Restaurants within walking distance

18: Number of employees at Colorado Springs CVB

60: Number of employees at Denver’s CVB

16: Number of employees at Omaha CVB

Amy Gillentine contributed to this article.