by Steven Hacker, CAE | July 01, 2017

Many occupations in the United States have become easier thanks to a combination of mechanical devices, processes and labor laws. And technology, of course, continues to play a huge role in making countless jobs simpler to perform. Everyone from commercial airline pilots to automobile mechanics and from surgeons to event planners all now rely on a wide variety of digital aids. There is, however, one profession that has become materially more difficult over the last decade: that of destination marketing organization executives.

Sure, the marketing of destinations has become vastly more efficient and effective in many ways. Anaheim, Philadelphia and the Orange County Convention Center in Orlando, for example, are some of a growing number of DMOs and venues that use virtual reality to help woo event planners with a range of experiential options.

Social media channels have opened extraordinary doors for destinations as a dynamic way of relaying their unique stories to thousands of potential visitors. Even the return on investment of FAM trips has been improved as it’s now easier to focus on genuine prospects and exclude freeloaders who were only out for a good time at the expense of a DMO.

But despite enhancements that have made destination marketers so much more proficient, the job of a DMO executive is now a high-stress, no-win migraine for many industry leaders. What was once considered a plum and relatively stable job has morphed into a career akin to that of a professional bullfighter—filled with drama, risk and sometimes a swift and bloody exit.

 

Calls for Greater Accountability

Contributing mightily to the intensifying angst are escalating demands—often unreasonable or driven by hidden agendas—for greater transparency and accountability in regards to how DMOs secure and spend their money. What is most disturbing about this trend is that calls for transparency and accountability are often fueled by ignorance. Elected public officials (especially during campaign season) are frequently the drum majors of intense media campaigns during which these topics arise. And while it is not unreasonable to suggest that government officials at all levels should be more aware of what their DMOs do, they should also be more vocal about why DMOs are vital to their districts and constituents.

San Diego, one of the perennial top destinations in the nation for leisure and business visitors alike, has ironically become emblematic of a city that seems to be continually and agonizingly under siege from litigation of some sort, at times verging on the brink of destroying the financial stability of its tourism authority. Several years ago, the proposed expansion of the San Diego Convention Center attracted opposition from a group of environmentalists concerned about the possible degradation of San Diego Harbor and the perils it posed to marine life. In the resulting long interim of legal give-and-take, alternate proposals were made: Could the San Diego Padres’ baseball stadium be adapted for use as an exhibition space? Could the convention center be redesigned as a more campus-like space? Many planners believed neither was a better solution. Meanwhile, the city’s largest event, Comic-Con, has grown massive, fueling speculation that it will soon be forced to relocate somewhere north of San Diego where two larger facilities exist. Needless to say, the city is preempted from hosting events larger than Comic-Con despite a torrent of planners who would jump at the opportunity to bring their events to town.

But this is only part of the tale. An ongoing series of lawsuits have contended that the way San Diego’s Tourism Marketing District (TMD) is funded is unconstitutional. The TMD assesses an additional 2 percent fee above the base hotel occupancy tax of 10.5 percent, all of which is earmarked for the San Diego Tourism Authority to market the city. A class-action lawsuit demanded the removal of the TMD assessment and also asked for the repayment of all of the money the San Diego Tourism Authority has received from the TMD since 2012, in the range of $100 million. However, the San Diego Superior Court dismissed the lawsuit in May, upholding an earlier ruling siding with the city and the TMD. Despite the fact that the judge has repeatedly signaled his support of the city’s position, the wheels of litigation continued to grind on as the class-action lawyers have stated their intent to appeal.

A new proposal, authored by San Diego Mayor Kevin Faulconer and expected to go to ballot in a special November election, suggests increasing the city’s hotel room taxes, which could generate as much as $685 million and would help fund the expansion of the convention center (as well as repair streets and finance homelessness programs). One complication is that the city doesn’t own the land upon which the expansion might take place. The land is owned by a real estate developer whose own plans to construct a new $300 million hotel on the site have languished since 2007 for several reasons, including the financial impact of the Great Recession. The developer, Fifth Avenue Landing, has now filed suit, contending that the city interfered with its permitting process. A hearing has been set for August.

At this point, the whole scenario is moving forward with several variables—perhaps too many. If Faulconer’s proposed ballot initiative makes it to a November vote, there is no guarantee that it will pass. If it does pass, and if Fifth Avenue Landing’s lawsuit were to be upheld, the city would then have to find the land needed for a contiguous expansion of the convention center, and given the scarcity of space around the building, this doesn’t even seem possible. Suffice it to say that if there were such a thing as a meetings-industry melodrama, this story might become a Netflix hit.

 

Spending Issues

When it comes to the hot topic of DMOs and money matters, equally heated are controversies about how such organizations should—and should not—be spending it. Visit Florida is one organization that has recently fallen under public scrutiny, and its case has ultimately involved both the state legislature and the governor.

Will Seccombe, the longtime CEO of Visit Florida, was asked to resign by the state’s governor in December following a dispute that arose after it was revealed that Visit Florida paid the rapper Pitbull $1 million to help with tourism promotion. The issue quickly expanded into how sufficiently transparent Visit Florida was being in light of the $76 million annual budget it receives from the Florida Legislature, and seemingly overnight the DMO saw its budget slashed to $25 million by the Florida House of Representatives, notwithstanding the impact it has had on substantially increasing Florida tourism. In his defense, Seccombe recently shared that visits to Florida during his tenure had increased 34 percent since 2009 and that approximately 110 million people visited last year.

It is important to note that Visit Florida is not the only DMO to have weathered some epic turbulence this year. A growing number of DMOs are experiencing similar challenges.

Increased Scrutinyon Funding

In Tennessee, the Chattanooga Convention & Visitors Bureau has been in the cross hairs of the state legislature, which recently passed a bill requiring the state comptroller to audit the CVB’s spending. Rep. Mike Carter discussed the issue in an April Chattanooga Times Free Press article:

“Carter said he believed ‘good folks’ run the CVB but that does not mean they should be above financial review. ‘I sponsored this legislation because they receive over $7 million in county funding and we need independent audit of how they use those funds,’ he said. ‘Public expense should require a public view.’ Carter said he limited the scope to Hamilton County because a statewide application would have generated a lot of opposition from tourism bodies across the state. ‘That doesn’t mean it couldn’t catch on elsewhere,’ he said, citing support he had received from other lawmakers.”

Two lessons have arisen from this trend. First, all DMOs that are funded by some form of public taxation—which, of course, is most—would be wise to voluntarily embrace the self-imposed transparency and to view their spending not through the internal prism of a tourism destination organization but through the filter of a potentially motivated antagonist. The second and perhaps more important lesson is that what DMOs do for their communities is not generally understood, especially by key stakeholders like elected public officials and the media. It would be astute for the industry to recognize this reality and launch a broad-based and ongoing public relations effort to address this threat.

A Growing Listof Challenges

If transparency and accountability were the only challenges DMO CEOs had to cope with, the job wouldn’t be nearly as stressful as it has grown to be. However, the list of other challenges has become long and continues to grow. DMO leaders must now address issues such as boards whose members include mavericks and agitators; disrupters like Airbnb, Uber, Turo and Lyft, which are eroding many traditional businesses owned by DMO members; and new legislation that offends minority populations and can result in destructive publicity and organized boycotts. All of this calls for DMO executives who possess the utmost negotiating and communications skills. Fortunately, many DMO CEOs are demonstrating just such qualities, and that they remain remarkably upbeat during such tumultuous times speaks well to the future of both their organizations and their destinations. •