Hundreds of thousands of people visit Idaho each year to hike, hunt, fish, bicycle, swim, and carry out other recreational activities. Tourism and travel in Idaho is a $4.5 billion industry that employs about 29,000 Idahoans. At IBR’s breakfast series on June 5th, a panel of travel and tourism professionals discussed their experiences about tourism marketing and the future of Idaho’s tourism industry.
Melissa Barry, Executive director, Southern Idaho Tourism
Scott Fortner, Director, Sun Valley Marketing Alliance.
Andrew Mentzer, Executive director, West Central Mountains Economic Development Council.
Josh Mercaldo, Brand director, Drake Cooper
Carrie Westergard, Executive director, Boise Convention & Visitors Bureau
An all-time high in lodging tax collections
We have a set dedicated 2 percent lodging tax collected by the properties that’s remitted to the state’s tax commission and then those dollars get funded to the Department of Commerce.
This year, like last year, we will have an all-time high in terms of our collection. We’re going to get real close to $12 million. That’s a lot of hotel rooms, a lot of private campgrounds, a lot of overnight visitation. Ten percent of that total goes off the top and funds the Department of Commerce tourism division. That’s going to pay the rent, salaries, fees, and all that kind of stuff. Forty-five percent of the remaining goes back into the regions it came from in the form of nonprofit grants. The other 45 percent goes into the statewide marketing program that Drake Cooper helps administer.
We are essentially one big ecosystem. When the state does well and the regions do well, the economic kitchen really runs hot.
Visitation overall is up 4 percent compared to our most recent research study which was done a couple of years ago in 2015. The number of person trips is increasing, the length of stay is increasing.You don’t have to be a large region that has lots of hotels to see the impact of tourism. Even our more rural communities see the value in that.
When we look at our neighboring states and their budgets and resources, and just the size of their state offices, we are very small. Typically, we are outspent annually 10 to one. If you think of a state like Montana who might seem a little bit more rural, like Idaho, then say California or Nevada, their marketing budget is $20 or $30 million plus. Their state office could have 20 or 30 people. We are competing at the end of the day against some of the best travel marketers in the world. That’s why groups like us on the panel here and everyone else in the state has to work together.
Every year Idaho has gone to their annual conference and they come back with wonderful awards for their creativity on their marketing campaigns so congrats on that. As far as Boise, our room demand has increased; we had 1.7 million overnight stays in 2017 in the Boise area. That has grown from 1.4 million five years ago. Most significant, though, is our hoteliers are able to charge more than they’ve ever been able to charge before. Our room revenues have grown 55 percent in five years and occupancy also went up from 63 percent to 73 percent. The last five years has been phenomenal for Boise and we see the next few years continuing down the same track.
We’re up 11 percent in Valley County from 2016 to 2017. We’re looking forward to seeing the numbers for 2017 to 2018. That’s probably largely due to the Boise market. In-state travelers are a major part of the travel budget, and a lot of folks that go from Boise to McCall or Sun Valley drive a lot of those numbers.
Because of in-migration, we’re seeing just by sheer numbers a massive uptake in some of those spaces. Right now, we’re sitting at 11 percent and I would not be surprised if we were considerably higher than that for next month.
The interesting thing about Sun Valley compared to a lot of other mountain destinations in terms of ski towns, is we actually operate much higher in the summertime. What we’re working on is trying to drive things like spring and fall. And we have an opportunity for some growth in winter.
Obviously, our access is important. We’ve also seen quite a bit of capital improvement within the community. Sun Valley Company has done a lot to the lodge, they’re finishing a remodel on the inn, the Aspen Ski Company is coming into the community building the Limelight hotel. Another developer out in the Aspen community came in and bought one of the other hotels. What that’s done is stepped the game up for a lot of the other hoteliers in the community. We’re obviously seeing a huge increase in Airbnb and we’ll talk about that in a little bit.
Our region is a little bit different. The Magic Valley in generaL has seen a tremendous amount of growth in the food industry. That does bring along lots of other services and infrastructures that kind of tailors to some of our tourists.
For a long time we’ve been an Idaho passthrough. We’re right along the way to get to Yellowstone and some of these other bigger national parks. But more recently because of some of this infrastructure growth we’ve actually seen people coming to spend the night. We’re getting above 10 percent lodging collection increases for our previous years. For the past three years before that it was five percent, maybe even lower than that, so we’ve definitely seen a lot of growth.
The shoulder season is definitely our area of weakness. We’re very much a leisure outdoor recreation spot, but we don’t have a lot in the terms of winter activities or convention space to kind of build some of that gap time. During the summertime, our hotels are at about 90 percent occupancy. Their rates are going up significantly.
The market: ‘An uncomplicated day’s journey to the state’
The No. 1 traveler when we talk about markets is Idaho residents. Outside of Idaho, the next four markets are Washington, Utah, California, and Oregon. At the agency, the market is an uncomplicated day’s journey to the state. From a drive standpoint, eight to nine hours tops or direct flights is the sweet spot.
The demography is a domestic leisure traveler in summer, fall, and early winter, visiting friends and family.
We get a little bit of a different take because a lot of our travelers are business travelers. We are not as much the drive market. We do focus on the nonstop air service market, so there’s 21 nonstop destinations; that’s where our focus and marketing and public relations efforts lie. People may come here only as a business traveler and the next time they bring their families and come on their own and they experience more on a leisure basis.
The West Central Mountains are often considered Boise’s backyard. We see day trippers, families coming up because of the affordability as well as the amenities. We have three ski resorts and both Cascade Lake and Payette Lake. There’s a lot of things to do; you can leave Boise at 6 a.m., have a full day and be back in time for dinner. We see a lot of that demographic and that is strictly to the accessibility of the Highway 55 corridor.
We’re trying to focus on celebrating those slack seasons as well. We’re doing that through looking at the individual traveler. One of the individual travelers that we think presents a lot of value for us in the future is going to be adventure cyclists. We have, I think it’s about 38,000 miles of two-track and single-track across the state of Idaho. We’re actually building a platform right now in the Cascade area for multiday adventure biking trips.
Sun Valley is primarily 70/30 in terms of destination visitation to state visitation. With the growth of Boise, that changes a little bit in the wintertime. It is what some might consider an aging destination. We have an old clientele and are going after a newer, younger clientele. We’re less likely to target or look for a tourist more than we are a traveler. That means it brings us somebody who’s really interested in having experiences, people who want to spend the time and dive into the region and area and explore and we find that to be a little bit of a delineated line between what our focus is.
We help to subsidize these flights, with our primary focus Seattle, Portland, San Francisco, L.A. We have flights out of Denver, the East Coast leg. We have a lot of visitation from the East Coast. We also just started a Chicago flight this past winter that we’re hoping to pick up for the following winter and get through the following summer.
Our passthrough visitors are very diverse. Yellowstone and the Grand Teton area draws many different people from all over the country who usually stop for the I.B. Perrine bridge in Shoshone Falls. For our specific destination marketing, we actually don’t resonate so well with the Pacific Northwest, Oregon and Washington, because we don’t have quite that same type of feel.
The state of Idaho is a big feeder for our visitation, but for the most part we see a really good population from California, Utah, and Nevada. That’s really where we push our marketing messages. Base jumpers come from all over to jump off of our bridge. We have this stretch of whitewater that’s internationally known but only available when we have a certain amount of water going through that portion of the Snake River. It’s just a matter of timing and making sure that we have the correct messages to the correct people. It makes it a little bit harder to pinpoint exactly who all of our demographics are. But for the most part in our general sense we really focus on kind of the park portion because that’s a really good family demographic, and then waterfalls. We’re very well known for geology, we have the canyon, we have steep rocks; that’s where we definitely do the best.
Raising national awareness about Idaho and what it has to offer
We can’t really influence the type of trip where people are visiting family and friends. They’re going to come for a wedding or graduation or things like that, and that’s just going to happen. We look at things that are more marketable and that’s where the outdoor piece comes in.
How do we make adventure attainable? At the end of the day, we have very low national awareness. Over the years there have been various studies done, and Idaho’s known for the outdoors, and potatoes, and then nothing. We’re working on awareness. Our goal with the state is an accommodation between information and inspiration.
When it gets down to adventure, we have to make adventure attainable. If we’re talking about a family from Tacoma coming down to Sandpoint, maybe there’s a lodging deal they want to take advantage of or mybe they want to do certain things while they’re there, ziplining, or rafting, maybe it’s in the winter and snowboarding or cat skiing. We need to help that traveler through that vacation planning process. At the end of the day we know they’re going to book on an OTA, an online travel agency. They’re going to look at their rapid reward points from their airline or from their credit card company to help purchase the program or the trip. So, we need to help them with information.
That’s basically showing the traveler, now that they’re aware of the state, what a whitewater trip looks like, or what a mountain biking trip looks like, and really getting down to that almost retail conversation. As we’re all destination marketers here on the panel, we all operate in that ecosystem. If we can get that hook into that traveler and sell a Twin Falls, or Ketchum, or Boise, we then turn it over to these professionals that can help get to that booking phase, or that event calendar, or that craft beer event, or that restaurant we need to take advantage of. That happens continuously, year-round.
We definitely sell recreation and adventure as part of the package for Boise. It’s where we can differentiate ourselves from a lot of other markets. We have 190 miles of trail, the Greenbelt, whitewater rafting, the most miles of whitewater anywhere in the lower 48. When you talk about the convention or meeting space, those are things that they can add value for their clients; it makes their whole experience better.
We’re really fortunate that we have this thriving, vibrant city as well.
With Sun Valley being a mountain town, we have to diversify ourselves. One thing that will have a huge impact for us is the dark skies designation that we just recently received. In Seattle, San Francisco, L.A., they don’t get that opportunity to see what the stars are like.
Our small rural towns don’t necessarily have the recreational aspect, so we’ve looked at other ways to get people to visit, like events and festivals and endurance races. People will travel from all over the country to go to a music festival, even if it’s in a very rural area. The Spudman in Burley brings in 2,000 people for the weekend.
Using sustainable tourism to introduce Idaho and draw visitors
The Magic Valley is very well known for its food manufacturing and production. We’re home to several large producers, and we have the most dairy cows in the state. We’ve tried agritourism, and it was proved successful for a short while. But then, they have maybe been derailed because a farmer needs to plant his stuff or doesn’t have the time to figure things out.
Also, the proprietary pieces that people might want to actually see are prohibitive. I don’t think an authentic view for tourists is available. Our organization has historically done a food tourism piece. We try to pull together all of the different producers that we have: Clear Springs Trout, Chobani Yogurt, and we make a meal out of it and allow some of the locals and tourists who are there at that time to be a part of that. That’s something we can expand. We’re working right now on turning that into more of a trail that people can experience year-round instead of just specifically on that date.
For producers, certain products are only available at certain times of year. So, if you’re a restaurant owner, how do you plan out your menus, how do you figure out what those specials are? There’s a lot of challenges with it and I think it’s really just a matter of bandwidth and the money and time to put into it. I think it’s a definite possibility, but we’re not quite at that sweet spot yet.
When we think about sustainability, we think about it in terms of the kind of visitation we have and when we have it and how much we have in a particular time. In an ideal world we would like that line to be flat and we could manage to it and we could provide great experience. Unfortunately, that’s not necessarily the case. It spikes during the weekends, it spikes during the holidays, it ebbs and flows.
When we track our occupancy and look forward six months, we can better prepare the lodging staff, the restaurants and the retailers to prepare for the guests. When we go back and see those spikes and ebbs and flows, we can prepare and soften the peaks. Ideally we’ll have a relatively flat peak that we can count on as consistent, so we can plan around it and get everybody to provide a pretty consistent level of guest service.
You have this local pride for stewardship and conservation and healthy living, and that’s actually part of what drives our tourism features in the Boise market. People come up there, they see it, it’s apparent. But the other side is, we have the winter carnival, Fourth of July, Labor Day, we have 50,000 people coming up over a short period of time. It’s imperative that our tourism, our chambers, our local hotel operators, restaurants, etc. go out of their way to impart a sense of stewardship when we see those volumes of folks coming through.
With conservation, I’m not speaking to the long-term health of the actual industry, I’m speaking to our natural resources. I think it’s something we can continue to work on but we do a pretty good job of informing people what the rules and regulations are, how to use trails, who the local groups are that are responsible for clearing trail. Then you get into the wildfire thing, there’s a lot of things in the natural environment that impact what we do and whether our season is prosperous or not.
Shortage of workers and of affordable housing is hurting tourism businesses
Having good recreation tourism in our region requires a kind of multi-pronged approach that includes housing, wages, skill development and recruitment. We have wonderful restaurants that can only open four days a week because they simply don’t have more bodies. We have golf courses that can’t be fully staffed because they can’t find a skilled laborer. That’s our biggest challenge right now with 2.9 percent unemployment, especially in lower-wage positions. The marketing components are all great, but we have to have the infrastructure and the assets to fulfill that requirement.
I would agree. We see that as the tipping point in Sun Valley and Wood River Valley; it’s starting to affect the brand. Whether it’s somebody working at a restaurant, or the guided service they’re participating in, as those people start to get pushed out, it starts to affect the brand and our identity. It’s been a challenge in that community for a long time. Unfortunately, we haven’t done a ton, and we’re just now starting to get to the point of actually getting shovel-ready here.
We have also started to see fatigue in visitors who’ve been going to Utah, Colorado, and Oregon. There is this huge opportunity for us to offer a different and unique experience. One thing we can learn from some of those other states is being a little more upfront about being a respectful visitor and how to participate in our communities. We can do it not necessarily in an apologetic or modest way; we can be upfront about, ‘This is what our expectations are when you visit here.’ We can still honor and respect visitors, but do it in a way that is more informative and educational to them.
There are about 29,000 travel-related jobs in the state. That is a huge area for training. One of the things the state is looking at right now is bringing back a statewide training initiative to help all different factors of this ecosystem. That could be Uber and Lyft drivers down to bus drivers down to your traditional hotel and restaurant type staff. The state sees the value in these first-touch experiences as travelers come through, whether it’s a vacation or business trip.
One challenge I see that potentially we’ll solve here coming up in the election is getting the new administration behind tourism. The current administration has not done that to the degree I think the industry wants it to be. We have a new opportunity there to educate that administration around the power in travel, the long-term sustainability in travel, what it means for the entire state, growth opportunities, things like that. We can start that administration out on the right foot. Come the election, we’re going to be in a great place. That’s not going to supersede what other states are doing because other states have a governor and administration that believes in tourism 100,000 percent. We need to be there if we want to challenge them and make up some room there.
You brought up something really great there. At the local level, we’re actually developing an apprenticeship right now, hopefully alongside the McCall Outdoor Science School and University of Idaho, for river guides. We’ll include a swift water rescue component.
This combination of on-the-job training with instruction will hopefully give us the best guiding force in the entire country, if not the world. Honestly, it’s a big opportunity.
We’re also doing a gap analysis this summer with McCall, Donnelly, Meadows Valley, and Cascade school districts. We’re working to identify the gap between what high school students, juniors and seniors, want to do after they graduate and what they think they should do, and what industry actually needs them to do. We’re fortifying our career technical education offerings at that level as well. We’re looking at implementing a hospitality and management program at the high school level because those kids live with their parents.
Technology’s impact on the tourism industry
In the research that I’ve seen, hoteliers and online rental operators intermix. You’re not necessarily talking about the same traveler looking at these types of accommodations. If you’re in Sandpoint and you’re going to a wedding, you might want to rent out a house or two versus going into a traditional accommodation. Or you may want to be at a campground, you might want to go to a dude ranch.
More variety is a good thing for the state. The state will certainly work with individual operators to brand them up on things like training and overall state marketing, so they can plug into state systems and get their businesses off and running.
Tourism technology has certainly touched the state. Computer programs can help build and develop websites quicker, and get those into the field. And also the technology in terms of attribution and tracking progress and performance of media buys, things like that. Seeing where these travelers, where their origination market is, when they come in the state, how long they stay, and when they leave.
Where we don’t have these opportunities to compete head-to-head with things like budget, staff size, things like that, technology is that great equalizer that allows us to be innovative and bring more programs to market. We’re scratching the surface now. There’s more to come.
The path to purchase is no longer linear. It bounces around on all sorts of different platforms. You just have to kind of target the ones that seem to be working for you. The good thing about the online vacation home rental is it does allow for a destination to organically kind of expand their bed base when they need it. It kind of ebbs and flows, so you don’t have a lot of buildings that are empty. It allows you to ramp up and ramp down for different things.
That’s the good side of it. The bad side of it I will tell you from that community perspective, is it does tend to take away the workforce housing for staff people who live in those communities. Somebody who had a home that may have been a long-term rental, has now turned it into a short-term rental, and that takes it off the market and takes away an opportunity for working staff to live there. There’s lots of challenges there. There are communities across the western United States who are trying to find ways to incentivize property owners.
I came from a community in Colorado that was at the forefront of all of this. It’s a community that had 3,500 VRBOs. VRBO started in that community and they were trying to find ways to incentivize homeowners to think about the long-term impacts and incentivize them to not necessarily rent on short-term basis, but to be able to provide workforce housing.
Seventy-two percent of our residential units in the West Central Mountains are second homes. That’s almost three quarters of the available housing. We have a total 460 hotel rooms in our region, in Valley County and about 344 vacation rentals. That’s about 64 units, for a total of 4,429 pillows between the two options. Obviously, the majority of those pillows are with the short-term rentals because hotel rooms are going to be two queens at most.
I have a solution, I don’t know if this will ever take, but it’s sort of a market model for our particular challenge and I plan on doing this myself. If you have a home, say in McCall, if you made that available on weekends, that doesn’t take units away from locals; you still live there five days a week.
If you make that available, then you can saturate that market to an extent where hopefully it normalizes. I don’t know if that’s the solution, but these discussions are occurring at the local level around workforce housing, short-term rental, Airbnb, VRBO.
In a hotel, you get a different service level than you would get in an Airbnb or VRBO. A visitor is a visitor no matter where they’re staying. Even if they’re staying with friends and family, they’re still going out to eat, they’re still shopping, they’re still attending attractions. They’re still doing all those things that a visitor does. So it still affects the economy.
Forces that shape Idaho tourism revenues
Natural events have a massive impact. Forest fire is one of the biggest driver of ebbs and flows during peak season. If you have a particularly long winter or wet season, or particularly long fire season, that can be catastrophic. Especially for the day trippers. They’re not going to decide to come to Cascade to spend a day on the lake if it’s fogged in.
Also, we are 10 or 11 years out of a recession. I think we all know tourism is something that people choose to do. It’s not high on their list; they have to pay their mortgage or put food on the table. If you really consider where we’re at in our economic cycle, there are vulnerabilities there, especially for our region. One third of our economy is recreation tourism. Being able to create a diverse portfolio of tourism that’s affordable, that is locally facing, is reasonable and attainable for everyone in good times and in bad times, is really important.
Back to your question about how we’re feeling about summer: we’re feeling pretty bullish. We’ve seen a lot of interest and we had a strong summer last year. All the indications show we’re making those commitments to our labor earlier than we’ve seen before.
In terms of the recession, everybody’s wondering how you prep for it. Keep in mind that a vacation is something that people need to do. It’s core to who they are. The more we can make those connections with people, the better off we are weathering any transition that happens in the economy.
We’re not talking about the mass amounts of people compared to partnering states and the surrounding states. If you’ve ever been to Moab in the summertime, we’re not going to be like that. We do it smart; we learn from other people; we manage what we’re doing in our communities.
Since we’re primarily a drive-to market, gas prices will be an issue. For the most part this summer, we have a forward momentum that we built up the past couple of years. Being a safe community and having that authentic feel, we just have a lot of opportunities in that area, so I just see that being a growth point for Idaho overall.
‘We’re earning it and we’re not spending it’
When I introduced myself I mentioned the number 705 million. This is the one number that keeps us up at night: it’s the number of unused vacation days last year. Now if you were to look at this at a national level, that number represents $255 billion and would create two million jobs. That’s the power of tourism right there. It’s in our hands, it’s in our laps. If we all just got up and got out of the mindset of being a work martyr and would get out there.
We’re earning it and we’re not spending it. We envision this number growing next year, unfortunately. Check out Project Time Off from the U.S. travel association. This has been an initiative within the U.S. travel industry for the last five or six years. The next time you have your PTO or time off, put it to good use, because it’s going to make you feel better. You’re going to come back energized and that’s really what travel is all about.
Don’t miss our next panel discussion!
Breakfast Series: Power of choice – Energy in Idaho
August 16, 2018
8 a.m., The Grove Hotel
Click here to reserve tickets!