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Measure
This...
Opinion by Zeitgeist President Bill Geist, taken from the Summer 2007
edition of the Zeitgeist Client Newsletter
 Destination
Marketing Organizations are at a critical crossroads in their evolution.
For the most part, we’ve begun to build the awareness and appreciation
of the industry that was so lacking (at least in America, where Tourism
has been sadly undervalued as an economic development strategy). And,
in many communities, governmental and private sector investment in this
strategy is increasing.
But, with this increased awareness and investment comes heightened expectations
and public scrutiny...which would be OK if the markers upon which DMOs
are measured would be realistic and fair.
Destination
Marketing Organization International (DMAI) took the first
steps in addressing this issue with the establishment of a standard
set of Performance Measures. I believe we need to go farther.
DMOs are intermediaries. We put buyers and sellers together. We have
little control over either...which is playing out in communities across
the country that are seeing hotel occupancies and ADRs rise on a resurgent
wave of business travel.
While we couldn’t be happier for our hotel partners, it puts DMOs
in an awkward position. For those that are in the business of selling
convention and event space, the available inventory is increasingly
unavailable. That’s no one’s fault...but it is a reality.
And, it’s a reality that investors and the media don’t quite
understand. If a DMO facilitated the booking of 50,000 room nights in
2006, most observers would expect 55,000 or 60,000 room nights in 2007.
After all, business is back and the DMO is armed with more money. Right?
Kinda. Because, while business is back and the DMO’s budget is
bigger, there are fewer rooms to sell. Rooms that the DMO does not control.
And, if the GM of the HQ hotel near the Convention Center thinks she
can get to 85% occupancy at $200/night in mid-March with business travelers,
she sure isn’t about to offer a room block at $129 for the Left
Handed Dentist’s Convention. Nor should she.
But, that leaves the DMO high and dry with nothing competitive to offer
in its response to the meeting planner’s RFP. Is it the DMO’s
fault that their bid is, thus, viewed as non-responsive? Of course not.
But, will investors understand why? Probably not.
Likely due to the fact that DMOs are typically powered by hotel tax
and have a bunch of hoteliers on their Boards, we are being judged on
a hotel matrix. But, we’re not hotels. We don’t control
the inventory, price, availability, service or product. Thus, we should
be judged on what we can influence.
Unfortunately, we’ve trained our investors and the media to judge
us on the wrong things by trotting out our “rooms booked”
numbers for long enough that it will take years to untrain them. But
that doesn’t mean that we shouldn’t be adding new measures
to the mix.
This isn’t a call for DMAI to reopen its Performance Measures
because I believe each DMO’s further measures will be unique to
each destination.
Each DMO Board (in concert with its CEO) needs to take a hard look at
why the organization exists. Chances are, it’s not selling rooms
(and, if it is, I’d suggest thinking a little bit larger).
But, what is it? Is it consumer awareness of the destination? Is it
intent to travel? Is it brand evangelism by local residents?
And then, how do you measure those often intangible goals? Indeed, it
will be different for every DMO.
And that’s why it will be so right. Ultimately, the owner of every
company defines how it will measure itself. The DMO Board should be
no different. To allow others to tell us how we will be judged, based
upon faulty understanding of industry dynamics, will result in nothing
but accusing stares and pointed fingers.
Decide what success looks like for your destination and your DMO. While
Room Nights are still a key result of our work...it shouldn’t
be the only thing against which we are judged
.
This is new territory. I’ve previously suggested (as a take-off
from Rev/Par) considering Book/Par as a more meaningful measure (Bookings
per Available Room). I’d love to hear and share your ideas with
the industry...and our e-newsletter and blog will be a perfect forum.
Hope you join the conversation.
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