When should you spend those limited marketing dollars?
A metrics company has an answer for Colorado's tourism industry
What times of year do tourism-related businesses not bother spending their limited marketing dollars?
Researchers at Denver-based lodging metrics company DestiMetrics have homed in on a marketing “strike zone” to help mountain communities better budget for and manage the inevitable peaks and valleys of the tourism industry, says Ralf Garrison, principal at the resort intelligence firm. After more than a decade of aggregated data collection for up to 25 resorts in North America, Garrison puts that strike zone at 25 percent to 75 percent of lodging occupancy.
Marketing dollars are best reserved to spend between the “knees” and “shoulders” of overall resort occupancy, to avoid a diminishing return on investment, Garrison says. When lodging reservations – which can be predicted up to 90 days in advance – exceed about 75 percent occupancy, resorts can curtail marketing. Reservations may continue, but allocating budget dollars to encourage visitors is not economically efficient, he explains.
Marketing to the strike zone as an analogy was a home run with Vanessa Agee, director of marketing for the town of Frisco, who has 14 years of experience with events in Summit County.
“Somebody actually put a number on it and verbalized something that people are scared to talk about because a lot of people think more is better,” Agee says. “It’s really frightening to say ‘enough is enough’ because we want to preserve the quality of life for both locals and visitors. You don’t want either of those parties to live under the crush of tourism.”
Although resort marketers are hesitant to say there are times their towns are crowded, and emphasize different tolerance levels for being overcrowded, many agree with the premise of the strike zone and work to balance their year-round ebbs and flows. Bruce Horii, director of marketing at Beaver Run Resort in Breckenridge, says he minimizes the valleys by promoting conventions at the 500-room property and shaves the peaks by not offering room discounts, or requiring four- or five-night stays during those times.
“Over 75 percent, we still market, but a lot of times we’ll change our message,” Horii says. “At a certain point we are trying to get a higher spending guest during high-demand periods.”
“The notion that there is a capacity that needs to be managed first appeared in our data in heady pre-recession times around 2006,” Garrison says. The busy peaks were apparent in 2007 and 2008, dropped off during the recession and re-emerged as a concern in the past two to three years. Issues such as parking, transit, affordable housing, and the quality of the vacation experience came back into focus.
Agee says several weekends in Frisco hit above the strike zone, including 4th of July and the Colorado BBQ Challenge on Father’s Day Weekend.
“Those are two times when I don’t want more visitors and am not upping my marketing expenditures,” Agree says. A few years ago she spent marketing dollars on six media outlets on the Front Range to promote popular summer weekends, but now that expenditure is cut in half and redirected to Frisco’s visitor valleys in the winter.
During the month of May, when weather in the mountains is iffy and reservations are below 25 percent, that’s when Garrison says resort employees “should take a vacation.”
“That’s the time of year that is not economically efficient to market at all,” Garrison says. “It might change in the future, but for now, don’t waste your marketing money in May.