As a group with 33 years in the destination marketing arena, we are often asked to observe, assess and,
contribute advice and research to Carolina Tourism Industry leaders.
The following represents
our position on the potential and way-forward to grow the #1 ranked industry across both Carolinas.
The piece was originally written for the SC Economic Developers Association Voice newsletter in July 2011.
This version is meant to deliver a valuable message, grit et al.
How is it that we can see the economic linkage between tourism and in-migration, as job creation engines for South Carolina?
Great question that I doubt gets discussed much in the Oklahoma University ED courses. Think about it like this.
Know anyone who relocated (personally or moved their business), who did not visit often before moving? In-migration
is a perpetual opportunity for “Cashing on Tourism”!
So, our SC Tourism Industry annually contributes $18.4
billion output impact to our economy (about 11% of the $164 billion total), creates/sustains 192,800 jobs (nearly 10%
of all employment) and generates $1.2 billion in taxes (about 20% of total collections). Yet, (believe it) PRT is funded at
about three tenths of one percent of our $5 billion general fund. (Chart 1 – Carolina Tourism Impact.)
The tourism
job creation linkage to in-migration? Fred Brinkman, the honored tourism veteran and 25-year PRT Director back in the 80s,
heard about the thousands of people walking into his 10 Interstate Welcome Centers asking for relocation information. Fred
immediately saw the potential economic engine spin-off effect (generated by his tourism industry “birth-mother”) fueling
what he began calling, the In-migration Industry.
His visionary PRT grants to the Center For Carolina Living ($200,000 over ten years) helped incubate this private sector enterprise to sustain a national attraction marketing campaign that is celebrating 25 years in 2011.
Today, Mr. Brinkman’s In-migration Industry delivers 1.9 new jobs for every new household (113,000+ jobs a year), Plus, an output impact of nearly $13 billion and $5 billion in payroll.
You can double these numbers for North Carolina. (Chart 2 - SC In-migration Impact.)
Thinking about cost per recruited job and, knowing that we need to acquire every industrial/headquarters/knowledge job we can buy, no matter the cost, it’s interesting to review a just a few of the huge successes the SC economic developers have achieved in recent decades. The chart below is illustrative of the reality of the Carolinas recruitment strategy. It’s all-good. Just note the Carroll Campbell $3.7 million grant to Del Webb, back in ‘92 and the resulting cost per job, as compared to a typical “industrial” job.
FYI, one way to calculate the cost of an incremental tourism job is to divide our General Fund investment of $15 million by the 192,800 jobs it sustains. Comes to $77.80 each. Another approach (the way AL Tourism calculates it) is to divide the SC tourism output impact of $18.4 billion by the number of jobs sustained created. Comes to $95,435 each.
So, I say, we need the $124,000 Boeing job just as much as we need the $95,435 Tourism job…as long as the lion’s share of the Boeing payroll is going to South Carolinians. (Chart 3 Cost Per Job)
2. Describe the travel segment called, "Turbo-Tourists" and how it leverages the Tourism Industry?
South Carolina will welcome an estimated 28.5 million visitors this year. [North Carolina gets 37 million.] Of those, research confirms that about 6% (4 million total) are touring specifically to investigate relocation, new business and investment opportunities. Those visitors are, “Turbo-Tourists.”
Highly beneficial to CVBs, EDOs, banks, homebuilders and tax collectors, these affluent, educated families visit numerous destinations as part of their “discovery” mission. They reserve way in advance, spend more, stay longer and return more frequently on average.
Beyond a $2,000 to $20,000 “exploratory” vacation, there’s an economic “turbo-effect” when they relocate or acquire a second home, investing $250,000 to over $1 million in the first year.
Then, the “turbo-effect” kicks in again, as these new homeowners begin entertaining, on average, six friends and family groups a year, some of whom, like birds-of-a-feather, will also become a “Turbo-Tourist” and relocate (invest their capital) here.
A third “turbo-effect” ices the economic cake. CarolinaLiving.com surveys of 100,000 people since 1986 consistently report that 14% “say” they plan to “start” or “move” a business, bringing intellectual capital, investing millions and creating thousands of new jobs across the Carolinas.
3. What is motivating people to invest in the Carolinas in terms of both personal and business relocation?
Capital and family decisions follow value opportunities. These decisions relate directly to relative cost differentials. Secondly, access to trainable labor and ease of doing business become significant to the value proposition. Concurrently, economic developers now play the lifestyle card as the “deal closer”. To the degree that we in the Carolinas can maintain these value differentials, including our Beautiful Places, the destination will be advantaged.
4. What threatens South Carolina’s competitive positioning to achieve sustainable growth?
Do we need to go there? Well, yes. Let’s all work together to get these boulder-stones off the highway to long-term prosperity. Do we dare mention, the flag? Air quality? Education achievement rankings? Embarrassing leaders? Source point pollution? Rural poverty? Lack of zoning? Under funding tourism promotion? Fragmentation among tourism leadership? All are solvable!
5. How would you say local economic developers and their community leaders could increase their market share of visitors, investors and in-migrating families?
First, realize that tourism is a major economic engine, even in small towns and rural communities. First, focus on building local awareness of your tourism and quality of life assets. Burnish those products. Be it main street, parks, entertainment venues, nature trails, historic sites, festivals, cultural events. Spiff these up primarily for your indigenous citizenry.
Next step is to showcase your
destination and invite the
audience segment you want to
attract. Challenge the Mayor and
City/County Council to marshal a
steady stream of marketing
communications funding. The
Town of Myrtle Beach dedicates the
equivalent of $20 million a year
to polish their brand to an
international audience.
Create a positively memorable “visit experience.” The result will be that CEOs, entrepreneurs and relocating families (including educated, affluent retirees) will put you on their list, plan more visits and ultimately bring their capital.
Witness the leadership over many years that’s transformed the likes of Asheville, Winston-Salem, Durham,
Greenville, Newberry, Aiken,
Charleston into primo “places” to
visit, invest, work, live, play,
do business and retire.
Consider these Eleven Recommendations to successful Tourism Development in SC:
• Link into the SC Heritage Corridor - Michelle McCullum
mmccollum@scprt.com
• Create tourism product
investments - George Estes -
gestes@scprt.com
• Join the SC Hospitality
Association and the SC Tourism
Coalition -
tom@schospitality.org
• Engage our new USC,
Smart State - Center For Economic
Excellence, Tourism Chair, Dr.
Simon Hudson, for research and
vision:
shudson@hrsm.sc.edu
• Schedule the Carolina Tourism & In-migration Research Briefing for your local leadership:
PMason@CarolinaLiving.com
• Contract Dr. Rich Harrill, the USC Tourism Expert to inventory your attractions:
rharrill@sc.edu
• Get with Jim Darby, Director of
Santee Lynches COG regarding the
advantages of keeping up with our
competitive set of SE states by
establishing an, SC
Newcomer-Friendly Town
Certification program:
slrcog@slcog.org
• Present your tourism ideas to the new PRT
Director, Duane Parrish,
DParrish@scprt.com
6. How many people are predicted to relocate to South Carolina in 2011? How do we compare with neighboring states?
The best forecast of the “gross-in” counts for men, women and children of all ages is 155,000 this year to SC.
NC will receive 310,000. What’s important for long term planning is that the counts go up every year and continues up for, well, forever. Is your community ready for this wealth building opportunity?
Moreover, they bring high quality characteristics: 77% have earned college degrees, Median Household Income is $119,000 and 44% are over age 50. North Carolina gets twice as many as SC, and the “blush” is off of Florida.
7. What percentage of those people on average will start or relocate a business?
CarolinaLiving.com surveys of 100,000 families since 1986 consistently report that 14% “say” they will “move” or “start” a business. The data reports needed square feet and planned employment. So if, 14% of these 59,845 new households a year, actually launch an enterprise, at minimum, they will hire one person.
Remember: Boeing is delivering 3,800, Linamar 363 and Amazon 2,500 jobs. And yes, we need all we can get.
For a customized proposal to market your destination:
PMason@CarolinaLiving.com.
8. Can you site examples of someone who has first visited the state and later relocated a business here? What were some of the influencing factors?
There is a research proposal in place to quantify and track this potent source of job creation. Carolina college graduates (from elsewhere) filling the business incubators will be a great resource. As will be, the Small Business Development Centers across the state. How many executive visits happened before, Boeing, Linamar Corporation, Google, Blackbaud, GoGreen and BMW made the decision to invest? The research results will be an eye opener to economic developers.
9. Please talk a little about the economic impact of retirees and what communities need to have in place to attract this coveted group? (Chart 4 UNCA What motivates Retirees)
So, first (with very few exceptions) we need to understand that retirees seek the same basic Maslovian needs that all people of any age want. Second, we need to “position” the Carolinas high, targeting those with net worth that will disallow them from ever qualifying for Medicaid.
Think: Cliffs, Mountain Air, Kiawah, Litchfield, Sea Pines, Woodside Plantation The FL “no taxes, y’all come” is bleeding state funds.
Today, 45% of newcomers are over 50. That percentage will grow as the 74 million (living) Boomers come forward into retirement. Communities that build their tourism sector and have quality health care delivery, cultural amenities, life long learning opportunities, trails, etc. will enjoy retiree market share.
That said, why just retirees? We say, the economic challenge and opportunity for Carolina community leaders is to attract and retain talent and capital… whatever their age. Household income for a 27-year old working couple (say, $75,000) mirrors the income of an affluent retired couple. The former is spending earned income. The latter spending saved income. Who cares how old they are? Oh yes, the school funding and capital-calls. Get over it. We clearly need to address the condition of our education delivery system. That’s really our #1 priority.
10. Can you share examples of SC communities that are harnessing tourism effectively to drive economic development?
Beyond the (national branded) major metro destinations and their savvy CVB & TDA operators, there’s a crop of emerging destinations successfully using CarolinaLiving.com visitor attraction machinery: Aiken, Clemson, Currituck, Cashiers, Newberry, Gaffney, Jasper County, Sumter, Edisto Island, Hardeeville, Pinehurst, Walterboro.
As traditional industrial development becomes out of reach, many others are awakening to tourism and its leveraged potential to attract visitors, affluent entrepreneurs and retirees. Think: Allendale, Brunswick, Bennettsville, Darlington, Elizabeth City, Fort Mill, Hickory, Marion, Mt. Pleasant, Oconee, Lancaster,
There are dozens more. Like the Little River Blueway that showcases the multitude of nature based recreation, State Parks and golf in McCormick, SC. Or the phenomenally popular, Swamp Rabbit Trail from Greenville to Travelers Rest. And, the Darla Moore Bean Museum in Lake City.
This “economic gardening” approach is normally lead by City Council or Chamber Board leaders, while local Economic Development officers, see more wisdom in certifying industrial parks. I say, mimic the Newberry model and go for both.
11. Any macro recommendations for insuring SC Tourism grows as a robust job creator?
Yes, here are some suggestions:
Work strategics with our North Carolina and Georgia “competitors”. As tourism partners, they deliver big brand identity and the all-important, “air lift” capacity [Atlanta, Charlotte, Savannah] to the destination marketing game. We create way more clout together, than apart.
The SC Tourism Coalition leaders
have an exceptional opportunity to
apply for a stream of tourism
research grants via experts at SC
University Tourism Schools. Use
the research findings to compel
our Legislature into public
private partnerships that will
invest in tourism products in
urban and rural settings. [Need
ideas? Read the $1.2 million plan:
http://www.scprt.com/tourism-business/tourism-development-plan.aspx
Add $5 million a year for the next five years to the PRT marketing budget. The Irish experts were emphatic in saying we way under-fund marketing and in addition, generate way less revenue per visitor than our competitive set. The worst strategy to grow this golden 192,802-job industry is to choke-off the Tourism Goose.
A partial funding solution for tourism marketing: Similar to the SCRA,
SC Launch: Get legislative
approval to create a Tourism
Industry Partnership Fund,
allowing companies and individuals
to earn a SC tax credit and
Federal tax deduction (form T-36)
by contributing. Then enroll the
192,802 tourism employees to
participate.
Position and prepare to capture our fair share of international visitors from China, India and South America.
In the longer term, the Tourism Industry and its related clusters need to re-join New Carolina, the brilliant SC Council on Competitiveness.
Pat Mason mini bio:
Mr. Mason co-founded the Center For Carolina Living (CFCL) in 1986 after eleven years in destination marketing with Marriott in New York/Chicago/DC and three years as VP Lead Generation with US Capital Corporation, in Columbia. That enterprise developed and sold $600 million of resort condominiums in 13 national destination markets between 1983 and 1986.
Among the first to co-brand the Carolinas as a destination, the Center’s print and digital communication platform reaches 500,000 transient pleasure visitors a year, touring the Carolinas for relocation and starting/moving businesses.
More than 100,000 people have completed their 26-question Carolina Lifestyle Survey™ over 25 years. CarolinaLiving.com is a 325-page portal site, rich with original content. Acknowledged as a leading destination research & marketing expert, Mr. Mason has been a Clemson Associate Adjunct Professor since 1998 and serves as a USC International Tourism Institute Fellow. He recently addressed the SC ULI
annual statewide meeting with a
Research Briefing on Tourism and
In-migration.
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