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VOL. 10 | NO. 27 | Saturday, July 1, 2017

Stiff Competition

Memphis battling to remain competitive in a tourism business worth billions

By JODY CALLAHAN

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Selling Memphis as a place to visit may be easier now than it’s ever been. Conversely, it may also be as difficult as it’s ever been. That dichotomy arises from the fact that Memphis has more amenities, more things to do, see and eat than ever before.

But so does just about every city hoping to attract tourists and conventions.

“Yes, it’s an easier sell. No, sometimes it’s a harder sell because of competition. Everybody wants a piece of the visitor economy,” said Kevin Kane, president and CEO of the Memphis Convention & Visitors Bureau. “Cities large and small are spending a fortune trying to get their message out, their product out, their assets out to get people to visit them.”

A 1997 brochure published by the CVB lists numerous attractions for the city, including stalwarts such as the Memphis Zoo, Graceland and the Brooks and Dixon museums.

But it also lists places such as Al’s Golfhaven, Celebration Station and Laser Quest. While such places might be a pleasant diversion on a hot Memphis afternoon, they are unlikely to convince visitors from around the country and the world to pick Memphis.

Today, places like that have been replaced by Bass Pro at the Pyramid, the Stax Museum of American Soul Music and the Memphis Grizzlies, among many others.

“It’s such a diverse offering, such a wide variety of experiences that people can take advantage of, from family fun to entertainment to music to history to food to outdoor recreation,” Kane said. “We have built a network, where no matter what your interest is, we have something for everyone.”

New and enhanced amenities are reasons that Memphis tourism is now an estimated $3.2 billion enterprise attracting more than 10 million visitors annually, according to numbers compiled by the CVB and other sources.

Those numbers also show that most visitors to Memphis spend about three nights here, although international visitors average three to four nights. Someone coming to a convention spends, on average, about $397 a day, including hotels, while an average visitor who stays in a hotel spends about $427 daily.

In 2016, the average hotel room rate in the Memphis area was $92.74 a night, and hotel occupancy totaled 64.4 percent for the year.

Tourism also generates $158 million annually in local taxes, according to the CVB.

But while those new amenities and recent renovations to older attractions – think the $92 million Guest House at Graceland or the $27.5 million renovation to the National Civil Rights Museum – still account for a large percentage of tourists, they are being complemented by other emerging draws.

And those new draws might not be quite what most people would expect.

ACTIVES AND FOODIES

One such draw might best be called “active tourism.” Instead of just seeing things – museums, Graceland and the like – tourists are actually doing things. They bike or walk the Greenline. They walk along the Big River Crossing that spans the Mississippi. They partake in all the new activities that Shelby Farms offers.

“Pushing the active components is really important, not just the museums,” said Doug Carpenter, whose marketing firm DCA has been hired by the CVB for a tourism campaign. “We want people to reawaken their perspective of the city. So we look at much more active, outdoors, interesting and new types of amenities so that people do get that impression that Memphis has changed (and they) should consider it.”

At Shelby Farms, the recently completed $52 million “Heart of the Park” project included an expansion of the lake, a new visitor center and an events center. Following those changes, Shelby Farms officials are noticing an increase in visitors from outside the Memphis area, marketing and communications manager Angie Whitfield said.

“We do see a lot of mentions on social media (and from) interacting with people at the visitor center,” Whitfield said. “So, it does seem, anecdotally, that folks are checking out the adventures at Shelby Farms Park as part of their visit to Memphis. And, as our visitor numbers have increased, it's probably safe to say that the percentage of out-of-towners has increased, too.”

Soon, tourists as well as Memphians will be able to add to that type of visit by taking part in a bicycle ride-sharing program. Explore Bike Share, scheduled to launch next spring, plans to offer 600 bikes available for rent. The bikes are equipped with a GPS system that will offer route recommendations and directions.

Another area that’s drawing visitors is what’s being called “culinary tourism.” For years, Memphis has been known for its delicious barbecue, a reputation that still attracts visitors to the city. But now more than ever, the city is known for so much more than that, as national food critics have been praising everything from Restaurant Iris to Gus’s Fried Chicken to Gibson’s Donuts.

In fact, there’s so much to offer for the palate that some foodies, officials believe, are visiting Memphis just to eat.

“Absolutely, it’s true. They’re eating all over town, not just Downtown. People are kinda into food right now,” said Kelly English, proprietor of both Iris and The Second Line, both in Overton Square. “We see people from all kinds of area codes make reservations at our restaurant in Midtown.”

And English said that type of business can really make a difference to restaurants, which typically have small profit margins.

“I’d say a 10 percent (increase), which is significant. People don’t realize how cumbersome the financial side of running a restaurant is,” he said. “When you talk about a 10 percent swing, those 10 percent of people that we’re talking about here, it’s not like we would replace them with locals. It’s 10 percent of what we would normally do. To a restaurant, that’s huge. Huge.”

Craft beers and distilleries are another such tourism element that aligns with the culinary experience in drawing visitors, officials believe. In recent years, numerous local craft breweries – Ghost River, Wiseacre, Memphis Made and others – have launched not only different types of beers, but engaging places to partake of them.

And the most recent entry is Old Dominick Distillery, which opened on Front Street earlier this spring. The first such distillery in Memphis will be part of the recently announced Tennessee Whiskey Trail. The goal is to attract visitors to each of the state’s 25 distilleries, and one of the planned events is a celebration in Memphis next May.

And while some might wonder whether a person would visit Memphis just for the food, drink or active possibilities, officials certainly believe these emerging types of tourism can play a role in swaying someone who is already considering Memphis.

“The Greenline, Shelby Farms, now the Big River Crossing, those are tourism amenities,” Kane said. “Those attract millennials and guests from all over the world who are finding something else they can do in this city. We have gone from pretty one-dimensional, known for great barbecue, to a culinary scene now where you’ve got award-winning chefs that have really created a real unique culinary scene. There’s a whole market of people that only travel to go to great restaurants.”

BARRIERS TO SUCCESS

But while those attributes paint a rosy picture of the future of tourism in Memphis, not everything is so positive.

In addition to the competitive drawbacks Kane mentioned, Memphis is facing other issues as it tries to grow tourism, as highlighted in a recent survey by J.D. Power, a well-known market research company.

In its Destination Experience Satisfaction Study, released late last year, J.D. Power rated Memphis 29th out of the top 50 U.S. cities for tourism. While that may not sound so bad, the group also rated Memphis just 12th out of 15 cities in the South, many of which are in direct competition with the Bluff City for tourism dollars.

According to the survey, 13 percent of visitors left disappointed and another 25 percent left indifferent. Those with concerns particularly cited safety, difficulties with public transportation and the ability to get to and from the city with ease.

While Kane questions the methodology of such a survey, he also acknowledged the noted concerns, particularly crime.

“It’s a great concern,” he said. “The issue of public safety is very concerning to us. We live it every day in Memphis. It is a problem that we have to deal with, probably more so than some other cities.”

However, Kane said that the perception of crime in Memphis isn’t as bad as it is in Chicago and New Orleans, two cities Memphis often competes with in terms of tourist dollars.

“At the top of that heap, Chicago and New Orleans. When it comes to negative perceptions, they’re off the charts. And both of those are great tourism destinations,” Kane said. “We are probably not perceived as safe as Nashville, but we are not perceived like New Orleans and Chicago.”

Another element of concern is Memphis International Airport. When the city was a Northwest and Delta hub, visitors had their pick of daily nonstop flights to Memphis. Now, however, such flights are much fewer in number, which can affect travelers, especially those coming here for business.

But there’s a nice tradeoff that comes with the loss of the hub, officials said, and that helps boost tourism numbers.

“The one thing that we’ve been able to do without Delta dominating the seats and flights is that we’ve been able to bring in more competition,” airport spokesman Glen Thomas said. “The average airfare has gone down by about $150 per ticket since those hub days. By bringing in some of the low-cost carriers and competition, we have been able to lower the cost.”

But the biggest things holding the city back, Kane and others said, are the Memphis Cook Convention Center and the lack of another large hotel near the facility. The building, they said, is simply old and outdated, particularly in light of the fact that Nashville just spent $623 million on a gleaming new facility. New hotel projects have been mentioned, but nothing is close to fruition.

“Hands down, we need the convention center product to be finished and to be the size and scope that makes us competitive,” said Cindy Brewer, a co-founder and principal at LEO Events, a meeting planning company. “And for the large-scale hotels with enough ballroom meeting space to attract the larger meetings to come with it.

“We have lost business for many years because of it,” she said. “They all want to be under one (hotel) roof, or be connected to the convention center, or have more square footage than they have.”

Memphis, instead, has plans for an $80 million renovation to the city’s aging facility. Those renovations are expected to begin in the fall and be complete in 2019, Kane said.

Right now, about 10 percent of Memphis tourism comes from conventions and conferences, Kane said. But with these renovations, particularly if another hotel can be added, that could increase.

“The renovations probably take it to 11 or 12 (percent), but more importantly it will keep it from going down to 5 (percent). It’s not so much what it’s going to do to pump up a lot of additional business. It’s allowing us to stay competitive,” he said.

In another an effort to bring more business to the city, this time from a previously untapped niche, the CVB has hired Carpenter’s firm – at a cost of up to $100,000 – for a project called “Sing Your City.”

The campaign is to let Memphians know that if they want to bring a group to town – as small as a family reunion, as big as a convention – the CVB is available to help with logistics and planning.

The campaign also hopes to find Memphians in a position to influence such business, then try to convince them to bring those meetings and conventions here, Carpenter said.

“In Memphis, there are any number of people who could be the head of a cardiothoracic association,” Carpenter said. “Members are all over the country and every year they’ll have an annual meeting and go to Orlando or to New Orleans. But the president might live here. Our effort is to reach these people.

“We want to educate them on the value of keeping these, or bringing these, events to Memphis, from family reunions to sporting events to meetings,” he said. “That kind of economic impact is huge, and it can grow.”

Still, even with those problems facing the city’s tourism industry, Kane said he will take Memphis over its competitors any day.

“Everybody knows Memphis and music,” he said. “They all love Elvis, they all love B.B. (King). They all know it came from here. You can’t do that if you’re from Little Rock. You can’t do that if you’re from Jackson, Mississippi. You can’t go to Vegas or Nashville and see Elvis’ house.”

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