Recently approved district gives agency sorely needed fundingNAPA -- The Napa Valley Destination Council will aggressively target more visitors to get them to the region at more crucial times – during the off-peak season and hopefully for longer stays in Napa Valley.
That was the message from Clay Gregory, chief executive officer of the destination council, as specific marketing strategies of its tourism business improvement district were unveiled last week at the Business Journal's Impact Napa conference.
"Our job is not to just bring more people to Napa Valley," he said. "It's to bring folks who appreciate Napa Valley wines, who want to stay in great hotels, who want to eat at our restaurants, go to our spas and hopefully spend days, if not weeks, here."
Although already perhaps the most well-known wine destination in North America, Mr. Gregory said pure visitor volume alone would not be enough to boost the tourism economy that has suffered in the recession.
[caption id="attachment_23326" align="alignleft" width="115" caption="Clay Gregory"][/caption]
"We don't want [visitors] when we don't need them -- we want them to come at the quieter times of the year and during the week. So our focus is to bring targeted folks in January through April and during the mid-week period," Mr. Gregory said. "It's not just a 'more is better' thing, it's a very strategically thought-out thing, and I think that's very important not only for the success of the economy, but it's a community issue as well."
Napa Valley tourism highlights
By the Napa Valley Destination Council
Tourism in Napa County generates over $1.3 billion in economic impact annually.
The visitor-serving industry is the second-largest sector of Napa County’s economy.
Every 24 hours, guests of the Napa Valley spend approximately $4 million in local businesses.
The tourism dollar has a tremendous reach. Tourism spending affects 196 different industries in Napa County.
Tax revenue generated by tourism spending is about $125 million annually.
Tourism-generated tax revenue directly supports Napa County and its jurisdictions to provide police, firefighting and numerous social services.
If tax revenue generated by the visitor-serving industry was to disappear, the annual tax bill of each resident of Napa County would increase by more than $1,000.
The visitor-serving industry employs 17,500 people in Napa County.
More than $500 million in payroll is generated by visitor-serving businesses in Napa County.
The potential returns generated by effectively managing and marketing tourism in Napa County are enormous. If the NVDC’s targeted marketing activities were to stimulate annual visitor spending by just 1.5%, $20 million in additional direct visitor spending would be the result.
A study by California Tourism determined that every $1 invested in targeted destination tourism marketing results in $203 in visitor expenditures and $13 in tax revenue.
County lodging data
January--June 2009 vs. 2010
Source: Smith Travel Research
Occupancy: +5.6 percent
Average daily rate: –1.6 percent
The formation of the improvement district, known as a TBID, which was authorized in June by the Board of Supervisors, was the destination council's prized project, as Mr. Gregory and numerous others lobbied extensively throughout the county to gain support of hoteliers and the various city councils that needed to approve of it before final county approval.
About 72 percent of hoteliers supported a 2 percent self-assessment that will be applied to visitors' gross hotel bills. It is expected to raise as much as $4 million annually for destination marketing. By law, funds from the TBID cannot go toward a city's general fund.
The destination council's previous annual budget was approximately $437,000, a number that was dwarfed by other destinations such as Sonoma County or wine regions along the Central Coast.
Mr. Gregory highlighted the importance of tourism in the Napa Valley, noting that its economic impact is second only to the wine industry and it is a major sector of employment.
"Tourism is a $1.3 billion impact on Napa County's economy," he said. "It's behind the wine industry but very important to the wine industry." Approximately 17,000 to 18,000 people are employed within the industry.
"People think tourism only helps hotels and restaurants and wineries, but it helps 196 different industries in Napa County," he said. "Virtually every business does better in Napa County when tourism does better."
Nearly $125 million in transient occupancy tax is collected from tourism annually in Napa County. But Mr. Gregory said the region could no longer afford to rely on the TOT revenue, nor could it simply rest on the laurels of its prestige.
"We were really living on what is a great reputation but not doing anything to manage our own message -- we were letting these other regions tell people what Napa Valley is about, and that's not a good way to market anything," he said. "You have to manage your own message, and that's what we'll be doing."
Accordingly, the destination council will lay out specifically tailored marketing that suits Napa's unique needs, Mr. Gregory said. For instance, whereas other destinations target conventions, Napa Valley will focus instead on smaller trade shows and select print advertising.
"The old bread and butter of destination marketing is bringing in conventions, but we don't have a convention center and we don't do conventions. But we do like small group business, so focusing on those and trade shows … is one of the things we will do," he said.
Perhaps more important, the destination council will invest significantly more into web-based marketing, social media and mobile technology as means of marketing itself to an increasingly important demographic.
"We're moving our marketing more and more toward Web and social media and mobile applications because one of the good news pieces of information is that we have a demographic that is 29-year-old heads of households that is the second-highest indexing group to come to Napa Valley," Mr. Gregory said. "So that means our marketing has to move toward what the Millennials want."
To see his slides and hear his talk, visit the Business Journal's Resources page for events online materials.
