TOURISM MEANS BUSINESS!HOW TOURISM AND ECONOMICDEVELOPMENT GO HAND-IN-HAND

Rob Hunden, CEOHunden Strategic Partners

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Overview

§ Backgrounder

§ The Challenge for DMO’s: Communicating Your Value Proposition

§ Small Pieces

§ Medium Sized Places

§ Large Places

§ Call to Action: So Now What?

§ Questions

Backgrounder

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Hunden Partners - Areas of Expertise

Master PlacemakingPhysical Programming

Market Feasibility

Financial Feasibility

Funding Options/Public Incentives

Economic & Fiscal Impact Analysis

RFQ/P Processes

Partnership Options

Business Plans5

HSP…. Host, Stay, Play

San JuanPhoenix

Kentucky Madison

Chicago

Fort Worth6

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Public and Private Sector Employment ExperienceCity of Indianapolis Bond Bank/Mayor’s Office 1996 - 1998Capital Markets, Consulting 1999 - 2005Hunden Strategic Partners – 2006 - Present

25 Years of Industry Experience Nationwide600+ Projects and StudiesSpeaker, Teacher and Author Move projects from Concept to Reality

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Rob Hunden, President & CEO

The Challenge for DMO’s: Communicating Your Value

Proposition

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Value to the Local Economy

DMO’s recognize the valueof the tourism andplacemaking industry totheir local economy evenwhen politicians and EDC’sdo not.

Yet what does the evidenceshow?

Migration

While many factors drivegrowth and migrationpatterns, including cost ofliving, taxes and jobgrowth, we see migrationmoving toward areas withstrong and growingtourism.

Migration12

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Migration

The fact is, people are migratingto places that have madeplacemaking, tourism andquality of life a priority.

With the Baby Boomers retiring,they are moving to places theyenjoyed visiting on vacation andfor conventions during theircareers.

Millennials are choosing basedon similar factors, with anemphasis on experience.

Migration

Often, these are lower taxstates and cities, but peoplemust be drawn to a place.Cost of living cannot be theonly decision-making criteria.People are drawn to a placethey enjoyed visiting, has agrowing and vibrant sense ofplace, downtown area andwalkable, interesting areaswith fun things to do, etc.

Benefits for Both Sides

The fact is, the things youbuild for tourists (eventcenters, attractions,districts) benefit localcitizens and are often paidfor with visitor dollars(hotel, auto rental andrestaurant taxes).

Who Do We Build it For?

BUT, we often reallyshouldn’t be building for thetourist per se. What we knowto be true is that visitors aredrawn to the things that areattractive to locals. Do notbuild for the visitor. They cansee right through that!

Build for the local, make itunique to you, and the visitorwill follow.

Who Drives Placemaking? The New Consumer

The New Consumer of today is different than any generation before them. The unique needs and desires creates an interesting opportunity in the creation of new attractions and facilities. What’s important:

§ Social Media is King

§ Efficiency and Immediacy

§ Authenticity and Transparency

§ Casual Lifestyle

§ One-World Concept

§ Value of Experiences

§ Soullessness of Sameness

§ Visual Appeal

§ Community

§ Multiple Music Genres

§ Lifestyle Options

§ Environment/Animals

§ Travel

§ Vehicles/Biking

§ Big Ticket Items

§ Currency

§ Adventure with Food

§ Cooking vs. Take-out

§ Fonts and Design

§ No Loyalty to Big Corporations

§ Charitable Companies

§ Gaming and On-Demand Streaming

§ Esports

§ Work Smarter Not Harder

§ Pop-Ups

§ Online Perks

§ Efficient Urban Living

§ Authentic Process/Product

§ Television and Movies

§ Geeking Out and Hi-Tech

§ Thrills and Experience

§ Fitness

§ Team Sports

§ Dating

Social Media Is King

The new consumer sees social media as a way tocreate their own personal brand and social value.All information is constantly updated. Youngergenerations also prefer real-time social mediaplatforms such as Instagram and Snapchat, whileolder generations still use Facebook and email.Any new facility must have ample Wi-Fi andcharging stations.

IMPLICATIONS

Use it to promote events, authenticity, videos. Beaware that it can also ruin you, but don’t let thattake your edge away.

Efficiency and Immediacy of Time and EffortWe live in a world of instant access. Videos,information, and coupon deals all come in theblink of an eye through smartphones andinternet. The new consumer does not like to wait.If they are forced to wait, the outcome better beworth the delay.

IMPLICATIONS

Experiences should be available without longlines, advance planning. Pop-up experiencesshould be part of the plan!

Authenticity and TransparencyThe new consumer demands authenticity andtransparency, especially with government,business corporations and authority. Bigcorporations and politicians are seen withskepticism. They prefer local start-up businesseswith accountability to their product and thecommunity they serve.

IMPLICATIONS

Pop-up shops and authentic vendors bringing newand different experiences, products andfood/drink. Cannot assume a 5-7 year lease willwork.

Priority on Experiences

The new consumer places a priority on the valueof experiences more than material goods. Theywould rather spend money on a Coachella concertthan invest hundreds into a new suit. Luxury itemssuch as expensive jewelry or investing in a suit fora job, therefore, are decreasing in popularity.

IMPLICATIONS

Standard in-line retail and chain restaurants arepassé. Careful about investing in anchor-experiences like Top Golf. While experiential,these will fade as all other experiences do.Experiences must be constantly re-imaginedwithin a space. Plan for it.

Visual Appeal/DesignThe new consumer prefers to live-in-the-momentand values visually dynamic apps, design andarchitecture with no boundaries. Sharing uniquedesign through social media amplifies this trend.

IMPLICATIONS

The ability to present constantly changing andengaging graphics (video or light) is critical andallows the experience to change constantly. TimesSquare mini-version, but interactive, everywhere.An iPhone is more interesting, constantly, so that isthe competition for time/attention.

Small, Efficient, Urban LivingThe new consumer has fewer possessions becausemost of what they need is accessible online anddelivered the next day. Therefore, tiny houses andapartments are the rage. Their living quarters aremore about affordability, physical accessibility,convenience and ease. They like to have quickaccess to retail that offers daily provisions, andprefer to shop online for durable goods. They donot require homes near most other retail, and onlyshop at those stores if they can’t wait for Amazonto ship it to them.

IMPLICATIONS Smaller portions at restaurants, smaller packaging and products. These may influence tenants, but maybe not real estate as much.

Authentic Process/ProductPeople of all ages are seeking out authenticprocesses and products from unique processes.The Kentucky Bourbon Trail and Craft Traildistilleries are great examples. Even within thistourism explosion, a certain segment seeks outnon-corporate, single-batch bourbons and relatedproducts. Of the items sold in gift shops, 80% isunique product, while 20% is everything else.

IMPLICATIONS

The whole experience, landscaping, music and lighting, not to mention tenants, cannot feel corporate or mass produced. People will pay more for the “inefficient” experience, process or product.

BOHO Expo

§ 12,000 square feet

§ 100% Colombian artisan retail products

§ 133 total stalls offers a new flexible andchanging array of retail to keep localsinterested (received 5,000 applications)

§ Very small pop-up shop spaces (about 8’x5’)

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Oxbow Market

Located in the Oxbow District of Napa, OxbowPublic Market has become a food and gatheringplace for residents and visitors throughout theNapa Valley.

§ 40,000 square feet

§ Scenic outdoor deck with seating along theNapa River

§ Local food vendors, artisan cafes and organicproduce outlet for local farms

§ First 3 years were slow and had to reassessthe tenant mix, add promotions

§ Popular as a stopping point between SanFrancisco and the heart of Wine Country

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Ponce City Market

Located in Atlanta on the BeltLine recreationtrail and opened in 2014, Ponce City Market ishoused in the fully renovated Sears, Roebuck &Company building. The rooftop Skyline Parkarea offers panoramic views, a bar, an upscaleclub, and is a major attraction by itself. Eventspace, bike valet and showers for cyclists areavailable.

§ Cost $250 million

o 259 apartments

o 330,000 square feet of retail

o 500,000 square feet of office

§ Rental Rates: $1,595 - $3,500+ per month(some affordable housing also available)

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So what are some examples of places that have seen tourism translate into growth and economic development?

Very Small Places(Under 100,000)

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Heber City, Utah2010 – 2018 Growth: 41.3%

2015 – 2018 Growth: 14.0%

Focused on tourism, downtown, recreation, quality of life.

Situated between Provo, Orem, Salt Lake City & Ski Resorts

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Heber Micro 2018 Area Population: 33,240

Prineville, Oregon2010 – 2018 Growth: 13.8%

2015 – 2018 Growth: 11.2%

Once devastated by timber and industry decline; rebounded due to tourism and quality of life, as well as low cost of living and power, which attracted data centers from Facebook & Apple in 2010, 2012.

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Prineville 2018 Area Population: 23,900

Jefferson, Georgia2010 – 2018 Growth: 16.4%

2015 – 2018 Growth: 11.0%

Last Year Job Growth: 5.3%

Exurb of Atlanta and north of Athens, using downtown and quality of life to lure those looking for the best of both worlds.

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Jefferson 2018 Area Population: 70,400

Ellensburg, Washington2010 – 2018 Growth: 15.8%

2015 – 2018 Growth: 9.9%

Most centrally-located city in Washington, home to Central Washington University, growing rapidly. Large inventory of properties at much lower prices = more land at affordable prices than cities west of the Cascades.

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Ellensburg 2018 Area Population: 47,400

Small Places(100,000 – 400,000)

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St. George, Utah2010 – 2018 Growth: 24.3%

2015 – 2018 Growth: 11.0%

Last Year Job Growth: 4.9%

Isolated desert community attracts both outdoor recreation enthusiasts (proximity to Zion National Park), and workers in the service industry. Las Vegas is just over 90-minutes away. Four of every five new residents were not born in St. George.

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St. George 2018 Area Population: 171,100

Bozeman, Montana2010 – 2018 Growth: 25.0%

2015 – 2018 Growth: 10.9%

Attracts families with higher incomes due to proximity to recreation opportunities such as first class skiing and Yellowstone National Park. Montana State University adds a big-city cultural flair. Recently expanded airport is now the busiest in Montana, offering best connectivity in the region.

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Bozeman 2018 Area Population: 112,000

Bend, Oregon2010 – 2018 Growth: 21.7%

2015 – 2018 Growth: 10.3%

Last Year Job Growth: 3.0%

Tourism growth and laid-back, craft-beer, artsy, and outdoorsy lifestyle, with no headaches of big city. Ample skiing, rock climbing, hiking, and far sunnier weather than the coast. Entrepreneurs thrive, with the most new registered businesses in the state in 2017.

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Bend-Redmond 2018 Area Population: 192,000

Greeley, Colorado2010 – 2018 Growth: 24.3%

2015 – 2018 Growth: 10.3%

Last Year Job Growth: 3.1%

White and blue collar industries both booming in Fort Collins and Greeley, due to pro-business climate. Both university towns. People want to be near the mountains, but away from the urban intensity and expense of Denver.

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Greeley 2018 Area Population: 314,300

Daphne-Fairhope-Foley, Alabama2010 – 2018 Growth: 19.6%2015 – 2018 Growth: 7.4%

Two spines of growth: Eastern Shore along the coast of Mobile Bay, growing affluent string of Mobile suburbs with upscale shopping and quaint downtowns. Central Baldwin, has beach tourism. Foley Sports Complex draws youth tournaments and tourism.

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2018 Area Population: 218,000

Medium Sized Places(400,000 – 1,000,000)

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Myrtle Beach, South Carolina2010 – 2018 Growth: 27.7%

2015 – 2018 Growth: 11.5%

Last Year Job Growth: 4.5%

Known for tourism, now becoming a truly balanced economy, with higher education and retirees moving in.

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Myrtle Beach 2018 Area Population: 481,000

Provo-Orem, Utah2010 – 2018 Growth: 20.3%

2015 – 2018 Growth: 8.7%

Last Year Job Growth: 3.5%

Burgeoning high-tech corridor (Silicon Slopes). Utah Valley State University growing + Brigham Young University. While close to Salt Lake City’s suburbs, Provo-Orem has its own distinct youthful culture and a more business-friendly climate.

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Provo-Orem 2018 Area Population: 634,000

Boise, Idaho2010 – 2018 Growth: 18.5%2015 – 2018 Growth: 8.2%

Last Year Job Growth: 3.6%

Young families seeking jobs and and seniors seeking a moderate climate and low cost of living, attracted by the mountains and sunny weather. Tech companies relocating from Seattle and San Francisco + organic growth.

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Boise 2018 Area Population: 730,000

Bentonville-Rogers-NW, Arkansas2010 – 2018 Growth: 18.5%

2015 – 2018 Growth: 6.7%

Last Year Job Growth: 1.8%

Focused on downtown, biking, walkability, culture, quality of life. Major facilities investments in hotels, museums and downtown.

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Northwest Arkansas 2018 Area Population: 550,000

Greenville, South Carolina2010 – 2018 Growth: 10.0%

2015 – 2018 Growth: 3.9%

Last Year Job Growth: 1.2%

Focused on curated downtown, recreation, quality of life. Continue to seek event facility development.

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Greenville-Spartanburg 2018 Area Population: 907,000

Large Places(1 million+)

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Austin, Texas2010 – 2018 Growth: 26.3%2015 – 2018 Growth: 8.3%

Last Year Job Growth: 2.1%

Tech and university center. Massive expansion of convention center just approved to accommodate demand.

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Austin 2018 Area Population: 2,168,000

Las Vegas, Nevada2010 – 2018 Growth: 14.4%2015 – 2018 Growth: 6.4%

Last Year Job Growth: 2.4%

Massive expansion of convention center underway to support continued demand growth. New Raiders stadium. Becoming a real city!

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Las Vegas 2018 Area Population: 2,232,000

Dallas-Fort Worth, Texas2010 – 2018 Growth: 17.3%2015 – 2018 Growth: 6.1%

Last Year Job Growth: 3.0%

Downtown placemaking and event facilities throughout the region. Expanding airports support diverse marketplace.

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DFW 2018 Area Population: 7,540,000

Phoenix-Scottsdale, Arizona2010 – 2018 Growth: 15.9%

2015 – 2018 Growth: 6.0%

Last Year Job Growth: 2.8%

Converting tourism into economic development, adding new facilities, attractions and downtown renaissance.

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Phoenix 2018 Area Population: 4,858,000

Nashville, Tennessee2010 – 2018 Growth: 15.6%

2015 – 2018 Growth: 5.6%

Last Year Job Growth: 2.6%

Focused on downtown, tourism, music, culture. New convention center helped downtown turn the corner and now supports 1 million room nights.

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Nashville 2018 Area Population: 1,931,000

Florida – A nice place to visit … and live!The Villages + 38%

Cape Coral/Fort Myers + 22%

Orlando + 21%

Lakeland/Winter Haven + 18%

Naples-Marco Island + 18%

Crestview-Fort Walton Beach/Destin + 18%

Punta Gorda + 16%

Sebastian-Vero Beach + 14%

Port St. Lucie + 14%

Jacksonville + 14%

Daytona Beach + 12%

Sarasota/Bradenton + 7%54

What Do These Have in Common?

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Placemaking

Built Environment +

Events +

Leveraged Assets (natural beauty, etc.)

= Economic Development, Tourism, Migration

Call to Action: So Now What?

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What can you influence?

EDC and DMO pro’s caninfluence policy, sure. Butdirectly, you can change thebuilt environment throughstudies, funding tools andcoordination, including:- Event Facilities & Spaces

- Districts (Retail/ Restaurant/Entertainment)

- Events (consistent, impactful)

- Hotels

Self-Study:Facilities & Events

Master Plan

Unlike tourism or economicmaster plans that often focuson intangibles likeorganizational strategy orbranding, places need tounderstand what they offer interms of the built environment.

A place becomes compellingwith the help of the curated,built environment.

Feasibility Studies

Once a high-level matrix ofgaps and strengths in termsof development is known,then deep-dive feasibilitystudies can be conducted,whether that is for aconvention center, youthsports complex, urbanentertainment district, hotelor arena.

Development 101

In my other classes and in reallife, we teach and studydevelopment processes tomove communities through thatprocess.

With over 600 studies and $4billion in transformative projectsover the years, you learn a fewthings. Our goal is to helpEDCs, DMOs and othersunderstand what comes nextand how to get there.

Development 101

Facilities & Events Assessment &Master Plan

Market and Financial FeasibilityStudy

Political & Financial Buy-In

Developer Solicitation & Selection

Deal Development & Funding

https://hundenpartners.com/downloads/

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To download this presentation, visit:

Questions

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Contact Information

Rob HundenPresident and CEOHunden Strategic Partners213 W. Institute Place, Suite 707Chicago, Illinois 60610(O) 312.643.2500(C) 312.933.3637www.hundenpartners.comrhunden@hundenpartners.com