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« Previous Story | The Industry Report Home Page | Next Story » MTS Wrap: Some Gloom, Some Doom, Plenty Of 'Get Off Your Ass'By Craig Altschul 
Yesterday, Dr. Laila Rach, New York University's Dean of the Tisch Center for Hospitality and Tourism, told MTS Forum participants she was close to the mark last April when the Mountain Travel Symposium convened in Vail. She predicted 2008 was going to be the year of the roller-coaster. "What I didn't tell you was that we were going to throw up every other day," she said. She noted the U.S. economy is "going, going, gone. The only bright spot in the economy is government spending." Painting a picture that the glass is below half empty, Rach congratulated those who are coming out of the season in the black. "Give yourself credit. If you come out of 2009 0-15 percent down, you came out ahead." Harari's message was indeed gloomy on one hand: "Anyone who thinks were going to come out of this next year is insanely optimistic. It will take five years. We are in a 'U' formation and right now we're somewhere along the bottom of the letter's well." Harari focused on how our mountain travel businesses can succeed in the headwinds of turmoil, while Rach zeroed in on consumer behavior during times like these. "If I'm wrong about the time frame, you can have the wheels in motion and be well-prepared for dominance," Harari said. There's always someone who said it first and Harari turned to Shakespeare: "When the sea was calm, all ships showed mastership in floating." "No one can offer crap anymore and survive, because there are too many options," he said, citing the woeful shape of the newspaper industry. "It's not that we don't want news, information, and entertainment anymore. We do. That business model just went down the tubes. Look, if you are over 50, you subscribe to a newspaper. If you're under 50, you don't." Dr. Rach said she believes Sept. 11 ended the 20th century, but this deep recession started the 21st century. She said there should be lessons learned: Consumers do not trust institutions; we expect options for everything; we demand value and quality (they don't separate them out); everything is negotiable; and people are determining the difference between a "want" and a "need." The mountain resort industry, she said, is focused on the affluent consumer, as defined by income. "But, today, affluent is really defined by those making $100,000. We used to live up to what we made, but that may change," she said. "The affluent made up 45 percent of the tourism market last year, but they won't continue to be a big a portion." Here's what's "in" for consumers, according to Rach: Clipping coupons; living within means; cooking at home; looking and comparing; and repairing. What's out? Paying full price; conspicuous consumption; outsourcing chores; buying on whim; and replacing. "It's about how you make your visitors feel secure. If you do something like offering money back if a customer loses their job, make it simple to understand up front, not a pile of fine print. Don't screw 'em," she said. Harari declared this a "copycat economy." "That means quality, turnaround time, strong customer service - they're all taken for granted. Just the slightest difference in price, for example, can be a deciding factor for a consumer. That is why crisis and copycat equal a volatile view." He said we have to be able to take advantage of this downturn. "Ask yourself if you are evolving value or protecting value. The biggest challenge and best opportunity we have is to 'de-commodisize.' "The copycat economy can be defied," he said. "Either you innovate or you head into commodity hell. You have to define and lead the agenda." He examined four values: Generic value, expected value, and incremental value. The last might be considered a creative plan (he used Vail Resort's Epic Pass as an example, but while creative, was actually a survival value). The place to be right now, Harari says, is the fourth value - "uncharted value." He dwelled on the example of how no one believed Apple could succeed in the retail store model. "That model is so successful that its store on Fifth Ave. is generating $4,000 a square foot, while Saks fifth Ave., nearby, is slogging along at $363 a square foot. "Why? The Apple stores are all about design. Just try the stuff. Someone in a t-shirt finds you within 30 seconds, smiles, and essentially says, 'Let's play together.' You can't leave without a new iPod accessory you don't need." We have to go from responding to leading, Harari said. "You must lead your customer to an impossible place. Your customer must say 'Wow!' and they must glow, tingle, be bewitched, dazzled, and thrilled. "Everyone is basically satisfied with their PC, right?" he said. "Satisfied just means perhaps not ticked off. Basically a satisfied customer feels nothing. But, what about how a customer feels about their Mac or their iPhone? Wow!" Meanwhile, Rach had some rough words for the airline industry and warned our industry "not to nickel and dime your customer to death. The airline view is for us to show them loyalty first - then get it." Making certain Web 2.0 is understood by those in the mountain resort sales field is critical, she said. We have to blog, do podcasts, video, RSS feeds, and push information to our customers. "Even Bill Marriott, whom I respect, does his own blog. I checked that out. Yes, he does it himself. "Your most valuable clients may not be spending as much with you right now, so this is the time to communicate with them," she said. "Ask how you can serve them better. Let them know a trip to the mountains can be as important for the family in June as it is in December. Consumers are buying, but very selectively. Be in their faces." It wasn't all gloomy. "This will end," Rach concluded. "They will come back because we always want to travel. But, show your loyalty to them." Harari warned never to let the market come to you. "It will too late." What It Means: Dr. Harari said his favorite cartoon shows two mangy buzzards on a tree limb overlooking a barren landscape. One looks at the other and says, "Patience, my ass. I'm just going to go out and kill something." MTS reconvenes next April in Banff/Lake Louise. What will we be talking about? « Previous Story | The Industry Report Home Page | Next Story » |
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