Abstract Summit Turismo 2009

Il caso Amsterdam – crisis as opportunity

Hans Dominicus – Director Marketing & Development

Introduction

Amsterdam ahs a leading position in international city tourism and conferences in Europe. Tourism is considered as an important economic factor, one of the six economic pillars of the city. Counted in foreign bed nights, Amsterdam hold a position in the Top Ten of Europe, has a 9th position in UIA congresses and reached recently the 7th position in the ICCA list. Visitors in the city generate over € 5 billion euro direct spend. This stands for around 50.000 jobs (fte) generated by visitor spending.

Although visitors to Amsterdam were in general increasing for the last 20 years, the city suffer an 8 % fall back last year and is expecting for another -10% in 2009. This is due to the economic crisis in the world. It is effecting tourism and business travel in Amsterdam and other European cities. And together with that visitor flows to museums and attractions are down as well. This negative trend is influencing entrepreneurs and their perception towards the future.

But one can also discover opportunities in the current situation. If one compares some cities in Europe, one can register overall growth over 2008 as well in some destinations, beyond the recessions of visitors flows in several cities. A recent held survey among over 100 experts in City Tourism Organizations , set up by the European cities Marketing association, learned that the expectations are in majority negative, but that there are some growth perspectives. Mainly in the home market of the respective cities (30% expected growth there), but also in some foreign markets. The German market is in the eyes of 25% of the managers a growing one, whereas from France, Spain and Italy the managers expect in 10% o f the cases a growth and in 30% a status quo.

Looking at the visitor segments, the leisure market is the most prosperous in the current circumstances, followed by the MICE non corporate market. The most negative expectations are in the field of individual business travel and corporate meetings – which is logical.

Analyzing the crisis – now and in the past

The marketing analysts of Amsterdam Tourism & Convention Board looked at the different crisis, which have affected visitor flows, in the past 18 years. The first one was the Gulf War, followed by others like the Yugoslavian Wars, the 1993 economic crisis, the 2001 Food & Mouth disease, the

attack on 9 September 2001, the 2002 Sars en the current one. All these had an effect on visitor flows in general and those to Amsterdam more specifically.

The development of visitor flows is compared by the analysts with the Dow Jones index. There is a clear correlation between visitors arrivals and this index, being a perception by the public of the economic situation. And the Dow Jones reacts to the different crisis in the world.

This does not mean that there is nothing to change.

Analyzing the effects of the Gulf War (1991)

Due to the situation in the Gulf , and the media exposure, combined with a limited geographical knowledge of the consumer, a lot of consumers saw their regular destinations as unsafe or unreachable. Therefore they were –forced by the situation - looking to other destinations. Mainly more North.

This created new opportunities for Amsterdam, so the CTO introduced an surprising Amsterdam campaign targeting the consumer in the nearby European countries. This campaign had effect. There was a smaller fall back than in other –competing – cities, who did not adjust their marketing.

The city also registered less decline in arrivals from European visitors and saw positive effects from nearby countries and the –relatively small- home market. Since then the CTO added the ‘spread of risks’ to their strategy. This means marketing in several markets, spread over long haul, mid range and nearby markets.

Other crisis had similar effects on visitor flows. This means that models for changing patterns can be developed on an empirical analysis.

The current situation for Amsterdam show a decline in arrivals from the USA and the United Kingdom, but visitor arrivals form for Amsterdam nearby markets as Germany and Belgium show (considerable) growth in 2008.

New marketing & promotion

This pattern as described before was expected and assumed in creating new –ad hoc - marketing campaigns. Amsterdam’s CTO just launched on the 15th of April a campaign under the name of ‘Give me a break’. This campaign was developed in a couple of weeks together with the Dutch NTO. The launch of 1001 nights for free, bookable via internet, resulted in a load of free publicity in newspapers and on social networks. The effect was huge. Numerous consumers went to the site for the free rooms, which were all gone after 9 days. This communication campaign was so successful as there were no hidden tricks in the offer. This is the case with a lot of –apparent- similar offers in Europe. More actions are to come, based on the principle that nearby markets will be prosperous in the current situation, although this first campaign registered also results from the USA.

Unpredictable consumer?

In times of recession, a raise of spending is not assumed. But the situation in this crisis is different. Consumers still want to spend money if the settings are right. The extreme good snowy winter gave

Austria’s Tyrol a plus in turn-over. The Art Fair in Amsterdam attracted 57% more visitors and more sales. Ryanair booked 5% plus in air traffic in March 2009.

So there are changes enough, if one react in the right way to the current situation.

How to react in the current situation?

Swiss Tourist Board went recently with a viral campaign on the internet for a cute, humoristic way of showing their aim for quality. The viral was seen by over 100.000 consumers within 3 weeks.

But first we look at the reasons behind travel:

- Give me a break - I want to relax now.

- Or - I like to forget everything and go active.

- Also the need for education remains: one want to learn something or to visit an outstanding and unique exhibition.

Unique experiences will trigger people more than ever to act or in this case to go somewhere. Events can stimulate this effect, if one can create a reason to go there.

Visiting family and friends is a sustainable reason for travel as well.

I can frame the theory for acting in the current situation in three steps:

1) Know your customer. You need to know what drives the consumer, what are the interests of your consumer/the one your targeting at.

2) Organize or adjust the product accordingly. If the consumer wants a special experience, give it to him/her.

3) Organize your communication to the changed patterns. Consumers are postponing decisions, and are deciding later. Make your communication remarkable, amusing or cute. Create a sense of urgency, giving the consumer no reason for postponement.

If you are able to organize the right product and the right communication: the result will in most cases be less decline and even growth in some cases. It are unique experiences that nowadays attract visitors to Amsterdam. It is not about the hardware, but about the software.