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Comprehensive findings review by the Sun Valley Marketing Committee. More at http://bit.ly/sunvalleymarketing
Citation preview
5/3/10
QUO VADIS Sun Valley and Ketchum?
“where are you going”
Sun Valley Ketchum Region MarkeCng CommiEee Interim Report
May 3, 2010
1 SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE
5/3/10
Discussion Topics
• Background – CommiEee – ObjecCves – Approach – Economic SituaCon
• Issues Summary
• QuesCons and Answers (fact based) – How are we doing? – How does that compare to other resorts? – What role is/did construcCon play? – What is the contribuCon of second homeowners and visitors? – Do we have the right product for visitors? – How easy is it for visitors to get here? – Are we spending the right amount in the right ways to market?
• Findings from our work
• Interim RecommendaCons will be presented at May 3rd meeCng
Page 2 SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE
5/3/10
Why do we need a MarkeCng CommiEee?
1. Youngman research suggests markeCng is not achieving desired objecCves
2. Lots of data, not much analysis or acCon
3. Freedom from operaConal constraints – MarkeCng ‘R&D’ group
4. Need for independence, and capacity to facilitate collaboraCon
5. CollecCng a wide variety of ideas from wide set of consCtuents
Page 3 SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE
5/3/10
CommiEee and Structure
AddiConal consulCng resources added as needed
Jim Knight Chair Jane Fairley Bill Wright
ConsulCng Resource: Bill White
ConsulCng Resource:
Stan Castleton
ConsulCng Resource: Tim Silva
ConsulCng Resource: Sheri
Howell & Cam
Hopkins
Sun Valley Co. Resort management experCse MarkeCng consulCng knowledge
Brand/retail/adverCsing/event experience ConnecCon to young markets
MarkeCng experience Deep business skills
Resort development experCse Deep business skills Deep understanding of Hotel Industry Branding expert
Page 4 SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE
5/3/10
CommiEee and ConsulCng Members
member area residence type years of SV exp. background education
Jim Knight (committee member,
chairman) Sun Valley FT 20+
business CEO, management consultant, experienced in
marketing of commercial products
BS Boston U MBA Tuck
(Dartmouth)
Jane Fairley (committee member) Ketchum PT 10+
Arthur Anderson, Ernst & Young, business management, consulting,
marketing, organizational psychologist
BA, MA Univ. of Melbourne
Bill Wright (committee member) Sun Valley FT 10+ management consulting, marketing
specialist, sporting goods industry AB Stanford
MBA Harvard
Sheri Howell/Cam Hopkins
(consulting member) Ketchum PT (FT) 30+
experts in marketing/advertising, branding, TV industry, music
industry, active skiers with young children
BA U. Of Wash.
Bill White (consulting member) Ketchum PT 3+
Magazine industry, Marketing, Allen & Co, consulting, Banking industry,
strategic business acquisition, internet entrepreneur
BA Yale
Tim Silva (consulting member) Wood River Valley FT 30+
Ski industry, resort management, Resort area marketing, VP Sun
Valley Co.
BA UC Davis MS Utah State
Stan Castleton (consulting member) Park City FT 3+
Resort developer CEO, resort RE, branding expert, resort marketing
expert, Arthur Anderson Consulting in hotel business,
BA, BS, MS Brigham Young
Univ.
Page 5 SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE
5/3/10
Scope of work
• Sun Valley and Ketchum asked the commiEee to build on the Youngman work and report back with a plan for markeCng SV/K
• CommiEee has NO vested interested
– No business interests in the valley
– 100% pro bono work by commiEee and consulCng resources
• Desire for community to thrive and prosper
• Create a tent big enough for everyone to live in and want to be part of it
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 6
5/3/10
We invested over Cme in an inclusive approach
Page 7 SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE
Define short term and long term objecCves
Clarify project results and Cmeframe
Establish project work plan
IdenCfy what we know and what we need to know
Solicit stakeholder input
• Over 65 Interviews • Email input • ExisCng research
Gather independent perspecCve
• Industry • Other CommuniCes • Industry consultants
Research comparable
communiCes, tax and economic
data
Analysis
Present interim results and “strategic roadmap”
5/3/10
Background
• Youngman study found local opCon tax (LOT) revenue DOWN 35% in Ketchum and DOWN 23% in Sun Valley
• LOT is a good surrogate for spending and therefore spending in our community(s) is DOWN 30% in aggregate over last 8 years
• Suggested ImplicaCons from Youngman study: – Spending has declined but not all resort communiCes are suffering equally – Visitors are disproporConately down in our community relaCve to others – Visitors spend less in our area than other resort communiCes – MarkeCng effecCveness and budget are less than desirable
• Many issues are well recognized in the community – ExternaliCes
• Economy is terrible • ConstrucCon and related are down • Real estate business is suffering • Resort business is down • TradiConal Alpine skiing demographic is stagnant
– K/SV specific issues • Product open does not meet visitors’ expectaCons • Brand fractured and confusing • No high end hotel properCes and too few hot beds • Lack of consumer brand awareness and recogniCon • WaiCng for SV Resort to solve the problem
Page 8 SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE
5/3/10
The paCent is ill and we see the symptoms • PresenCng symptoms-‐
– LOT is down in Sun Valley and Ketchum – Overall economic acCvity ($ spend) is below acceptable levels-‐as quanCfied in Youngman study
– ConstrucCon acCvity is off – Low occupancy rates
– Empty store fronts – Businesses going broke – Fewer visitors
• What disease (s) is creaCng these symptoms? – US economy
– Are other resort economies in the same trouble? Some resort economies are doing well (Jackson), others not (Vail) – Has Sun Valley lost market share to other resorts? – Lack of high quality accommodaCons (hotel/condo)
– Baby Boomer wave has crested and boomer offspring will not automaCcally replace them – MarkeCng approach
– Other factors • The community has a lot of ideas about what to do-‐examples include:
– MarkeCng spend
– MarkeCng efficiency – Brand Awareness
– Product offering – Lodging availability – Accessibility
• However, we need to make sure we are spending limited resources (people, $ and Cme) on the highest impact opportuniCes • To do this we needed to do addiConal diagnosis to clearly idenCfy the disease
– -‐-‐otherwise we risk placing our limited resources and future in the hands of relying on anecdotes and opinion
…but are we clear on the disease?
Page 9 SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE
5/3/10
SV/K is a special place with many unique strengths facing challenge of building new relevance
Economy • Strong heritage and a “community” surrounded by natural
beauty • A deteriorated local economy
• How much of the downturn is a result of the naConal economy?
• How does this compare to other resort communiCes?
• What role has construcCon played in the economic acCvity of the area?
• Sense of pluralism and special interests overshadowing community cohesion
Product • Is product suited to target demographics? • What does the product “brand truth” i.e. what does product
stand for? • Do we have enough hotel rooms?
• Are the hotel rooms we have the right kind?
• What is the relaCve importance of the lodging product?
• How important is accessibility (air, bus and car)?
• How important are Ccket prices-‐to full Cme and visitors? • What is personality of SV/our product?
• Do we have enough and the right post sport acCviCes and entertainment?
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 10
Visitors • What is our visitor profile (age, income, desired experiences,
etc) ? • Are we meeCng customers’ expectaCons? • What is the relaCve spend of visitors, 2nd home owners and full
Cme residents? • How many visitors come to the area? • Why do they come or choose not to come? • What do they spend? • What is the historical trend?
Marke@ng • Is there consistency in our markeCng message (image, logos,
etc)? • How effecCve is our markeCng? • Do we spend enough on markeCng and is it well spent? • Do we market an overall SV/K experience or just fragments? • What is the threshold markeCng budget required to create/
promote/renew/and or redefine as brand such as SV? • How do we make second homeowners brand evangelists?
Source: 65+ local interviews, Team Analysis
5/3/10
“Prejudices are what fools use for reason” -‐Voltaire
“Just the facts Ma’am; just the facts” — Dragnet’s Joe Friday
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 11
5/3/10
Sun Valley/Ketchum Region is suffering worse than the economy in general and other areas
• US Economy (GDP Q4 2007 TO Q4 2009) down 6.3%
• Tourism and related acCviCes down ~5%
• Tourism Employment down >6%
• Ski oriented resorts down 0%-‐6%
• Sun Valley/Ketchum Region1 down 20% – Sun Valley down 18% – Ketchum down 21%
• Tourism Spending dropped from a high rate of ~$620B in 2007 to an annualized rate of ~$590B in 2009 (measured in constant $)
• In 2008 there are 21M Americans with incomes over $100k and they spent $2.1T up from 19M Americans and $1.9T in 2006 of which less than 2% was spend on vacaCon related acCviCes—Source: US Bureau of Labor StaCsCcs
• Net loss in real spending power in this group
Note 1-‐-‐based on LOT (adjusted to eliminate Ketchum building LOT)
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE 12
Source: US Government, Youngman study, Team Analysis
5/3/10
Two CiCes
Ketchum Sun Valley SV/K
PopulaCon 3,272 1,466 4738
Median age 43 52 45
Median value of residence $723K $1.1M $840K
Aggregate household income
Per capita income (2008)
$152M
$46K/per capita
$86M
$58k/per capita
238M
$49.5k/per capita
Spending by residents
Per capita spend
$126M
$39K/per capita
$60M
$40K/ per capita
$186M
$40k/per capita
Size of locally taxable economy $136M $40M $176M
Property Taxes $3.4M $3.0M $6.4M
EducaCon 95% HS/52% College 95% HS/60% College 95%/55%
PopulaCon growth (2000-‐2008) 9% 3% 7%
Housing
Total 2,947 Vacant ~ 50%
Owner occupied 865 Renter 710
Total 2,339 Vacant ~75%
owner occupied 465 renter 133
Total 5286 Occupied 2173
Owner 1330 Renter 843
Page 13 Source: US Government, Zoom data, Gem State Prospector, Team Analysis
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE
5/3/10
30
35
40
45
50
55
60
65
70
75
80
30 32 34 36 38 40 42 44 46
Age affects Brand Image and Sustainability-‐-‐We are 10% older than Aspen and 20+% older than other resorts
45
41
37
36
35
35
34
32
30 35 40 45 50
SV/K (1936)
Aspen (1946)
Park City (1963)
Vail (1962)
Jackson (1963)
Telluride (1972)
Big Sky (1973)
Whistler (1965)
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE 14
Bringing down the average age will not be easy. Example: If 500 thirty year olds move to town as full Cme residents, the average age will drop by only 1.5 years to 43.5.
Resort Age
PopulaCon Age
SV/K
Aspen
Source: US Government, Team Analysis
5/3/10
CommuniCes differ in size and income
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 15
SV/K
Park City
Big Sky
Vail
Aspen
Whistler Telluride
PopulaCon
Hou
seho
ld Size
Source: US Government, Zoom Data, Team Analysis
1.5
1.7
1.9
2.1
2.3
2.5
2.7
2.9
3.1
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
Resort Communi@es
Jackson
5/3/10
SV/K resort economy is not as economically diverse as other resorts
5
5.5
6
6.5
7
7.5
8
8.5
9
2000 3000 4000 5000 6000 7000 8000 9000 10000
Economic Diversity
More Diverse
Larger
PopulaCon
Econ
omic diversity Index
SV/K
Aspen
Jackson
Steamboat
Page 16 SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE
5/3/10
SV Company directly represents approx. 13% of the local economy and yet influences much more
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE 17
Source: US Government, LOT Data, Team Analysis
SV Company (esCmated from LOT)
SV/K (non SV Company)
5/3/10
Ketchum Retail is biggest segment of the local economy and far exceeds lodging
Page 18 SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
2001 2002 2003 2004 2005 2006 2007 2008 2009
total LOT category re
venu
e (200
9$)
year
Ketchum Retail Sales
Ketchum Bldg Material Sales
SV Retail Sales
SV Lodging Sales
And shopping is #1 acCvity pursued by visitors in resorts Source: LOT Data, Team Analysis
5/3/10
ConstrucCon supported 21% of the local economy
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 19
….and the loss hurts
0
100,000
200,000
300,000
400,000
500,000
2006/2007 2009/2010
Payroll
Total
ConstrucCon Economy est. scaled from LOT;
79%
Lost to Bldg bust; 21%
Construc@on revenue lost
Source: US Government, LOT data, Team Analysis
Majority of construcCon is one Cme capital investment…
$(000)
5/3/10
Full Cme SV/K residents account for over 35% of the economy
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE 20
Full Time Residents; 38%
Visitors; 62%
Amount of Local Spending
Full Time Residents
Visitors
Source: LOT Data, Census Data, Team Analysis
5/3/10
Visitors make up over 60% of the SV/K Economy
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 21
Full Time Residents; 38%
Visitors without homes in SV/K; 24%
Visitors with property (2nd homeowners);
38%
Full Time Residents
Vistors without homes in SV/K
Visitors with property (2nd homeowners)
Source: LOT data, US Census, county Business PaEerns, Team Analysis
Second home owners represent the same % as full Cme
5/3/10
Where do Visitors come from?
Second Homeowners are highly concentrated in the NW (same is true for visitors) with remainder spread across the country…very liEle foreign ownership
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 22
California; 29%
Washington; 20% Idaho; 19%
NY; 3%
Utah; 3%
Oregon; 3%
Florida; 3%
Nevada ; 2%
Other; 18%
Foreign =~1%
Note: Data for Blaine County extrapolated to SV/K
Source: SVKVB, SVE Homeowners, Surveys, Team Analysis
5/3/10
Second Homeowners can make a difference
2nd Home owners spend
today 5% increase
$10M into local economy • Equivalent to bringing in 4000 new visitors
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 23
Source: Team Analysis
5/3/10
Do we have the right lodging product for visitors?
• Big Sky is similar to Sun Valley in # of skier days 400k/yr – Remote – Access issues – Vacant 66% in Big Sky vs. 55% in SV/K – Similar number of condos but newer in Big Sky – Similar populaCon size
• SV/K does not have ski in/out lodgings—others such as Big Sky do and this is acknowledged as criCcal variable in aEracCng high-‐end visitors
• 28 hotels (mostly condos) are listed in SV/K with only one (SV Resort) rated higher than 3 star
• Majority of SV/K lodging is condos (non rated)
…but over 40% more hotel rooms and 4 star properCes
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 24
0
500
1000
1500
2000
2500
3000
SV/K (blue) and Big Sky (red) lodging
Condos
Source: Public InformaCon, Team Analysis
5/3/10
Condos for rent are old and need rejuvenaCon
• Housing Median Age: 24 years – 1986 is the norm – 70% is more than 20 years old
• Over supply hinders reinvestment
• No consistency in quality definiCons
• Consequence is some visitors have two star experience at a four star price
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 25
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
<10 10-‐20 20-‐30 30-‐40 40+
Percen
t of H
ousing
Age
Ketchum and Sun Valley housing
0
500
1000
1500
2000
2500
<10 10-‐20 20-‐30 30-‐40 40+
Num
ber of Units
Source: US Government, SV Chamber, Team Analysis
5/3/10
How easy is it for visitors to get here?
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 26
Imagine you live in SeaZle, San Francisco or even Minneapolis let alone Chicago, Dallas or NY
Flights per Days
Or, say you decide to fly to Boise (many flights) and try to get to Sun Valley
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Salt Lake City
Minneapolis Denver SeaEle LA
BOZEMAN
SUN VALLEY
0
2
4
6
8
10
12
BIG SKY/BOZEMAN SUN VALLEY/BOISE
Bus roundtrips/day
Source: Research and Team Analysis
5/3/10
Is SVKCVB spending the right amount on the right acCviCes?
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 27
$-‐
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
Source: SVK Chamber
Income
Sun Valley Ketchum Chamber and Visitors Bureau
Spending
5/3/10
New Visitor AcquisiCon Costs
Typical Revenue to community per visitor is
~$2100 1
Number of Visitors* ~55,000 2
Cost to Market (net of MRG, Business Support and Visitor Center)
$900,000 3
Visitors as a result of markeCng 10% 4
MarkeCng driven Visitors
~ 750 5
AcquisiCon Cost per New Visitor (not including Sun
Valley Company)
>$ 1300 5
Page 28
Notes— 1. From Visitor surveys 2. 55k is esCmate of total visitors –not family units 3. From budget 4. Team esCmate from visitor surveys 5. CalculaCon Sources: Visitor Research, SVVB 2010 budget, Published Data, Team analysis
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE
5/3/10
The Paradox of Scale and EffecCveness
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 29
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80
Marke@ng Scale and Effec@veness
SV/K
Telluride
Steamboat
Vail
Spend Index
EffecCveness Index
Scale of Spending lags others…by at least $2M/yr
With no increase in $ we need to increase effecCveness by a minimum of 300%
Source: Interviews with Telluride, Steamboat and Vail and Team Analysis
5/3/10
Sun Valley Brand is an Umbrella for many messages
Sun Valley
Retail/Lodging and
Dining Experience
Resort
Experience
AuthenCc Community
Mountain and
Outdoor Experience
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 30
5/3/10
Findings
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE Page 31
Economy • We are one economy • We are hurCng economically more than the US economy and more than most other resorts • ConstrucCon of second homes and SV faciliCes has masked the underlying economic problems for a long Cme and deluded us • Retail acCvity in Ketchum is extremely important to our economy • We suffer from too much economic concentraCon
Brand • We are an authenCc community first with a resort (not a resort town) • A unique niche/bouCque/special product unlike any other • We have a very small share of the ski market (<1%) and SV/K is not right for everyone—we have to market special aEributes • Brand is confusing, lacks clarity and consistency
Product • Our hotel lodging product has not kept pace, is taEered and needs to be both expanded and revitalized • Condos for rent are in serious over supply, quality is deterioraCng creaCng financial implicaCons for the owners and a need to reinvest
Transport • Tough to get here (but we knew that) • We have failed to maintain adequate local air service • Roughly 30% of visitors come through Boise airport but we lack acceptable transport • Compared to other resorts, may be more percepCon than reality • Other resorts have taken acCon to address this issue and we have not
MarkeCng • We are trapped in a markeCng paradox (scale and effecCveness) • Our markeCng effort is trying to do too many things with too liEle money • We need more resources for a full fledged re launch of the SV “brand” • Visitors are 2/3 of our economy and visitors who own property are 30/35% and can make a big difference • TacCcal markeCng to visitors who own homes is overlooked
5/3/10
Summary
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE 32
• We are blessed to have Sun Valley Resort and yet it is unreasonable to ask them to do everything for the community – We are too caught up in waiCng for the Sun Valley Resort to solve our
problems
– SubstanCal customer service improvement in last year—happy people make happy customers
• Everyone’s job is customer service and we all have a role as salespeople for Sun Valley
5/3/10
Nothing will ever be aZempted if all possible objec@ons must first be overcome. -‐ Samuel Johnson
SUN VALLEY KETCHUM RESORT AREA MARKETING COMMITTEE 33