When I took on the Letchworth Gateway Villages initiative six months ago, the first challenge posed to me was this: how can our local businesses more effectively attract Letchworth State Park’s 700,000 annual visitor market to our communities?
As I dug into this problem and started looking at comparative data, market trends and sustainable tourism models from similar parts of the world, an even bigger question emerged - could travel and tourism be a viable strategy to help us revitalize our rural economy?
What I'm Learning
In the U.S. tourism has become an important economic driver and growing source of revenue for state and local governments. In fact, since the employment recovery began in 2010, the travel industry has created 972,000 new jobs at an 18 percent faster rate than the rest of the US economy. That's more jobs than the entire manufacturing sector. (U.S. Travel Association, 2017 Report, The Power of Travel Promotion: Spurring Growth, Creating Jobs).
In New York State tourism is now the 4th largest private sector employer. In 2016 the state set new records for visitation and direct visitor spending for an overall economic impact of $104.8 billion (The Economic Impact of Tourism in New York, 2016). Closer to home in the Finger Lakes, Tourism is a $3 billion industry supporting nearly 60,000 jobs and generating $385 million in state and local taxes (The Economic Impact of Tourism in New York, 2016, Finger Lakes Focus).
More revenue means more tax savings at the household level. This is a particularly important point when we consider the increasing tax burden in rural areas suffering from depopulation. In 2016 New York State’s $8.2 billion in travel-generated revenue saved the average household $1,133 in taxes (The Economic Impact of Tourism in New York, 2016).
Travel Destinations Spur Economic Development
In addition to helping states and localities build a strong tax base, a vibrant travel and tourism industry creates a “virtuous cycle” of economic benefits by improving the quality of life for local residents and making a community more attractive to potential employees and businesses.
A great example of this dynamic is the transformation Corning, New York underwent when Corning Enterprises and government leaders turned to travel and tourism as a means of boosting the region’s economy. By intentionally investing in the region’s travel-related assets this public-private alliance was able to increase traveler spending in the area from $11.4 to $38 million in just 10 years.
Read the case study:
Finger Lakes, New York: Travel Promotion Transforms Rural Area Into Napa Valley East
Promising Market Trends
Another aspect of travel and tourism that makes it a compelling development strategy for our area is the current alignment between our regional assets and key market trends that are likely to be here for decades to come.
Millennial Market Power and the Rise of Experiential Travel
As the largest generation to date, Millennials are just moving into their prime spending years which is set to profoundly reshape our economy in the years to come (Goldman Sachs). Millennials, not surprisingly, constitute the largest travel market in 2017 and continue to drive major travel trends like food tourism, sustainability and wellness / adventure travel (Skift Report, Megatrends Defining Travel in 2017).
Why is this good for us? As an area with abundant scenic beauty, outdoor recreation options, a unique rural arts culture, and a strong agricultural industry with growing craft beverage, wine and farm-to-table offerings, we are primed to capitalize on these trends.
New Market Segments
These specific regional assets (if developed strategically) also have the potential to attract higher return market segments like “Geotravelers.” Geotravelers are defined as travelers that “care about sustaining or enhancing the geographical character of a place - its environment, culture, aesthetics, heritage and well-being of its residents” (Geotourism Study National Geographic and TIA, 2002). According to a 2010 State of Montana survey, researchers found that Geotravelers spend more money per day and stay longer in a destination. They are typically well educated, care about sustainability, have higher levels of dispensable income and are frequent leisure travelers (Statewide Vacationers To Montana: Are They Geotravelers? Dylan Boyle, Norma P. Nickerson, 2010).
Interestingly, Geotravelers have a similar profile to the high return market segments identified in a recent destination market analysis conducted in 14 counties by the Finger Lakes Tourism Council. The research found top market segments resided within a 400-mile radius of the Finger Lakes Region and identified the primary visitor to the Finger Lakes region as older (35-65), without children in the home, living in a small town or rural environment with an upscale lifestyle (Destination Wide Market Analysis & Strategic Marketing Plan, Finger Lakes Regional Tourism Council, 2016).
Tech Innovation and the Sharing Economy
Other promising trends include the growing popularity of online hospitality platforms like Airbnb and VRBO which enable homeowners to lease or rent short-term lodging including vacation and apartment rentals. In New York State several counties including Livingston are able to collect occupancy tax on Airbnb rentals which is an important source of tax revenue for the county. In places like Wyoming County where there is a lack of traditional accommodation (and therefore occupancy tax), Airbnb could be a viable solution for entrepreneurs and tourism to work together to increase tax revenues for the County.
Ride-sharing apps like Uber and Lyft are also likely to dramatically impact travel and tourism in rural areas where transportation and lack of connectivity can limit visitors and local residents from exploring and patronizing places spread out over larger distances. This is especially true for our area's largest market - SUNY Geneseo students - who tend to patronize businesses close to campus because they don’t have cars and have limited options for public transportation to explore the many other towns and attractions outside of main street Geneseo.
Opportunities for Entrepreneurs
As innovations like Airbnb and Uber become more prevalent in rural areas, they create new entrepreneurial opportunities for enterprising individuals without the same barriers to entry and levels of risk associated with more traditional types of businesses.
As part of this blog series we will be exploring different facets of sustainable tourism in our region over the coming months including viable market opportunities for local entrepreneurs, workforce development needs, and what kind of policy environment is required to attract investment and stimulate growth in this sector. We will also look at areas of the State similar to ours that have successfully leveraged travel and tourism as a regional development strategy.
With over 700,000 visitors already coming to Letchworth State Park each year (a level of visitation on par with the top third most popular national parks in the U.S) I’d say we have a pretty compelling proof of concept that, tourism, if developed strategically, could be a vital part of shaping our future economy.