WHAT IS A TOURIST DESTINATION AND WHY CAN’T I HAVE ONE?

A Tourist Destination is not a place, it is a business. It is operated by the people of the place, but it only works if they commit to the fundamentals of a business. It is a business that makes the bulk of its money from DIRECT TOURIST SPENDING. Its primary products are the story of the destination – usually the story of its people – and the hosting of its customers. The story of the destination is told through attractions that package the destination’s history, place, belief systems and unique lifestyle. The more attractions, the more satisfying the tourist shopping and spending and the more sustainable the business. The hosting of customers allows the sale of accommodations, transportation and a network of hospitality elements. Therefore, a successful Tourist Destination has a sustained inflow of customers who buy accommodations, pay to move around the destination and eat drink and make merry while enjoying a healthy inventory of attractions.

Here is an example of the way it works.

Miami/Ft. Lauderdale is a successful Tourist Destination. They have ensured a constant flow of customers by investing in things that create events (mostly sporting and cultural) and developing a branding to support those elements. A Bahamian going to Fort Lauderdale for a Miami Dolphin’s football game (and some shopping) might have the following experience.

On landing he would either take a taxi or rent a car to get to his hotel. Both the rental car company and the taxi company are locally owned. The hotel he is likely to check into would be selling accommodations primarily. not likely a resort (we will say why later). Again, the hotel is likely to be locally owned, although operating a franchise, like Comfort Suites. For breakfast, he would most likely go to Denny’s, Wendy’s or some other locally owned franchise operator. For lunch he might stop at the food court in the mall or a mall restaurant. For dinner it might be Olive Garden or Red Lobster, also locally owned. After the game and dinner, he might head to a local nightclub before returning to his room. Every expenditure would have been to an establishment owned locally. All of his (direct tourist) spending would have gone into the local economy to spur its growth.

Compare that with a Floridian’s trip to Nassau.

Yes, the taxi company and the rental car company are locally owned, but the accommodations he is taken to is more likely to be at a resort. A resort, by definition, is an attraction with accommodations. Their customers expect to be taken care of while they enjoy the attraction that prompted their choice. So whether it is Baha Mar, Sandals, Breezes or Atlantis, the visitor from Florida expects to have his hosting needs completely met on property. Breakfast, lunch and dinner, followed by in-house entertainment. With the possible exception of an island tour, the Tourist Destination can expehile the resort and cruise ship operators repatriate their profits, the local economy celebrates only the jobs produced.

This does not mean that resorts are to be discouraged. They serve two very important purposes in the tourism economy. They are a healthy source of employment and they polish the brand of the destination. But in the marketplace they compete for customers with the Tourist Destination, a competition that is healthy if the Tourist Destination is operating its business properly.

Let us return to the success of the Tourist Destination. It relies on two things: a customer-getting strategy and an inventory of attractions. A customer-getting (marketing) strategy is a long-term commitment, the most important responsibility of the destination’s managers. It must result in a sustained inflow of customers over an extended period, and requires a branding commitment. The defunct Tourist Destination called Nassau has not had one for almost half a century. And rather than build an inventory of attractions, successive administrations have actively discouraged the creation of attractions, hoping to prove that attractions  are not as important as resorts. The result is a highly successful resort sector and a defunct Tourist Destination. And attempts to suggest that all is well when even the blind sees otherwise. There are few hotels in the destination because there is no customer-getting strategy and they could not survive without an inflow of customers. Without customers being hosted in the Tourist Destination, its product has withered and died. No product, no accommodations, no transportation, little hospitality. Is there any wonder the Tourist Destination is destitute while the resorts and cruise ships celebrate their best year ever?

Patrick A. Rahming

April 26, 2024

ARE YOU FEELING IT?

“I don’t know how I got myself into this mess.”

This recent headline repeated the dilemma a young lady found herself in. According to her, she set out to do a favour for a friend, but now found herself up to her neck in negative results. While reading about her case, I wondered if perhaps this is how the members of the governments of the Bahamas over the past 40-odd years must feel today. They all thought that the path to greater prosperity for Bahamians lay in securing large, successful, foreign-owned tourism businesses that offer lots of employment, and providing them with the local resources for success. The current government has shown that they were most likely wrong. Especially over the past year, they have touted their role in making the cruise operations and the resorts in Nassau outrageously successful. They have not, however, been able to report on a concurrent booming economy or of any significantly greater prosperity for Bahamians as a result.

The Bahamian economy is based upon the tourism business, and while there may be many ways to structure a business, the two primary ways to make a living in tourism are to either work for a tourism enterprise, that is to be employed, or to provide tourism product and do business directly with tourists. The model we have pursued over the past four decades is the former, while promising the benefits of the latter. Beginning sometime in the 70’s we agreed to focus all our resources on the success of Foreign Direct Investors (how else would we get new investment dollars to fund our own success?). While the program has been a failure in most instances, It has been successful in Nassau and is presently the source of our considerable pride. The strategy we have adopted of providing generous incentives for these attractors of large numbers of visitors (land. Location. Tax relief, work permit concessions, “marketing assistance”, access to the highest offices in the nation and in some instances publicly choosing their business interests over local business interests) have worked. They are the successful “partners” we set out to create.

So, now is a great time to assess the success of that policy.

The large foreign-owned businesses we targeted are resorts and cruise ships. The current administration has helped drive a record-breaking success for both right in Nassau’s front yard. Both have publicly declared last year their best year ever. Numbers of visitors have almost doubled. Our Foreign Direct Investor “partners” have seen whopping profits (I’m not sure what portion of those profits were shared with the Bahamian people’s bank account as “partners”). It would stand to reason, then, that the Bahamian economy should also be experiencing its “best year ever”. Unfortunately, rather than doubled revenues from successful local business activity, government has had to raise money by incurring debt, raising fees and collecting outstanding debts. Most surprising is that there is practically no real tourism business activity on the island of New Providence – no attractions except government-run heritage sites, few entertainment opportunities with almost no show clubs or nightclubs with live music, less theater than existed 50 years ago, practically no museums or art and craft markets. Compared to the tourism activity on the island when the commitment to resorts was made, New Providence is destitute. While commercials boast about sharing our culture with visitors, there are precious few options for doing so. Nassau is certainly not a Tourist Destination. It has no customers of its own, no product for sale and therefore makes no significant contribution to the economy.

It is easy to blame this malaise on the problems of the past, like hurricanes, recessions, COVID or crime. But deep inside most of us know that something is terribly wrong. These factors have affected our “partners” as well. Even the blind can see that there is a disconnect between the success of cruise ships and resorts and the growth of the Bahamian economy. The source of that disconnect is a defunct Tourist Destination.

“But wait. If we have millions of tourists coming to our shores, doesn’t that mean we are a Tourist Destination? I believe we are the most successful Tourist Destination in the Caribbean.”

It does not. In our case it simply makes us a landlord for a number of successful tourism businesses. We are satisfied with employment and seem to be committed to remain out of the business, to leave that to the “big boys”

But what is a Tourist Destination, and why is it important to our economy?

A Tourist Destination is a community of people who agree to share their unique story. A Tourist Destination is a business, organized and managed by the community that makes money from direct tourist spending. The business requires the Tourist Destination to   get their own customers into their business arena, to provide an inventory of attractions for sale and to create and maintain a business environment that encourages business success. It must also host its customers, selling accommodations, transportation and hospitality businesses. It is the reinvestment of the profits of the Tourist Destination community that fuels the growth of its economy.

Someone who buys a cruise is not buying a trip to Nassau, but has the opportunity to enjoy a limited-time tour of Nassau. Their contribution to Nassau’s economy is minimal. They are the customers of the cruise ship, not the destination. With their ticket they have bought their accommodations and almost all their hospitality needs., There is no need for transportation. This customer represents over 75% of our visitors.

Our definition of a resort is “an attraction with accommodations”. A resort’s story is its attraction. It sells accommodations, any transportation needed within its resort property and all of its customer’s hospitality needs. The resort’s guest is its customer, not the customer of the destination.

So, resorts and cruise ships both sell the same things a Tourist Destination sells (its story, accommodations, transportation and hospitality), and the three compete for customers globally. In the case of the Bahamas, only the local Tourist Destination is not pursuing its business interest with its resources. Its resources have already been committed to the success of its competition.

Krior to 1970, governments supported activities and events that brought visitors to Nassau, the destination. Events like Speed Week and the Miami-Nassau Powerboat Race and promotional trips that supported local nightclubs by exposing stars from the Cat and Fiddle and the Conch Shell produced  a constant flow of visitors that kept hotels like the Prince George, the Winsor and the Carleton full. Once the focus was shifted to the full promotional and financial support of the resorts, those hotels and nightclubs died. With no visitors in the destination itself, the attractions died as well, leaving the hapless tourist destination business with no customers, no product to sell, therefore no profits with which to fuel the economy’s growth. And that is where we are today. We are boasting of the success of our competition and counting their customers as our customers. Anyone who says we are not succeeding must be crazy. On the other hand, are we feeling it yet?

“I only got into this to help my people. Look at all the jobs.”

For the past forty years, governments have paid for the resorts to get customers, neglecting their own business. Somewhere along the way, our own business as a Tourist Destination died. As noted, the resources we once put into attracting Tourist Destination customers have been committed to the cruise ships and the resorts. The fact that they are our competitors is not an issue. Competition is both healthy and potentially productive. It is the willful neglect of our own business that is the issue.

“I don’t know how I got myself in this mess.”

Ya lie.