Rhode Island Tourism Overview

O’REILLY: I think it comes from two or three sources. First of all,
it’s a source of entry-level jobs for many high school and college students
looking for summer employment. And those tend to be at or not too far above
minimum wage. Secondly, there is a lot of part-time employment in the industry
by choice of the employees. But when that is translated into a number of people
employed and a number of dollars of payroll paid, sometimes lazy or unsophisticated
analysis will divide one by the other and say, oh gee, that’s not much per person
or much per hour when the number of hours worked in a week or a year is limited
by the choice of the employee. There are many employees who choose to work part
time year-round. We have other employees who choose to work seasonally only.
They leave and go to warmer climates or the ski areas in the winter and come
back in the summer. So I think those are two of the reasons why the industry
is often perceived as low wage when it’s really not.

DEPETRILLO: I think it’s the perception across the country, although it’s changed quite a bit. I think it used to be much worse. I share Tim’s passion about the quality of the jobs this industry offers. It does provide employment for a huge number of people. And again, it does provide entry-level employment, part-time employment, but it also provides a huge range of career opportunity for people that quite frankly need an opportunity to show what they can do and then lead them to good paying careers that last a lifetime.

PARE: I don’t want to get too far along without addressing the impact
of Sept. 11, 2001 on the tourism industry. Are we still seeing the effect of
that fateful day, and what impact?

LHOWE: Yes, the immediate impact of Sept. 11 for New England as we saw it was after the first shock of the event, there was a huge interest in New England travel. We saw the traffic in New England just skyrocket, because it was a drive market. I mean after Sept. 11, people were looking for a drive market plus there are people who are looking to get away from New York City to clear their heads and to get back to normal. And that drive market is sustained. The research that we’ve seen is that a lot of people are still reluctant to travel far from home on their vacation not out of any real specific fear. They just want to be able to get home if something happens. But all in all, there was of course heavy impact in the cities. But once you got out of the cities, the more tourism – beach and mountain areas – they’ve bounced back pretty well.

PARE: How about Newport, Tim?

O’REILLY: What we have seen, however, is a loss of foreign business. We don’t see anywhere near as many foreign businesses coming. And we have seen a loss of corporate meetings that required flying. The local corporate meeting market from Boston to mid-Connecticut will drive to Newport. We had at Castle Hill two cancellations and two pickups for the weeks after Sept. 11 of corporations canceled because they had a lot of flying in. And another group out of Boston called and said they had canceled their meeting in Las Vegas and were looking for a place to come. I think that the economy has affected tourism in Newport in the last year or two more than Sept. 11 once we got over the initial shock.

PARE: David, at the state level, what do you think?

DEPETRILLO: At the state level, certainly after Sept. 11, I think for our lifetime, travel really has changed. We immediately began as much local drive promotion as we could. We worked with the region to get the word out of our discount packages, getaways to try to encourage people to travel. But certainly travel behavior has changed. But you know what? Rhode Island has what they’re looking for. They’re looking to be more in touch with history, heritage, places they could feel at home with their family. And that’s what we offer. So I think that we’re well positioned in the post-Sept. 11 economy. We do need to be concerned about the changes in the economy relative to business travel, which has had a substantial impact.

PARE: The state Legislature recently turned to the tourism industry
and tapped them for a 1 percent hike on meals and rooms, to at least dig away
a little bit at the state deficit. I wonder first of all, what do you folks
see as the impact of that legislation?

O’REILLY: I think that the impact on the individual diner is relatively
minimal. (For businesses) they have to make changes in printings if you’re going
to get a cup of coffee and so forth and so on. I think that national statistics
will indicate that approximately 70 percent of the food and beverage purchases
in the state are by the state’s residents. So we have in fact taxed ourselves
another 14.3 percent in sales tax. It will affect the larger meeting groups
because meeting planners as professionals will negotiate hard with the venue
for hotel rooms, for all the convention services and so forth. And then they
add up what the total package is, and when Rhode Island’s package has an additional
cost in it, even 1 percent – and they’re talking about a $100,000 total expenditure
– all of a sudden that becomes a significant number in the decision. And Hartford
is putting a new facility in for convention that will compete with our facility
across the street. And I will almost guarantee you that there will be some groups
that will go to Hartford once that is opened, when they see some differences
in the taxes.

O’NEILL: Well, it doesn’t seem to have hurt the individuals. In other words, if you had a $50 meal, and you paid 50 cents extra, I think it was a burden on the proprietors who had to work out all the bookkeeping and so forth in the meantime, and the monies are returned to the cities and towns in which they are generated. As far as the convention business, I was talking with our director of marketing, Peter Gardner, and we were thinking that that could be an exemption made where conventions just pay 5 percent or something if you’re selling over 100 meals to give an advantage to the person who is trying to market conventions. But if we’re facing tough times around the town where property taxes are so high, and they’re trying to develop some source of revenue for us particularly although we might be paying the difference for also tapping into so many visitors during the high season that there might be some sort of a compromise they could make that would help the convention business but continue to roll a few more dollars into cities and towns.

PARE: David, how is the state using the Internet to promote tourism?

DEPETRILLO: I couldn’t overestimate the importance of the ‘visit Rhode Island’ Web site. We generated one-third of the leads coming into our office from vacation travelers on the Internet on our Web site alone. Just in the last year, it went from 20 percent to 33 percent of the inquiry. That’s huge for something that didn’t exist just a few years ago. Almost all of our inquiries came from advertising our articles that were in the paper. And what happens is when the people come to a Web site, they keep coming back.

PARE: One thing you have certainly heard in the past is that our tourism
industry, our Chambers are too fragmented. You hear what Newport does for Newport,
what South County does for South County, what northern Rhode Island does for
northern Rhode Island. Is that the case? How do we get to the point where we
are working together and everyone can benefit?

O’NEILL: Well, I don’t know where that nasty rumor began because we
all work very cooperatively and share as much information as we can. We meet
about nine or 10 times a year with the division of tourism so we know what marketing
programs are happening. As far as the regions, we all know each other on a first-name
basis, and now with the trade shows together we represent the state of Rhode
Island by districts. We’re all interconnected on the Web sites. We’re connected
to the state site so that anyone surfing can pick events all around the state
in the off-season and visit. So I feel we work very cooperatively, and I’d like
to know specifically what we’re not doing cooperatively that we could do better.

O’REILLY: I disagree with Anne. I think that there’s a lot more that
we could do to market ourselves as a statewide destination. And I think that
the private sector needs to get much more involved in figuring out the direction
of those marketing efforts because we spend millions of dollars collectively
marketing for our own properties. And we understand an awful lot about media
selection and that media brings results and so forth. And it hasn’t been done
always in a coordinated way. Yes, there is some coordination, but a lot more
could be done. And we’re looking at … the Tourism Advisory Council, and we’ve
had some speakers from other jurisdictions come in and talk to us about what’s
being done in other parts of the country.

PARE: What do you see as Rhode Island’s target audience? Who are we
going after right now to bring to the state?

O’NEILL: In South County, we’re going to be meeting some of those challenges because we have a new $4.5 million fish and wildlife educational center opening in Charlestown. We’ll have a “duck boat” coming on board which you have here in Providence and Westerly, so we’re constantly adding product. There’s a fast ferry now leaving Quonset to Martha’s Vineyard, so there’s an extra way to spend the day there for the family. So I agree. We need more hotels in South County to accommodate the people now that we start bringing them in. And with the anniversary of Rhode Island, we’re building the Ryan Center which is an 8,000-square-foot facility which will be accommodating home shows, shows for families, the Boston Pops are coming down for a Christmas concert. We have a golf show coming. And all those attractions at the university where there is even parking beginning to offer more and more families now year-round. It will take awhile to build it up, but it’s all happening. And I would say most of our market draw from T.F. Green because it’s such an easy run down to South County and then there’s the drive market from Connecticut, New York, Pennsylvania. The East Coast would be your target. We get a lot of requests from California. We monitor every single phone call that comes into the office so that we can judge exactly what advertising is working, how well it’s working so we know – have a track record of history now. We know what works well. And we try to do a very successful job of only putting our dollars where we know we’ll get a good positive response. And it seems to be working.

PARE: We are seeing hotels go up all over Warwick and all over the
state. And then certainly the big topic here in Providence is whether there’s
going to be another one. But you’ve been talking about this for a long time.
It would certainly seem like one would show up if one were put up there in Galilee
or somewhere. Why don’t we see more?

O’NEILL: Well, we have one in Hampton and Coventry which is a bit out in the country, and they’re breaking all records. They’ve been doing a fabulous job. There’s one proposed on Route 1. I’m already reading about plans for one in South Kingstown and so forth. I hope that one comes off. I just noticed that one is not going up in Quonset, which we had hoped for. So that area around Quonset Point I think could sustain great hotels if it had the right facilities for the businesses around the Quonset campus and then the leisure travelers who would come in. And we’re not as affected by the outside world. We’re certainly affected by the economy, but leisure travel seems to hold up the economic picture and for all families are very important. We’ve done a survey, and about 88 percent of the people interested in our part of the world are coming to beaches.

PARE: What about hotels? Do we need more in Rhode Island overall? Are
we filling up the ones that we’re building?

O’REILLY: We need them in downtown Providence to support the convention center. I was on the Convention Center Authority for eight years, and we went through numerous explorations of that. It’s a combination of reasons why we haven’t seen more in downtown Providence: economic, site availability, politics and what have you. But we certainly could use more in downtown Providence. The rest of the state I think is a matter of market forces where we’re seeing hotels springing up around the airport in Warwick because there’s a market for them. We’ve seen some hotels developed in Newport but not most recently when there was a market for it. The seasonality of our visitation and our visited destinations, i.e. Newport, South County and so forth, is a major constraint on capital investment in hotels. There’s no question about it. I think we have a lot of empty hotel rooms in Rhode Island from Columbus Day to Memorial Day. And that’s the issue we’re dealing with. Downtown Providence does not have that many empty rooms when the convention is in town. And that’s another issue.

PARE: David, what’s your take on it?

DEPETRILLO: I think hotel rooms are just like the new terminal at the airport, just like the convention center. This is important to the infrastructure of tourism. It has major changes over the last two decades. There were parts of Rhode Island that had no hotels. And that really has changed. Blackstone Valley has some new hotels now, Warwick, etc. In South County, they need more hotels. The bed and breakfast industry has flourished there, as it has in Newport. So it’s not just hotels. But, yes, we can use some more as Tim mentioned. Downtown Providence is important – it’s important to have more hotels there not just for the convention center, but we need a mix of business. We need business travel, convention travel and leisure travel.

PARE: What about the importance of the airport runway?

O’REILLY: It’s a no-brainer. It’s too bad it’s such a difficult process because any informed judgment is that we need it. It will expand the market for us in many number of ways. Yes, some residents are inconvenienced, but you know, that airport has been there for what 50 or 60 years? And if you don’t like runway noise, you may have to move. I know I’m probably irritating some people by saying it. That’s the fact.

PARE: David, how critical is the future success of T.F. Green?

DEPETRILLO: Well I think obviously it would provide more direct service to the West Coast. And I think the business community it’s important to them. But it’s a complicated issue. There are a lot of local issues that tend to point out that need to be addressed. But there’s no doubt that the industry indicates to us it’s something that they would like to see.

PARE: Jonathan, any thoughts on that?

LHOWE: It’s a complicated issue. And long-range planning, you know, I think has to be considered. Can T.F. Green really expand and meet the future needs 30 years down the line? Now there’s city all around it. I think that’s really the key. Is it really feasible to get that airport to where it seems to have to be in 20 or 30 years, or do you start now trying to figure out what the alternative would be? It’s a hard decision and an expensive decision. But I think people know the value of it, whether immediately the runway has to be expanded will be beneficial. I don’t know. I think if it had been done three years ago, it would have been very expensive with the downturn of the economy and Sept. 11, but you can’t predict the future by that.

PARE: Dave, what are Rhode Island’s greatest competitive strengths
in attracting tourists to Rhode Island?

DEPETRILLO: You know, I mentioned before that we have what people are
looking for, but I think also it’s the quality of what we have. Again, it’s
the strong cultural assets that we have and the really strong scenic beauty
and natural environment. You can’t match Narragansett Bay and coastal area with
the Atlantic Ocean, Block Island, the architectural heritage again, I think
some of the finest, again, in the country, the museums, some of the best music
festivals, national reputation, international reputation for our restaurants.
This is what people are looking for. This is what I think makes us different
than many other places. It gives us that competitive edge in Rhode Island.

O’REILLY: Atlantic Ocean and Narragansett Bay first and foremost. That’s
our really distinguishing characteristics. After that then the cultural tourism,
architectural tourism certainly have a lot to do with it.

LHOWE: I think the return visitors when they come to Rhode Island not
only find the beauty in the culture and the history, but it’s easy to see. You’re
not fighting off the Cape Cod traffic. You’re not having to drive long distances.
I think when people return home from Rhode Island, I think what they’re telling
people is it has all these assets, but, you know, I’m not sitting in traffic,
and I’m not having to wait forever to get a dinner at a restaurant. You know,
it’s on a human scale. And I think that’s a great asset.

O’NEILL: We can keep building on the (attractions we offer) and as everyone mentioned, people are very friendly in Rhode Island. So I think you get a nice feeling and you want to return again. It’s very accessible in New England. It’s part of New England. And that’s the other thing we forget that Europeans know the words ‘New England’ and Rhode Island is a state in New England, so we have an advantage of being located within a group name the whole world recognizes as New England.

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