The Providence Riverboat Co. once served primarily local customers. Its boats would take groups out on the Providence River for cocktail cruises, leaving from the deck of the Hot Club.
Then the company joined the Providence Warwick Convention & Visitors Bureau, took advantage of its promotional efforts and began attending its monthly meetings for business owners. As a result, its business model changed.
“Not only did our revenue nearly triple that first year, but the manner in which we conduct business changed dramatically,” co-owner Kristin Stone said. “We now cater to Providence’s thriving tourism [industry].”
About 7,000 passengers embark annually on the company’s narrated tours, WaterFire Providence rides and seasonal specials.
Stone’s optimism is shared by many across the Ocean State. After changes in marketing leadership at R.I. Commerce Corp., a rebound from the poorly received “Cooler & Warmer” campaign of 2016, and tensions over funding formulas, the state’s six tourism districts seem to have found serenity.
Working relationships with each other and Commerce RI are positive, many tourism leaders say, although they’ve yet to come together on a long-sought tourism plan for the state.
“I see us in a very comfortable, working spot,” said Robert D. Billington, executive director of the Blackstone Valley Tourism Council. “There’s a smoothness and evenness that allows our state to excel. … I like not spending a lot of time defending. Right now, we are poised for a good period of growth.”
Billington was among 19 members of Rhode Island’s Special Legislative Commission to Study Methods for Growing Tourism, which analyzed the industry for the past two years. The group’s final report, released in April, included a recommendation that the state begin to form a long-term, tourism-development plan.
The suggestion was Billington’s – made, he said, because the state needs a sustainable way to promote its very different assets equally.
[caption id="attachment_288064" align="aligncenter" width="696"]
UNIFIED PLAN: Tourists walk in front of Ballard’s hotel and beach club, one of Block Island’s oldest and most popular businesses. Jessica Willi, executive director of the Block Island Tourism Council, said a unified plan for tourism requires communication and money.
/ PBN FILE PHOTO/K. CURTIS[/caption]
WHAT’S THE PLAN?
Tourism leaders and businesses dependent on the industry have been vocal about the need for a unified approach to selling the state for years.
So, what’s taking so long to even begin the formal process? The answer isn’t clear, although historically limited funding (boosted in recent years under Gov. Gina M. Raimondo), lack of direction and the sheer number of people involved are contributors, says VIBCO Inc. CEO and President Karl Wadensten, a Commerce RI board member since 2009.
“We have so many things in Rhode Island that we don’t have plans for and we’re reactionary,” he said. “We chase these things around like a moth. There’s a lot of overlap of roles and responsibilities. It’s kind of like calling 911; unless you point and say, ‘You call 911,’ no one’s going to do it [because everyone thinks someone else already has].”
Changes in tourism leadership at Commerce RI have slowed progress as well, others say.
In 2016, under Betsy Wall’s brief tenure as chief marketing officer, little communication took place between the districts and Commerce RI, says Evan Smith, CEO and president of Discover Newport.
After Wall resigned in the wake of Cooler & Warmer, her successor, Lara Salamano, began to open lines of communication, Smith and others say.
“She started to make key investments within the state. … She was able to take a broken program and … get it moving in the right direction,” Smith said.
Her cautious pace did frustrate some districts, but tourism leaders say the signs of improvement during her two-and-a-half-year tenure are obvious.
“We’ve made a step in the right direction,” said Kristen Adamo, PWCVB president and CEO. “There is a strategic marketing effort with the [current ‘Fun-Sized’ campaign] and a media plan for advertising.”
Adamo and others say what’s needed next is the same type of direction seen in successful campaigns from other states, such as “I Love NY” and “Pure Michigan.”
“Typically, what happens in a state is there’s an overarching sort of umbrella that everyone else falls into, and different tourism districts incorporate aspects of that,” Adamo said.
Postindustrial Blackstone Valley, for example, with its bike trails, hiking paths, rivers and lakes, attracts a different type of visitor from those who head straight to South County’s beaches, Billington pointed out.
“Our resources are different, and our story is different, and I have to promote differently,” he added. “The state has to look at those differences. The state needs a brand, but we’re part of the sub-branding. That’s why it’s important to have a very, very vibrant marketing campaign that includes every city and town that wants to be included.”
But Heather Evans, Commerce’s new chief marketing officer, maintains that the state does have a plan – and that’s to stick with what’s working. Hired in late May after Salamano took a job in the private sector, Evans says she’s yet to read the state commission report. She points to increasing returns on ad spending as a result of the Fun-Sized campaign, and a “total traveler economy” that’s grown 29% over the past six years.
“The results speak for themselves,” Evans said.
[caption id="attachment_288063" align="aligncenter" width="696"]
YEAR-ROUND DESTINATION: People enjoy the beach in the coastal village of Watch Hill in Westerly. Heather Evans, chief marketing officer for R.I. Commerce Corp., said there’s a huge demand for the state’s beaches in the summer but R.I. needs to look at how to create demand during other times of the year so it can become a year-round destination.
/ COURTESY JOHN WOODMANSEE[/caption]
BUILDING ON MOMENTUM
According to a report by the analyst group Tourism Economics, Rhode Island hosted 25.4 million visitors in 2018, with 8 million of that number staying overnight. That’s compared to 24.8 million visitors, 7.8 million of whom stayed overnight, in 2017.
The report also tracked a nearly 5% tourism industry growth in spending statewide in 2018 and 29% growth over the past six years.
The total “traveler economy” increased as well, growing from $6.5 billion in 2017 to $6.8 billion in 2018, Tourism Economics found. Totals account for visitor spending, tourism-related construction and supporting industries.
State lawmakers and other members of the legislative commission on tourism say increasing that momentum is paramount, but it’s not quite clear yet exactly how.
“Tourism is doing very well,” said the commission’s head, Rep. Lauren H. Carson, D-Newport. “Should there be a stronger, more coordinated tourism plan? Always. I look forward to what this new tourism director has in mind.”
Evans says that for now, the state is sticking with the series of short videos comprising its Fun-Sized campaign, launched in 2017. The videos, which show bursts of activity and panoramic views of the Rhode Island landscape, run as travel ads on websites such as Trip Advisor.
The rotation now includes more than 30 videos showing would-be travelers the fun packed into the smallest state in the nation. About $3.10 was spent on hotels for each $1 spent on the ads, an improvement on the $2.30 spent on hotels in fiscal 2018, Evans said, citing data gathered by an online tracking program used by Commerce RI.
The ads have generated more than $30 million in advertising value over the past two years, she added.
“We know we’re seeing a very substantial return on investments, and we know we’re not seeing diminished returns,” she said.
Commerce RI is working with an estimated $5 million tourism budget this year, an amount similar to last year, agency spokesman Brian Hodge said. It will, however, lose $194,000 this fiscal year to the tourism districts from a redistribution of a lodging tax on room rentals collected by third-party hosting platforms such as Airbnb.
FUN-SIZED
[caption id="attachment_288065" align="alignleft" width="170"]
FUN-SIZED: Examples of Rhode Island’s Fun-Sized advertising campaign. Launched in 2017, the short videos show bursts of activity and panoramic views of the Rhode Island landscape and run as travel ads on websites such as Trip Advisor.
/ COURTESY R.I. COMMERCE CORP.[/caption]
Carson believes there is room for more integration between tourism districts and Commerce RI. On Block Island, some in the tourism industry agree.
“I guess a little bit more information coming from the state to us, as to what they’re doing, would be helpful,” said Julie Fuller, general manager of The National Hotel.
Her summer outlook is robust, based on pre-bookings at the 45-room hotel, but she’s not sure whether the state or her own tourism council is to thank for the strong crowds.
A unified plan requires communication and money, says Jessica Willi, executive director of the Block Island Tourism Council.
“The plan … needs to get all our boats going in the same direction – and then fund it,” she said. “It’s really more about strategy than actual art direction. … I don’t believe the purpose of that [commission] report was to say we need a new slogan.”
Establishing an online presence through advertising, especially with ads that tell a story in seconds, is key in the current market, says Smith, of Discover Newport.
“The most important tool to deploy is social media, and as part of social media, video is kind of king,” Smith said. “I think their videos have been very effective. They’re short, fun and thought-provoking. … What is key is how you market experiences. In today’s world, people aren’t being influenced by slogans, they’re being influenced by how well that campaign works.”
The Fun-Sized ads, most of which are seen by people outside of Rhode Island, are canny advertising to Stone, of Providence Riverboat, and others.
“We are fun-sized. I kind of grew to love it. I don’t think they need to roll out something different this soon. It’s kind of catchy and quirky and funny but it actually makes a lot of sense for Rhode Island,” she said.
Ultimately, though, Fun-Sized is the state’s campaign, while tourism districts oversee their own marketing efforts.
“A statewide plan is not what we do as regions. We promote our own regions. We have our own focus,” said Louise Bishop, executive director of the South County Tourism Council. “Commerce has to create the statewide plan and we make suggestions. We are asked how this would best work for us.”
[caption id="attachment_288146" align="alignright" width="300"]
MORE EFFICIENCY: Bob Burke, owner of the French restaurant Pot Au Feu and Independence Trails Providence, said Rhode Island’s tourism efforts are “terrible,” mainly because there are too many agencies tasked with promotion and money is being spent on salaries and other expenses, diluting efficiency. / PBN PHOTO/MICHAEL SALERNO[/caption]
Not all business owners agree on Fun-Sized’s effectiveness, though. Bob Burke, owner of the French restaurant Pot Au Feu in Providence and Independence Trails Providence, said the state’s tourism efforts are “terrible,” mainly because there are too many agencies tasked with promotion. Money is being spent on salaries and other expenses, diluting efficiency, he believes.
“Not enough of the money makes it to actual marketing and promotion – we’re top-heavy,” Burke said. “It’s just all sliced and diced down to the point where there’s really no one in charge of marketing the brand.”
With scaled-down administration and strong promotion from Virginia through Connecticut, Rhode Island’s tourism industry would thrive even more than it is now, Burke predicts.
“Our tourism department is focused on getting people from so far away that they’ll only come here once in their whole lives,” he said. “Rhode Island as a whole should be focused on stealing business from Cape Cod.”
WHO’S IN CHARGE?
Evans spent her first weeks on the job making the rounds of the state’s tourism districts, with an initial goal of striking a balance between the state’s marketing and what the districts do.
Conversations highlighted the need for a more aggressive “head and beds” strategy to get visitors to stay longer, and opportunities during the cooler months, beginning in September, said Evans.
“There’s already a huge demand for our beaches in the summer, so we need to look at how we create demand during other times,” Evans said. “To me that’s making Rhode Island a year-round destination. How do you make Block Island more of a popular place in September and October?”
Evans plans on working side by side with the districts.
“What I’m really trying to understand are [districts’] challenges and how we can complement and amplify what they’re doing, and making sure what the state does is additive and not redundant,” she said.
But questions about who is – or should be – leading the overall Rhode Island tourism effort persist.
[caption id="attachment_288067" align="alignleft" width="300"]
OCEAN RACE: Crowds gather to support the teams competing in the Newport leg of the Volvo Ocean Race in May 2015. In 2018, Newport was again the only North American locale to host a leg of the worldwide race, which drew more than 40,000 attendees in the first week.
/ COURTESY VOLVO OCEAN RACE/MARC BOW[/caption]
While Commerce maintains that is its role, Carson sees the tourism districts as the “backbone” of the industry.
“It’s the regional districts that are really making the charge,” she said. “They have been the consistent keepers of the roost to really make our industry what it is, without a doubt.”
Carson plans on requesting another extension for the commission, whose second one-year term expired in March. While unsure of how much time she’ll ask for, she believes the legislature should eventually create a permanent tourism commission.
“We’re not finished with the things we need to evaluate and investigate,” she said.
In addition to Billington’s recommendation for a long-term plan, the panel called for looking at the health care industry and vocational schools for opportunities to attract tourism through conventions, trade shows and similar events.
The commission also recommended that the state begin growing a “sustainable tourism economy,” study the effects of climate change on the tourism industry and take a look at the impact of expansion at T.F. Green Airport in Warwick.
TAX SHIFT
Carson’s group did see one of its biggest priorities accomplished this year when lawmakers approved a redistribution of the 5% hotel tax on room rentals collected by third-party online hosting platforms such as Airbnb, to include a cut for local tourism districts.
[caption id="attachment_288066" align="alignright" width="300"]
BREAKERS MANSION: Visitors tour the Breakers Mansion in Newport. Rep. Lauren H. Carson, D-Newport, head of Rhode Island’s Special Legislative Commission to Study Methods for Growing Tourism, said tourism in the state is doing well, but it could benefit from a stronger, more coordinated plan.
/ COURTESY DISCOVER NEWPORT[/caption]
Now, up to 45% of that revenue goes to tourism councils. State officials estimate that will total more than $194,000 during fiscal 2020, and the same amount the following fiscal year. Previously, the districts received no tax revenue from transactions conducted through hosting platforms.
Districts say the money will go back into marketing. The extra $45,000 that the PWCVB is budgeting for is to be spent on digital advertising, targeting the “Northeast drive market” from Massachusetts to Philadelphia, Adamo said.
The districts’ gain, however, will be Commerce RI’s loss, which will cut into the number of ads the agency can run, Evans said.
“This will cost local tourism businesses about $3 million in lost revenue, based on the measurable return on our ad spend,” she said.
Carson hopes the redistribution will end funding tensions involving the districts. She says they date back more than five years, when there were questions about whether the state was using its share of the lodging tax for marketing.
Then in fiscal 2018, lawmakers cut tourism districts’ allotment of the broader hotel tax (beyond third-party room rentals) from 47% to 42%, in order to divert more money to Commerce RI after the “Cooler & Warmer” rollout in 2016.
Willi recently said she’d like to see the districts’ share of the hotel tax restored to 47%.
But Carson thinks the redistribution on room-rental taxes “are the final adjustments, unless the districts give me feedback. I think a very favorable compromise has been reached.”
Discover Newport stands to gain about $50,000 this fiscal year, Smith said. Although happy with the redistribution and overall tourism funding, he would still like more information from hosting platforms on the origin of their hotel tax revenue.
“I would like to see more in-depth reporting from Airbnb,” Smith said. “There still needs to be a lot more dialogue.”
Elizabeth Graham is a PBN staff writer. Contact her at Graham@PBN.com.
