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September 29, 2006 |
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Upcoming
Events:
Save the Date: ATME Marketing Issues Forum - December 6th, New York
ATME at EyeforTravel - Chicago October 4-5th Holiday Inn at Merchandise Mart
Free Seminar: "The Brand Promise" October 4th, 9am - 11am
ATME at TIA's Marketing Outlook Forum - October 12 - 13th, Boca Raton Club & Resort, Florida.
Seminars on Partnership Marketing; Domestic & International |
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Dr. Brown's Speech
ADDRESS TO ATME’S
Marketing Issues Forum
Dr. the Hon. Ewart F. Brown JP, MP
Minister of Tourism & Transport
19th September 2006
Bermuda’s Lessons for All Luxury Marketers
Good afternoon everyone. Let me begin by thanking the Association of Travel Marketing Executives for this very kind invitation. I am honoured to address this body of industry professionals and I particularly wish to thank Jacqueline Johnson, who did so much to make this possible.
My initial reaction to the topic on which I have been asked to address you was “Hmmm…...short speech……”. Bermuda has just enjoyed its most successful 2nd quarter tourism results ever… and so I have thought long and hard about what I might share with a room full of competition!
The reputation of Bermuda as an island destination that stands for style and elegance is a hard-earned one. Before many of our neighbours to the south of us were engaged in the tourism industry, Bermuda had successfully lured the very rich from the East Coast of the United States. Their world of ‘country-club’ exclusivity was replicated in Bermuda. To this they were pleased to add a touch of English custom, which provided an increased feel of elegance and gentility. Through the 1970’s this was our image to the outside world… you had to ‘belong’ to holiday in Bermuda. As such, our product and marketing strategy became inextricably linked to this one demographic of visitor.
Over time we were successful. Large tracts of land were converted to tourism properties and the boom of the 70’s and 80’s began. Our streets were teeming with visitors. We had it good.
Unfortunately, the expression ‘resting on our laurels’ became the Island’s tourism policy. With an alarming lack of foresight we failed to respond to some key indicators. There were several, but perhaps the most illustrative actually comes from our cruise ship policy.
Bermuda’s location meant that any meaningful cruise from the ports of New York, Boston, Philadelphia or Norfolk had to include Bermuda. We never courted a cruise line and our attitude simply was ‘where else will they go?!” Well, they showed us. It should have been a major hint to us when the first ship sailed from New York on a 7-day itinerary for the Bahamas…. completely bypassing Bermuda. The larger ships had been designed to do just that and we ignored what this early indicator was telling us…. That there was competition now, that technology was making the world smaller and that other components of the industry was weighing in with that great consumer equaliser ….. CHOICE.
What happened to us? Our repeat visitors got old. Their children who enjoyed Bermuda as teenagers maybe came once on their honeymoons and that was it. Having let the marketplace view us in one way for so long, our exclusivity began to simply exclude. Airfares rose to ridiculous levels, with potential visitors being told by travel agents “well, its Bermuda”. The 90’s traveller was not so enamoured of the country-club world to pay extortionate airfares for a 90-minute ride. They looked elsewhere.
Our hotel product that was first rate in the 70’s and 80’s was not sufficiently refreshed in the 90’s to make it attractive. They too simply rode the wave to the shore, never attempting to stay on its crest.
By 1995 our tourism numbers were in the doldrums. A succession of ill-fated attempts at re-branding coupled with an ever-dwindling quality of hotel product meant we were in a spiral. It was as if nothing could reverse the trend.
Having painted the picture of what was, I turn now to recent history and our examination of what is. Several factors have contributed to our turning the corner in Bermuda’s tourism and more successfully marketing our kind of island destination.
Solutions: Airfares & Eliminating Seasonality
1. Airfares
With a walk-up fare of $800 return from JFK to Bermuda I knew that only a reduction in airfares would start the revival of our tourism industry.
The woes of the legacy carriers are widely known. You can guess what their responses were to our request to reduce their fares on the highest yield per mile flight for most of them.. Enter Jet Blue. For four years, first as Minister of Transport and later as Minister of Tourism and Transport, Jet Blue was courted by Bermuda. Their reputation for entering a market, increasing the number of passengers whilst stimulating lower fares meant that they were the ideal fit for Bermuda.
After many sleepless nights and much diplomacy, on May 4th 2006, Jet Blue started twice daily service to Bermuda from JFK with fares as low as $129 one way. Needless to say, the legacy carriers have matched those fares and the result has been an increase in each airline’s load factor and an increase of 8% in visitor arrivals since Jet Blue’s introduction. From the NY area alone, we have seen since May 4, a 27% increase in traffic.
Our thinking was simple … rich people didn’t get rich by throwing away good money on a bad deal.
2. Eliminating Seasonality
The history of Bermuda’s tourism is that we were open for business between May (sometimes April) and October. From November to March we were closed. We made so much money during our season that there was no need to pursue business in what became known as the ‘off/low /winter season’.
A critical element of re-positioning our tourism was to change this mindset both locally and in the marketplace. Bermuda has a wealth of pursuits that are not weather dependent and whilst we might not offer the beach experience of the Caribbean in the November to March period, we can and do offer golf, tennis, running, riding and spa.
Bermuda no longer has an off-season. Our goal is to present the marketplace with an alternative to the beach experience that is now cheaper to get to and as close as it ever was.
We have two seasons in Bermuda now, Golf and Spa and Beach and Sizzle.
Solutions: Geo-Centric Marketing & Hotel Development
3. Geo-centric Marketing
Ask yourself what magic number of visitors a destination requires to be successful. What does a tourism Minister need to call it ‘a good year’. In Bermuda our 80’s peak, by which we have all been measured, was 525,000. To some of you that is paltry, but for the size of Bermuda, the visitor experience we aim to provide and the number of hotel beds available, that number is an absolute maximum.
Additionally, tourism marketing by and large is the responsibility of the government and the Ministry of Tourism and Transport receives about $6m out of its $40m budget for this purpose. Not a lot of money, I know.
So, with these constraints of size and budget taken with increasing competition, how do we approach this whole question of marketing Bermuda?
We have opted for a geo-centric or far more targeted approach to marketing Bermuda. In emphasising those things available to visitors we have stressed that we are not an island of gated resorts, but a destination with many pursuits away from the hotel. To capitalise on this our sales and marketing team consistently pursues niche markets or event based travellers who are attracted by the openness of a visit to the Island.
We have taken the ‘know your customer’ philosophy to another level by pitching Bermuda to sectors whose travel interests can be accommodated in Bermuda. Golf clubs, running clubs, historical societies, survey respondents indicating a particular interest, all receive direct marketing, collateral and relentless follow-up from our team.
Woven into this approach is the emphasis on the proximity to Bermuda and its ideal ‘weekend getaway’ status for the romantic couple or those seeking to rekindle a flame. We invite them to “Feel the Love”.
Whenever I meet people of my age or perhaps a little younger and I ask if they’ve been to Bermuda, the response is almost uniform “Well, yes 35 years ago on my honeymoon”. We were the honeymoon destination of choice. Our aim is to re-establish that position in the marketplace and as you may have noticed we are emphasising Bermuda’s romantic qualities culminating in a Love Festival in February at which couples will be invited to slow down, renew committment, listen to slow music again and simply enjoy each other in what we feel is the world’s most naturally, romantic setting.
The elegance and exclusivity part of Bermuda’s reputation has been more difficult to manage. I think we played up exclusivity so much that we told people not to come. This mindset has been hard to charge locally also.
Patiently, though we are getting the message out that if you can afford us, you’re welcome… which is worlds apart from the country club ideal of some money still isn’t good enough to join. We want our guests to view Bermuda as their own private Island, we feel that this positions us as private but accessible…. not so exclusive as to exclude.
All of these changes in our marketing strategy are designed to recognise the fact that money is now younger, browner, more adventurous, prepared to make choices and is looking for more to do on vacation. We feel we are appealing to those travellers.
4. Hotel Development
Airfares reduced, marketing tactics on track, and an end to seasonality achieved, what about the product itself. All of those policy achievements count for nought if we are pitching a rolls-royce and visitors find a Honda.
The re-investment in our hotel product is the last piece of the successful marketing of Bermuda or any destination. We have had no major hotel development in Bermuda since the 1970’s. Within the last two years, $1.6bn in investment has been attracted to this sector. You cannot underestimate the importance of that demonstration of confidence in your product to the marketplace. It is the validation of all the other efforts and proves that the buzz surrounding the destination is real.
Our Ministry’s efforts to secure recognised five-star brands for new hotel developments have signalled our commitment to providing a first-class product for our guests to enjoy. This means you have something to sell; something which softens the blow of paying ‘Bermuda’ room rates, and something which genuinely compliments the private island feel we are trying to create.
Conclusion
Well, ladies and gentlemen, I think that’s just about enough of our trade secrets!
Truly it has been a pleasure to share with you our own experiences in Bermuda and to provide you with an overview of the hard work it takes to market an island destination like Bermuda. We are a work in progress trying to reverse a trend of two decades of decline. We have learned our lessons well and I expect that we will continue to reap the rewards of that hard work.
Thank you for your attention.
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The
Association of Travel Marketing Executives (ATME) is
a 25 year old professional association made up of senior
level travel industry marketers representing all segments including:
airlines,
hotels and resorts, cruise lines, tour operators, online
travel, international tourist offices, CVB's, state and local
tourism
offices, car rental companies, technology providers, etc.
ATME is the only worldwide organization of its kind to provide members with an
ongoing forum for the exchange of creative ideas and effective marketing solutions.
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