SWOT Analysis of Providence, RI as a Tourism Destination
Providence, RI is an up and coming second tier destination for both leisure and travel visitors. Still unknown to many travelers, the city experienced a resurgence about 15 years ago with focus on revitalizing downtown, building a sustainable meetings and conventions package, investing in arts and culinary, and making the downtown area a safe place for visitors to walk about. The CVB’s mission is to market and promote this beautiful downtown area with a goal of bringing in visitors, both near and far, corporate and social, to experience what the entire destination has to offer. A few notable elements of the destination are:
- Top quality hotels representative of all traveler tastes
- The incredible Restaurant Scene, fueled by Johnson & Wales University
- Boutique Shopping on Westminster, Wickenden, and Thayer Streets
- Historic Sites like the First Baptist Church in America
- Cultural Sites like the RISD Art Museum
- 8 Colleges & Universities
- Great localized neighborhoods, like the East Side
- A top 10 Little Italy in America, Federal Hill
- Unique Attractions like WaterFire
- And so much more!!
The Bureau itself is a 501(c)6 not for profit organization funded through public dollars and private marketing partnerships. The CVB employs 22 full time employees and another 18 part time volunteer ambassadors. The Bureau operates two visitors’ centers – one on Sabin St. in the lobby of the RI Convention Center and the other in the main CVB offices located at 10 Memorial Blvd. across from the Providence Place Mall. The CVB has an annual operating budget of $3.2 Million and strives to complete a zero balance budget each year. As such, it is the CVB’s responsibility to book large-scale meetings, conferences, and events into the destination utilizing the area facilities for future years as well as to promote Providence, RI as a premier leisure destination.
To close out 2016, the Bureau had one of the most successful years to date. After reviewing the performance of each department, the staff at the CVB could not have been happier with the results! Some highlights were as follows:
- The Convention Sales Team generated 108,412 total room nights for the destination; 65,345 of those room nights were tied to bookings at the Rhode Island Convention Center
- The Marketing Team secured the equivalent of $1.8 Million in editorial content highlighting destination partners in various magazines including GQ, Travel & Leisure, Saveur, and Food & Wine.
- The Membership Development Team was able to grow the CVB Membership by 14% raising the total membership to 432 Members.
- The Convention Services Team was able to increase the average satisfaction score for convention planners from 83% positive to 85% positive
This is just a small sample of the many accomplishments of the CVB team over the past twelve months and none of these could be made possible without the support of the CVB’s strongest partnerships, such as:
- The Rhode Island Convention Center
- TF Green Airport
- Lou Hammond & Associates PR Firm
- Providence Economic Development Commission
- The Omni Providence
For purposes of this case, we will exam the sales team at the CVB in greater depth:
The CVB Sales team was successful in generating 108,412 contracted room nights for the destination. 60% of these bookings (65,345 rooms) are tied directly to larger scale conventions utilizing the Rhode Island Convention Center and surrounding hotels inclusive of the Omni Providence, Providence Biltmore, Providence Hilton, the Courtyard by Marriott, the Dean Hotel, the Hotel Providence, and the Renaissance Providence. The other 40% of the bookings (43,067) were scattered throughout the state and consist of mainly single property bookings in the City of Providence and Warwick, RI as well as larger sport tournaments that have utilized the facilities throughout the state.
Assessment of the PWCVB Sales Team
The total room nights break down into the following categories, Association Meetings (56%), Corporate Meetings (13%), Sport Events (25%), and Social (6%).
108,412 total rooms marks a 13% increase from the previous year’s result of 94,318 total rooms and breaks a streak of 4 years in a row where the sales team has failed to reach their annual goal. The team’s goal for 2015 was 100,000 rooms, which they surpassed by 8%.
The sales team is currently deployed in the following territories and segments:
Mike: Sport & Tournament Groups
Eldad: Northeast United States (New England, New York, New Jersey)
Tiffany: Midwest United States (Primarily Chicago)
Chris: Washington DC & Southeast United States (based in Washington DC)
Bryan: Social Market (collectors, hobbyists, reunions, etc.)
CVB Sales Team Member Sales Goals, Actual Results, and Experience:
Mike: 16 Years – 33,000 room night goal; booked 38,349 in 2015 (116%)
Eldad: 12 Years – 22,000 room night goal; booked 24,561 in 2015 (112%)
Tiffany: 18 Years – 23,000 room night goal; booked 24,320 in 2015 (106%)
Chris: 3 Years – 13,000 room night goal; booked 10,032 in 2015 (77%)
Bryan: 1 Year – 9,000 room night goal; booked 11,150 in 2015 (124%)
After reviewing the contracted bookings it was found that the best markets for the CVB to generate business opportunities were Boston, New York City, Northern New Jersey, Rhode Island, Washington DC, Chicago, Atlanta, and Colorado (which mainly produces sport bookings).
In addition, the CVB team found themselves competing for business mainly with Columbus, OH; Hartford, CT; Spokane, WA; Baltimore, MD; Indianapolis, IN; Philadelphia, PA; and Austin, TX. For the most part, they lost the most business to Indianapolis and Baltimore. In further analyzing reasons for losing business to these destinations two main factors are contributing from both destinations: Airport accessibility is great in both cities; and, each city has been offering clients various grants (through an opportunities fund) to offset additional expenses occurred in the destinations – which is currently something our CVB does not offer.
The CVB Sales team currently does not purchase any advertising promoting meetings and conventions in the Greater Providence area. Instead, the team’s strategy is based on face to face meetings with clients, tradeshow appointments, Direct mail and email campaigns to past clientele, and the meetings section of the CVB’s website, goprovidence.com. Using these methods, the team was able to conduct 267 individual sales appointments, exhibit at 16 industry tradeshows generating 349 meeting leads for the destination, and conduct 37 site inspections with interested clients. Once a client came to Providence for the site inspection, the closing percentage grew to 86% contracted from about 37% without a site inspection. The CVB team believes this personal approach is an asset that sets the destination apart from the competition
Enhancing Team Performance and Meeting Sales Goals
As a destination, the sales team is seeing an excellent uptick in hotel room rates, as of writing this report the average daily rate in Providence is $153 and $105 for Warwick with an occupancy of 87% in Providence and 68% in Warwick – increases in all categories year over year. Providence has also been consistently selling out on Saturday, Monday, and Tuesday evenings due to leisure travel over the weekends and a high convention volume on Monday’s & Tuesday’s. Based on these results and the team’s overall performance in 2016 it can be assumed that the demand for meetings and events in Providence is high and the CVB is in a fortunate position where they can select the right bookings for the destination.
The year has not been a complete success for the team as they have also been faced with several challenges to booking business within the destination. A few major contributing points are as follows:
Lack of Breakout Space at the RI Convention Center: Providence is an in demand destination for scientific association conferences. Given the presence of higher education as well as reasonable proximity to the major pharma and biotech companies in the Boston area, Providence is a budget friendly alternative to meeting in the Massachusetts Capital. The challenge lies in the number of breakout rooms required to host many large conferences in this market segment. At current, the convention center is offering 1 grand ballroom (10,000 sq. ft.), a larger exhibit space that can divide into 4 sections (100,000 sq. ft. total), and 18 breakout rooms of various sizes (depending on air wall configuration.). In an analysis of lost association opportunities it was found that a driving reason was the lack of space within the building. The majority of these opportunities require 2 large ballrooms, 1 for dining and 1 for general sessions, and a minimum of 25 breakout rooms for concurrent tracks of smaller meetings located under one roof. On average, however, these groups only require 50,000 – 75,000 sq. ft. of exhibit space.
Lack of Sports Facilities within the Greater Providence Area: The Sports Commission lost 12 bids for tournaments this past year due to lack of adequate space to host sporting events. 8 of these opportunities were basketball tournaments that the CVB has utilized high school gymnasiums throughout the city for in the past. Due to the high demand and current schedule of programming, these courts are unfortunately maxed out on availability. The remaining 4 opportunities were all soccer tournaments, which faced a similar scenario to basketball as high school turf fields are at max capacity. These lost 12 events represent nearly 50,000 total rooms nights that could not be realized. The sports commission believes there are two potential solutions to this challenge, 1 is to build a multi-sport complex somewhere in the destination and the second is to work with the colleges and universities in Providence to gain access to their facilities. The second scenario has been pursued in the past and the schools have had limited interest in partnering.
Effects of DMO Sales Goal on Destination’s Economy
Limited Indoor Connectivity of the facilities used in citywide bookings: In analyzing lost opportunities from the 2016 year, a major contributor to a client’s decision to book elsewhere was that only one hotel is attached to the Convention Center via skybridge. The City lost 8 citywide bookings (which would utilize 4 hotels each) during the months of November – April because of weather concerns and clients not wanting their attendees to have to walk outside in the event of winter conditions. Overall, the feedback from the clients was that they liked the convention center, Omni, Courtyard, Biltmore, and Hilton – but felt each hotel other than the Omni was too far of an outdoor walk for their attendees. The CVB countered in each scenario by offering a rotating shuttle service at the client’s expense, however this was not viewed as a viable alternative.
Limited Access to Direct Flights into the Destination: TF Green is a smaller regional airport offering airline services from US Air / American, JetBlue, Southwest, and limited niche carriers both domestically and internationally. TF Green is an extremely efficient airport with over 98% of flights arriving and departing on time, however clients have stated that it is extremely hard for their attendees to book a direct flight into Providence. For the most part, Midwest and West Coast attendees would need to make at least one connection (sometimes more) and this is seen as a major deterrent to booking the destination for top tier clientele who’s attendees are used to arriving the day a conference starts and departing immediately upon it’s conclusion. The Bureau Sales Team has identified 4 potential bookings in the past year that did not book Providence due to the limited airlift.
Lack of Marketing Support: For the past several years the CVB Sales team has noticed a decline in the effectiveness of printed advertisements targeting meeting planners to book their events within the city. After analysis these ads proved to be expensive and were producing little results in the form of lead generation. Given this result, the decision was made in 2015 to transition the budget that was allotted for advertisements and instead use those funds for client events in key demographics. To date, the CVB help 4 key customer events in New York City, Denver, CO, Philadelphia, PA and Boston, MA resulting in several leads and bookings for the destination. The transition seemed to have been working, however, the sales team has reported a significant decrease in client’s initial knowledge of the destination. They are finding they are spending the majority of their time educating clients on the basics of meeting in Providence, rather than talking specifics about actual client programming. As such, the CVB sales team is requesting that dollars be reallocated to a marketing campaign that will target planners in a unique way and help educate them on the basics of the destination.
Identifying Barriers to Increased Sales Team Success
To further complicate this challenge, the team is finding more and more clients only want to communicate via email and increasingly via text. Phone and in person appointments are becoming harder to secure and the team is of the belief that a strong social or mobile strategy could help them regain their foot in the door with key clients.
For the upcoming fiscal year the CVB is anticipating a similar total budget to 2015 and expects operating income to be right around $3.2 million to support all functions of CVB operations. The funding sources will continue to be the hotel tax collected, strategic partnerships with area stakeholders, and dues revenue from members broken down as follows:
Hotel Tax Collection: $2.8 Million
Strategic Partnerships: $300,000
Membership Dues: $100,000
Of the total operating budget, each department can expect the following budgetary allotment based on the previous year’s spending:
Sales: $1.3 Million
Marketing: $1.3 Million
Services: $200,000
Administration: $400,000
*All departmental budgetary figures include staff salary
The United States Travel Association is spearheading a new initiative heading into 2016 called Meetings Mean Business. Under this campaign, USTA is funding several destination grants with the goal of building infrastructure within destinations that supports both leisure and business travel. These grants can be used for anything relating to the cause of putting more heads in beds with examples including, but not limited to: Building of Convention Centers, Revitalizing outdated tourism infrastructure, revamping and upgrading transportation hubs, designing and launching marketing campaigns, etc.
This is an unprecedented offer and program by USTA who will be funding up to 5, $10 Million grants for qualified cities who are successful in pursuing this opportunity.
This program was announced in the final quarter of 2016 with the application for grant approval due on March 31st, 2017.
The CVB published these results along with the rest of the 2016 accomplishments in the latest annual report detailing a full year in review. As typical of the close of the year, the CVB also reported these results to their Board of Directors. This 15 person panel is a collective of volunteers appointed to serve as the strategic voice and visionaries of the CVB. Their role is to understand the current state of affairs and solidify strategic directions for the agency to pursue in the coming year. After the presentation of the final results of the year, the CVB Board then sets goals for each of the Bureau’s departments. In the past 4 years – and no differently this year, the CVB Management Team has asked the Board to keep the sales goal flat to the previous year for the upcoming year and each year it has been the belief of the Board that the goal should increase – the past 4 years the goal has gone up by 2,500 room nights each year settling for 2016 at 100,000 for the year despite the team missing the mark in 2015, 2014, and 2013. The CVB management is asking for 100,000 room nights to remain the goal, but given the results from this year, the Sales Team at the CVB is anxious to hear what goal the Board appoints them with.
During this meeting, the Board will also be presented the five major challenges identified by the sales team and will be expected to determine a strategic plan to overcome some of the hurdles to increased sales.
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