Monday, June 24, 2019

Puerto Rico marketing organization shifts narrative as tourism grows

By on June 12, 2019

Discover CEO Brad Dean (Courtesy)

Works with limited budget to promote ‘thriving’ island

SAN JUAN — In its latest quarterly presentation to the tourism industry, Discover Puerto Rico, the island’s destination marketing organization (DMO), showed rising travel bookings, length of stay, spending and improvement with regard to how the island is perceived abroad.

While the main message from the DMO officials was that tourism is a driving sector for the economic recovery of the island, they also alluded to limitations in possible areas of expansions because of what Chief Marketing Officer Leah Chandler described as “a compressed budget.”

Act 3 of 2017, which established the private, nonprofit DMO, provides the organization a $25 million budget derived from the island’s hotel room occupancy tax revenue. This year, the DMO’s first, it also counted on rollover funds from Meet Puerto Rico, whose sales and marketing operations it absorbed, but are non-recurrent and will not be available next year.

For fiscal year 2020, Discover Puerto Rico will operate with the $25 million appropriation but the law that enabled it only allows it to receive $5 million from any partnership it may go into. The organization is also looking to attract Community Development Block Grant funds from the recently approved U.S. disaster aid legislation.

Nonetheless, Discover Puerto Rico CEO Brad Dean said, “Our biggest limitation right now is because of the budget limitations, we can’t market in all of the [places]; we don’t have resources to market everywhere we could grow, so we have to be very selective and limit our investments to the best short-term strategies, but we are laying the groundwork for greater results in the future.”

Dean also explained that, while the DMO knew “$25 million would not be enough to double the size of the visitors’ economy,” the first step was to establish a successful strategy and argued that the data gathered by its consulting firm Arrivalist and public relations firm Ketchum confirm the organization is headed in the right direction.

Arrivalist collects information from location data gathered by cellphone apps and focuses on “purposeful arrivals” to the island, meaning layovers or cruiseship-stop passengers are not included in calculations. The firm showed that the average stay is longer than four days, and increases  for people who have been exposed to promotional material.

The DMO’s director of research and analytics, Alisha Valentine, said during her presentation that, “the most exciting piece of data we’ve seen to date is lodging revenue topping anything we’ve seen before on this island.”

Valentine explained that the 17.2 percent increase in revenue compared with the 2017 peak comes from a rise in the daily rates and growth of independent, short-team rentals such as booked on Airbnb and Homeaway, which now comprise 25 percent of the lodging market. She added that the numbers of visitors is slightly less than in 2017 but current travelers are spending more.

The DMO’s presentation not only focused on numbers but also on its marketing and communications strategies. Among those presenting was Sara Garibaldi, sales and economic development director for Ketchum, who spoke about an expanding digital presence, at 11.5 billion impressions so far, with “an ad value of $202 million” since July last year.

Garibaldi said one goal is to “shift the narrative” about Puerto Rico from recovery, or “comeback story,” to a message that tourism in Puerto Rico is thriving, and pointed out that earned media coverage, or that gained through promotional rather than paid efforts, was already shifting in tone.

Dean added that the move away from recovery talk was made “because every decision we make is informed and guided by research. We can’t just simply react and respond based on emotions or what we think to be the case, we test our theories and validate our strategies. So the research is showing that the publicity and the promotion is working, perception is improving and now we can begin to pivot from ‘we are open for business’ to ‘Puerto Rico is Thriving.’”