Leaders in Utah’s travel and tourism industries report a years-long trend of growth in the state. Utah has become a global destination, but obstacles loom in the form of continuing public perception problems and infrastructure challenges due to a growing population and the influx of travelers to the state.
Cody Adent, Cliffrose Lodge
Dirk Beal, Deer Valley Resort
Mike Cameron, Christopherson Business Travel
Dennis Copyak, Le Bus
Cliff Doner, Visit Salt Lake
Kaitlin Eskelson, Utah Tourism Industry Coalition
Jason Ford, Sheraton City Center
Kathy Hirst, Morris Murdock Travel Salt Lake
Steve Kieffer, Big-D Construction
Scott Lunt, Western States Lodging
Joel Racker, Utah Valley Convention & Visitors Bureau
Nathan Rafferty, Ski Utah
Cecilia Romero, Holland & Hart, LLP
Greg Ross, Hess Corporate Travel
Ryan Starks, Heber Valley Tourism & Economic Development
Sara Toliver, Ogden/Weber Convention & Visitors Bureau
Vicki Varela, Utah Office of Tourism
Nancy Volmer, Salt Lake City Department of Airports
A special thank you to David Williams, associate managing director of the Utah Office of Tourism, for moderating the discussion.
What is the current state of Utah’s travel and tourism industry?
VARELA: The best way for Utahns to understand the impact of our industry is the tax relief per Utah household. About $1,200 of tax relief per Utah household is generated by tourists. Those are people who visit here and then take their children home to educate them in other states. Spending last year was $8.4 billion, which translated into $1.2 billion in tax revenues.
RACKER: The Kem C. Gardner Institute has done some work analyzing the travel economy in Utah County. We are about a $750 million industry down there, generating about 8.4 percent of the tax base for Utah County. So in a county that may not typically be associated with tourism, we’ve got wonderful attractions with Sundance and Thanksgiving Point. We are a significant player in travel and tourism—it’s not all south. It’s not all skiing. It’s really spread out throughout the state.
There have been reports that international visitation has dropped 4 percent in the last year. Have you seen that in your segments, and what do you attribute it to, and how are you dealing with that?
COPYAK: That 4 percent probably represented all the Chinese visitation that we lost last year. For whatever reason, the Chinese market really dipped in our particular transportation company. We had about a 35 percent drop from the year before in Chinese business, but we picked up other areas. Some of the domestic travel picked up a little bit. With the pound not being very strong, the UK still held its own. So the rest of the internationals held on OK.
ADENT: We did see a little bit of a drop. For us, it was actually from Europe with what’s going on with the EU. But with our economy being so strong, our occupancy and our ADR was still up year over year. What’s great about tourism is in our global economy, as one economy is doing better, another one is typically not doing so well. It’s just cyclical. So we did notice it, but it was replaced by domestic and in-state travelers. It was still a really great year for us.
VARELA: There was some drop with Canadian visitors and from the European Union. This goes back to a strong dollar and to the value of having a very diverse portfolio of visitor type so that when one segment is down for one reason or another, we fill in with domestic or international accordingly.
VOLMER: The airport is the anomaly here because last year we had record growth. We saw 24 million passengers in 2010 and a 20 percent increase in international travel. I’m not sure how to explain that. We actually saw an increase in the international travelers last year.
BEAL: In Ogden, it’s always a longer stay, higher spend, which has been great and comes typically at key times—for instance, South American business during Easter has been great, and they are staying longer, spending more. So we’re probably flat to a little up in that market.
Last year we lost the OR show, and Visit Salt Lake has been working hard to keep the convention business strong in light of that. How is that effort going?
DONER: What’s really tough about losing OR is that we didn’t really have a lot of time to fill that in. It takes us several years to book these groups. And the bigger the group, the longer it takes to book them in. Our lead time is between two to six years.
We found out about it basically about this time last year. So we weren’t really able to do much about January. We lost about 5 percent of overall revenues in January. Summer, we don’t have that filled in yet for 2018. We do have some groups—despite not being able to book Outdoor Retailer, we have actually set another record for the third year in a row for booking conventions in Salt Lake. Now, that spreads over several years, but so far we’re doing quite well.
TOLIVER: With shows like Outdoor Retailer, it’s not just Salt Lake that feels that absence. The compression we experienced up north made for a very nice January, which we felt the loss of this year. But with them bringing in some other great shows like ASAE and MPI and some of these opportunities we’ve had to host meeting planners—FAM Tours for Go West was here recently—those are all great opportunities, not just for Salt Lake as the host city but for all of us who are in that meetings market to showcase what we have to offer to those entities.
BEAL: We probably lost four or five direct pieces of business as a result of Outdoor Retailer leaving; it’s the ripple effect. We do a lot of hard-good product launches, so bike products or trail shoes. We lost some, but we’ve had a couple groups who want to be here because they feel the conservation conversation is not continuing, and they want to participate in it. So they’ve actually chosen to come back and keep the dialogue going. That was a little bit of a silver lining.
STARKS: We have a family-owned company from Argentina that’s relocating to Midway. They’ve come up to the OR show for the past several years. They came into our office the other day and said, “The show was good, but so what if it’s gone. We love Utah and we love what we found here in Midway, to the point where we’ve actually bought a house and we’re opening a business in 2018.” So I know it’s big loss in many ways, but the brand that it created really put the word out there, and we’re still seeing some of the benefits from that show.
How is the corporate and business travel sector faring?
CAMERON: Corporate travel is strong right now. We tend to be a leading indicator in the economy. And the economy is strong and, therefore, corporate business travel is very strong. Our business is up significantly over last year or the previous year. We represent the outbound of the business travel segment, and our international business is up significantly.
BEAL: Probably 20 to 25 percent of our business is group, and so it’s predominantly leisure visits. In a year like this, with the snow challenges, that’s been carrying us. Our group and corporate business is up, especially non-winter business. So it’s a nice balance to leisure. It fills in those periods, and it’s growing. Mostly that’s Front Range or Utah-based corporate business.
RACKER: We had a record year in group business last year at about $19 million of measured economic impact for groups. One was a Department of Planetary Science meeting, so they were international. We had people from all over Europe. Then we were able to close on one for next year, the American Association of Physics Teachers. And these groups are almost 3,000 room nights over a five- or six-day period. So for downtown Provo those are huge. And it just completely changes the face of the community when these groups are in.
LUNT: We talk a lot about conventions, but the corporate meeting sector is getting bigger all the time. There are some big companies that continue to come into the Salt Lake market that produce a whole bunch more meetings and sleeping rooms than the conventions do.
In looking at the numbers for 2017 versus ’18, our surrounding states were pretty flat year over year, but Utah actually grew a couple points in occupancy. So we’re doing well.
RACKER: We’re feeling that with the Silicon Slopes and all the new hotels that are opening. We are growing our occupancy number even though we’ve added supply, and that’s really unusual. And that’s why we talk about the travel economy moreso than just convention, because convention is a piece of it and the tourism is a piece of it. It’s really the overall travel economy. It’s been very solid.
HIRST: We’re the largest meetings and incentives company, and most of our clients are outside Salt Lake. Most of our Asian clients and South American clients are showing a lot of interest in coming to Utah, especially the Park City area, the mountains. So we’ve seen that growing quite a bit. Our meetings and incentive business sees more Utah business, which is really great. It’s not necessary to have our people fly off to Dominican Republic or somewhere like that; they can be right here.
How is the winter sports industry doing in light of not having as much snow as we usually benefit from?
RAFFERTY: Our business is really, really healthy. We have to have two things to have an incredible ski season: one is a cranking economy and one is a good snow. Not too much, not too little, but snow at the right time. We’ve got the economy cranking right now. But we have been a little bit snow-challenged.
It’s absolutely incredible, the product the resorts are providing, given the lack of Mother Nature’s help. And it’s tough for us. A little bit is the motivation, especially of residents, because you look out the window and there is no snow down here, but skiing is really quite good. I don’t know that any resort would be open just in Park City without many millions of dollars of snowmaking investment. The same goes for Snowbasin. It has world-class snowmaking and really good ski conditions right now.
We’re coming off the heels of three record seasons in a row. Things couldn’t be stacked up more perfectly for us. I think we will get an Olympic bid sooner than later, whether that’s ’26 or ’30. That’s a big deal for us; it’s not just those 17 days during the games, it’s all we talk about for the seven years leading up to the games. So that’s going to be incredible.
Skiing is big business in this state. It’s a $1.4 billion business now, 20,000 jobs, one of, if not the largest, export in the state. But almost all of our problems are problems everybody else would love to have. The big one for us is infrastructure and getting people in and out of the mountains. It’s becoming more and more of a challenge as we see more and more people want to come and enjoy our resorts.
Fortunately, that’s a problem we can fix. It’s just an expensive problem sometimes. But we’ll see some changes coming up, and the Olympics can help in that regard as well.
Nancy, can you tell us a little bit about how the airport reconstruction is progressing?
VOLMER: We’re not expanding; we’re not renovating. We’re building a totally new airport. In 2020 we’ll be opening up a new central terminal. We’ll just have one check-in point. Right now we have three terminals. We’ll have a new parking garage with twice as many parking spaces. We’ll have a north concourse and a south concourse. We’ll be opening those on the west side in 2020. Then we’ll start demolishing the current facilities.
So in 2024 we’ll have a totally new airport. And it’s going to be beautiful. It’s something we really have thought through as far as what the experience will be for our passengers. We have some beautiful art installations that are going to be reflective of the beauty of Salt Lake and Utah. It’s just going to be so much more spacious too. There will be more windows with more light. I think it’s going to be something that the community can be very proud of.
It’s having a huge economic impact on the community too. It’s a $3.6 billion project. We’re updating our economic impact study, but we bring in about $3 billion a year with this project. So it’s a huge project.
VARELA: The efficiency of our airport is famous. And this will be the first complete post-9/11 airport in the country. So you think about the way we are all tortured through these bizarre lines that they’ve had to create for security at airports all over the country—Utah’s will be thought through carefully from the ground up so that the whole experience will be efficient and elegant.
CAMERON: The airport is the common denominator that binds us all together. We all rely on the airport, and we are very fortunate for the investment they are making because there is so much economic growth happening here. It’s clearly outgrown the capacity it was originally built for.
And the major tenant in the airport is a great tenant, Delta Airlines, and we’re fortunate to have their commitment to Salt Lake City as one of their major hubs in the U.S. They are firing on all cylinders right now. We’re fortunate to have the partnership between Delta Airlines and the Salt Lake International Airport to fuel all of our businesses now and in the future.
VOLMER: If we didn’t have Delta’s support we could not build this facility. Another big message we try to get out is that there are no local taxpayer dollars being spent on this project. It’s the users that are paying for it, and the airlines as well. So it’s their support that has allowed us to be able to build this new airport.
Some of our national parks have experienced constraints at certain times of day or certain times of year. How are we dealing with that?
VARELA: We’ve actually defined our strategy as the Red Emerald strategy. There is a very rare stone that is mined only in Utah called the Red Emerald. That’s what we want the Utah tourism experience to be: a rare and refined experience.
We want to draw customers who will spend more time, who will engage more intensely with local communities. That’s engaging more intensely in everything we have to offer on the urban front, the great new food scene here, the great new theaters, the remarkable ways that our whole Wasatch Front has evolved over the last 10 years or so into a more interesting urban experience than people can ever imagine.
And then also engage our visitors more intensely in the rural experience. Certainly the Mighty 5 will always be a core part of our brand promise and differentiation, but getting people off the beaten path. We’re proud that we’ve started to lay the groundwork there, because we continue to have an increase in visitation at our national parks, but the visitation to our state parks is growing even faster. That’s exactly what we want.
In San Juan County, as an example, their tourism growth was above 30 percent last year. That’s exactly the sort of thing that we want to see, where maybe we attract a visitor to go have an experience with a Native American learning about how you build a hogan, about Native American food—really deep diving into those off-the-beaten path offerings. We’re really looking at quality visitation, not quantity of visitation.
And using the tools of technology to serve up to our potential customers the kind of experience that we know might be custom fit to their passion, given the fact that we can keep track of almost everything they do online. We know what their interests are. This is an opportunity that is probably the most important thing we’ve been able to take on over the last several years.
ADENT: Consumers and travelers, they want unique experiences anyway—things that aren’t what everyone else is experiencing. They want to go on a path that no one else has taken, and take a picture from that point of view. In Southern Utah, there is so much more to offer than what people are consistently seeing in the media. It’s on us to do a better job and be more responsible in what we’re speaking about and informing the consumer of these other incredible things.
What are some other challenges we’re facing in the industry right now?
BEAL: It’s the workforce and workforce housing specifically for us. It’s all about that. We do not have a labor pool. A labor pool cannot afford to live close to our businesses. As a private business, we manage 350 private units for employee housing. Park City has made a huge commitment to workforce housing, but it’s still not enough. And specifically in our resort, people want to live in the community. They want to be a part of that. So while we have housing in surrounding areas, it’s still not what they are looking for.
RACKER: Planning for population growth—the infrastructure to get up and out of the canyons. They’ve projected that Utah County will be the size of Salt Lake County in the next 25, 30 years. And if just a portion of those people want to enjoy American Fork Canyon and some of the other canyons, it’s going to be a real challenge.
We need to be willing to tackle some of these really expensive fixes and look at ways that we can spread that out, because we don’t want to take away from what we’ve got, but we know the population is going to grow. We’ve just got to be prepared for it and we’ve got to hope that community leaders will tackle those things and not say, “Well, somebody else will take care of it.”
FORD: The modernizing of liquor laws. And laws that we currently have that are significantly different from other states. As a hotel, when you’ve got a father and two boys that want to come in and just have burgers, and the dad wants to sit down and try a Squatters or an Epic while they are sitting there watching a game, then being maybe forced into a position where we’re having to say, “Well, you’re not welcome here,” and then take 20 minutes to try to explain local liquor laws, “but let me point out some other places where you can go or maybe have your kids sit in the lobby while you go inside.”
We have so much to offer, and there are so many wins that we have against our competitive set in other states, but then we do these things that just make us seem archaic and silly.
RACKER: In Provo we’ve got one full-service hotel, and they have put significant money in upgrading that product, and yet now we’re faced with the exact same issue. And where we’ve got a few watering holes in downtown Provo, our Marriott is the nicest place where you can get liquor, and it’s just going to dramatically change what they do. Especially for these international groups that just want a nice place to socialize. So I hope that they can address these things, because it isn’t just a Salt Lake issue. It’s a statewide issue.
ROMERO: A bigger issue is that you have sister states that are marketing our silly liquor laws. You have them highlighting how ridiculous they are. Now, nobody wants people that are drunk driving. We can all agree with that. But I’m not sure that our current legislation really addresses that issue, because the casual drinker understands, we have one or two and then we go home. It’s a problem if we have one and then we’re pulled over and we’re sent to jail. That’s going to do nothing for our travel and tourism industry.
FORD: The law almost seems counterintuitive because, again, going back to my hypothetical family, I’ve got a dad and two kids staying in my hotel, and his commute home is to take an elevator and go back upstairs to his room, but the law is going to force me to then send him out.
DONER: It’s the unintuitive nature of what we’re doing with it. It’s not the controls that we are trying to implement, it’s that what we end up with is something that someone from outside can’t make any sense of.
ADENT: Last week, we were working with our St. George economic development team hosting a company from California that was pursuing St. George as a possible location to relocate their business. The first place that we were going to go to dinner, we realized they didn’t have liquor. So we definitely can’t go there.
So we went to another location. They got there and went to a bar area, and they had all ordered a glass of wine, and then they went to go sit down at the table, and they weren’t allowed to. So then we had to have this conversation with them explaining why that is. And we just don’t need an obstacle like this to get in the way of this huge economic growth that could be supportive for our area because we can’t carry our wine from this part of the restaurant to this part of the restaurant.
ESKELSON: Last year, after the blood alcohol content law was passed bringing it down to .05, we could directly correlate $1 million of negative media value within the week following the law being passed. That was very specific to that law. And it targeted about 250 cities that we can all argue globally are in our competitive set.
TOLIVER: The reputation issues continue: It’s liquor, it’s public lands, it’s a whole slew of things that continue to harm our efforts at letting the world know about what a great place we are to visit. I continually tell my elected officials that even though there are other states with crazy liquor laws as well, we come into the conversation with preconceived notions and perceptions that a lot of other states don’t have.
What opportunities and challenges do we have with our amazing state parks?
STARKS: It’s very important that we continue to develop infrastructure, trails, new state parks. Utah just made Echo the 44th state park. So as we mature and continue to grow, our reputation is going to go beyond the Mighty 6 into the Magnificent 44.
VARELA: Many of our state parks have had double-digit increases in visitation. Goblin Valley, in fact, has had a 103 percent increase since 2014. Fremont, 49 percent increase. Goosenecks, 37 percent. Sand Hollow, 56 percent. Our state parks could be national parks in other states, and people are starting to understand the magic of that.
RACKER: Even with some of the challenges we’ve had on Utah Lake, it was up 22.9 percent last year. So our state parks are jewels, and we just have to make sure we spread that visitation out, as the Office of Tourism is doing, and really promote our state parks.
Although I will say, too, that some of our state parks are feeling some of the same pinch as our national parks. You look at Dead Horse or you look at Jordanelle, and they are full to capacity. That’s a challenge but an opportunity to even take it down one more step, get those people from the park into that next trail system or that next recreational opportunity.