TTIA Helps Keep Turnstiles Turning and Tourists Coming to Texas Destinations
TE recently spoke with David Teel, President and CEO of the Texas Travel Industry Association (TTIA). TTIA represents an array of travel and tourism-related business in our state, including hotels, airlines, attractions, campgrounds, convention and visitor bureaus, advertising firms, restaurants, travel agencies and tour operators. Mr. Teel shared his thoughts on the current state of the travel and tourism industry and its importance to the Texas economy.
TE: How is the Texas travel and tourism industry performing as the state and the country continue to rebound from a weak economy these past few years?
David Teel: That’s an interesting question particularly for our industry, in travel and tourism. Because when people talk about recession, they look at the most recent recession three or four years ago. And I think people lose perspective of a recession that happened back in 2001 that was immediately followed by the events on 9/11. That was a huge blow to our industry. And just as we thought we were about to recover comes 2007, and we had another recession. So we’ve been hit doubly-hard over the last decade. This has not been the best decade to be in the travel and tourism industry. That being said, the last couple of years for us have been pretty good. Some of our attractions members with Texas Travel Industry Association have had some record years. It’s spotty. It’s not something we see all over the state. But particularly if you’re a business, if you’re an attraction located in one of the hot spots for travel and tourism in Texas, you’ve done pretty well the past couple of years. Not all sectors have shared in that success. Obviously the airline industries have had their challenges over the last several years. The hotel sector still lags a little bit behind where they’d like to be in terms of revenue per available room; daily room rates, and occupancy. But they’re almost back to where they were. So overall, with the qualification that it’s a little spotty from place to place, we feel pretty good about where we are right now, and hope the national economy continues to hold so that consumers feel that they have the disposable income to continue to travel.
TE: What does a strong travel and tourism industry mean for the Texas economy?
David Teel: We are one of the largest service export industries in the state. A lot of people tend to forget that or don’t realize that about travel and tourism is that we are an export -- we’re selling our product to people outside the state. And a really added benefit that comes with that is that you can’t export our jobs. Our jobs have to stay here, so that’s a really valuable aspect of our industry ... Texas is a very strong state for in-state travel. Personally, I think a lot of that is that you have to be a committed traveler to get outside the state of Texas if you’re in a car. You’ve got to drive five or six hours to get out of Texas depending on where you are. And that positions us very well. But we also have a large population base, a very good land transportation system in the state, we love our automobiles - that all cues everything up for a very strong travel market. And our economy has generally been better than a lot of other states. So we’re well-positioned for a stong in-state travel market. It probably constitutes about somewhere between 60 to 70 percent of the overall market. The vast quantity of that 30 percent or so that’s left is domestic travel and that will come primarily from our shoulder states - Louisiana, Arkansas, Oklahoma, New Mexico - just because of proximity. And because we have a critical mass of tourism product that I think they don’t have and it’s hard for them to get it. So we’re a very popular destination there. In the midwestern part of the country, straight north from us, we are a good beach destination. We are the First Coast, not the Third Coast, for many people located there. Internationally, Texas is a growing market as a destination. We have just this past year increased from number nine to number seven, as a state destination. A lot of people don’t realize that. Domestically, we’re the third most popular state destination. People don’t realize that, either. It’s a big part of the Texas economy. And the economic impact that comes with that travel, overall travelers spend about $63 billion in 2011 in Texas. That’s direct spending; no multiplier, no in-direct, no deduced -- that’s hard cash coming in. And about ten percent of that’s from international. So international’s very important for us. We have two hub airports here, of course, with Bush in Houston and DFW up in Dallas. So we can actually get people here. So we’re very well-positioned to grow the international market. And that’s where the growth potential is in terms of new visitors to our state and new dollars to our state.
TE: How many Texans are employed in the travel and tourism industry and what types of jobs are they. I imagine it runs the gamut.
David Teel: I’m glad you brought this up because that’s my personal project right now. The jobs that go on here, and it’s a big project for TTIA. There’s some research that’s been done through the Office of the Governor with their Economic Development and Tourism division that shows that direct employment in the industry is slightly over 500,000 Texans. And when you factor in the indirect employment, that grows to well over a million Texans who depend upon our industry for their jobs. We’re actually working on a project right now on an industry jobs project. My suspicious is it’s going to show grow and even more jobs that our industry provides. And I think that’s one of the great best kept secrets about the travel and tourism industry is the types of jobs that we provide. We are a huge employer. And much of the growth that’s happened in jobs in Texas and in the nation, actually, over the last 12 to 18 months has come from the leisure and hospitality sector, and that’s only a small sliver of the travel and tourism industry. That would include things like attractions and hotels and restaurants. A very important part of our sector, but a very limiting part – it doesn’t include transportation sector or a lot of the other professional sectors that are out there. And when people look at us from a leisure and hospitality standpoint, they often limit us as an industry to what we call the customer service jobs – those front-line jobs, the ambassadors for our industry. When you go to a restaurant, it’s your server. When you go to a hotel, it’s the person who carries your bag in, the person who opens the door for you. Those are great jobs, but they’re often perceived as being low-paying jobs. And what we have in our industry is a whole back of the house, which is really the core of what our industry is. Those include jobs like me – the CEO of an association. There are business CEOs out here. There are marketing, advertising, and public relations professionals. There are engineers, architects, and medical personnel. It goes on and on. We’re like any other industry, with all the professions that everybody else does. But we aren’t perceived as providing those kind of jobs. We look at ourselves as a job provider and having a core to our industry, which are those professional and highly skilled positions that we’ve talked about and trained skills development positions. But the added benefit that we provide, I don’t think many other industries do provide. Of the thousands and thousands of job opportunities that we create during different seasons of the year – primarily the summer months where we can hire your high school students and your college students, the second wage earner in a family, we put those people to work. And it fits a need. It’s a market need from a workforce standpoint. For people who can’t or don’t want full-time employment. We provide the opportunity to put them to work part-time or seasonal. And for many of these young people, whether they decide upon a career in travel and tourism or not, they are getting valuable skills development, valuable experience that they’re going to put to good for somebody down the line. And we hope it’s with our industry. We have story after story after story of people who started off as bellman in hotels who are now CEOs of hotel corporations. So we think we’re also a great industry for career development, for career advancement and for staying in the industry for a long time. So we’re a valuable job provider.
TE: What are some of the new destinations and travel hot spots here in Texas that are keeping the industry growing?
David Teel: This year in particular, 2012, has been one of the most robust years in my days in this industry that I’ve seen. We had the new Pleasure Pier come on-line down on the seawall in Galveston. It’s really a kind of throwback to the old boardwalk kind of experience. And it’s on the site of what used to be the old historic Flagship Hotel. So the foundation is still there and what was unique about that was that in its day the Flagship was, I think, the only hotel, at least in this country, that was built over water. Of course, the last hurricane down there kind of did away with that, but Landry’s moved in and refurbished that … The Pleasure Pier has been going great. It’s been very popular there and it’s added a new dimension to the landscape there in Galveston, which they’ve needed after that last hurricane. It’s a welcome addition to their tourism. SeaWorld, of course, added their Aquatica Water Park – a major addition to an already significant attraction. The Schlitterbahn resort hotel on South Padre Island, they went in and bought what I think was the old Holiday Inn down there and put in a 221-room hotel and indoor waterpark that’s pretty much adjacent to their outdoor waterpark. Six Flags Over Texas added the new SkyScreamer, the world’s tallest swing ride. Those are a few exciting things. And in 2013, the new thing that’s going to be on the tourism landscape will be at the Fiesta Texas Six Flags Park in San Antonio. They’ll be replacing the old Rattler wooden roller coaster, which has been there for a long time, with something called The Iron Rattler. I understand it’s going to be technological marvel as roller coasters go because they’re actually integrating steel and wood into the overall construction of it, so it’s going to have the ambiance to it, but be a lot smoother ride. It’s been a pretty significant year for new attractions, which is a pretty good sign for the economy. Companies are investing in expansions. And, of course, I’d be remiss if I didn’t mention Formula One coming to Texas and the Austin area.
TE: Can you talk a little bit about the role TTIA plays in supporting the industry and encouraging travel and tourism?
David Teel: We’re not necessarily a marketing organization; we’re an organization that serves our members and tries to create a positive environment for the industry. But we do have some marketing programs that do focus on in-state activity. We have a program called See Texas First, which is an integrated marketing program targeted at Texans. It’s do that just that – see Texas first before you take your dollars outside of the state. I think we have, with the exception of snow skiing and gambling, probably every experience anyone would want to do. And we can do it better than a lot of other places. So what we do is try to create opportunities for our members in the industry to market to Texans and tell that story and promote the destinations and attractions that we have. Internationally, we don’t do a whole lot – we rely upon the Governor’s Office with their Texas tourism program. They have a robust international marketing effort. And we have some members who do some very strong international marketing activity. From the international standpoint, most of what we do has indirect influence on the industry through policy initiatives and policy development at the federal level and even at the state level that helps to create an environment and an atmosphere that’s conducive to travel and conducive to a positive business climate for those in our industry. And we work with some national organizations like the nonprofit arm of the U.S. Department of Commerce. They have an office called Brand U.S.A., which is the first national advertising marketing promotion function to promote the U.S.A. as a travel destination. We try to provide as much support to that activity as we can, seeing how Texas is beginning to emerge as a growing international destination. And then other things like visa reforms – just making it easier for people to come into the U.S. – particularly from places like Brazil, where the Texas brand is a great brand there. So whatever we can do to make obtaining visas easier for people we think is a good thing … We also take a look at the overall tax and regulation environment that is in the state, making sure that there’s a common sense approach to that. We like to be a resource for decision makers at the state level and provide as much reasonable input as we can from time to time just to be sure we’re keeping a good environment for the businesses and also a good environment for the consumers. We want Texas to be a very strong, robust economy. That’s a big issue for us. We’re always interested in different aspects of our industry, whether it’s heritage tourism, cultural tourism, the arts, parks and wildlife or outdoor activities. So we’re always interested in policy initiatives that help grow and sustain those things. And another initiative that’s very important to us and to the state is the day public school starts in Texas. The current law requires a fourth Monday in August start date, which we think makes a heckuva lot of sense for a lot of different reasons. For the taxpayers in the state, we think it makes a great deal of sense because it saves so much for school districts in terms of non-instructional costs and administrative costs required to operate a school district. Those savings and the additional travel period that is generated through a longer summer period help generate tax revenues that go back and help pay for education and support more teachers. We are an industry that values an educated workforce as much as anybody else. That’s an important thing for us, too.
TE: How has the industry changed over the years, particularly as travel and tourism-related businesses utilize new technologies?
David Teel: I’ve been in this industry 20-plus years and there was a day – and it wasn’t that long ago – when the typical traveler would, as a family, spend weeks, if not months, planning that big summer vacation. And they would spend all this time researching where they wanted to go and collecting travel guides and a lot of printed information. Boy, that’s changed. With the advent of the Internet, mobile technologies and social media that’s out there now these days we see a lot of what I’ll call impulse travel. Instead of weeks or months, people are making these decisions in the matter of hours or days. Which has been a real challenge for us because many times you don’t know what’s coming until it’s upon you. If you’re managing a hotel and Friday afternoon at one o’clock it looks like you’re going to be 50 percent full and all of a sudden by midnight you’re 100 percent full, you’d better have bought all the food for your restaurant and have enough wait-staff on board. So it’s a good problem to have, but it’s a fundamental shift in the way the consumer reacts to the industry, the way transactions are conducted, and the way we can deliver information out to our customers … But it’s an interesting situation we’re in now days, because as much as everybody is a consumer of the new technologies that are out there, the popularity of some of those traditional travel guides and things, it’s still there. There’s still a strong demand for that. And a lot of people like to have those publications in the car with them when they hit the road … The Texas State Travel Guide – that’s an iconic piece of travel literature. Years ago we thought if we could get a million of those out to consumers every year it’d be great. And they’re still doing it today. Even with the advent of the new technologies that are out there, that book remains hugely popular.
TE: And finally, what should every Texans know about their state’s travel and tourism industry?
David Teel: I think people should know that we are predominately a small business/entrepreneurial industry. That means that a lot of those half million to a million jobs that we talked about are driven by small business. Yes, we have some huge employers like the airlines and the SeaWorld’s that employ thousands of people. But it’s still all about the small businesspeople -- people in our communities throughout the state who are hiring workers, who are communicating with consumers and generating travel. And that travel not only generates revenues for those businesses, it’s creating jobs in those communities and there’s a domino effect with the tax revenues that are generated of that business. There’s no better tax for a Texan to have than one that’s paid by somebody else. And that’s what travel-generated taxes are. It is such a value to a community because you’re bringing visitors into a community and those visitors are helping keep your property taxes lower, your sales tax rates lower because they’re providing additional revenues that help fund your schools, pave your roads and pay for public safety. A lot of times people see us as just being a fun, family entertainment-driven industry, but, in fact, we’re business – as much a business as anybody else.