FROM CANYON TO COVE: Battered travel industry fights back

It was “ground zero” in the battle to save the travel and tourism industry, and I was on a reconnaissance mission to find out how hoteliers and others whose livelihoods depend on visitors planned to stay alive.

It was a sun-drenched Wednesday, and some 300 members of the Orange County Tourism Council were gathered at the beautiful St. Regis Monarch Beach in Dana Point. That’s where the ill-fated and ill-timed AIG meeting was held earlier this year that caused a national furor over big spending by big corporations who were also asking for big taxpayer bailouts.

AIG went on to receive its bailout, and yet another, and is still in business.

But, after comments were made by President Obama and others in the administration lambasting the practice of corporations holding meetings at high-priced luxury hotels, the conference and convention industry bubble burst. Meetings were canceled all over the country, and the Meetings Industry started having to defend itself.

So far, the Meetings Industry has not recovered — and that is just one component of a frightening freefall in the visitor-serving sector around the country.

Who knew there was such a thing as a Meetings Industry; but a lot of the economy — local and national, big business and small — depends upon gatherings that bring hundreds together in one place, and Laguna Beach is no exception.

Attack on Meetings

The “Attack on Meetings” — as the AIG incident’s fallout has come to be known in the visitor-serving sector — is just one body-blow to an industry that was flying high until the 9/11 terrorist attacks, according to Bruce Bommarito, chief operating officer and executive vice president of the U.S. Travel Assn., who was the confab’s keynote speaker.

“Since 9/11, the world has changed,” Bommarito said. International travel has hit the skids, except for visitors from the U.S.’s nearest neighbors, Mexico and Canada. Gone are the days when big-spenders from Asia and Europe flocked to our shores.

One reason is the “airport experience,” including long lines, immigration interrogations, and just plain unfriendliness on the part of the gatekeepers, Bommarito says. Before even buying an airline ticket, international visitors now must wait weeks or months to obtain visas, and efforts are under way to streamline this process but the never-ending war on terror isn’t helping matters.

With the recent global scare over a possible swine flu pandemic, the hoteliers gathered at the Tourism Council’s annual conference listened with rapt attention — and some gallows humor — to the group’s new strategy to capture market share in an age of tightened spending: branding the whole county with a slogan and logo designed to attract and retain visitors.

Branding effort

Led by the Newport Beach Conference and Visitors Bureau’s energetic Chief Executive Gary Sherwin, the Tourism Council spent a lot of time to come up with this slogan: “The OC — Forever Summer.” They handed out DVDs with the logo and urged attendees to incorporate it immediately into their advertising.

Getting everyone in the travel industry — from hotels to visitor-serving businesses — on board with this “branding” concept was a key part of the conference. To get this point across, the Tourism Council brought in a heavy-hitter from the East Coast: Tim Pearson, who used to work for the Irvine Co. and said he named the Irvine Spectrum. Pearson is now with global marketing firm KPMG.

‘Can’t get much worse’

Pearson’s mantra was that “the rules have changed,” and the old rules that businesses used to live by are dead and buried. It’s a new day, and a new strategy is called for.

Still, some light is being seen at the end of this dark tunnel, according to Pearson. But it’s not a very bright light.

“Consumption is not contracting as rapidly as it was during the second half of 2008,” Pearson reported.

“The recovery will not be driven by consumer spending because it’s hard for households to reduce spending further. Consumers have stopped spending on anything unnecessary so it can’t get much worse than it is today.”

Not only are some families losing jobs and homes, but those whose finances are intact have the gut-wrenching fear that the worst could happen.

So they are staying home, having “staycations,” or not vacationing at all in fear that their jobs will be ripped out from under them if they leave town.

Movies and short getaways, day trips or overnighters, are more appealing because they are cheaper and feel safer, he said.

Deals and freebies

For an industry based on luxuries — after all, vacations are not food or medicine — the trick is to give people something extra. Call it “deals,” value-added or by any other term, it’s freebies.

“People like free stuff,” Pearson said. For example, a hotel could offer a free night’s stay, or tickets to an event, as part of a package.

People are catching on to this trend, and savvy travelers are asking for “deals” and free stuff when they check in, he says.

Overall, Pearson said that vacation spending could retrogress by 30 years, with spending like it was in the 1980s — which was way before many of these big hotels were built.

This bodes especially poorly for Laguna, which depends upon its hotel bed tax for much of the city’s revenues. Budget-cutting is already in the works, as reported by City Manager Ken Frank in this issue (article on page A1).

And yet, for all this, it could be worse.

The downturn in Southern California is nothing compared to the collapse in Vegas, baby.

CINDY FRAZIER is city editor of the Coastline Pilot. She can be contacted at (949) 380-4321 or cindy.frazier@latimes.com.