Only a hibernating Montana grizzly could be unaware of the drumbeat of discouraging economic news. From the crash and burn of much of our banking system thanks to poor decisions by underestimating risk to the financial distress of retailers and manufacturers, including an impoverished automotive industry, the economic news has been universally grim.
Rising unemployment (although down slightly in April), a record for home foreclosures, increased personal and business bankruptcies, untenable state deficits ($21 billion and growing for California alone), and declines in economic activity are all part of a bleak economic picture.
This same song has been playing in the travel industry as businesses and families reduce spending (and, believe it or not, borrowing) while attempting to put their financial houses in order. Airlines are flying fewer passengers, rental car companies are seeing fewer customers, and hotels are facing reduced occupancy.
The Department of Commerce reported that nationwide travel spending was down an annualized 22 percent during the fourth quarter of 2008. Results from the first quarter of 2009 will be released by the Bureau of Economic Analysis on June 16. A study commissioned by Deloitte and released in mid-May indicated that nearly half the families interviewed who planned a summer vacation expected to stay in less-expensive hotels and spend less time away from home. Although the United States saw a record number of international visitors in 2008, this bright spot had turned negative by early 2009 as economic conditions deteriorated globally.
Not surprisingly, national parks are feeling the impact of the economic downturn. Yellowstone National Park reported a 13 percent decline in 2008-09 winter visitation compared to the previous year. A portion of the drop was attributed to weather, but there seems little doubt the poor economy was an important factor. That said, the park witnessed an 11 percent upswing in visitation through 2009's first five months.
Elsewhere, Grand Canyon and Yosemite national parks reported year-to-year declines in visitation through the first four months of 2009.
Concern about the economic consequences of decreased travel caused Interior Secretary Ken Salazar to announce on June 2nd that national park entrance fees would be waived during three summer weekends. At the same time, he revealed that several park concessionaires including Aramark Parks and Resorts, Forever Resorts, and Delaware North Companies would be offering various summer discounts and giveaways.
A decline in park visitation can be expected to be accompanied by an increase in national park lodging vacancies. The National Park Service reported reductions in overnight lodging for Yosemite, Sequoia, Big Bend, and Zion of 11.4 percent, 9 percent, 8.3 percent, and 25.9 percent, respectively, for the first four months of 2009. The decline wasn’t universal, however. The Grand Canyon lodges, Stovepipe Wells in Death Valley National Park, and Grant Grove in Kings Canyon National Park reported slight increases in stays during the same period. Still, the outlook is, at best, guarded with the approach of the prime visitation season for most parks.
In general, lodge concessionaires are finding advance reservations are down; in some cases, significantly. However, they seem to believe (or hope) that an unusually large number of families will be making last-minute travel decisions, and that overall occupancy will be better than indicated by advance reservations.
Alicia Thompson, manager of sales, marketing, and public relations for Glacier Park, Inc., indicated this is true for their lodges in Glacier National Park. Brandon Kursner, general manager of the Pisgah Inn on the Blue Ridge Parkway, said that travelers are booking later, but the lodge is still filling on weekends and October is sold out. That said, his guests are spending less on souvenirs, something that seems to be true at nearly all the park lodges and gift shops. As an aside, the inn has started including a complimentary breakfast for its guests.
Phil Dickinson, director of sales and marketing for Xanterra Parks & Resorts’ Furnace Creek Inn and Ranch in Death Valley, agrees that people are reserving much closer to their travel dates, an unusual practice for foreign tourists who are the major factor in Death Valley’s summer visitation. Still, both Mr. Kursner and Mr. Dickinson appear relatively optimistic for the upcoming season.
In the current business climate, concessionaires are pursuing several avenues in an attempt to reduce the effects of the weak economy. In some instances businesses are combining several components in a single promotion.
* The most basic promotion is a reduction in the prices charged for rooms, meals, and activities.
This includes an effective price reduction when tossing in incentives such as free or discounted meals and activities. The disadvantage of this option is that, while it might attract families who would otherwise go elsewhere or not go anywhere at all, it also reduces revenues from travelers who would be willing to pay rack rate.
This type promotion is being tried to an extent, but it appears to be primarily aimed at specific groups or offered only during shoulder seasons when rooms are generally available anyway. Kenny Karst, public relations manager for Delaware North Parks & Resorts at Yosemite, said the concessionaire’s lodging is typically sold out during peak season and they are offering discounted packages only for the shoulder and off-season of October through March.
Back at Death Valley, Xanterra is offering seniors (age 60 and over) “longevity bonus” discounts of 10 percent, 20 percent, or 30 percent for stays in Furnace Creek Inn or Furnace Creek Ranch of one, two, and three days, respectively.
Glacier Park, Inc. partnered with other park concessionaires to offer a June Vacation Stimulus Package that combines lodging with 2-for-1 deals including golf, horseback riding, rafting, and tours in its “Jammer” buses. These packages are valid through June but had to be booked by May 22. The company also offered discounts for customers who booked air, rail, and car rentals through the Glacier Travel Center. In addition, the concessionaire announced its 2009 Sustaining Glacier’s Treasures Program for the second week in September that combines four nights at the motel unit of Lake McDonald Lodge with meals and volunteer work in cooperation with the National Park Service and the Glacier National Park Fund.
Jackson Lake Lodge in Grand Teton National Park is offering a You Decide package from mid-May to mid-June and from late August through late-September that gives guests who book a two-night stay a $100 resort credit that can be used for an activity such as a float trip, guided fishing trip, horseback ride, bus tour, or scenic lake cruise.
The park’s main concessionaire, Grand Teton Lodge Company, is also offering a Conservation Vacation Volunteer Package that includes a room discount at Colter Bay in return for service hours in projects such as trail maintenance, brush clearing, and cabin preservation. This package, at $120 per person per night based on double occupancy, includes three meals a day and is available September 20-26.
* A second option is to increase or redirect marketing budgets.
For example, some concessionaires may concentrate more heavily on promotions directed at local or regional markets. This alternative is more effective for concessionaires in parks such as Death Valley, Olympic, Sequoia, Shenandoah, and Yosemite that are within reasonable driving distance of major urban centers. It is also effective for smaller lodges that typically cater to locals and repeat visitors.
Bill Hecomovich of Kettle Falls Hotel, a small lodging facility in Voyageurs National Park, said that their business is quite good and he is finding that locals are spending less by staying closer to their home areas. Targeting the local or regional markets is generally less appealing for isolated destination parks such as Glacier, Big Bend, Isle Royale, and Glacier Bay where a greater commitment of time and money is required on the part of travelers.
* A third possibility is forming a consortium of affected parties.
This option offers efficiencies because an increase in business for one concessionaire is likely to result in increased business for other concessionaires or businesses in close proximity to the same park. An increase in business for Xanterra in Grand Canyon or Yellowstone will almost certainly result in increased business for Delaware North’s operation in the same park, and for businesses near park entrances.
Forever Parks and Resorts is partnering with the National Park Service, the Nevada Dept. of Wildlife, Lotus Broadcasting Company, and other concessionaires in Lake Mead National Recreation Area in a program to attract Las Vegas visitors to Lake Mead. The program includes opportunities to win trips and activities including a grand prize of a houseboat vacation on Lake Mead or Lake Mohave.
At Rock Harbor Lodge in Isle Royale National Park, Forever Resorts is offering a “Kayak Eco-Tour” that includes four nights’ lodging, meals, boat transportation to the island, and guided kayak trips. “Many of Forever Resorts operations, including those in national parks, have partnered with other concessioners and public entities to bring additional added value to visitors for staying or visiting Forever destinations,” explains Darla Cook, vice president of Forever Resorts.
* A fourth option that appears to be the choice of Aramark Parks & Destinations is the bundling of a room, meals, and activities into a discounted package made available for most of the season.
Sandy Heilman, vice president of sales and marketing, relates that the challenging economy has caused Aramark to become more aggressive. For example, Far View Lodge in Mesa Verde National Park is offering a Soaring Savings Package of a one-night stay, a half-day guided tour, and a continental breakfast for two at a price of $199. This special is offered through the summer season until October 21.
Aramark is offering a similar package at Lake Powell Resort in Glen Canyon National Recreation Area that includes two nights’ lodging, a scenic boat tour or day use of a boat, plus a daily breakfast for two. The concessionaire’s two properties in Olympic National Park – Kalaloch Lodge and Sol Duc Hot Springs -- are also bundling rooms, activities, and limited meals.
Skyland Resort in Shenandoah National Park is bundling a room, breakfast for two, and admission to Luray Caverns for $139 to $155 on most weekdays through September 2010.
New and revised promotions are possible in the event travel to the parks remains weak through the summer. If the Federal Reserve has difficulty determining what works in a rescue of the U.S. banking system, lodge concessionaires can be excused for tweaking existing promotions and trying new campaigns in an attempt attract more visitors to their properties. Unfortunately, concessionaires in parks such as Glacier, Isle Royale, and Voyageurs that are subject to short seasons have limited flexibility to offer new pricing and packages. Although it is more difficult to conduct business when the economy heads south, it is often a time when innovation occurs and much is learned. Stay tuned.
David and Kay Scott are the authors of The Complete Guide to the National Park Lodges, published by Globe Pequot. Additional information about national park lodges is available at their website.
Comments
My wife I we stayed three nights over Memorial Day weekend at Volcano House, the park lodge inside Hawaii Volcanoes National Park. We didn't get any deals (but didn't ask for one either, shame on me) but I was surprised how empty was the lodge. Our ground floor volcano view room was the only one of five occupied the whole time. The upstairs room was occupied one night out of three. I expected a full house like many prominent park lodges are during prime times. Must be the overall drop in tourism to Hawaiii. I wish I'd called direct instead of booking online and asked for a better deal (shame on me). By the way, the lodge is dated, in need of new mattresses, better food services, but the view can't be beat!
I live in Hawaii and can testify that our tourist-based economy is indeed in dire straits. Visitor numbers are down about 23% from a year ago. Tourism is an industry that reflects general consumer confidence, and that is not a pleasant picture right now. The sudden price spike in the price of oil last year followed by the real estate and financial meltdown was a one-two punch to tourism. For those involved in providing commercial services to visitors to the national parks and for the communities that depend on tourist spending the downturn in the economy is proving to be disaster. Here in Hawaii property prices are falling, unemployment is increasing, tax revenues are declining, and airline service has been reduced. Scenes such as these are playing out in other tourist dependent regions across the country.
The era of the private automobile is in decline. Oil supplies are tightening, and the cost of driving will once again increase. If park tourism is to survive it must adjust to the transportation reality unfolding. That means a shift back to mass transit, such as busses and passenger trains and adapting visitor accommodations accordingly. Trying to resuscitate the automobile based model is ultimately a waste of time and resources.
Frank C, the following is a link to a study commissioned by the U.S. Dept. of Energy. It does a good job of presenting the energy challenges facing the nation and describes the urgency of taking immediate mitigative actions to avert a crippling energy shortage in the near future. There are many other authoritative studies produced by respected energy experts that reach the same basic conclusions.
http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf
The end of cheap oil has important implications for national parks, as well as virtually every other aspect of modern life. The days of two or three people encased in three-to-four thousand pounds of metal and plastic cruising carefree around the country are fading. It is simply an unsustainable system. The visitor industry will have to adapt as people are forced to move to more efficient and less expensive means of travel.
Tourism is a free enterprise industry and it depends on the luxury dollar. The luxury dollar is disappearing due to unemployment.
NPS lodge rates are very expensive. I never could afford them and tent camped instead.
Deals that combine lodging and food are a good idea. I always heard that Las Vegas is cheap because the food is cheap to allow the gambling dollar.
If the NPS wants to survive they have to accommodate the tourist and sport enthusiast. Cheap lodging and tours are a good idea for tourist. Allowing sport enthusiast to use the NPS is another.
The last 20 years of so have been the domain of the tourist who has tried to limit the use of parks by tourists and sport enthusiast, they rarely succeeded but the arguments illustrated on this site show that many want the use restricted to only a few rather than the many like the mountain bikers. The mountain bikers if their numbers will increase will get greater demand power and the NPS will accommodate them.
I hope the NPS does succeed in maintaining enough tourists to survive and maintain the funding for maintenance. The NPS should be aware that the more development increases maintenance costs.
With the debt getting to be so high for each person and new child there is little ability to continue high funding the next 20 years since the feds are spending the future dollars now.
RAH, your comments typically provide a lot to agree with, but once in a while you drop in a real zinger. Like this one:
The tourism industry depends on the luxury dollar? I think you might want to put a sector qualifier or two in there. As an industry, tourism in America (and in developed countries around the world) thrives on money spent by people of ordinary means.
I do believe Bob misunderstood the definition of "luxury" dollar. Discretionary dollar is more appropriate. The "people of ordinary means" have fewer discretionary dollars to spend and tourism is a discretionary pursuit.
The issue (reality) of oil production limitations and its impacts on our industrialized world has obvious implications to national parks. Oil production in the U.S., once the world's leader in petroleum, peaked out around 1970, and has been in decline since. Until recently, Mexico was the third largest supplier of oil to the U.S.. Now, however, it is experiencing dramatic production declines and will soon be a net importer of oil. The same is true for a host of oil producing nations, including those of western Europe. Total world oil production has been essentially flat since 2005, despite historic record prices. We now use about 3 barrels of oil for every new barrel that is being discovered. Virtually all major oil producers acknowledge that the days of cheap oil are over. The oil that remains in the ground is largely more difficult and expensive to produce and often is of a lower grade. It is not politics that will force us to make changes in the way we live; it is geological reality.
Park visitation is a child of the era of cheap and abundant energy, particularly liquid fuels. People thought nothing of jumping in the family car and driving hundreds or even thousands of miles for recreational sightseeing. Accommodations for visitors in and around the parks were designed around the use of private cars and, in some cases, the need to control their impacts. We now are entering a new era of transportation and life in general. Circumstances will force park visitors, commercial operations and management to make substantial adjustments. Instead of the large numbers of private vehicles entering a park, greater numbers of people will almost certainly arrive via bus or, hopefully, a resurrected national and local rail system. Chances are that there will be fewer visitors arriving from longer distances. Camping will probably become more popular. The RV is likely to disappear. The list goes on, but the basic message is clear. We have passed a national and global inflection point in regard to energy and our economy, and there is no going back to the "good ole days" of carefree motoring.
I don't want to beat this point into the ground, RAH and Anon, but please indulge me. Travel-related leisure activity ceased being a luxury in America many decades ago. Today, Americans consider leisure travel to be necessary for "a reasonable standard of well-being" in pretty much the same way that automobiles, dishwashers, cable TV, and cell phones -- all once considered luxuries -- are now viewed as ordinary elements of the American lifestyle. That's why it's wrong to say that you spend a luxury dollar when you spend a dollar on travel-related leisure. As Anon has aptly pointed out, you spend a discretionary dollar. That is a hugely important distinction. To acknowledge this is not to deny the existence of a luxury component of visitor industry. It is represented by higher-end goods and services, including such things as costly lodging in some national park-based hotels.