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.
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.