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"Compeitive Clusters have been successful because it brings a cross-section of the economic community together around very important issues to enhance economic development here in Monterey County."
— Mark Verbonich, VP, Pebble Beach Company
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Cluster Projects - Tourism
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C2 is a unique opportunity to bring the educational leaders together — combining forces — to further create one of the world's strongest and most resilient tourism clusters.
Strengths of the Tourism Industry
- Hard-to-match natural beauty and other physical attractions
- Worldwide recognition as a desirable destination
- Core market with attractive demographics
- Excellent facilities, amenities
- A variety of attractions
- Strong industry marketing expertise
- Growing ability to work together, as an industry
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Introduction
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The Monterey Bay Aquarium and other botanical and zoological attractions are among the County's star industries; industries in which the County is highly concentrated and which are forecast to gave high growth in the next five years. This cluster includes the Aquarium and all other amusement and recreation activities, hotels, motels and other lodgings, eating and drinking places (though these are not typically economic drivers by themselves), museums and all visitor-serving activities. To continue to be successful in the fast-changing and increasingly segmented tourism industry, this cluster also needs the attention of policy makers.
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Overview of the Industry
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A common misconception of our region is that it runs on tourist dollars. While it is true that travel-generated income is important to our region, and that we are an international tourist destination, the actual earnings in this sector, as a percent our total income, are relatively small.
By the numbers, visitors spent about $1.9 billion in Monterey County in 2003 (that ranks us in 11th place among all California counties). By Transient Occupancy Tax (TOT) measures, we rank 7th in the state – in 2004, over $37.5 million was collected. The total economic impact of the tourism cluster, when economists add in the indirect effects contributed by suppliers, was over $3 billion last year.
Though it looks good, it has been better – lots better. In fact, if you look at the four industry indicators — TOT, travel spending, payroll and employment — all four have been in recovery since 2000. For example, the TOT in 2000 was almost $42 million – 12% more than in 2004. We cannot rely on old methods to assure a full bounce-back. Today's tourists are more careful where they spend their vacation dollars.
Based on area expansion plans, employment within the industry will continue to offer excellent opportunities for workers seeking to enter or advance in hospitality careers.
Competitive Performance
- Change in Average Occupancy: Monterey County has experienced an increase of 0.7% in average occupancy during the months of 1st Semester 2004-05, compared to Tahoe (down 10.2%), Napa/Sonoma (up 6.3%), California (up 4.2%)
- Change in Average Room Rate: Monterey County experienced an average monthly increase of 6.7% in average room rate during the months of 1st Semester 2004-05, compared to Tahoe (up 4.2%), Napa/Sonoma (up 7.4%), California (up 11.6%)
- Change in RevPar Average: Monterey County experienced an average monthly increase of 7.4% in average RevPar during the months of 1st Semester 2004-05, compared to Tahoe (down 6.6%), Napa/Sonoma (up 14.1%), California (up 11.6%)
- Change in Total Room Revenue: Monterey County experienced an average monthly increase of 7.0% in Total Room Revenue during the months of 1st Semester 2004-05, compared to Tahoe (down 7.2%), Napa/Sonoma (up 14.5%), California (up 11.9%)
Source: Smith Travel Research
When the tourist cluster representatives got together in the C2 forum, the critical issues coalesced around four strategies:
Improved market focus: Improve the level of business intelligence, especially with respect to global trends, new technologies and best practices.
Cluster development: The hospitality industry in Monterey County is characterized by a few large operators and hundreds of smaller members. It is essential for the many players to articulate on policy issues with a single voice and combine forces to implement joint programs.
Build specialized economic infrastructure: Infrastructure covers a broad range of core services and capabilities; examples include a centralized reservation service and convenient transportation to get visitors between destinations such as the waterfront, Carmel, Laguna Seca and the National Steinbeck Center without a car.
Public-private collaboration: How to spend the TOT wisely is increasingly important and ongoing source of friction between the industry and government. It is also important to develop new revenue sources.
While the County of Monterey and the cities of Monterey, Marina, Seaside and Sand City contribute to the Monterey County Convention and Visitors Bureau, a county-wide marketing organization, more funding is needed to position Monterey County as the premier business and leisure travel destination.
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