Editor’s Note: Skift is publishing a series of interviews with CEOs of destination marketing organizations where we discuss the future of their organizations and the evolving strategies for attracting visitors. Read all the interviews as they come out here.
This continues our series of CEO interviews that began with online travel CEOs in Future of Travel Booking (now an e-book), and continued with hotel CEOs in the Future of the Guest Experience series (which is also an e-book).
Chicago is ready to take its place among New York and Los Angeles as one of the cities lusted after by foreign tourists. Although its visitor arrivals have grown faster than expected, the city’s leadership has its eyes on even greater success.
Marketing Chicago, and raising awareness of its attractions from restaurants to plays, is at the center of its growth strategy.
Skift recently spoke with the CEO of Choose Chicago Don Welsh about his marketing strategy in China, the city’s new branding campaign, and how it validates its budget growth. An edited version of the interview can be found here:
Skift: Chicago is a well-known destination and its tourism appeal is growing. Chicago welcomed a record 50.2 million visitors in 2014. Congratulations. Do you hope that Chicago will become an international tourist hub on par with New York or L.A.?
Don Welsh: It is incredibly important. It’s one of three goals that the mayor established when taking office four years ago. The first goal was to reach 50 million visitors by 2020 and we were close to accomplishing that when the mayor raised the goal to 55 million. We broke the 50-million mark last year.
Goal two has to do with the fact that we have the largest convention center in the western hemisphere at McCormick Place. We have a specific goal of booking 2.4 million convention room nights a year and 55 new groups.
Goal three was to move from the 10th position to the 5th position in the U.S. among international visitors by 2020. We’ve moved up one spot to the 9th spot, replacing Boston. International growth is definitely critical for us. We’ve always done really well as a domestic destination, but now have a renewed focus on international growth. We have offices in Canada, Mexico and four cities in China including Beijing, Shanghai, Guangzhou and Chengdu.
Skift: Chicago is not traditionally a first stop for Chinese tourists coming to the U.S. What do you focus on from a marketing perspective and what is your goal?
Welsh: We realize that we’re traditionally a city where Chinese will come if they’re on a tour or for a day if we’re lucky. What we’ve been pushing for the past four years is that Chicago legitimately becomes a two- or three-night stopover on a two-week visit to multiple cities in the U.S.
We have four tourism offices staffed with people who focus solely on selling and marketing Chicago to China. That is, of course, done in the native language. We also work very closely with our hotel, restaurant and attraction partners in Chicago.
Chinese visitors want to explore and one of the things that they love about Chicago is that it’s a very manageable destination. It’s clean and safe with beautiful parks, great restaurants and shopping, all of which is very important, but not all visitors know what to expect. We’re a pleasant surprise. We had 128,000 Chinese visitors in 2013 and I wouldn’t be surprised if that number grew dramatically in 2014.
Skift: Let’s move to branding. Chicago Tourism just rolled out the new EPIC branding campaign. How are you planning to measure the impact or success of the new brand and campaign?
Welsh: Prior to myself joining the organization and Mayor Emanuele taking office, we didn’t really do any TV advertising or much on the social media or digital side. We had been running regional campaigns targeted at Indianapolis, Detroit and St. Louis and working with a company called Strategic Market research to do an awareness study measuring how much incremental business it generated immediately after a campaign ran.
Now, all of a sudden, we’re going into places like San Francisco and Denver, markets we’ve never done before. I think any organization spending tax payers’ money has to do back-end analysis to look a the return on investment. You use that to determine your planning for the future.
Skift: Is your consumer profile, the type of traveler coming to Chicago, changing at all?
Welsh: That’s a great question. We’ve always seen a tremendous amount of families but two years ago we starting seeing couples, and groups of couples, coming in for the weekend. Also, more people are coming in for specific events or culinary experiences. We’re starting to see more and more people coming for three days instead of two because they want to visit x number of restaurants or theatre productions.
We also get a lot of very high-end meetings and conventions in the engineering, manufacturing, technology and medical industries. When business travelers come to the city, whether it’s their first or 25th convention, that they’re booking their favorite restaurants and entertainment.
Skift: Are there any shifts in the destinations that you’re competing with for travelers either regionally or internationally?
Welsh: We did a tremendous amount of research in developing this new brand to really understand travelers’ perception. It’s interesting. People who know Chicago know that it is a vibrant cool city, but if somebody has never been there then they are really unaware of all there is to do. You have as much, if not more, to do as you would in any other major city and in many cases it’s more affordable and easier to access.
We’re starting to see people come back for subsequent visits seeking out the neighborhoods.
Skift: It sounds like raising awareness of how much there is available is a major challenge for the city.
Welsh: That’s spot on. How do you create awareness in markets where they have no idea who you are? How do you bring even greater awareness to people who may not have been here for ten years or ever before?
Skift: Well, let’s talk about channels for a minute. What channels or platforms have been the most successful in terms of raising awareness and engaging travelers?
Welsh: Let’s use China as an international example. In a really short period of time, we’ve basically been able to elevate China not only against other U.S. cities but other cities around the world. Everybody is competing for China and we’ve succeeded by being in the marketing twice a year, marketing in the Chinese language, inviting media to Chicago in large groups, and working on social media. We also activated some of the university students in the Chicago area, asking them to tweet what a great city is it.
On the domestic side, we’re just scratching the surface on social media. We have an incredibly talented employee doing it all right now so we’ll be add more resources to it. We’re trying to all the levers at the right time, to make sure that we’re opening up every potential channel at the right time to create a greater awareness of who we are and what we have to offer.
Skift: How do you see destination-marketing organizations’ position within the travel industry changing in the next five years? Do you think you’ll be working more or less closely with other sectors and stakeholders?
Welsh: It varies by destination. What’s clearly beginning to happen is the organizations’ need to be the central repository for information about their city or destination. With the continued used of technology during search and selection, the DMO has to be the single source of knowledge for their city. In order to do that, you need to have a live vibrant database where all events in your city are accessible.
The customer, whether they’ve driven a couple hundred miles or flown in from around the world, has to provide the tools and resources that the customer wants on their terms. The organizations that do this, and do it in a very personal way, will be the ones that win.
Skift: What trends do you see in terms of funding for destination-marketing organizations?
Welsh: It will probably continue to be an ongoing challenge. If you look at a lot of the cities and states around the world, there’s a tremendous need for infrastructure, for government to have access to as much tax revenue as possible.
We’ve been fortunate – our budget has grown from 13 million to more than 30 million. This happened under Mayor Emmanuelle, who clearly gets what every dollar invested will yield. In the last four years, total tourism revenue in Chicago has grown from about 11 billion to close to 14 billion, general taxes have gone from 500 million to 900 million and hotel tax has grown from 70 million to 115 million.
Back to the original question, everything that a destination marketing organization does with taxpayer money has to be measureable. Cities have to decide whether they’re going to fix roads or target the tourism organization. The organizations that are much more prudent and demonstrate ROI are the ones that will continue to get funding.
Skift: If you had ten times more funding than you have now, what would you do with it?
Welsh: We’d probably spend a lot more in the national and international markets from marketing, advertising and social standpoints. We would do a little more on the convention side to showcase Chicago as a great meeting destination, for mega-conventions and five-person corporate meetings.
We’d have no problem putting a together a very solid strategic plan justifying how and why we’d spend it. The days of these organizations getting money without being held accountable are over.
Skift: We always struggle with quantifying these marketing efforts. It’d be fantastic to see more numbers.
Welsh: For example, we probably spent a total $3 million in international markets. When we receive the international visitor numbers, it’ll be easy for us to sit there and say how much we spent in Canada, Mexico and China to arrive at some pretty basic rudimentary projections on whether or not it validates the investment.