THE FINGER LAKES:

Accessing the Economic Potential of a Mature Vacation Region

Jake Buganski
Certified Destination Management Executive

January 2017


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

CONTENTS

Page 3

Introduction

Page 4

Background

Page 6

How the Region Looks to Visitors

Page 7

Emerging Competition

Page 10

Threats to the Industry

Page 11

Problem Statement

Page 12

County-by-County Occupancy Tax Analysis

Page 14

Timeline for Implementation

Page 15

Projected Outcomes

Page 19

Proposed Structure

Page 21

Conclusions


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

I have come to believe that a serious lack

of vision is a malady of almost epidemic
proportions, and that needed vision is not
likely to be supplied by administrative
leadership.

-Robert K. Greenleaf, The Power of Servant Leadership


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

INTRODUCTION

From the outside looking in, the Finger Lakes Vacation Region of Upstate New York is a
world-class wine region, encompassing several bona fide tourism destinations. However, the
regions tourism economy is languishing due to a lack of concentrated eort, and a dilution of
regional tourism messaging. With 17 Destination Marketing Organizations (DMOs) 14
individual county Tourism Promotion Agencies (TPAs; existing as a mix of Convention and
Visitors Bureaus, Chambers of Commerce, and quasi-government or independent nonprofit
organizations), two 14-county regional organizations, and one 5-county subregional
organization all competing for a share of Finger Lakes tourism business, it is very diicult for
travelers to plan trips to and subsequently navigate the region.

More than $20M in occupancy tax is collected in the Finger Lakes Vacation Region, most of
which is required by statute to be reinvested in developing tourism. The 17 organizations
promoting tourism in the Finger Lakes also generate varying levels of additional revenue
through memberships, advertising sales, sponsorships, corporate investment, and grants
from the state tourism department, bringing the total amount committed to tourism
promotion in the Finger Lakes closer to $25M. (At least $2.5M more is invested at the state
level to promote travel to New York State more broadly.)


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

BACKGROUND

Unresponsive Funding Mechanism

The statutes that allow for occupancy tax to be collected and reinvested in tourism in the
Finger Lakes Vacation Region do so at the county level, as is the case in many other states.
This creates a problem that is certainly not unique to the Finger Lakes or even New York
State but one that increasingly threatens to undermine DMOs as the established experts on
their respective destinations, and as the authorities on tourism development for their
jurisdictions. Individual counties marketing themselves as counties contrary to the
well-established fact that visitors are oblivious to county lines not only creates confusion for
the visitor, but also allows for public money to be questionably utilized.

While implementing these statutes was standard practice to fund tourism promotion
for many years, in most cases they do not account for the evolution of the tourism
industry. Nonetheless, the industry has evolved, and the current level of
competitiveness in the marketplace demands more substantial funding for DMOs than
most statutes allow for. Unfortunately, most do not have provisions to ensure that a
budget derived by these means is significant enough for the custodians of the proceeds
to conduct viable eorts.

Sizing Up the Competition

Destination Marketing Association Internationals (DMAI) 2015 DMO Organizational and
Financial Profile Study establishes that the average DMO budget in the United States is
$3.39M. While there are obviously DMOs operating with less than this average (aer all, it is an
average) of the 246 DMOs that responded to create the study, only 77 had budgets less than
$2M, 31 of those had budgets less than $1M, and 10 of those had budgets less than $500,000.
The majority of professional tourism management is being done by organizations with at least
$2M budgets.


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

Current Configuration of Finger Lakes Tourism Organizations

Less than half the organizations funded to promote tourism have budgets greater than $750,000

Since only two of the 17 DMOs in the Finger Lakes Vacation Region are operating with budgets
over $2M, the remaining 15 are at a distinct disadvantage. Most are investing less than
$750,000 in tourism development in this competitive landscape, making it nearly impossible
to move the tourism economy forward at an acceptable rate. Unfortunately, the activity that
occurs with this amount of spending can easily create the illusion of success.


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

HOW THE REGION LOOKS TO VISITORS

An internet search for visitor information on travelling to the Finger Lakes may guide visitors
to any of the following tourism websites, all covering a portion of the Finger Lakes Vacation
Region (approximately a 90-mile radius) :

1) ngerlakes.org
2) ngerlakestravelny.com
3) ngerlakeswinecountry.com
4) tourcayuga.com
5) marktwaincountry.com
6) corningngerlakes.com
7) experiencecortland.com
8) visitngerlakes.com
9) visitithaca.com
10) ngerlakeswest.com
11) visitrochester.com
12) ngerlakescentral.com
13) visitsyracuse.com
14) visittioga.com
15) watkinsglenchamber.com
16) waynecountytourism.com
17) yatesny.com

Finger Lakes Tourism Alliance

Finger Lakes Regional Tourism Council
Finger Lakes Wine Country
Cayuga County Ofce of Tourism
Chemung County Chamber of Commerce
Corning and the Southern Finger Lakes
Cortland County CVB
Finger Lakes Visitors Connection
Ithaca/Tompkins County CVB
Livingston County Tourism
Visit Rochester
Seneca County Chamber of Commerce
Syracuse CVB
Tioga County Tourism
Watkins Glen Area Chamber of Commerce
Wayne County Tourism
Yates County Chamber of Commerce

There are at least as many pieces of collateral available with information on travelling to the
Finger Lakes as there are websites. Various visitor guides, event directories, and maps are
produced by each entity listed above. With each of these entities generating just enough
revenue to invest in these reasonably well-produced digital and print assets, any can appear
to be an authority on the region. However, consumers may not find what they expect within a
particular website or printed piece, leading to frustration and missed opportunities to convert
prospects to actual visitors.

These entities are mostly competing amongst themselves, even bidding up the cost of
Finger Lakes keywords as they jockey for position in paid search campaigns.


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

EMERGING COMPETITION

Because tourism is an industry that remains largely misunderstood and research to gain
insights can be expensive, small-budget DMOs typically benchmark against prior years
results or neighboring counties rather than evaluating a broader competitive set, or investing
in in-depth, impartial evaluations of their eorts. To those outside the industry, seeing any
increase in tourism-related expenditures tends to be labeled a success, and the value of
tourisms economic impact which generally amounts to hundreds of millions, if not billions
of dollars in a given region can seem very impressive.

However, consider this comparison of two American Viticultural Areas (AVAs; a federal
designation for what is commonly known as a wine region) in the northeastern United
States, and their respective tourism promotion eorts:

The Finger Lakes AVA

The Outer Coastal Plain AVA

Established 34 years ago in 1982

Established 27 years later in 2007

Encompasses 2.6 million acres

Encompasses 2.25 million acres

Includes more than 100 wineries

Includes about 30 wineries

Touches each of the 14 counties in the

Touches parts of nine New Jersey

Finger Lakes Vacation Region

-

counties

About $25M of tourism promotion

takes place

Less than $5M of tourism promotion

takes place

(Note: There are six total DMOs in the nine counties touched by the Outer Coastal Plain AVA, but
one is charged specifically with promoting the AVA as a destination, and its four counties are
almost entirely encompassed by the AVA. Four of the other five counties that the AVA touches are
beach destinations, so for the purposes of this comparison, their economic impact is excluded,
though their budgets are included in the $5M noted above.)


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

In 2015, tourism direct sales in the Finger Lakes Vacation Region totaled $2.92B,1 while in the
four counties that are the oicial jurisdiction of the DMO representing the entire Outer Coastal
Plain AVA, tourism direct sales were $2.95B.1 (Including all nine counties would bring the
Outer Coastal Plain AVA total to $25.14B.1)

While geography particularly the Outer Coastal Plain AVAs proximity to major metropolitan
areas along the northeast corridor certainly factors into the equation, the Finger Lakes
Vacation Regions 60+ year history as a vacation destination and wine region, and the
presence of Syracuse and Rochester within the 14-county versus 4-county comparison are
relative equalizers. All this points to the challenges associated with disparate and oen
confusing messaging from Finger Lakes DMOs regarding how a visitor can access and
experience tourism product in the region. With at least five times the budget of a newcomer to
the wine tourism market, this world-class, world-renowned destination is unable to keep
pace.

Other examples of aspiring AVAs include the Middleburg AVA in the area of Loudoun County,
Virginia, and Texas Hill County, west of Austin and San Antonio in Texas. Similar
considerations must be made when comparing these as with the comparison to the Outer
Coastal Plain AVA, though this is the case in any analysis of competitive destinations.

Middleburg AVA

Texas Hill Country AVA

Much smaller at 126,720 acres

Established in 2002

About 40 wineries

Established in 1991

Close to the Washington, DC metro area

About 50 wineries

and surrounded by more concentrated

About an hour from Austin and San

Much larger; at 9,000,000 acres it is the

second largest AVA in the US

development

Antonio, but very spread out and

Touches 2 counties

mostly rural
-

Touches 17 counties


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

In 2015, tourism expenditures in the two counties of the Middleburg AVA totaled $1.80B2;
more than 60% the total in the Finger Lakes AVA in an area less than 5% of the size.

The Texas Hill Country AVA saw $14.80B3 in tourism spending in 2015, however that total
includes the metro centers of Austin and San Antonio. To make a more accurate comparison,
the 15 rural counties in the Texas Hill Country AVA amassed $1.34B3 in tourism direct sales,
compared to $1.06B1b in the 12 rural counties in the Finger Lakes AVA (excluding the Syracuse
and Rochester metro areas).

Within the next few years without any change to the way tourism marketing is done in the
Finger Lakes is it likely that aspiring wine regions where promotional eorts are tactical and
coordinated (if not also well-funded), will continue to gain market share.

There is, however, plenty of room for growth. It is not unreasonable to project that with
more strategic eorts and more eiciency, tourism spending in the Finger Lakes
Vacation Region could double in the next 10 years.

1. The studies from which these numbers were derived were both conducted by Tourism Economics, an Oxford Economics
company, using similar, industry-standard methodology.
a.

NJ - www.state.nj.us/state/pdf/2015-nj-economic-impact.pdf

b.

NY - www.fingerlakes.org/uploads/pages/pdf/NYS Tourism Impact - Finger Lakes 2015.pdf

2. Source: US Travel Association- The Economic Impact of Domestic Travel On Virginia Counties 2015

3. Source: Dean Runyan Associates - The Economic Impact of Travel on Texas 1994-2015


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

THREATS TO THE INDUSTRY

Without beginning to aggressively follow tourism industry issues and trends, DMOs in the
Finger Lakes risk falling victim to situations that are occurring industry-wide regarding
accountability and the security of traditional sources of funding. With local governments
under increasing pressure to balance budgets and cut spending, jurisdictions where
stakeholder buy-in for tourism development is lacking have seen occupancy taxes diverted or
eliminated in the course of political maneuvering.

Remaining relevant and competitive in the current landscape will likely require
combining occupancy tax proceeds from multiple counties where synergies exist, and/or
travelers are already experiencing them as single destinations. This should be favored
over the current county-by-county approach, as funding available at this level is simply
insuicient to remain competitive, to justify continued investment, and to provide a
complete visitor experience that promotes extended stays.

In most (if not all) counties, provisions exist in the current statutes that allow for varying
amounts of the occupancy tax collected to be used for regional promotion of tourism. In other
words, the revenue can be used for eorts in collaboration with surrounding counties. Not
only would multi-county cooperatives make good business sense, they would also be
politically favorable; demonstrating a willingness to create eiciencies in the spirit of the
legislation from which most DMO funding is derived. The notion that parochial attitudes of
local oicials might be an impediment to the eicacy of this approach should be met with this
fact.

10


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

PROBLEM STATEMENT

$25M of tourism funding split 17 ways within a 90-mile radius is simply not a sustainable
model for funding tourism. The common complaint that there is not enough money to be
eective is only relative to the current division of resources. $25M is more than enough to
eectively market the Finger Lakes Tourism Region.

.
At least $25M is available to fund tourism in this area

What follows is a plan for Chemung, Schuyler, Steuben, Tioga and Yates Counties that
incorporates these tenets, with a model for an eventual multi-county collaborative with
a $2M+ budget.

11


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

COUNTY-BY-COUNTY OCCUPANCY TAX ANALYSIS

Below is a brief outline of the relevant parts of the enabling state legislation for each county
that allows for an occupancy tax to be imposed. In each, paragraph nine focuses on the
details of how the tax is to be allocated, with the remainder of the statue being identical for
each county; in part setting the rate for the tax at 4%. (Note: Other counties in Upstate New
York have increased their occupancy tax to as much as 6% with no resulting competitive
disadvantage.)

Aer deducting specific allocations (in each county the administrative fee, and in Yates
County an additional 50% for county-specific tourism promotion), the language for each
countys enabling legislation reads, (the remainder) shall be allocated to enhance the general
economy of [county name] County. In Yates county this amounts to 40% of the occupancy tax.
In each other county, 95%.

Language
regarding
allocation

Max for
admin
Max regional
promotion
Renewal
required

Chemung *

Schuyler *

Steuben *

Tioga

Yates

...to be
allocated for
tourist and
convention
development
in the county
of Chemung
and
surrounding
tourist region

...to be
allocated for
tourist and
convention
development
in the county
of Schuyler
and
surrounding
tourist region

...to be
allocated for
tourist and
convention
development
in the county
of Steuben
and
surrounding
tourist region

...to be
allocated at
the discretion
of the county
legislature
for the
purposes of
tourism and
economic
development

...the county
shall be
authorized
and shall
dedicate fty
percent of
such revenue
to promote
tourism in
the county

5%

5%

5%

5%

10%

No limit

75%

75%

No limit

40% (inferred)

N/A

N/A

N/A

Every 3 years

Every 3 years

* Most natural opportunity for collaboration exists

12


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

Investments in destination marketing, when managed eectively, consistently yield some of

the greatest benefits of any facet of economic development. Therefore, as the mandate to
enhance the general economy in each county and the surrounding tourist region exists,
professional tourism management, conducted with an adequate budget derived from as many
contiguous counties as it might take to reach that threshold is the only eective course of
action to meet this obligation and responsibly steward these public dollars.

Clearly, the identical language in the statutes regarding allocation in Chemung, Schuyler, and
Steuben Counties creates the most natural opportunity for collaboration. Indeed, this was the
originally established footprint of Finger Lakes Wine Country (FLWC) a now five-county,
subregional DMO in 2000. Variations in the language for Yates County (who joined FLWC in
2002), and Tioga County (who will become part of the FLWC eort in 2017), did not preclude
them from allocating funds to this organization, but could obscure a clear path toward
elevating its status as an authority within their jurisdictions concurrent with such accords in
the other three member counties.

13


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

TIMELINE FOR IMPLEMENTATION

These observations are not made in isolation from the reality of diiculties that may have
prevented some of these ideas from being realized in the past, or that may slow progress
toward achieving them now. With this in mind, the following timeframe for implementation
was proposed and subsequently agreed-upon by the Board of Directors for the Steuben
County Conference and Visitors Bureau (SCCVB; also known as Corning and the Southern
Finger Lakes) at its board retreat in June of 2016.

Year 1

Year 2

Year 3

Year 4

Year 5

Explore the logistics of condensing or combining regional tourism

websites and/or collateral materials
Condense or combine regional tourism websites and/or collateral
materials
Explore the possibility of sharing staff and other resources to streamline
operations and attract additional funding
Create a centrally-housed regional tourism cooperative with satellite
county ofces
Merge organizations if nancially expedient or continue to operate as a
cooperative

In this timeline, the most logical framework for the cooperative referenced already exists as
FLWC.

14


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

PROJECTED OUTCOMES

The following chart illustrates the relationship between spending on tourism promotion and
the economic impact of tourism in Chemung, Schuyler, and Steuben Counties (the three
counties whose occupancy tax statutes create the most natural opportunity for collaboration
in FLWCs 5-county footprint). The numbers are the average for 2011-20141,2, and assume that
each county is following its mandate to reinvest occupancy tax revenue to develop tourism
business.

Chemung

Schuyler

Steuben

$102,127,697

$32,803,868

$127,324,741

Occupancy tax collected

$776,027

$401,642

$913,190

$ Generated / $ Invested

$139

$86

$147

Total Tourism Sales

(NOTE: Consideration of disparities in their occupancy tax legislation and other economic
dissimilarities exclude Yates and Tioga counties from this comparison.)

As the chart suggests, larger investments in tourism promotion yield greater results. This
dynamic is proven time and again in tourism research, nationwide. There are far more
complex studies available that explore this relationship in detail, but for the purposes of this
report, it is enough to demonstrate that there is a correlation and establish a baseline for
projecting performance with increased or more accurately, concentrated investment.

In addition to the three counties shown above, Yates County has generated an average of
$410,0582 in occupancy tax during this period, and Tioga County has generated an average of
$195,9842.

15


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

FLWC had a $901,500 budget in 2015, with $297,500 in public funding derived from occupancy
tax in four member counties; $105,000 from Steuben County, $67,500 from Yates County,
$65,000 from Chemung County, and $60,000 from Schuyler County. $604,000 of the FLWC
budget was comprised of private investment.

The following chart shows the approximate amount available to commit to a multi-county
collaborative in the 2017 FLWC footprint.

FLWC

Chemung

Schuyler

Steuben

Tioga

Yates

Total

Average
total tax

N/A

$776,027

$401,642

$913,190

$195,984

$410,058

$2,696,901

Tax %
available

N/A

95%

70%

70%

95%

40%

N/A

Total $
available

$604,000

$737,226

$281,149

$639,233

$186,185

$164,023

$2,611,816

Within each countys current budget for tourism promotion eorts, there are nuances
and caveats to consider, so the total amount above is artificially high. Ideally, each
county would work to relieve itself of any obligations that reduce the amount available
to commit to a multi-county collaborative. This would likely take time and ultimately
may not even be possible, but considering approximately $600,000 in such
commitments across all counties, at least $2M is available to commit to an expanded
FLWC eort. This budget would help position FLWC and the counties it represents as
more legitimate competitors in the tourism marketplace.

Projecting the total impact that might occur if tourism development eorts were
concentrated this way requires that the total amount of the occupancy tax be considered
not just the amounts theoretically available for multi-county collaboration. As previously
noted, while the amounts vary for each county, all but 5% of the tax in each county reserved
for administrative purposes (10% in Yates), must be allocated either to county-specific

16


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

tourism development, or, shall be allocated to enhance the general economy of each county.
Adding to this the portion of the FLWC budget derived from private sources establishes a total
to which we can apply a multiplier to project total economic impact.

$2,541,553 (total tax minus admin fees)

+
$604,000
(FLWC privately sourced revenue)
________________________________________________________________
$3,145,553

TOTAL

Considering the ratio of $147:1 that Steuben County averaged from 2011-2014 with an
average of $913,190 being invested in tourism development, a more well-funded eort should
have at least this much success (and likely more). The first chart below demonstrates the
projected increase in tourism sales for each county when this $147:1 ratio is applied to
$3,145,553 in concentrated tourism development eorts.

$147:1 multiplier

Chemung

Schuyler

Steuben

Tioga

Yates

29%

9%

36%

10%

17%

Projected total revenue $130,305,008

$41,854,544

$162,453,984

$44,210,030

$77,599,297

Net gain in revenue

$28,177,310

$9,050,677

$35,129,243

$9,560,030

$16,780,165

New local tax revenue

(approximate)

$1,972,412

$633,547

$2,459,047

$669,202

$1,174,612

% of all tourism
spending in FLWC
footprint

The net gain in revenue is 22% across the board. While this may seem optimistic, consider
that between 2010 and 2015, the DMO representing the Outer Coastal Plain AVA (referenced
earlier) saw a 35% increase in tourism sales; jumping $769M to $2.95B at a rate of growth
nearly double that throughout the rest of the state of New Jersey3. This was achieved, in part,
by applying knowledge of industry trends, as well as establishing a collaboration between the
DMO, four separate chambers of commerce, and a regional economic development agency.

17


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

The outcomes of a more optimistic though achievable 35% net gain in revenue calls for a
$176:1 multiplier, shown in the chart below. This amounts to an additional $0.13 per $10,000
invested above the $913,190 baseline.

$176:1 multiplier

Chemung

Schuyler

Steuben

Tioga

Yates

29%

9%

36%

10%

17%

Projected total revenue $156,011,438

$50,111,563

$194,502,729

$52,931,736

$92,908,002

Net gain in revenue

$53,883,741

$17,307,696

$67,177,989

$18,281,736

$32,088,870

New local tax revenue

(approximate)

$3,771,862

$1,211,539

$4,702,459

$1,279,722

$2,246,221

% of all tourism
spending in FLWC
footprint

1. Source: Tourism Economics - The Economic Impact of Tourism in New York State (2010-2014)
2. Sources: Publicly available county budget publications; Yates County Tourism - Occupancy Tax Survey (2009-2015)
3. Source: Tourism Economics - NJ Tourism Economic Impact Study (2010-2014)

18


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

PROPOSED STRUCTURE

Concerns of those who might be aected by the proposed changes discussed here are likely
1) job security, and 2) loss of autonomy. Both are easily addressed:

1) The idea that six oices and their related stas, existing currently in an ineicient
paradigm would somehow be jeopardized when eiciencies are created and more
resources potentially become available is counterintuitive.
2) The only potential loss of autonomy in this scenario would occur if TPAs are utilizing
occupancy tax dollars for purposes other than tourism development, in violation of
their statutory obligations.

For this model to function properly, TPA leaders in each county would simply contract their
leisure travel marketing to FLWC, passing through all available occupancy tax proceeds for
this purpose. Amounts required to remain for county-specific marketing in this scenario
should be used for the purpose of developing meeting and convention business, and/or to
achieve community and stakeholder buy-in as a foundation for providing a world-class visitor
experience; a critical component of destination marketing that desperately needs to be
retrofit to this market.

As with any contract, those between TPAs and FLWC would provide for suicient reporting
and accountability, including partner relations that focuses on articulating the
county-specific benefits of the consolidated eort. While these should ultimately be realized
in the form of increased economic impact and tax receipts, those are no replacement for the
level of service each TPA currently provides its tourism partners and/or members.

For this reason, dedicated tourism sta within each organization would remain critical,
though their roles may change slightly. Likewise, the physical presence of the satellite
locations for the centralized cooperative in each county where some of these

19


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

individuals currently report would remain as local branches to serve nearby

constituents.

To the extent that any leader of a chamber of commerce within this paradigm had been
overburdened by the task of attempting professional destination management with an
impossibly small budget, this model should serve as a great relief; freeing these individuals to
simply oversee a truly professional and viable tourism development eort, while shiing
focus to a myriad of other critical chamber functions like member services, professional
development, education and events, business recruitment, and economic development.

20


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

CONCLUSIONS

The Rest of the Region

While the plans discussed in this report do not address the entirety of the unrealized potential
of the Finger Lakes Vacation Regions tourism economy, they set forth a concept that can
easily be applied in other areas of the region. Local leaders in those areas must be tasked with
identifying where synergies exist, and what budgets might be combined to reach the
threshold necessary to fund a truly competitive eort.

Regional Collaboration
If and when the concept of multi-county collaboratives is applied throughout the Finger
Lakes, broader regional initiatives will become a more realistic option for influencing travel.
Not only would there be a more manageable hierarchy to operate within and funnel
messaging through, but reaching consensus among a few multi-county collaboratives versus
14 TPAs is an infinitely more reasonable proposition.

Ideally, work recommended toward collaboration at the regional level would occur
parallel to, or at least as a result of a more collaborative approach at the county level.
The business decision behind the bifurcation of the 14-county regional eorts remains
unclear to the writer of this report even aer being embedded for 11 months as a
Finger Lakes TPA leader so this dichotomy must totally confound travel consumers.

A more organized structure would also help stakeholders understand the role of each tourism
promotion entity in the region, making them more credible as industry leaders. A possible
configuration, constructed using this logic, is shown below.

21


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

Possible Configuration of Finger Lakes Tourism Organizations

With six tourism organizations versus the current 17, all have budgets of at least $750,000

While the configuration above may or may not represent the most ideal groupings for
multi-county collaboration, it demonstrates how streamlined marketing tourism in the Finger
Lakes Vacation Region could become. One role a regional entity might play along the way is to
facilitate the process of mapping out and initiating the specifics of these collaborations. To be
sure, the quality of strategic planning at the regional level would likely dictate much of the
success of the constituent collaborations.

(NOTE: In the example above, Corning and the Southern Finger Lakes remains as an arm of
FLWC, serving as the brand for the group and meeting markets within its footprint. Other areas
with product to attract this type of business might implement a similar subsidiary configuration,
provided there is a budget to support it.)

22


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

Addressing Seasonality
Those working in the Finger Lakes Vacation Regions tourism industry must dismiss the
notion that there is no room for growth in-season. This is by-and-large a seasonal
destination, and while there are opportunities to increase business during the shoulder
seasons and the winter, this business will never develop to the point where annualized
occupancy rates are a compelling argument for new development. In a seasonal destination,
the case for new investment is made with other KPIs.

For instance, professional destination management includes providing independent

accommodations operators with the tools and insight to develop a level of sophistication that
ensures they are not leaving money on the table. In a region with many independently-owned
properties, and in the absence of such eorts, average daily rate (ADR) is surely not maxed
out. Focusing on this metric for the accommodations industry, specifically will have the
most impact on encouraging growth.

This is not to concede that there is no room for growth in-season. Midweek hotel
availability during the busiest times of year suggests that visitors are not
acknowledging that there is enough to do to justify longer stays. This is an indication
that they are experiencing Finger Lakes travel one county at at time, as it is being
presented to them.

However, lodging is just one facet of the tourism economy. Focusing on accommodations
industry metrics as the sole measure of success for tourism development stifles not only the
growth of the other tourism-related industries, but in turn the growth of the accommodations
industry itself. In the Finger Lakes Vacation Region, lodging represents about 25% of the
tourism economy, while industry-standard analysis also considers food and beverage, retail,
recreation, transportation, and second homes. Impacting this broader tourism economy is
the only way to adequately address seasonality.

23


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

A Note on The Role of Corning

In the Fall of 1999, Longwoods International was engaged by Corning Enterprises (the
economic development arm of Corning, Inc., the largest employer in the Southern Tier of
Upstate New York) to research the best way to develop the region's tourism economy as a
means to improve quality of life, and to help recruit the best and brightest talent to live and
work in the area. The study found that assets in the tri-county area of Chemung, Schuyler and
Steuben Counties which until that point were viewed primarily as outdoor vacation
destinations were well-suited for positioning as a unified destination for touring
vacationers. The exercise eventually gave rise to FLWC in 2000.

FLWC was subsequently used as a case study in a 2003 report entitled, Guide to Best
Practices in Tourism and Destination Management, by Rich Harrill, Ph.D., from the Georgia
Institute of Technology, Economic Development Institute, Tourism and Regional Assistance
Centers. This report reiterated that Corning, saw the need to develop the region to attract
professionals to its workforce, and goes on to say that, the company realized what many
people are now coming to understand about tourism as economic development: that an
areas quality of life is important to both tourists and potential residents. Addressing quality
of life issues in a community is oen the first step in community tourism development.

There is no expectation that present work will be met with any more reverence than the
original research, Dr. Harrills study, or any other work acknowledging the validity of the
multi-county collaborative concept. It serves to reinforce these ideas and reiterate that they
need only be committed to, in practice, for the desired outcomes to occur. There remains no
compelling reason not to allocate the majority of occupancy tax proceeds to fund
multi-county collaboratives; particularly those born of professional research and vetted by
industry experts like Dr. Harrill.

It is an unfortunate consequence that the name of the company, Corning, and the city in
which it is located, being one in the same, frequently lends to the notion that the former has

24


The Finger Lakes: Accessing the Economic Potential of a Mature Destination

any less broad a vision than is discussed here. Corning was recently referred to as a
superstar of the global economy by The Economist.1 This distinction is not one achieved by
practicing the myopia that deniers of Cornings altruism in contributing to the economic
viability of the region might suggest. Leaders in all the communities where Corning exerts
influence would be well-served to simply be willing beneficiaries of its corporate citizenship,
which is consistently regarded as exemplary.

Outlook
There is tremendous upside for the Finger Lakes Vacation Region. With a little introspection
and a few modifications to the status quo, those who are committed and reverent to this
world-class destination will find a way at long last to make Finger Lakes tourism the
economic driver for Upstate New York it is so clearly poised to be.

1. The Economist, Special Report: Companies, September 17, 2016

25