Debbie Braun: Measuring return on investment
Special to The Aspen Times
Aspen, CO Colorado
People ask the Aspen Chamber Resort Association all the time: “How do you measure the ‘return on investment,’ or ROI, for Aspen’s destination-marketing program?”
It is a valid and important question, and one that most nonprofits and government-supported agencies are faced with time and again.
It is an even more important question in these challenging economic times, as we must ensure that limited marketing budgets are being put to the best possible use, and we must prove we can provide measurable return for the investment.
But it also is an interesting question, because ROI is part art, part science and a little bit of faith.
The science part is easy. In the case of ACRA’s destination-marketing program, we track campaign measurements including calls to unique 800 numbers, web statistics, vacation planner requests, occupancy reports, sales tax collection and a host of other tactics. All of these tools combined provide quantifiable results.
There is more to this picture, however. Aspen relies on tourism for tax revenue and jobs. Much of the art of marketing lies in the intangibles, which makes measuring the ROI a challenge.
According to a recent article, “Travel and Tourism Works for America,” much of the travel and tourism industry’s ROI come from indirect sources. They cite “the trickle-down effect” as one example of this.
Locally, this is often the case. Check the accounts payable register for a local hotel, a direct beneficiary of tourism and a sign of marketing dollars at work. You will find countless other local vendors on the books: florists, landscapers, special events planners, etc. They, too, are benefiting from marketing dollars, though the ROI is not necessarily reflected in occupancy numbers or airline seats booked.
Another example of why the art of marketing makes determining the ROI difficult is the “psychological and developmental benefits” of the investment, according to the “Travel and Tourism” article.
Locally, we see this effect in such things as community pride, word-of-mouth, Aspen’s image as a world-class resort, special events and the like. How can we measure, in solid statistics, the benefit of the Winter X Games? We may know how many people rode RFTA to the event, and we may know how many Google hits Aspen received during those four days, but what do the X Games mean for Aspen’s image, the locals, the tourists who were here for the games or the potential tourists watching the games from their couch and on the verge of booking their own Aspen vacation?
Indeed, measuring the ROI for Aspen’s destination-marketing program can get messy.
In other words, if you want to figure out the ROI on a new machine for production or mail sorting, it’s fairly easy to look at the incremental costs and revenues associated with that machine. With finance, it’s relatively easy to classify investments.
But with tourism and marketing, it’s complicated. But that doesn’t mean you shouldn’t try, which is what ACRA will continue to do as we move forward in its marketing endeavors.
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