The following article is taken from the August 2009 issue of the Main Street Journal. Click “Subscribe Online” above to start your subscription.

Destination Memphis: How tourism is weathering the economy
By: Jonathan Devin

This September the headlines are as likely to cover what is not happening in Memphis as what is. For the first time in over 100 years, the Mid-South Fair will not take place within the city limits and the Church of God in Christ (COGIC) is not coming back after its 2009 national convocation Downtown.

The economic impact of these two losses in tourism remains to be seen, but many have opinions about recent decreases in overall tourism in Memphis. Some are more hopeful than others.

Kevin Kane, president and CEO of the Memphis Convention & Visitor’s Bureau (MCVB), says that his 30 year career in the travel industry has shaped his perspective on his hometown, Memphis. “In some ways it makes you appreciate Memphis more, when you realize the grass isn’t always greener on the other side of the fence,” said Kane.

The MCVB, a nonprofit, markets the city of Memphis across the globe through ad campaigns and development of Memphis’ brand: “Home of the Blues, Birthplace of Rock’n’Roll.” Kane has been with the group for the last 18 years.

“Surprisingly we attract close to 10 million visitors annually to Memphis and Shelby County, and the number one overwhelming response that we get is (tourists) can’t believe how friendly people are here,” said Kane.

Asked if he was worried about the departure of COGIC and the Fair, Kane replied that he was more disappointed than worried. “There was a time when the Fair was the only thing the tourism industry in Memphis had to look forward to,” said Kane. “I’ve been going to the Fair almost every year since I was a little boy. I’m disappointed that there wasn’t more of a sense of urgency in this community to keep the Fair in Memphis.”

A combination of declining attendance over the last several years, an increase in urban problems like parking and crime, and the availability of land in Tunica County ultimately led to the decision to move the Fair south. This September the Fair will be held at the DeSoto Civic Center in Southaven, and in 2010 at its new permanent site in Tunica County.

Critics question whether Memphians will drive to Tunica County for the Fair. Jim Rout, former Shelby County mayor and general manager of the Fair, sees it differently. “We think that as long as we have a truly good value for the people, and provide easy access to our venue, a large percentage of fairgoers will come from the Memphis area,” said Rout. “A good example to prove this is that people drive to Tunica now to see entertainment because it is a valuable resource, providing quality entertainment and is easily accessible.”

Regarding COGIC, whose 20,000 members represented the largest annual convention in Memphis, Kane was less nostalgic. “The reality of COGIC is that they are unique,” Kane said. “If Memphis had not been their spiritual home, chances are they would have been going to other cities long before now. I don’t really think (the loss) is as much a black eye for us, but it’s disappointing.”

Kane acknowledged that Memphis would be unlikely to find another convention of that size to fill COGIC’s place every year, but he was hopeful that COGIC might return to Memphis as early as 2012. “Surprisingly, I haven’t had one hotel call and say hey, you’ve got to get them back,” said Kane. “Part of that is because they are so large and they stretched our capabilities and as a result, there’s a lot of complaints and frustration on both sides. The general consensus among most hotels was ‘oh well.’”

Mohamad Hakimian, managing partner of the Madison Hotel, is more concerned about a drop in business travel than convention traffic.

Most Downtown hotels have fewer than 300 rooms and are designed more to accommodate the needs of business travelers than vacationers. Since the national economy plummeted last summer, major corporations are finding ways to avoid business travel and cutting back budgets for the travel they must provide. “Business travel is down substantially,” said Hakimian. “People are trading down where they used to splurge and stay in luxury hotels, now they stay in middle-class properties.”

The Memphis Business Journal reported in June that occupancy rates for hotels have been hovering just over 50 percent since December 2008, dipping slightly in January, increasing by May, and never going below the national average.

Hakimian and his partners are not taking any chances though and have worked hard to cement relationships with corporate clients by offering volume discounts and increasing in-house catering events. “Our social catering which includes weddings and corporate parties is up this year about 30 percent over last year,” said Hakimian.

Kane agrees that hotel rooms, or a lack thereof, are a big problem for Memphis tourism, particularly for conventions. “From a meetings and conventions standpoint, we have a limited number of large, full-service/meeting hotels,” said Kane. “We have 21,000 hotel rooms in Shelby County. We only have five hotels that are larger than 300 rooms and only one hotel that’s larger than 500 rooms. That’s unheard of.”

Memphis’ two largest hotels are the Downtown Marriott with 603 and the Peabody with 467.

Conventions may draw upwards of 2,000 people for three to five days—far more than any combination of the larger hotels could accommodate together. “A meeting planner wants to put his delegates in as few properties as possible,” said Kane. “If somebody’s here with 2,500 people, we may have them spread out in 11 or 12 hotels. Well, they can all go to Nashville and stay in the Opryland Hotel.” Soon they will be able to stay in Nashville’s new, $600 million, downtown convention center as well. The center, which will break ground this year, will include a 1,000 room hotel.

Despite the lack of large facilities, Kane said that attraction attendance and convention traffic–which is booked years in advance–are up in Memphis right now despite the bad economy.

Downtown restaurants are feeling the pinch as well, but not necessarily because of COGIC.

Jay Uiberall, who owns three restaurants—Automatic Slim’s, Dyer’s on Beale Street, and U-Bees on Highland Avenue—said that COGIC delegates rarely patronized the bar-type atmosphere of Beale Street. “I would expect to see an increase at Automatic Slim’s with the national Baptist convention this fall,” said Uiberall. “We’ve offered discounts (to COGIC) in the past and we’ve pitched ideas like having a gospel brunch before services, but it didn’t come to fruition.”

But he is concerned about everyday tourism.

“In general we do an enormous amount of business off of tourism,” said Uiberall. “Over the last year I’ve seen a significant decrease in the amount of tourism especially in the Downtown area. We work with the concierges trying to get the tourists in, we do what we can and we’re starting to see a small trickle back recently. We’ve had to be a little more creative though.”

Likewise, the tourist attractions themselves have mixed feelings about changes in the tourist market depending on any of the many variables in the formula which may affect each venue differently.

A handful of Memphis’ tourist attractions like Graceland, Beale Street, and the National Civil Rights Museum appeal to crowds from Jonesboro to Japan.

Others like the Memphis Zoo and the many museums that comprise Memphis’ musical heritage draw heavily from the region. Kane lists Sun Studios, the Smithsonian Rock’N’Soul Museum, Soulsville, and the Center for Southern Folklore, to name a few. Still others that Kane calls “hidden treasures” like the Brooks Museum of Art catch the attention of tourists only after they reach Memphis.

Kane explained that about 60 percent of any city’s tourism consists of daytrippers and roadtrippers from the immediate 300 mile radius, but the presence of the other 40 percent from outside the Mid-South is crucial because they tend to stay longer and spend more.

The MCVB’s Economic Impact Study of March 2009 states that convention and leisure visitors spend just under $290 per day and stay an average of 2.94 days. Day trippers spend an average of $60 per day.

European visitors to Memphis in 2007 were estimated to be valued at about $30 million. 88 percent of those visitors came to Memphis for vacation.

Together, Kane believes that these attractions create a multi-layered tourist market which can sustain itself through tough times. “Over half of Graceland’s visitors are under the age of 35,” said Kane. “That’s amazing when you think that he’s been dead 32 years and hasn’t had a hit in 40 years. It’s not just a dying breed trying to remember their teenage years from the 1950’s. There’s a phenomenon to the legacy of Elvis Presley from a cultural standpoint that can continue to attract fresh audiences.”

Kane adds that Beale Street, with about 4.5 million visitors each year, is on of the top five tourist attractions in the state.

“Zoos by nature do not typically have that unique quality that brings people from around the globe, because so many cities have zoos,” explained Kane. “But in our case, our zoo
is in a different category.”

Brian Carter, director of marketing and communications for the Memphis Zoo, said that he advertises in cooperation with Graceland, the Cook Convention Center, and downtown hotels hoping to snag tourists who came to Memphis to see larger attractions.

“Our biggest increase in regional and national tourism came when the pandas arrived in 2003,” said Carter. “Having pandas puts you in a different class of zoo, not just for tourism, but in terms of conservation and programs. It puts you on an international map.”

Carter said that 40 percent of the Zoo’s visitors do not live in Shelby County and added that the Zoo has also increased its popularity by designing new exhibits with art and architecture very much in the fore. “For the calendar year 2008 we had 834,778 for visitors and in 2007 it was 882,219,” said Carter. “We haven’t opened a blockbuster exhibit in the past two years and we expect that in the year after we open the new Teton Trek we will go over 1 million visitors again like we did in 2006 when we opened the Northwest Passage.”

The Teton Trek, which will feature animal exhibits from Yellowstone National Park will open this October.

Like the Memphis Zoo, 40 percent of the Brooks Museum’s 100,000 annual visitors are from outside of Shelby County and similarly, the museum relies on new exhibits to generate attendance. “Our 2008 attendance remained remarkably steady throughout the year, with peaks seen during blockbuster exhibitions like Andy Warhol and Fernando Botero,” said Elisabeth Callihan, public relations and public events manager. “We have noticed a slight decrease in our 2009 attendance, compared with last year’s at this point, because of our Tuesday closure,” said Callihan. She’s hopeful that attendance will rocket back up this fall with a new exhibit titled Masterpieces from the Museo de Arte de Ponce, which will be the largest in the museum’s history.

“It’s rare that an exhibition of this significance and magnitude comes to Memphis, so I am confident that attendance will get a big boost during the show’s run,” said Callihan.

As for the up-again, down-again Memphis Grizzlies, Kane said that the presence of major league sports in Memphis is never a bad thing even after a losing season. “The Fedex Forum obviously is a great venue—one of the best sports venues in the country today,” said Kane. “Even though our team struggled last year, having a major league franchise from a tourist perspective is a big deal. It was a stigma for us to be the largest market in the United States outside of Las Vegas that didn’t have some form of a professional sporting franchise.”

So what is the big challenge for Memphis’s tourist market?

“I think that self esteem is one of Memphis’ biggest challenges and that’s not unlike a lot of other communities,” said Kane. “The reality is that very few communities have great civic pride.”

But the MCVB’s study did find that 96 percent of those who visit Memphis were likely to give a favorable recommendation to their friends and families.

Said Kane, “So the good news is that we’re exceeding tourists’ expectations.”