Despite a strong dollar, a plummeting pound and concerns about security worldwide, New York hit a milestone in 2016 when it surpassed 60 million visitors for the first time. News editor Johanna Jainchill spoke with Fred Dixon, CEO of NYC & Company, the city's marketing arm, about how New York set this record despite those challenges.
Q: How did New York prevail in what looked like a difficult year for tourism?
A: We were prepared going into this year [knowing] that it was going to be challenging and amplified our efforts in many ways. We knew for certain in some key international markets, particularly in Europe, it was going to be important to drive the market as strongly as we could. We focused on two main pillars: value and urgency. One of the big messages was the new New York, all the exciting new happenings and developments, but also the value message and the notion that you can come to New York and even if your currency is worth less this year you can still have a great time. There was a lot of messaging on how to do New York on a budget, affordably, off-season. We went into more markets with direct consumer advertising than ever before.
Q: You predicted in April that spending would be down. Was it?
A: Spending overall actually increased. It is down per capita, but there were 1.5 million more visitors this year than last, so total spending actually went up. That's what you have to do; it's the only way to grow spending when people are tightening their wallets more. It really is a volume game in many ways, and it's also trying to encourage visitation in lower times of year when their currency goes further against the dollar.
Q: Hotels report that room rates are falling. Do you predict improvement in 2017?
A: The [development] growth has been so consistent over the years that, to the dismay of hoteliers, it's inhibited rate growth. The hotel average daily rate in New York is not back to where it was in '08, before the economic downturn. Experts in this field will tell you that it will moderate over time. It takes a moment for the market to catch up to new growth and we've had so much of it: seven or eight consecutive years of significant growth. That's not something you recover overnight from. The good news is that as a destination we have continued to drive demand. Sales of room nights have grown at a really healthy rate.
Q: Did you lose any international share?
A: The domestic market grew faster than the international market, and that's not always been the case. Canada, the U.K. and Brazil are three standouts in declines. The U.K. was only off 0.9%. Not bad for a market of 1.2 million. Brazil is continuing to struggle economically, but we hear that they are bottoming out and will come back up. We haven't pulled back on promotion in Brazil. We don't believe in dipping in and out of markets. You lose so much momentum when you do that.
The big news this year was the growth in China and that it moved up to the No. 2 spot after the U.K. We focus a lot on the international market because per capita they have a larger footprint economically. But the domestic market is always the largest volume. The major attractions -- museums, Broadway, restaurants -- they really depend on the domestic markets.
Q: Do you think New York benefitted from fears about traveling to Europe?
A: It's possible. Going into the summer we were concerned it might be the opposite; because the dollar was so strong we thought people would say this might be the year to skip New York and go to Rome. But we didn't see any negative impact.