Discover Kalispell 2019 - Destination Tourism Strategy Design and Implementation
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Discover Kalispell
Destination Tourism Strategy Design
and Implementation
2019
“Ideas and solutions for your competitive world.”
3.1
P.O. Box 10109, South Lake Tahoe, CA 96158 www.smgonline.net
Kalispell Destination Tourism Strategy Project Overview Introduction Discover Kalispell is the destination marketing organization (DMO) for the City of Kalispell, Montana. The organization is charged with generating economic benefits for the city, its stakeholders, and residents through marketing the area as a must-visit destination in Northwestern Montana. Kalispell is a remarkable little destination located in Flathead County. The destination is unique. It possesses attributes that can be found in both resort destinations and a small to medium sized city. From a resort perspective, the destination has access to Glacier National Park, Wilderness Areas, and winter and summer recreation opportunities. From a city perspective, Kalispell boasts a commercial airport, a variety of hotels, big box and local retail shopping, and an assortment of events for both residents and visitors. And, making Kalispell even more unique is its local community with a shared passion for protecting the environment, and connecting with the outdoors. The destination, long known for its proximity to Glacier National Park, has been defined by that shorthand, which in some ways, has limited the awareness of Kalispell’s other destination offerings that can generate more travel spending. To improve its competitive position, Discover Kalispell is seeking to develop a Destination Tourism Strategy that serves as a blueprint for the organization to achieve critical goals to enhance revenues, local taxes, and employment. Why a Destination Tourism Strategy for Kalispell? It’s a great question. In short because tourism has become increasingly competitive. A destination can no longer just assume that because it has tourism assets that it will be successful. Hardly. The competitive and consumer environment changes rapidly; visitor needs and wants are different. As well, the myriad challenges that destinations face such as overcrowding and climate change are dictating that destination “The possession of tourism marketing organizations need to be more thoughtful and assets alone, as beautiful as involved in proactively managing tourism - or risk being they are, does not seen as part of the problem. In our experience, it’s also automatically guarantee your not about the plan. It’s really about the thought process destination’s success.” that goes into the plan and the thinking that is needed to remain competitive in a rapidly changing environment. SMG Consulting At SMG Consulting we see ourselves not as planners, but as designers. We see tourism strategy from an artistic community-based perspective, not your standard top-down mechanistic view. The strategy we have developed for Kalispell is unique, based on the culture and values of the local community that give Kalispell a sense of place and belonging. It's our job to help the DMO, Discover Kalispell, to translate SMG Consulting 2|Page
Kalispell Destination Tourism Strategy
what’s interesting about its place-based attributes and community into a competitive strategy that
effectively differentiates the destination to create interest and demand to targeted visitors.
Throughout the strategic planning process, we strive to answer some straightforward questions to
improve Discover Kalispell’s effectiveness.
1. Given the changing marketplace and the assets of the destination, where does the organization
want to be one year from now, two years from now, three years from now. And, can it get
there?
2. Does Discover Kalispell and its stakeholders have the capabilities to implement a new
destination tourism strategy? It's also not enough to have a strategy; an organization must have
a collective mindset that embraces change and allows DMO staff to confidently implement the
strategy.
At SMG Consulting, we see destination tourism strategy design as transformative for the stakeholders,
the staff, and the community as a whole. SMG is committed to help guide Kalispell to see itself and its
assets in a new way, and to develop a core opportunistic strategy designed to take advantage of existing
programs as well as look at new programs. The goal is to maximize all of the destination’s assets, and
align opportunities with the changing market conditions which, in turn, drive strategies and programs.
Discover
Kalispell
Strategies and
Programs
Destination
Assets
Strategic
Opportunity
Changing Market
Conditions
Strategic Impact
SMG Consulting 3|Page
Kalispell Destination Tourism Strategy
Our Philosophy
At SMG Consulting we believe the long-term success of a tourism strategy is based on a simple premise -
it takes the client, the stakeholders, and the community to develop a strategy that works.
We do not come to Kalispell and tell stakeholders what to do. Instead, we act as a guide and resource
that works with Discover Kalispell and the entire destination to
develop an authentic and defensible strategy.
Yes, we push and pull and cajole, but mostly we try and provide
you with insight and knowledge acquired through our years of
“We are designers and experience and many successful projects. In the end, it’s a
strategists, that value process that we believe will benefit Kalispell too.
creativity and insight.
Not planners with a
standard formula for
each destination.”
SMG Consulting
SMG Consulting 4|Page
Kalispell Destination Tourism Strategy
Scope of Work
SMG Consulting uses a three-phased process to create the Destination Tourism Strategy.
Destination Tourism Strategy Facilitation Methodology
Understanding Creating Transforming
Phase 1 – Understanding
We look to understand all aspects of the destination, especially what makes the destination different in
feel and culture.
Phase 2 – Creating
Once we understand a destination, we focus on a process to design and create marketing strategies to
improve the competitiveness of the destination.
Phase 3 – Transforming
Once we create strategies to improve the competitiveness of the destination, we develop the steps to
transform those strategies into real changes that benefit the destination.
It is our specific goal to provide Discover Kalispell with
a Destination Tourism Strategy that over time will
increase the competitiveness of the destination, and in
turn, increase revenues, taxes, and local employment.
SMG Consulting 5|Page
Kalispell Destination Tourism Strategy
Our Approach
The strategy development process is a comprehensive approach that will help make implementation of
Discover Kalispell’s strategic efforts more effective. We bring in and involve those who will be a key part
of implementing the strategy. And, we go beyond just the tourism industry’s involvement and attract a
broad, cross segment of the community including recreation lovers, the arts and culture community,
environmentalists, local government, downtown businesses, and other stakeholders.
Overview
The proposed strategic design process is holistic to bring the real uniqueness of the destination to the
surface and ensure the buy-in and support from the broader tourism industry.
SMG Consulting 3-Point Strategy Design Approach
Market
Changes
Discover
Kalispell
Tourism
Stakeholders Destination
Assets
Kalispell Strategy Ecosystem
The SMG approach captures the key elements necessary to develop a successful organizational/
destination tourism strategy.
The first dimension is a macro dimension that includes a review of the dynamic change
elements in which Kalispell currently works. Here we ask about what significant changes in the
marketplace are occurring that the destination needs to take advantage of or be wary of.
The second dimension is a Destination Assets perspective which includes perspective and
insight from the broader community.
The third dimension includes a stakeholder community and industry viewpoint which provides
perspective and insight from a variety of stakeholders within Kalispell.
SMG Consulting 6|PageKalispell Destination Tourism Strategy
Destination Tourism Strategy Report Format
The report format will take the reader from a broad understanding of tourism within the region all the
way through specific actions steps that will transform Kalispell into a more competitive destination for
the near and mid-term. This broad to narrow report flow is designed to provide the reader with a
backdrop and context with which to understand the macro environment in which Discover Kalispell
exists, then through the specific action steps to maximize its competitive position.
Section One: Understanding
Part 1: Overview of Flathead County Tourism
Part 2: Kalispell Tourism Overview
Part 3: Kalispell Competitive Dynamics
Part 4: Destination Assets, Liabilities, and Opportunities
Part 5: Social + Cultural Trends
Section Two: Creating
Part 6: Strategy Development and Integration
Section Three: Transforming
Part 7: Implementation
Special Thanks
Special thanks to the staff of Discover Kalispell for their support in providing information, data, and
arranging and holding meetings. Additionally, staff insight and perspective were invaluable and
complementary to the broader community perspectives collected.
SMG Consulting 7|PageKalispell Destination Tourism Strategy Executive Summary (Setting the Stage) The development of the Kalispell Destination Tourism Strategy is designed to consider where Kalispell is today and to transition the destination to become a more competitive place. This transition needs to occur in a way that encompasses four key elements: to optimize the economic impact of visitors, to support and empower the local tourism industry, to be a voice for the value of tourism in Kalispell, and to respect and champion the local culture and natural resources of the area. 1. Optimize the Economic Impact of Visitors Visitor spending is one of the major revenue generators to the City and residents of Kalispell through retail sales and the Transient Occupancy Tax collection. 2. Empower the Local Tourism Industry To be successful, it is imperative that residents see themselves as part of the tourism industry. The alignment of community values with the tourism industry needs is critical to present an authentic experience that reinforces why Kalispell is different from everywhere else. Additionally, it is important for Discover Kalispell to empower both the tourism industry and the community with its technology and information that it gains from the programs and research it implements. It’s a two-way street; with new ideas flowing from the community up and from Discover Kalispell down. It’s only through this empowered and collaborative approach that the DMO can truly be as innovative and effective as possible. 3. Be a Voice for Tourism Discover Kalispell needs to be the voice for the tourism industry. Unfortunately, many people don’t have an understanding or may not care for tourism. Some residents may see tourism only in a negative light. As such, it is important for the DMO to not only to reach out with the information and benefits of tourism, but to continue to encourage community participation and sharing in all that Kalispell has to offer. Who wouldn’t want to share the fun? 4. Champion Local Culture, Recreation and the Natural Resources Perhaps one of the most important roles Discover Kalispell can play is championing the local culture, recreation and the natural resources. It is these elements that serve to define what makes this place different and in doing so, increases the competitiveness of the destination. It’s also important to be sensitive to the negative sides of tourism that can impact the natural resources and local community such as overcrowding and pollution. Championing also means managing and protecting these precious resources because they are truly what makes Kalispell unique and will make the DMO successful. SMG Consulting 8|Page
Kalispell Destination Tourism Strategy As Kalispell evolves, the goal of this strategy is to make the destination more competitive. That does not mean for Discover Kalispell to do or to offer the same things as everybody else. For Kalispell to succeed, it must be different and unique, quirky and fun, and introduce its local entrepreneurs that embody Kalispell’s unique mountain culture that gives the destination life and distinction. It must follow its own path and tap deep into its local culture and bring it forward by telling an interesting and compelling story to potential visitors—one that honestly captures the character of Kalispell. To get there, Kalispell is going to have to understand and celebrate its differences and not wish they had things that other destinations might have. It’s a different way of seeing a destination – and one the visitor will appreciate. SMG Consulting 9|Page
Kalispell Destination Tourism Strategy
Section One: Understanding
Understanding the Forces of Change
Perhaps the best place to begin to shape destination tourism strategy is to understand the forces that
shape and impact a destination. These forces are often beyond the control of a destination, but not
beyond their understanding. As such, by understanding these forces destinations can adapt and adjust
and hopefully minimize the negative impact and maximize the potential opportunities that may exist.
Macro forces that influence the historic and future demand for tourism
The major forces that impact Kalispell tourism have been identified below. It’s also important to note
that not all of these forces impact tourism efforts equally, but they do impact those efforts in some way.
It’s critical for Discover Kalispell, and the broader tourism industry, to understand these as a backdrop to
developing a cohesive and holistic approach to Kalispell’s competitive strategy.
Technology
Political & Socio
Legal Cultural
Kalispell
Destination
Environmental Economic
Competitive
In considering these impacts, oftentimes the tourism industry is most familiar with the economic and
competitive factors because they are most evident. But make no mistake. Each of these areas can and
will have an impact on the competitiveness of Discover Kalispell.
Table 1 on the following page is a summary of the macro forces that can potentially impact the
destination.
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Table 1: Macro Forces of Change: Potential Impact on Kalispell Tourism
Macro Force Description/Impact
Socio Cultural - Changes in population: Baby Boomers through Millennials
- Reason why people travel
- Destination experiences/activities
- Changes in behavior
- Changes in social media use
- Changes in decision making/transactions
Potential Kalispell Impact:
- Understanding the nuanced differences to what visitors are looking
for, i.e. authentic experiences, convenience, etc.
Technological - Use of technology in destination/consumer marketing
Potential Kalispell Impact:
- Changes in ways to reach consumers, distribute visitor and
destination information.
- Access to and mapping to remote areas.
- Changes to how people book lodging, outfitters/guides, etc.
Economic - National, state and regional economic trends
- Economic trends shaping consumer buying habits
Potential Kalispell Impact:
- Visitation levels and spending decisions within the destination
- Lodging and community spending and pricing
Environmental - Climate change and its impact on the Montana ecosystem.
Potential Kalispell Impact:
- Increased fire and resource damage
- Impact on visitor outdoor experiences
Political/Legal - State, County and City legal impacts
Potential Kalispell Impact:
- State liquor licensing; future downtown road routing
- County sign ordinances etc. impacting visual corridor
Competitive - Competition from other similar destinations
Potential Kalispell Impact:
- Constant pressure on pricing and adaptive marketing strategies and
programs
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Part 1: Overview of Flathead County Tourism (Understanding)
The following section is designed to provide a current understanding of the size of the tourism economy
in Flathead County, and more specifically, Kalispell. Within the county, there are several tourism
destinations including Kalispell, Whitefish as well as chamber of commerce supported efforts in Big Fork,
Lakeside and Columbia Falls that work to attract visitors utilizing their own marketing and promotions
funding. Additionally, the region is part of Montana’s Glacier County promotional efforts.
Understanding the context of where the destination is currently operating within the competitive set
provides the basis for looking forward to achieve stated goals. Additionally, the section provides an
overview of the Discover Kalispell tourism promotion efforts and a summary of destination assets,
liabilities, and potential opportunities to increase the competitiveness of the destination.
Flathead County Tourism Overview
Flathead County generates approximately $530 million in destination tourism spending1.
The largest categories of spending include restaurants/bars, retail sales, and hotels/motels.
Figure 1: Flathead County Visitor Spending
Transportation Fares $443,000
Farmers Market $1,002,000
Gambling $1,480,000
Vehicle Repairs $2,557,000
Misc Services $6,085,000
Campground, RV Park $7,717,000
Auto Rental $15,141,000
Made in MT $16,446,000
Rental Cabin, Condo $27,722,000
Lic.,Entrance Fees $41,890,000
Groceries, Snacks $49,686,000
Outfitter, Guides $59,396,000
Hotels, Motels $63,241,000
Retail Sales $73,439,000
Restaurants, Bars $125,237,000
$0 $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 $140,000,000
Source: 2017 Economic Contribution of Non-Resident Travel Spending in Montana Regions and Counties
1
2017 Economic Contribution of Non-Resident Travel Spending in Montana Regions and Counties
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Part 2: Kalispell Tourism Overview (Understanding)
A. Size and Scope of Kalispell Visitor Spending (Estimated)
In terms of visitor spending in Kalispell, it is estimated non-resident tourism spending is approximately
$97 million on an annual basis. The figure below illustrates the general spending by visitors to Kalispell
estimated by SMG Consulting using State of Montana and local data.
Figure 2: Estimated Visitor Spending in Kalispell
Transportation $12,644
Farmers Market $1,458,980
Gambling $1,264,449
Misc Services $1,458,980
Made in MT $2,917,959
Gas, Diesel $6,808,572
Licenses, Entrance Fees $7,781,225
Groceries, Snacks $9,045,674
Outfitters, Guides $11,185,511
Retail Sales $13,811,675
Restaurants, Bars $23,343,576
All Lodging $17,799,553
$0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000
Source: 2017 Economic Contribution of Non-Resident Travel Spending in Montana Regions and Counties, SMG Consulting
The three largest spending categories include restaurants and bars, lodging, and retail sales. These three
spending categories are key elements in any tourism economy and stress the importance of the
integration of outdoor activities and the town/community into the visitor attraction mix.
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B. Kalispell Lodging Trend
Kalispell has approximately 1,900 hotel-motel rooms, most of which are flagship brand hotels. In terms
of overall occupancy, between 2011 and 2018 the destination has seen annual occupancy increase
slightly from 51.1% to 53.1%, and Average Daily Rate (ADR) increase 23% from $87.5 to $108.
Figure 3: Kalispell Annual Occupancy Trend (2011 – 2018)
54.5% $120.00
53.9% 54.0%
54.0% $107.23 $107.70
$102.15 $102.27 $101.81 $100.00
53.5% 53.2% $97.48
$92.30 53.0% 53.1%
$87.50 52.8%
53.0%
$80.00
52.5% 52.2%
52.0% $60.00
51.5%
51.1%
$40.00
51.0%
50.5%
$20.00
50.0%
49.5% $0.00
2011 2012 2013 2014 2015 2016 2017 2018
Occupancy ADR
Source: Smith Travel Research
In terms of seasonal occupancy, Kalispell’s strongest quarter is the summer (Avg 75.7%) followed by
spring (Avg 57.6%) and fall (Avg 39.5%). The winter quarter has the lowest demand (Avg 37.8%). The
figure below illustrates the typical demand pattern as measured by occupancy rates. Clearly, there is an
opportunity to grow during every season of the year.
Figure 4: Kalispell Seasonality 2018
90.0%
80.0% 81.2%
76.9%
70.0% 71.9%
69.0%
60.0%
57.0%
Q4 Avg=39.5%
50.0%
Q1 Avg=37.8% 47.9%
44.3%
40.0% 39.2% 40.6% Q3 Avg=75.7%
37.2%
33.8% 33.6%
30.0% Q2 Avg=57.6%
20.0%
10.0%
0.0%
Jan Feb March April May June July Aug Sept Oct Nov Dec
Source:
Smith Travel Research
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C. Discover Kalispell Tourism Promotion Efforts
The Kalispell Convention & Visitor Bureau - Discover Kalispell, is a division of the Kalispell Chamber of
Commerce. It is funded through Kalispell’s share of the 7% state accommodations tax (Bed Tax) and the
$2/rm night Tourism Business Improvement District (TBID) fee. Discover Kalispell is governed by
Kalispell Chamber Board of Directors and the Montana Tourism Advisory Council that approves
the allocation of the bed tax funds, and the Kalispell TBID Board of Directors and the Council of the City
of Kalispell that approves the allocation of the TBID funds.
The organization provides a full range of Destination Marketing Organization marketing programs
designed to create awareness for the destination and attract visitation to Kalispell and operates the
Visitor Information Center.
Website/ Search engine optimization
Visitor Services
Social media
Public relations
Special events
Promotions
Group Sales, Meetings and Conventions
Additionally, the organization has industry input via its 7-member TBID board. Additionally, there is a
twenty-six-member Kalispell Chamber of Commerce board comprised of key industry sectors and ex-
officio reps from the County and City. They are advisory boards that approve the annual CVB marketing
plan and budget and are updated regularly during the year on KCVB initiatives.
The primary role of the organization is to create awareness and influence potential visitors to choose
Kalispell over other competitor destinations.
2018 Google Analytics
Intereest
Influence
Quick facts
Website -users, 138,000
Page views- 332,000
Committment
Sessions- 171,000
Bounce rate-69%
Booking
To that end, marketing efforts generated 138,000 website users, of which 88% were new visitors. Based
on the website experience, a percentage of will be influenced to visit.
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Part 3: Kalispell Competitive Dynamics (Understanding)
Following is a preliminary look at Montana for the last seven years, 2012 through 2018. This trend line
shows two sets of players; those growing and those flatlining:
Table 2: Lodging Data 2012-2018 Selected Competitive Set
2012 to 2018
City Track Annualized Performance Numbers YTD December
2018 2017 2016 2015 2014 2013 2012
OCC ADR OCC ADR OCC ADR OCC ADR OCC ADR OCC ADR OCC ADR
Kalispell 53.1 $108 52.2 $107 54 $102 53.9 $102 53 $102 52.8 $97 53.2 $92
Whitefish 54.9 $124 51.4 $120 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Missoula 64.6 $106 64.7 $101 62.6 $95 60.9 $93 59.3 $90 57.4 $85 55.7 $83
Butte 51.2 $90 50.8 $91 62.9 $92 52.9 $92 51.6 $87 49.5 $85 52.4 $81
Bozeman 72.5 $117 69.9 $115 70.3 $110 70.3 $110 65.5 $91 64.3 $95 62.6 $90
Helena/GF 58 $91 58 $91 58.2 $87 58.2 $87 58.6 $84 57 $84 59.4 $81
Couer d 'Alene 63.3 $138 62.3 $136 61.7 $133 61.3 $128 58 $127 58 $123 57.7 $116
Billings 60.7 $94 57.7 $95 58.6 $94.00 59.7 $95 65.1 $95 62.6 $87 68.1 83.8
Source: Smith Travel Research
Missoula: University town, regional mall, rail head and Interstate 90. Limited service hotels and
suites dominated by Hilton Garden Inn off freeway.
Butte: Open pit mine and I-90 location. Limited service freeway proximate lodging.
Helena: Capital city with significant historical and intellectual demand generators. Occupancy
stability with hotels at all segments, I-15 and shortcut back to I-90 to west. Helena should be an
in-state demand market for a lot of segments to Kalispell, but it is small.
Bozeman: Big Sky Resort and Yellowstone gateway, college town with a Hampton Inn,
Homewood Suites, Holiday Inn and Grand Tree Inn all I-90 facing, and several low-end limited
service hotels including La Quinta and Holiday Inn Express in close proximity to the airport.
Billings: Largest city in state, center of commerce, Conoco refinery. Approximately 175K
residents in the metro area and 400k in the trade area. Billings must be seen as an in-state piece
of market demand for Kalispell including meetings, sports events, low season offerings, and
product programs.
Coeur d’Alene: Stands out on annualized ADR. Must use Spokane airport for access. While it
does not have winter sports base, it has strong summer lake and other economic drivers.
Observations:
Only Bozeman and Missoula are running close to national average indicating the other Montana
destinations are lacking any significant off-season demand and driving down annualized ADR as
occupancy differences are small on an annualized basis. This should be an area of concern for
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Kalispell indicating there is a highly seasonal and need (especially with an airport) to invest in
demand that impacts off season (meetings and group) or focus on demand generators in off
season that are not consistent with Whitefish.
Missoula and Bozeman show strong long-term growth in both rate and occupancy, stable
markets suggesting much less destination seasonality impacts. This also suggests that growth is
happening in both rate and occupancy throughout Montana.
The outcasts are Butte and Helena where government (capital) likely drives rates and
occupancy. Helena occupancy is stable due to government being one of the economic engines
in such a rural state. While neither are direct competitors to Kalispell, both should be considered
for shoulder season demand and be a target market to pursue government meetings, etc.
Whitefish stands out with pure resort pricing (ADR) and the ability to hold rate during off seasons.
Kalispell has been range-bound around 53% annualized since post-recession 2011 and on, while
Whitefish (with very limited historical data available), seems to be moving upward but basically
in that same range. In contrast, Bozeman is not range-bound and is tracking upward, as is
Missoula.
Kalispell has a similar performance year over year. This could be a result of being tied to tracking
Whitefish.
Figure 5: Kalispell vs. Whitefish Occupancy 2018
KALISPELL VS. WHITEFISH OCC%
2018
Kalispell Whitefish
90
80 80.6 81.2 82.1
77.5 76.9 74.8
70 71.9 69
60
57
54.4
50 52.2
46.6 47.9
43.1 44.3
40 39.2 40.6 39.6
34.7 37.2
33.8
31.5
30
20
10
0
Jan Feb March Apr May Jun Jul Aug Sep Oct Nov Dec
Source: Smith Travel Research
Whitefish was able to jump occupancy in 2018 to 3.5 points while Kalispell could only show .9-
point growth in presumably the same location demand generator set. Whitefish has three new
lodging properties and this new supply has driven down Average Daily Rates and in turn shifted
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some demand away from Kalispell, suggesting a need for more differentiation and a stronger
Kalispell positioning.
Impacts for Kalispell: Strategic Opportunities
Demand generation clearly favors summer over winter. Annual data is more neutral as YTD
Kalispell outpaces Whitefish. This indicates the strong possibility that this is a winter issue only.
Clearly, there is an ADR advantage in Whitefish that is probably a resort area premium that is
not going to be resolved if Kalispell continues to focus on being a resort. Kalispell needs a new
value proposition to maximize its competitive advantage.
Occupancy in Kalispell has not changed significantly over last seven years, which suggests a need
to identify clear space positioning beyond Glacier National Park, Whitefish, and outdoor
recreation.
Further, the occupancy for both Kalispell and Whitefish annualized have room for
improvement. Perhaps not for true winter resort ski towns, but certainly opportunity to
improve..
Summary
Another perspective compares Occupancy and ADR from a pure resort perspective and city perspective.
As can be seen below, Kalispell falls in between these competitive sets.
Figure 6: Competitive Set Comparative
2018 RESORT VS. CITY OCC% & ADR
$140 63% 64%
$128 62%
$120 62%
$109
$100 60%
$91
$80 58%
$60 55% 56%
$40 54%
$20 52%
$0 50%
Pure Resort Kalispell City
Occupancy ADR
Source: Smith Travel Research
Pure Resort=Whitefish, Couer d’ Alene, Sandpoint, Bend City= Helena/Great Falls, Butte, Bozeman, Billings
Kalispell is not achieving Occupancy or ADR of a pure resort or city destination, but it is positioned more
as a core resort. It begs the question where does Kalispell fit? Is it a city or pure resort? Perhaps it needs
to define its own space?
The strategic logic of mimicking or tracking Whitefish demand is not leveraging anything new. This trend
pretty much screams in black and white and can easily be used to make the case to start thinking about
something new. Kalispell needs to define its unique aspects and unique markets and differentiate from
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Whitefish. If not, both destinations will grow - but Whitefish will take the overwhelming market share
since it better represents an existing resort destination.
Part 4: Destination Assets, Liabilities, and Opportunities (Understanding)
SMG Consulting engaged with a cross-section of community members in an effort to understand the
values, character, and culture of Kalispell. It is these elements and understanding how residents see
themselves that allows the destination to define its core assets. While oftentimes assets are thought of
in terms of a destination’s attributes, i.e. bike trails, hiking trails, etc., it is really the local culture that
gives it life and distinction that differentiates it from other destinations.
A. Kalispell Assets
The community engagement process identified several core assets that define life in Kalispell.
Friendly Community/Small Town Feel
Perhaps one of the most constantly mentioned values is its friendliness and its small-town feel.
Kalispell residents recognize the importance of tourism to their local economy and way of life, and
as such, they are very friendly and welcoming to visitors.
Outdoor Recreation
Kalispell has a variety of world class outdoor recreation options. Land and water based recreation
helps to define the local residents’ passions. Be it hiking, biking, kayaking, or the availability of open
space, the local community places high importance on access to outdoor recreation.
Downtown
The Kalispell downtown is an emerging opportunity to present an entirely different side of Kalispell
to visitors. The downtown area is in transition which will see new housing, dining and shopping and
more importantly, will be a catalyst for local culture to be on display and experienced.
Family Friendly
Kalispell is very family friendly and supports a variety of experiences that reinforce it.
Shopping
Kalispell is known for its availability of shopping, especially for Canadian visitors, which is an
important activity and revenue generator.
Glacier Park International Airport
Kalispell is accessed by Glacier International Airport which provides air service from a variety of
national markets including the following:
Salt Lake City Minneapolis/St. Paul
Atlanta (Seasonal) Dallas (Seasonal)
Denver Chicago (Seasonal)
Seattle Portland (Seasonal)
Las Vegas Oakland (Seasonal)
Los Angeles (Seasonal)
San Francisco (Seasonal)
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Phoenix (Mesa)
Proximity to Glacier National Park
Glacier National Park is a major attraction that attracts both national and international visitors.
B. Kalispell Liabilities
Along with its core assets, Kalispell also has liabilities that can limit its ability to maximize its tourism
experience and revenue over time.
Signage and Wayfinding
One area that could be improved is the signage to downtown, and the wayfinding in town which is
currently being addressed by the City of Kalispell.
Mindset
Often familiarity can breed passivity or an attitude of that’s the way it is. A key step to improving the
competitiveness of Kalispell is to reimagine the destination’s assets in a more competitive way and
effectively communicate it. To that end, one area that is of critical importance is the ability to
rethink the destination using all of its assets not just the outdoor recreation.
Community Vibe
In today’s tourism world, many destinations have very similar attributes for people to enjoy
including shopping, dining, and activities. What often sets a destination apart is the feel and sense of
place which is organically defined by the community way of life and its values. There is a need to
bring more of the local culture to the surface in an effort for visitors to better connect with the
destination.
More Dining Variety
As the downtown continues to evolve, it is hoped that more upscale dining will also be included as a
complement to the existing dining options available in Kalispell. Given the destination’s proximity to
Montana agricultural assets, a greater variety of dining experiences is hopeful to emerge, and in
doing so it will add another dimension to the local culture and to attract more foodies to the
destination. A major limiting factor to the culinary category is the antiquated liquor laws.
More Diverse Special Events
Kalispell needs to encourage the development of a wider variety of events that integrate the local
culture and extend beyond the traditional, existing segments. Events such as a Reggae festival to
different foodie events will help to attract a broader and more diverse visitor base.
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Kalispell Assets and Liabilities - Summary
Assets 1.Liabilities
- Friendly Community/Small town feel 2.- Signage and Wayfinding
- Outdoor Recreation 3.- Mindset
1.- Downtown 4.- Community Vibe
2.- Family Friendly 5.- More Dining Variety
3.- Shopping 6.- Diverse Special Events
4.- Glacier Park International Airport
5.- Proximity to Glacier National Park
Strategic Opportunity
Improve the competitiveness of Kalispell by reimagining and leveraging
its assets to create a "Destination Community" that positions Kalispell
between a resort destination and a city creating clear space in the
market.
This new positioning effectively unites the destination's traditional
outoor assets along with its unique persona which will increase
demand, revenues, and taxes during targeted times of the year.
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Kalispell Destination Tourism Strategy
Part 5: Social & Cultural Trends (Understanding)
Now more than ever, consumer behavior and technology has forever changed the travel and tourism
industry. From Baby Boomers to Millennials, our increased disposable income and insatiable appetite for
new experiences, social engagement and convenience is fueling the staggering growth of tourism - and
its diversity. Curated experiences that delve deeper into the local culture are in demand from foodie
immersion quests to off-the-beaten-path physical challenges. Consumers are in charge - dictating
destination offerings while transforming the local communities that serve them with every transaction
and social media review.
Expectations are high, super high. Make travel easy, uncomplicated,
and unique. Once in a lifetime, bucket list experiences have spurred You’re not a Tourism
innovation and transformed tourism destinations including the
residents and businesses.
Destination.
Understanding these pivotal consumer lifestyle trends and You’re an Experience.
integrating them into the DMO Destination Tourism Strategy is vital
for building awareness of the destination, increasing visitor SMG Consulting
spending, and room nights at Kalispell hotels and motels.
Top Consumer Lifestyle Trends
Once in A Lifetime Experiences
Today’s traveler wants their own personalized travel experience with an injection of local culture
and an easy transaction. Travelers want to visit new destinations with new places to eat, shop, stay
and more over-the-top adventures that align with their values and social media status. Experiences
range from total immersive wellness retreats, to ecological voluntourism expeditions, or a story-
driven walkabout in a historic downtown. Setting the pace of this new trend – in all aspects of our
lives - are Millennials who insist on exploring the world in a new way; to uncover and discover the
local culture and share their stories and imagery with others via social media and travel review sites.
Local Culture Immersion
Essential to all travelers is the ability to experience a destination like a local – even with a local.
Taking part in a physical activity or event that truly captures the essence of the local community is a
top aspiration. Travelers in all segments and all age groups - want to experience the local culture
through the cuisine, locally-made products, hands-on activities, local causes, and favorite pastimes.
Convenience – aka, Do it for Me
From planning to transactions to finding the most unique experience, travelers seeking the
authentic don’t want to do the research or planning. They want you to do it for them. They want to
be able to easily learn about a destination through their trusted source – Social Media Influencers,
Trip Advisor, Instagram – and they want to find it at the best rate with the best perks – using their
credit card points. Convenience at every step of the travel transaction – from booking
accommodations to a customized outing with a local such as an Airbnb Experience - is a key selling
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point for all ages and traveler niches wishing to spend less time planning and more time in the
activity, allowing time to post on Instagram and Twitter.
Travel Reviews & Social Media Influencers
More than ever, consumers rank travel review websites such as Trip Advisor and social media
influencers as more credible than traditional DMO websites to get the “real scoop” about a
destination, hotel, restaurant or an activity.
Booking Flexibility & Control
One only needs to look at the shift in overnight booking trends from last minute bookings to
extended business stays. Mobile technology and aggregated booking sites such as Trivago,
Booking.com, TravelPerks and Kayak has given leisure and business travelers greater control and
flexibility in booking travel from same day or taking advantage of last-minute offers.
Points, Perks & Rewards
Demand for travel rewards and perks are on the rise. Perks and credit card points are a key
consumer trend especially for Millennials who are signing up in record numbers for travel reward
credit cards with points for airfare, hotels, dining and other purchases. Frequent business travelers
and even non-brand-loyal leisure travelers are insisting on more perks beyond room upgrades such
as in-room fitness equipment, sound-proof pods, private lounges, and cell-phone concierge.
Discover Kalispell DMO Opportunities
Without a doubt, tourism promotion in 2019 and beyond is going to require a lot more work by the
DMO to meet consumer needs supported by the local community and businesses. Marketing programs
will involve a highly-defined and targeted set of tactics to match consumer lifestyle trends and their hi-
tech hi-touch demands. Clearly, Kalispell can provide exceptional experiences with its stunning natural
beauty, high priority with environmental protection, and friendly community. But you’ll need to foster
the economic and customer service transition by engaging all businesses to ensure real-time booking
information is available. With the help of your local businesses and residents, you’ll be able to develop
your own curated experiences/packages steeped in local traditions and hands on experiences. Most
importantly, recruiting passionate local storytellers, local guides and social media influencers will help
protect your local community and businesses.
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Section Two: Creating
Part 6: Strategy Development and Integration (Creating)
This section focuses on actually creating and integrating a more competitive strategy for Kalispell. The
strategy is designed to change the competitive playing field more favorably to align with Kalispell’s
sustainable strengths, and the integration of two key strategic elements.
Strategy Integration/Transition
Core Strategies
1. Use the price advantage
1. Destination Community
2. Drive the website
2. Grow demand during target seasons
3. Projected results
The development of a destination strategy for Kalispell is based on broadening the appeal of the
destination using the local culture and experience model; and deploying marketing resources to be
more effective to achieve a 60% annual occupancy rate in five years.
A. Core Strategies
1. Reposition Kalispell as a “Destination Community” as opposed to a Hub
Currently Kalispell is positioned as a “Hub” with access to a variety of recreation and other opportunities
– not all located within Kalispell. The new “Destination Community” strategy is deliberately designed to
increase the competitiveness of the destination. This nuanced difference is important to understand. A
hub is typically seen in geographic terms as in hub and spoke, but a “Destination Community” is a place -
in and of itself – an experience shaped by residents. It allows the potential visitor to see Kalispell as a
broader and more interesting place than just as a hub which further differentiates the destination.
Hub and Spoke “Destination Community”
Geographic Reference An Experience
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Asset Re-Evaluation/Building Experiences
For years, Kalispell has been known primarily for its proximity to Glacier National Park and incredible
outdoor recreation. This shorthand has defined Kalispell for decades. However, it also defines Whitefish.
While no one can dispute the importance of the Park and recreation and the role they have played in
visitations, there is and can be much more to experience at Kalispell. Rethinking Kalispell’s assets along
the lines of a Shopping + Downtown + Agriculture + Community experience provides a much more
expanded portfolio of assets to present to visitors, as well as curated experiences that match consumer
lifestyle and booking trends.
Primary Assets New Assets Total Assets/Experience
Downtown Glacier National Park
Glacier National Park
Community: Local Outdoor Recreation
Outdoor Recreation
culture, values and Shopping
Shopping character Downtown
Community: Local culture,
values, and character
By viewing Kalispell’s assets as community, one can see a more balanced and complete set of attributes
with which to communicate to potential visitors, thus, making the destination more multi-dimensional.
Viewed as an experience, in fact, makes the destination more competitive both from a local cultural
perspective and destination attribute perspective. According to Booking.com 2019 tourism survey, 60%
of travelers value experiences higher than material possessions and they are willing to pay for it.
Kalispell stakeholders need to consider expanding their vision of Kalispell tourism beyond the more
traditional revenue drivers and evaluate how a broader view can make the destination more
competitive.
The new “Destination Community” positioning does not diminish the fact that Kalispell is a hub for
regional visitor access activities. Instead, positioning Kalispell as a “Destination Community” makes
Kalispell a much more interesting place to visit – to experience - and makes it more competitive.
Communicating how potential visitors can experience the destination creates the ability to differentiate
Kalispell from its competitors, creating interest and potentially influencing them to visit and spend more
time and dollars in Kalispell. Simply promoting recreation does not effectively create a sustainable and
defendable difference. But, promoting a guided experience such as “Peak Bagging with Pete” does.
By capturing the eclectic feel of Kalispell defined by the local culture, combined with its recreational
assets creates a sustainable and defensible communication platform to present the destination as an
authentic experience that is unique from the competition. Above all, it creates a clear separation from
Whitefish.
Transitioning the hub positioning into the Destination Community positioning can be achieved through
messaging. For instance, the website introduction statement “Discovery in Every Direction” could be
changed to “Montana has a soul. Discover it in Kalispell.” This statement broadens the perception of
Kalispell and entices visitors to want to learn more and experience this unique mountain destination.
Messaging such as “Come to Kalispell for the Sushi” is so counter to what people expect that it opens
the door to discover more about the values, local culture, and character of the destination.
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2. Rethink Seasonal Focus for Growing Overnight Lodging Demand
Considering the seasonality of Kalispell and its proximity to Whitefish, Discover Kalispell should consider
further differentiation with a seasonal focus for visitation. As was seen previously, the following
situational factors exist in the marketplace for Kalispell.
Annual occupancy is 53% with 60% targeted in five years.
While the Summer quarter is the peak for Kalispell in terms of occupancy, it has room to grow.
There may be visitor volume limitations that exist at Glacier National Park, but there is available
room inventory in Kalispell.
Significant lodging capacity exists during the shoulder season. While conditions may be
challenging depending on weather, there are opportunities for other demand generating visitor
segments.
Winter business levels have been consistent at the 35% occupancy level for over seven years
suggesting that current marketing efforts will not drive significant increases. Because of its
proximity to the ski resorts, it is also believed that Whitefish is a primary beneficiary of winter
marketing. As such, winter marketing dollars spent to promote these efforts actually benefit
Whitefish at the expense of Kalispell.
Figure 7: Kalispell Occupancy 2018
90.0%
Opportunity is here.
80.0% 81.2%
76.9%
70.0% 71.9%
69.0%
60.0%
57.0%
50.0%
47.9%
44.3%
40.0% 39.2% 40.6%
37.2%
33.8% 33.6%
30.0%
Limited opportunity here.
20.0%
10.0%
0.0%
Jan Feb March April May June July Aug Sept Oct Nov Dec
Source: Smith Travel Research
Based on this occupancy vacancy it is recommended that Kalispell winter promotion efforts focused on
skiing be minimalized and let Kalispell serve as the overflow bed base to the Whitefish ski segment. As
such, Kalispell marketing funds can be redirected to new segments in the summer and shoulder season
using the “Destination Community” positioning supported by curated experiences.
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B. Marketing Strategy Integration/Transition
The strategy integration and transition seek to take advantage of Kalispell’s pricing advantage in the
short-term. By developing and implementing a repositioning of the destination and expanding its target
segments in the mid-term and then raising rates once a clear point of differentiation is established,
Kalispell can be seen in a “clear market space.”
1. The Price Advantage
Properly promoted, Kalispell’s product attributes and price/value translate into a clear visitor benefit.
The core strategy is to fully exploit the price/value advantage Kalispell has with regard to its other
competitors in the short-term, while building a clearer point of differentiation that will facilitate
increased average daily rate over the mid to longer term.
The figure below illustrates this price advantage and compares the 2018 Average Daily Rate for
Whitefish and Kalispell for one night. The figure also illustrates the average quality rating for the hotels
in each destination as assigned by users in TripAdvisor. As can be seen, Kalispell - while rated slightly
lower on quality - 4.3 versus 4.5 for Whitefish - holds a significant 15% price advantage over Whitefish.
This short-term advantage should be used while Kalispell repositions the destination as outlined. As
repositioning gains traction, it will enable Kalispell to increase ADR based on a more differentiated and
more competitive destination experience.
Figure 8: Kalispell Lodging Pricing and Rating vs. Competitive Set
4.55
Whitefish
4.5
4.45
4.4
Short-Term Price Competitive
4.35 Advantage
Kalispell
4.3
4.25
$106 $108 $110 $112 $114 $116 $118 $120 $122 $124
Source: Trip Advisor property ratings, Smith Travel Research, SMG Consulting
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2. Focus on Driving the Website and Influencing Potential Visitors
Given the prominent role that the Internet plays in travel planning, Kalispell’s marketing efforts should
continue to drive potential visitors to its website. At the core of the strategy are two basic principles:
The best organization to create awareness and brand positioning to influence visitors to
choose Kalispell is the Destination Marketing Organization.
The best organization to book a room or make a sale is a lodging property or an online travel
agency (OTA).
How the strategy works (see the model on following page)
Marketing programs (advertising, SEO, social media, public relations) are executed to attract
target market segments and to increase the existing database for future tourism marketing
efforts. Once the target segment is attracted, they either show interest (go to the Discover
Kalispell website) or not.
Once they go to the website, at some point, they may link to a lodging property, Glacier National
Park or outfitter. They may book directly, or they may book through an online travel agency or
some other channel. This sequence of events may happen all at once or over a period of time.
Based upon their experience, new visitors either become repeat visitors going back to the
lodging property/attraction directly or back to Discover Kalispell’s website to choose another
lodging property or attraction, or they fall out of the entire system.
The DMO can measure its effectiveness and accountability at several points.
o First, it will be able to measure how many website users are generated overall by its
marketing efforts.
o Second, it can develop online surveys to determine how people got to the website, its
influence to motivate them to book a vacation, and the return on investment (ROI).
o Third, it can measure how many visitors (leads) it provides to its TBID members,
attractions, and local businesses.
Discover Kalispell must concentrate its efforts on repositioning the destination and creating awareness
to drive potential visitors to its website in order to educate and encourage them to visit the
destination. In doing so, it is important to remember two key priorities:
1. Tourism promotion efforts must concentrate on the marketing elements that individual
organizations/businesses cannot do (or do as well) for themselves; and
2. Stakeholders must work together to support the “Destination Community” strategy.
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COMPETITIVE STRATEGY
“Destination Community”
Montana has a soul. Discover it in Kalispell.
Discover Kalispell
Advertising/Branding/Promotions SEO Digital Marketing Social Media
Public Relations Sales Content Development Publications
Target Segments
Geographic Demographic Seasonal Reason to Visit
www.DiscoverKalispell.com
Influence website visitors to Discover
Kalispell
Book a Vacation
Property Direct Online Travel Agent Other
Destination Experience
Extend vacation Repeat vacation Convert a day trip
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3. Kalispell Projected Results
As a result of implementing the strategy it is expected that Discover Kalispell will increase interest in the
destination with the intent to drive more potential visitors to the website. Current unique visitors to the
website are approximately 166,850 annually. The figure below projects unique visitor growth at 10%,
15% and 20% between a five-year timeframe.
Figure 9: Discover Kalispell Unique Visitors to Website | Annual Projections
403,644
2023 291,822
244,285
336,370
2022 253,758
222,077
240,264
2021 220,659
201,889
200,220
2020 191,878
183,535
166,850
2019 166,850
166,850
0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000
20% 15% 10%
Source: Google Analytics, SMG Estimates
In the figure above, assuming a range of annual growth rates between 10% and 20% of website visitors
over the next five years, there would be an incremental increase of website visitors. Assuming 10% are
influenced to visit, it would mean potential lodging revenue between $3.5M and $8.8M generated just
through the Kalispell tourism marketing efforts. Visitors can be tracked through the website. This does
not include consumers that might have been influenced to visit but did not use the Kalispell website.
Table 3: Lodging Revenue Projections
2019 2020 2021 2022 2023
10% Growth $3,570,590 $4,006,202 $4,406,833 $4,807,115 $4,410,260
15% Growth $3,570,590 $4,188,313 $4,816,545 $5,539,030 $6,369,891
20% Growth $3,570,590 $4,370,402 $5,244,483 $7,342,284 $8,810,741
Source: SMG Consulting Estimates
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Notes: Projections are based on website user growth using an estimated 10% influence to visit rate, 2.0 avarage
length of stay, $107 Average Daily Rate (ADR), and 2% inflation rate.
Phased Strategy Roll Out
The key toward leveraging this competitive advantage is to not only communicate the pricing, but to
promote Kalispell’s outdoor recreation, downtown, and local culture through curated experiences that
end with a transaction.
The figure below illustrates the roll out of the strategy in three phases.
The end result is a more competitive destination that is distinguished from Whitefish with a different
value perception for different market segments. This strategy allows the lodging industry to create its
own favorable (higher) pricing differential based on a different value proposition.
Kalispell Destination Strategy Roll Out
Phase 3
As the new
repositioning and
Phase 2 differentiation gains
Differentiate traction and
Kalispell. perceived value in
Claim the "Kalispell the minds of
Kalispell consumers increase,
Phase 1 Destination lodging prices begin
Community" to consistently rise.
Utilize existing price
advantage. positioning.
Define it.
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Part 7: Implementation (Transforming)
This section focuses on implementing specific steps in an effort to drive the new strategy and transform
the destination into a more competitive position which in turn increases revenues, employment, for the
City of Kalispell.
The key to implementing any strategy is the actual execution of specific action steps. To that end, it will
be imperative for Discover Kalispell to integrate implementation steps into their work plan.
The following “Strategic Framework” will provide Discover Kalispell and the tourism industry with
important direction for implementing the identified competitive strategy.
Discover Kalispell Strategic Framework
Destination Leadership
& Destination
Marketing & & Organization
Product Promotion
Development Alliances
This Strategic Framework leverages the opportunities available to Kalispell that increases the
destination’s competitive advantage by building on its strengths and further differentiating Kalispell as a
unique place within the Northwest Montana market. These implementation steps enable the
destination to maximize its competitive opportunity.
SMG Consulting 33 | P a g eYou can also read
