Scale and the Public Sector in Tourism and Economic Development

Many individual tourism-related businesses and attractions fail because they begin at the wrong scale. While finding a local entrepreneur often is an essential piece to building and tourism and economic development program you want, make sure that local person is supported in the same ways that I hope you support all local entrepreneurs. In particular, they need to do market research and be sharp and realistic about expectations.

Local boosterism can cause someone to jump in faster than the market will absorb. Tourism is often a slow build in communities where there has not been much tourist activity. If the public sector believes strongly in tourism potential, it may want to absorb some of the early-years risk for an entrepreneur through whatever economic development incentives are available in your state.

Another way the public sector can assist is by providing an overall facility, whether through zoning a district, or constructing or redeveloping a market, block of stores, or conference center. Rentals can eventually amortize this cost, but having the government bear the development cost of a versatile structure that adapts to the market could be a huge benefit to entrepreneurs.

Providing the facility or group of facilities in one area also is an effective method for a government to help tourism and economic development reach critical mass by seeming more important since all attractions are grouped together.

One more piece of advice for the public sector professional would be to consult market research folks for franchises. Even if you’re repulsed by the idea of a Fast Food Giant in a tourist destination, their market study might tell you a lot. So next time they contact you, don’t brush them off. Play their game; their real estate and market perspective could teach you about your own city.

Reprinted with permission from http://www.useful-community-development.org/