It’s been a big year for destination marketing in San Jose, California.
The Silicon Valley city clearly has plenty to offer – the region is home to Apple, Facebook, Twitter, and thousands of technology startups that help drive business travel and a thriving meetings and conventions industry.
In 2015, the City of San Jose gave Team San Jose a new mandate to expand economic development by leading local destination marketing for the very first time. Team San Jose isn’t your typical DMO, though. The organization manages theatres, arts venues, a convention centre, and even a UPS store, in an effort to coordinate and promote many civic institutions that support its current business.
Starting a new destination marketing organization (DMO) would be exciting enough. Then in 2016, the Super Bowl came to town.
What can destinations learn from San Jose’s first year of destination marketing?
VP of Communications and Marketing Laura Chmielewski represented Team San Jose in discussions about the future of destination marketing at Destination Think! Forum 2016. After the event, we asked Laura and Kyle Schatzel, Communications Manager, about Team San Jose’s first-year Super Bowl successes, challenges, opportunities and its blossoming partnership with Airbnb.
David Archer, Destination Think!: Team San Jose seems to have a broader scope of work than some other destination marketing organizations (DMOs). Can you briefly describe Team San Jose’s mandate?
Laura Chmielewski, VP Marketing and Communications, Team San Jose: We are in the heart of the Silicon Valley, so what happens here is constant change. Over the past ten years, this organization has taken on more and more each year. We started almost strictly as a venue management company while we were growing, selling and renovating these historic structures. For example, our California Theatre has hosted two events to launch Apple products, and our convention centre in Silicon Valley has also kept us pretty busy. We booked 52 trade shows in our convention centre and 611 theatre performances in our theatres during 2015.
A few years ago, our board and the City of San Jose felt that it was time to start destination marketing for the first time. As you know, it is a crowded field. The business destination of San Jose is so strong that its promotional efforts were primarily through sales.
So in the past year, they hired me to come and work with our new CEO, and most importantly: to work with the community to start telling the story of San Jose as a destination.
Can you describe your approach to working with the San Jose community?
Laura: We’re the most diverse city in the country, we’re the happiest city, we’re the healthiest city. But we’re also a city that’s undergoing extreme change.
A portion of our community has been here since John Steinbeck wrote about how the people of central California used to be, when San Jose was one of the greatest agricultural economic systems on the planet. It was called the “Valley of Heart’s Delight” because of the great abundance of fruit growers in the area. So that portion of our history is still very much alive.
On the other hand, a third of the people who are working and living in San Jose right now were born in a foreign country. They’re leaders in the tech industry. San Jose itself, not including outlying towns like Cupertino and Mountain view, has over 6700 tech start-ups.
You can imagine that the confluence of these forces makes it really interesting but also important that we get community buy-in around what their story is as we begin to tell it.
How did this storytelling begin for Team San Jose?
Laura: This mandate, this dream, came with no funding and no consumer marketing assets. It also came with the Super Bowl.
So in year one, we were trying to do all these things at once: leveraging the global eyes that were on us for Super Bowl 50 (in February 2016), and using every opportunity to cast the spotlight on San Jose, and talk about it as a strong leader that is diverse, healthy, amazing and beautiful. The greatest of hope stories.
Can you describe your biggest challenges going into your second year of destination marketing?
Laura: Our challenges really are the challenges that all DMOs face. The biggest challenge is identifying funding and trying to figure out a sustained and sustainable funding source. We can’t do what we know we need to do if we don’t have any money or any staff to do it.
But more than challenges, there are so many opportunities, because our leaders have never seen this strategy of destination marketing and how it can not only feed certain tax coffers, but also unite the citizenry in their shared story. Honestly, money is always going to be a problem, but we’re proud of the opportunity and the importance of the task that we’ve been given.
What’s your approach to trying to create that sustained funding?
Laura: We’re part of an interesting TBID [Tourism Business Improvement District] structure. We’re talking to our hotel partners, and we’re talking to our arts partners, because we believe they are our destination’s greatest story tellers. We are still getting to know the landscape and we are looking at every possibility.
Kyle Schatzel, Communications Manager: And I think that one of our biggest opportunities right now is in educating the community in San Jose on the power of destination marketing and the value that it can bring. It’s about getting the message out there. And the more funding we can get, the more we can make these things happen.
We have another opportunity as a travel destination where it’s very expensive to stay in town on the weekdays, but on weekends it’s very affordable. So we’re trying to bring in business travellers and help them blend their trips with leisure. We’re also trying to bring in more international travellers. We now have flights Beijing and Shanghai. We’ve got a flight from Frankfurt, a flight from London and we just actually launched service to Vancouver this year as well.
Laura: We should also note that we need to get creative due to our lack of funding. For international promotion we’ve partnered with neighbouring counties: Santa Cruz and Monterey counties. Both of these counties have had international presences for a very long time. With our new international flights and with our very different needs – as Kyle just mentioned, we need people on the weekend, they need people during the week – we’ve partnered with them for international promotion, so we’re leveraging our dollars that way as well.
What can other DMOs learn from your experience as a destination just beginning to reinvest in destination marketing?
Laura: I think the most important thing they need to learn is to be creative. Lead with your strongest assets. When we knew that Super Bowl was coming, one of the teams stayed in one of our hotels and actually used our convention centre for meetings and practices. We had an agreement with the NFL. We then leveraged that agreement into a presence in Super Bowl City, and we were the only DMO in Super Bowl City who didn’t pay for their presence there.
Instead of just posting someone there to give information about San Jose, we turned our whole venue into a stage, worked with forty-nine of San Jose’s cultural partners to put on shows from morning to night, with San Jose branding.
Had we gone the traditional route and had the money to do marketing, it would have looked a lot different than bringing a cultural explosion of San Jose into the middle of Super Bowl City where 1.2 million people were exposed to our brand in a way that isn’t traditionally done.
Kyle: For me, one thing that I’ve noticed here is the importance of leveraging partnerships. And what we did with Santa Cruz and Monterey was probably the greatest example of that. But many times, there are probably greater opportunities that you haven’t realized yet. So really look at the partnerships that are out there and see how these can work and make your destination a better place.
Laura: I’m going to add to Kyle’s point. The partnerships that we have because of our location really work to our advantage. We were one of the first places to collect revenue from Airbnb. And because we’re known as a business and meetings destination, we use our Airbnb properties to draw attention to mostly unknown destination assets – like our natural beauty.
DMOs are having many interesting conversations about Airbnb and the sharing economy. Has Airbnb been widely embraced in San Jose?
Laura: Yes. We’re collecting money anytime somebody stays in an Airbnb and this allows us to talk about how different some of our product is. Our hotel product is also our Airbnb product. So during the Super Bowl, although Bruno Mars stayed in our Fairmont, Beyonce stayed up in the beautiful hills of the Los Altos in a glass box house. We’re able to talk about and generate PR in a completely different way because of the diversity of our accommodation offer.
Has there been pushback from your local tourism industry about since Airbnb became a partner?
Laura: No, our industry loves them. We have an incredibly high occupancy rate, and our ADR (Average Daily Rate) during the week is very high. Our hotels are doing very well, and they know the importance of marketing dollars.
Kyle: A different type of traveller uses Airbnb, as well, whereas business travellers use downtown hotels. Many millennials and leisure travellers are more likely to use Airbnb when they stay. And it really adds to the hotel inventory that we have here in San Jose.
Laura: The fact that Airbnb is paying into the TOT (Transient Occupancy Tax), which in part, funds what we do, is good for them. They feel Airbnb is a different product and they’re absolutely right.
Related reading: How should destinations respond to Airbnb and the sharing economy?