87: Would Your Stakeholders Fight to Keep You If You Disappeared Tomorrow? (Gary Sherwin)

Speaker A: Well, hello, my fine friends. Welcome back to Destination Discourse. I'm your host, Stuart Butler, and I'm joined today by Adam Stoker, who is the biggest Star wars fan I've ever met. How are you, Adam?

Speaker B: Stuart, there's a big galaxy out there, and in that whole entire galaxy.

Speaker A: Mhm.

Speaker B: There is no one that's more of a Star wars fan than I am.

Speaker A: Uh, that's entirely untrue. Right. You're not a big fan, but your brother is. And I got to tell you, he's now my favorite of the Stoker boys.

Speaker B: Yeah, you know, he's, he's 12 years younger than me. His name's Jake, and if anybody wants to follow, it's Jake. Wars is his handle on social media, and I think his youthful, immature, uh, takes on entertainment and media are excellent.

Speaker A: I, he's, he's a kindred spirit to me because he does like Star wars, he likes Lego, he likes video games and Pokemon and stuff.

Speaker B: So he's a Stoker you wish you were friends with.

Speaker A: It's like, I've never met this kid, but he's already my favorite stoker. And if, if this doesn't work out with me and you, Adam, then I'm certainly gonna do a different podcast with him.

Speaker B: I like it.

Speaker A: Yeah, it's, I mean, he's really. I'm a fanboy. You can, you can certainly tell him that's, that'd be great. But we're joined today with an industry legend, someone I, I was not familiar with until recently. It was introduced by Matt Staika, but, but. Welcome to the show. Gary Sherwin. How are you, sir?

Speaker C: I'm doing terrific, Stuart. Adam, it's great to be with you too.

Speaker B: Yeah. Good to see you again.

Speaker C: It's, uh, you know, Adam, you were in my CDME class, and Stuart and I got to know each other a little bit recently and, uh, we're, uh, talking. I think we've got a lot in common.

Speaker A: That's right. You know what's interesting is when I came to the industry five years ago, a lot of people called me a troublemaker. Uh, and my understanding is when you came into the industry, you were a troublemaker and you started doing things differently. The DMOs weren't supposed to do so. I like that. I think we got a lot in common.

Speaker C: Well, you know, if you can't break a few things along the way and, um, you know, I think sometimes our industry, we tend to like to follow each other and always, uh, try to play nice, and that's all Wonderful. And there's a time and place for it, but I think sometimes, um, you have to be hopefully a little bit brave. And, you know, and there's a difference between being brave and suicidal. Uh, and in the DMO world, that's a fine line, I think, sometimes. But you, you still have to push it. I think that's part of why communities want, uh, us to be here. And, um, and that's really where great work comes from. That's my opinion.

Speaker A: Well, it's great. Today we're going to be talking about a lot of stuff, but I think we're going to meander. But the core thesis is going to be around. Is the. Is the current playbook or the previous playbook dead? And how do we navigate the future? Because you're right, there was a time and a place for following people, but that time is not now and that place is not here. Right. We're in a very different world. But before we get into that malaki, it is time. And Adam, I don't know about you, but, you know, last week's episode, you were. We were Hijacked by Jeanette Rauch. So did you miss the jingle?

Speaker B: Severely.

Speaker A: All. Uh, right, well, go ahead. Let's. Let's let it roll.

Speaker C: You missed it.

Speaker A: I didn't. I really didn't.

Speaker C: What did I. I don't know.

Speaker B: Head bob says differently.

Speaker A: I'm having mixed feelings.

Speaker C: I'll be honest.

Speaker B: Ah.

Speaker A: I don't have emotions that often, but I'm having an emotion and I can't figure out if it's hatred, if it's. If it's nostalgia. What is it? I don't know.

Speaker B: I kind of hope you feel something.

Speaker A: You made me feel something, Adam.

Speaker C: Well, Stuart, uh, you'll be happy to know that there is in fact here in Newport Beach a Stu News. And I kid you not, it is an online newspaper. It is the definitive newspaper on everything Newport Beach. Um, guy named many years ago started it down the road here in Laguna Beach. He since passed away, but, um, it was taken on and now it is the source of how everyone gets their information. And I will. Our city council. It comes out on Thursdays and Fridays and everyone goes, oh, my God, Stu News. It's, you know, there's going to be bad news in there or, you know, Stu News always captures the stuff that people talk about but are afraid to talk about in public. So, uh, you're. Congratulations.

Speaker A: So, Adam completely ripped off your Newport Beach News. I didn't realize this. He should be sued. Someone should.

Speaker B: Yeah, I'm A little nervous about the copyright infringement.

Speaker A: Yeah. You do have a posture. Yes, in yours though, Adam. But I personally think that the proprietors of Stew News should send a cease and desist letter to Adam. That would be amazing.

Speaker B: This.

Speaker C: Well, just to be clear, our cfo, her father is the uh, head of Stu News. So uh, well, let's not tell him about Stu's News.

Speaker A: We definitely don't want some legal, legal battle.

Speaker B: And for the sake just of clarity for the attorneys listening, Stuart is entirely the owner of this show.

Speaker A: Yeah, I don't know that we have a legal budget, so we might have to look at that. Stu's News with an apostrophe. This week is, uh, about Google. Google IO just happened last week from when we were recording this. It'll be a few weeks ago from when this publishes. But this is one of those events that I pay attention to every year. I always look at Apple's annual event, I always look at Google's annual event because there's usually something sort of giving you a tip to what the future is. And I think we're at another one of these watershed moments here with what Google just announced. So what was interesting and I want to get our friend of the show, Tim Peter, back on to talk about this because he just did an episode of his podcast, um, Digital Reset where he talked about this in depth. But Google released a bunch of how to, uh, information about SEO the day before IO started. And that wasn't a coincidence. But then when Google I O came out, they're fundamentally reimagining what a search engine is, right? And it's going from a search engine to an AI assistant. So when people go to google.com and start typing, it's going to be more personalized. It's going to use AI to predict what you're going to write. But then the response, they're going to try to keep you in the search engine. So they did a bunch of stuff. You're going to have itinerary builders right within the search engine. You're going to have a shopping cart right within the search engine. So this is the beginning of the end of websites in a lot of ways, especially for DMOs. And we've talked about this on the last few episodes of the show where we right now spend money to drive people to our websites to then send other people or send spent. Send the same people to other people's websites. Right. Our stakeholders. Google is going to completely circumvent that with this new change to the search engine and ah, a current model of monetization. If we, if we have stakeholders that we're charging for clicks, somehow or another is going to disappear into this black box, which is Google, which right now is going to have very little ability to actually measure stuff in it. Right. We, we don't know what AI. So we've gone from our uh, website being the front door to our destination to now AI is the front door to our destination. And this is really one of those watershed moments, I think. So Adam, I don't know if you've read any of the follow up on IO or not, but what's your initial reaction to what Google just announced?

Speaker B: Um, I would take a little different angle on it than you and that's that I see this more as a desperation move from Google than an innovative capture of the future. And what I mean by that. Well, let's talk about it. Let me finish my point and then you're welcome to disagree there. But my opinion is that Google has got to figure out how to retain the search volume that it's been capturing over time. I understand that you disagree just because

Speaker A: I'm shaking my head. You keep going, keep going.

Speaker B: Um, but we had Jeanette, uh, Rauch on last week and she talked about that people are going to start working within AI as opposed to leveraging AI the way that they have in the past. And if you're working within AI, for example within Claude, which in the industry, as far as I've seen, Claude has been just taking the industry by storm. A lot of people are working within Claude. Google's not part of that equation. And so as much as they can, they can innovate as much as they can within the environment that they've created. But if you're within CLAUDE and working within Claude, CLAUDE is actually the determiner of the results that you see if you're asking questions or searching for something specific. And so I'm not sure I agree that Google's going to be able to um, make the, the DMO website irrelevant because I, I think, and this is to your point in, in talking about how chat, GPT, uh, they've got the consumer market and that's just not enough. I think CLAUDE is going to also go to the consumer market because the enterprise SaaS is not enough either. And they're going to be able to own both the consumer and the B2B organizations. And I'm not sure Google's going to be part of the equation either.

Speaker A: Okay, I'll let our guest respond to that before I tear it apart.

Speaker C: You know I mean, I think, you know, the, the big thing is we're all in the DMO space trying to get a handle on exactly what AI is going to do, what it won't do. I know just within our own organization, the public facing aspect is important. The internal aspect of it we're also facing. So yes, clearly we're all dealing with disruptions on multiple levels. I guess the question is, since AI aggregates a lot of the data that it goes in and mines through multiple sources, um, don't DMOs have a, I, uh, think a larger presence on aggregating that information on AI when it is pulled up? So if you're listing a complete, you know, if you have a website that's robust, doesn't AI kind of pull a lot of that stuff in, in terms of its responses? I know it gets it from lots of sources, but yeah, you know, DMOs play a huge role in providing that data.

Speaker A: Right, for sure. But it's the generic table stakes data that the OTAs have already and Google really has been aggregating for a long time.

Speaker B: Um, and that's assuming schema is built or is set up correctly on the site.

Speaker A: Yeah. You know what's interesting? One of the things they said when they gave it, hey, here's your roadmap for good SEO. And they also said, hey, don't worry about geo and other stuff because if you do good fundamental SEO, it's going to take care of itself for the generative AIs. Um, they said don't worry about the technical side. But then they retracted that. They came back and restated that good structure is always a good idea, but it's not necessary. But, uh, they did talk about good content. They talked about citations, they talked about eeat. All the stuff that's good for SEO is good for AI, which is great. Here's where I disagree with you a little bit, Adam. One, I'll say it doesn't really matter which one wins. Right. Because the outcome is the same whether it's anthropic, whether it's OpenAI, whether it's Google, whether it's someone else that doesn't exist yet. It really doesn't matter. The fact is the website becomes less relevant every day. Why I don't think I would bet against Google. One is they already own a lot of enterprise relationships because they've got Gmail, which is running a lot of email for businesses. They've got Google Docs, Google Sheets, Google Slide. Right. A lot of people are using all the Google suite for their enterprises. Already they haven't caught up with like co work yet. They haven't caught up with um, Claude code yet. But I think that's a, that's a matter of time and there'll be a lack of friction to, to use their product. But I also don't think that consumers are one dimensional the way you're thinking because Google just posted record profits. Their last quarter was the most they've ever made profit wise in a single month. The search volume is actually up, not down since generative AI has been out and they already understand that they know how to monetize better than anyone else and they know more about individuals than anyone else because they got so many tentacles in you. So I would never bet against Google winning the consumer war and I don't think there's anything that suggests that consumers won't have multiple things for multiple functions. Right. So it's, it's, I still even right now I'm using Claude a lot for my work related AI and a lot but I'm still going to Google for a lot of things too, especially consumer decisions and stuff like that. The other part that Google did roll out with this announcement is not only a smarter search with information right within the Google ecosystem, but it's also agentic. Right. So you can now tell your search eng, go book me this vacation or go without having to have a plugin or something separate, you know, on the browser level. So I think, I think Google already owns a consumer. There's been a fragility to Google that hasn't really mattered to them. Like the cost of switching search engines is almost zero and yet people haven't because Google's always produced the best experience and I don't see that stopping anytime soon. If Google has the best experience for the consumer, they're going to own the consumer.

Speaker B: Well, I think it'll be interesting to see. I the, as I hear you describe it, you're, you're making some assumptions about what they're going to be able to do and, and I agree if they're going to be able to do that they'll absolutely win the consumer war. I just haven't seen them do it yet. And so I kind of, I want to see what they do because right now as far as the AI function Chat GPT owns the consumer and Claude and Anthropic or Anthropic which owns Claude and, and Perplexity and a few other platforms seem to own the enterprise experience. Right. And so I agree with you. If they're able to achieve what you're talking about if the agentic uh, uh, and by the way an agentix search engine finally sounds like a valuable search engine to me. So if they're successful with that I most definitely will agree with you more. Um, I'm just not sure I'm ready to claim them the victor.

Speaker A: No, I don't think anyone's doing that. I just wouldn't bet against them. You know I think it's, we're still early in this arms race but I think ah, you know the takeaway, regardless of whether it's Google anthropic, it doesn't matter who wins. We've got to double down on a few core values.

Speaker B: Right.

Speaker A: We're going to remain relevant I think, I think we've certainly got to find ways to differentiate ourselves and how we're talking about stamp bog standard marketing is, and sending traffic to our website is, is already almost obsolete but it's certainly going to be obsolete in the next few years. We've got to become media companies, we've got to create a lot of content, we got to create first party data, we got to understand that our consumer better and uh, we got to focus in driving brand awareness so that we're filling the AI searches with people wanting to go to Myrtle beach already. So yeah, so everything's changing guys, which is why we've got an expert that's, that's been around the block a little longer than either of us in this industry and has seen a few shifts along the way. But I would say Gary, do you think this is the biggest shift you've seen in your career in demos?

Speaker C: Well, you know part of the advantage of having white hair is um, that I have seen so many uh, periods in our uh, history where um, DMOs have been um, deemed almost irrelevant. Um, you know when, when the Internet, you know, was coming about and everyone was getting excited now you had to get a website and that was very exciting. Around the early 2000s everyone jumped on that and then they said well you know, if you need a website you probably aren't going to do a visitor guide and if all you have to do is click, then there's really you know, no reason for a DMO to you know, exist anymore. Uh, let's just get rid of all of our programming, do everything online. Well that didn't quite work. Then you went to the OTAs. Oh, the OTAs are going to put us out of business. Right. And we heard that for many years in fact if you looked at the Destinations International, um, uh, future study, I believe it was in 08. It was so gloom and doom, um, that, you know, our issue of relevancy and the fact that, um, you know, we were going to be displaced by all of these for profit third parties that were going to kind of do the work that we've had traditionally done. And consumers now will just go on some of these OTAs, find out everything they need. They'll never come to a DMO anymore. So, you know, and as a result, we have, we've continued to kind of pivot and change and maintain, uh, a sense of relevance while adapting many of these new technologies. And so I don't count the DMO industry out anymore. I just think we need to be able to evolve into more meaningful contributors within our community and leaders within our industry, um, so that we could take advantage of these, these things. I mean, I, you know, I, I, I'm not afraid of AI. A lot of people are freaked out by it and they're thinking, oh my God, we're gonna, all these jobs are gonna be lost. I'm not saying that it's gonna just make some displacements. It certainly will. I don't think it'll put DMOS out of work. Assuming that the DMOS are competent and they know how to add value and again, being essential to their communities in ways that, you know, engage, um, with the consumer. And some of it may be, instead of doing visitor guides, we're going to focus more on experience development, which we can then find ways to promote and get into the marketplace. Uh, which we, in the past, we didn't, we, you know, whatever you had, you wrapped it up in a bow and served it up to the public. Now we're taking a more aggressive role in actually creating the products and experiences in our community, which I think is a healthy thing. And the mechanism of pushing it out is becoming much more automated. Uh, but it still needs to be customized, it still needs to be brand centric. I think DMOs, one of the important things we do is we're caretakers of the brand. Um, and that's something we always should never lose sight of because AI and the OTAs, they don't really care about our brand. They just look at trying to find ways to monetize our brand. So, yeah, we're going to have to adapt and change. Am I concerned? No. Um, I just see this as another technological force, one that is highly sophisticated, one that we will certainly need to adapt. The consumer starting to go there, but there's a very meaningful role if we play it right and we're strategic and we understand how to utilize it with the customer in mind. Because I still think that AI is going to depend on a lot of our efforts in order to communicate the things that they're going to. To the end user. Yeah.

Speaker A: So how do you. Right now you're probably getting the same kind of questions I'm getting from my, uh, stakeholders about what are we doing differently? How are we tackling the shifts? What are you communicating to your stakeholders? About what? The value proposition, the reason that the DMO exists. What do we do in that community that they can't do without us?

Speaker C: Well, if you look at, uh, a lot of hotels right now and the great consolidation that we're seeing out there, uh, you know, hotels, by and large are not having their marketing budgets increased. They're being decreased. Um, their salespeople aren't able to travel as much as they would have liked. Um, you know, a director of sales and marketing is really a director of sales with a marketing name attached to it. So marketing might mean buying ads somewhere, but they're not real marketing people. And I think that the DMO has to be able to kind of look at its community and say, am I, uh, am I just additive? Am I a nice thing to have? Or am I essential to the business proposition of all of our stakeholders? To the point where if you went to a stakeholder, say, in the DMO world, your largest hotel, and said, if the DMO went away tomorrow, uh, it's the old story of, you know, if a tree falls in a forest and no one's there, does anybody hear it? Same with the dmo. Are they going to say that you are, in fact, uh, absolutely essential to their business model, and without you, their business model would be maybe not completely handicapped, but severely handicapped. Would they say that about you? And I would say that most DMOs, unfortunately, probably are in the nice to have and they. And people like them and, you know, they're nice people and I like seeing them, but, uh, can I live without him?

Speaker B: I don't know.

Speaker C: I wouldn't want to, but maybe I could. And that's not a good place to be. I just think we need to be able to, uh, think about our stakeholders and say, where's their pain points? And they have a lot of pain points out there right now, um, at all levels. It doesn't matter if you're a restaurant operating on incredibly thin margins. Retail that's dealing with all sorts of dysfunction right now with, you know, trade wars and price increases, hotels that are, you know, seeing competition Ramp up and fewer resources to address it. And that's where DMOS really need to think, I think a little more strategically of, uh, how are we going to work with our partners that make them feel that without us, they can't exist? And until we get to that point, I don't believe DMOS will ever get the level of political respectability that we're all craving and have been craving for many years, um, because we want to be respected, and we know that the work that we do is important, but in too many communities, it's not seen as essential. So it's. Adam, you were, you were in my CDME class. Um, and when we started that strategic issues course, the number one thing I ask everyone in the class, but, you know, let's put it on the, on the wall. What's keeping you up at night? And the number one thing is always board, governance and funding every single time. And it has been that way for 18 years. Never seems to change. And we talk about it and talk about it, and Di says, well, if we talk about it differently, maybe use different vernacular and see if we can maybe change the words, and maybe that finally the elected officials will see the wisdom of our ways and finally understand that we are huge economic contributors and why wouldn't they fund us over police? Well, that's just dreamlike thinking. It's just never going to happen. And that's why I think we need to get real about who we are, where we stand, and what's ultimately going to protect our future. Yeah.

Speaker A: Adam, do you have any response to that?

Speaker B: Uh, several different possible directions. I actually just want to start with a question. Uh, Gary, and you mentioned very early on in what you were saying that you're owning events and experiences more than ever before. I kind of want to hear more about that. How are you actually approaching that within your destination where other destinations that are listening could, could learn from that?

Speaker C: Well, you, I, I think you find events in your community that, um, are more than just simply events. They can also be effective brand builders for you. So, case in point, um, you know, when I got here, uh, 20 years ago, I, I met with the, uh, our folks at our film festival, and it was a nice little film festival, um, and it been around for about five years. And we thought, okay, what if we can elevate this film festival? Um, use it as a means to tie the Newport beach brand, which, you know, has a, you know, it's. We kind of position ourselves as sort of the can of Southern California. Um, and so can has a film Festival. It has a beach, it has big yachts. It's an aspirational lifestyle. We said, let's take a page from that and see if we can work to elevate that. That festival. And so we did. And we said, listen, we're going to. We even changed the dates so that it's now during the award seasons that gets more celebrities to come to town, which generates more publicity. So, yes, it creates an event, it drives people to town, but for us, the more important part of it is it is a brand builder that helps tell our story without us having to necessarily tell it. If you understand, was that event privately

Speaker B: owned and you guys purchased it, was it something that the DMO already did and you elevated it, tell me how that came about.

Speaker C: Film festival is a standalone, non profit. And what we did is we said, listen, let's go in there and see what we can do together to elevate the festival, but also use it as a bit of a Trojan horse. And let me give you an example of what we did in London. Um, so, you know, over 10 years ago, we were figuring out how to get into the British market, establish ourselves, because everyone's been going to London. They do the same old thing, they have a nice dinner somewhere for a bunch of people and la dee da. Okay, well, I'm thinking maybe we need to do something a little bit more innovative. So I said to the film festival president, I said, how about if we go crash the BAFTAs? And, you know, the BAFTAs are the British Oscars. And he says, what are you thinking about? I said, uh, you know, BAFTAs are right before the Oscars. Let's go and throw our own party, an award show, and kick off the BAFTA awards. Now, the baftas are a very big deal in London, and they didn't invite us, they didn't ask us, and we didn't ask them. We just said, we're going to go to London and we're going to host our own award show and see if we can, you know, kick off the baftas, which are always on a Sunday night. A couple of weeks before the Oscars, we were going to go in on Thursday. So we worked with the film festival. He said, let's do a film festival event in London kicking off baftas. It's all about the Newport beach brand, but it's about recognizing British talent underneath that brand. We did it. It got us phenomenal press coverage. It's a hugely successful event. And guess what? We do kick off the BAFTAs. And the president of the BAFTAs comes to our event to say welcome to BAFTA week. It took us a few years to get there, but what we did is we took that event, which has all the core elements of our brand. And if you go come to it, it is very much of a Newport beach event, but it is a film festival event. But that's okay, because when we're talking about the film festival, we're also talking about the Newport beach brand. So we're able to have people engage with the brand through film and understand our brand components without us saying, hey, here's Newport Beach. This is, uh, these are all the things we have to do. I love.

Speaker A: How do you tether the new, the London version versus the one that you host in Newport Beach? How do you tether the two together?

Speaker C: Um, well, we just make it part of the film festival family. So film festivals, every October, we do it a big celebrity, um, award show here during that event. And then in London, we basically make it the Newport, uh, Beach Film Festival, honoring British and Irish talent. And all the award winners are all fit within that category. So we've had, you know, most of the major A list, you know, British talent, uh, come to our event. And then eventually we attracted the, um, interest of Variety magazine. They came in, said, how about if we honor up and coming British talent? So we do the 10 Brits to watch, and they present that as part of our program. So now to be in that and you're up and coming British actor, you're going to want to be a part of it. So, yes, it's very much about the film festival. And if you're looking at, you're thinking the film festival is doing it, but no, we're underwriting it, we're orchestrating it, we're pulling all the strings. It doesn't. And Visit Newport beach is clearly a part of it, but it isn't the driving part of it. It's the film festival, but it doesn't matter. It's all Newport beach at the end of the day.

Speaker B: So one of the things that you said about going in there is you said they didn't ask us for permission, and we didn't ask them for permission. And I actually think that there's a little bit of a culture of, um, Stuart's talked about it on this show before as the tyranny of politeness, where we try so hard not to ruffle anyone else's feathers that we don't do anything without permission. And when you start to look at, around at all the different things that we could do if you wait for permission, you're never going to do anything. Right. And so the fact that you guys went and kind of crashed the. Built your own event three years later, the president of. Was it bafta, is that the name of it? Uh, comes and attends your event to kick it off and welcome everybody to the event. That's a fake it till you make it, uh, example. And if you would have waited for permission, it never would have happened. Right. And, and so I think destinations culturally need to stop waiting for permission, stop playing by a fake list of rules that isn't real. It's just the way we've always done it and start taking risks and doing things like that. That's not a massive financial risk you took. It's a, it's. Well, and maybe it was a big financial risk, but the, the impact of it compared to the possible downside, uh, of course it was a win. Right.

Speaker A: And the show is being scrappy. Right. It's that combination of courage and imagination coming together to do things that are novel and haven't been done before. But with strategy, it wasn't like a Hail Mary. Right. It was taking a calculated risk of something that could, could pay big dividends. And obviously it has. This is why you're a troublemaker, because you don't ask permission.

Speaker C: Well, I mean, you know, uh, you know, as they say, ask for permission later. Um, you know, and the other nice little cherry on the top of this is, after we did it a few years, um, PBS said that they wanted to broadcast the whole show. So, uh, PBS sends a crew to London. They broadcast the whole show. It's on the PBS app. And so we get additional, you know, viewership exposures on that as well. That was another. That was a bonus that came out of this.

Speaker A: Yeah.

Speaker C: Um, so it gives us domestic as well as UK exposure. Um, but, you know, I mean, I think sometimes, you know, you're right. We can't play it too safe. You know, I, I think if our partners want something out of us, uh, that I think the key to most DMOs, you have to stay a couple steps ahead of your stakeholders. I've always said to the team, if the board is coming to us and saying what we need to do and that we've missed an opportunity, game over. We, we always need to be able to go to the board and say, we're five steps ahead of where you are right now, and here's where the ball is bouncing and here's where we're deploying and thinking that we're going to go to and we don't always know the destination, but we have a general direction and we know based on data and you know, other sources that we consult that this is a good approach. We may not know how we're going to implement it yet. I mean I think sometimes people get it caught up in the well, how are we going to do it and how are we going to deploy it? And you get so caught up in the details you talk yourself out of good ideas. I think sometimes you don't, uh, you shouldn't be careless about it. But I think you need to be able to come up with a compelling vision and then work to fill, find a way how that compelling vision could be executed. Um, instead of just getting mired into the what about this and what about that? Because honestly if I, if we had done a white paper on this thing in London, we probably would have never done it. Yeah.

Speaker A: Guarantee you that makes sense. I mean we got to ask why not? Sometimes instead of the why, right. A lot of people say well, why would we do this? Well, why not? Why not try it? What's the worst can happen? So you, you mentioned staying ahead of your, your board members and your stakeholders there in, in sort of predicting where the ball is going to bounce next. What, what are some, do you have some tangible specifics of where you think things are shifting that we DMOs, the audience listening, the, the destination listening to this, need to be thinking about like where, where should they be placing bets right now in terms of future relevance and future performance for demos?

Speaker C: Uh, there is a lot of space for DMOS to add value in their communities on a number of levels. And, and, and I'll just give you what we've kind of have kind of uh, been able to drill down on here in Newport beach. And that is the group market. Now. We don't have a convention center every, all of our business is self contained. But I know that our hotels and we have major brands, we have the Hyatts and Marriotts and all of that. But I have found that being a major brand um, does not necessarily mean you have the resources to do everything you need to have done. Um, as Marriott gets out of the hotel business and more into the franchising business, uh, that means that they're going to invest even less at the per property level in terms of individual marketing. And yet the demands for filling up these rooms at a healthy rate and if you're like us, a self contained type of destination, um, it is a mad scramble because 60% of our business has to come from group, uh, versus leisure. And everyone thinks of this as a leisure destination, but we're very much group dependent. So what can we do for the hotels that they can't do for themselves? And there's a lot that they can't do for themselves. Some of the biggest trade shows that are out there, the hotels cannot afford to send people to, they can't afford to pay travel expenses. Um, you know, you look at cvent, um, which is, you know, the premier lead service now in the group market. Um, to get a ticket seen in consideration, you have to have a DMO sponsorship. Your hotels have to have a cvent sponsorship. Those cost tens of thousands of dollars and hotels can't pay for them. And yet they are critical to customers being able to see them. Um, so we need to be able to figure out where are we going to add value in the group space that the hotels aren't. How can we offer them opportunities to get in front of clients? How can we help them convert business? And we can't just do the old, I went to a trade show, here's the lead, go convert the lead, and if you need help, give me a ring. Um, those days are gone, they're over. And I, uh, truly think that a great salesperson is a consultant where they sit down and work with the client and say, let's talk about your piece of business and let's talk about your pain points and what it's going to take for you to see this as a successful meeting and then to go and deal with our partners in the very same way. Um, you know, we need to get much more hands on, involved. We need to be able to help smooth out differences. Um, you know, in terms of room nights, we don't measure leads or assistance or any of that stuff with our hotels. At the end of the day, we're judged solely on converted contracted room nights that our hotels have helped put together, um, with us. And, um, they agree whenever a piece of business is done that we send them a form that says, yes, the DMO was critical to us booking this piece of business. And they sign the form and then it gets converted, um, into a piece of book business and the hotel has to agree to it, and we have to agree to it. But saying that it might not be that we took the lead from the inception to the end, it could be that our salesperson happened to know the client, the piece of business got stuck at the hotel during the contract, and our person calls and gets the thing unstuck, resolves the customer's issue and the contract got signed, it might have been a single phone call, but that single phone call resulted in the booking, therefore we should take credit for it. That's a whole different way of looking at. Whereas hotel said, well you came at the end, you didn't really generate it, I'm uh, not going to give you credit for it. Uh, those days are done. At the end of the day it's did you help me turn the business or didn't you? It's as simple as that.

Speaker A: And did you show, when you transition to that kind of mindset that's, that's different than what most demos have set up. Right. They don't have that level of collaboration and, or even that feedback loop. Right. It's sort of uh, salespeople notoriously territorial and they want to take credit for everything themselves and look as good as they can, especially if commission's involved. But what was that transition like going from uh, like a more traditional relationship to this, what sounds like a very partnership driven collaborative relationship.

Speaker C: Well it's gotta be built on extremely deep trust. Um, and you know, one of the things that we've insisted with our hotels and we said listen, we're going to show all of our cards, but we really need you to show all of our, your cards. And that means if there's, if you have a soft underbelly and you have a, you know, need period or a problem, then we need to know about it so that we can help you effectively dress that. So it might be an uncomfortable truth within the organization that maybe they don't want to talk about, but we need to know about. Um, it might be something else that's going on, but the hotel has to share with us, we need to share with them. And that level of vulnerability is very rare in the DMO world and that's unfortunate, but I really think that's where we've got to go because that's how we're going to be able to provide true value for our partners. Case in point. Um, I say this all the time. I talked about it, the best stations international CEO forum. And I'm stunned that more DMOs don't do this and that are, that's funnel reviews. Every uh, you know, DMO should be able to go to its hotel partners and say, okay, we're going to have a meeting, sales strategy meeting, we're going to talk about stuff we're doing, but I need you to bring your funnel of all the business you're working on, including your proprietary business and we're going to lay it on the table. And we're going to go over every single piece of business and we're going to strategize on how we're going to close that business together. And we will keep that information proprietary. We will not share it with the guy down the street. This is only about you. So what can we do? So let's lay it out. And it's amazing how effective that is because our salespeople can say, oh, I know the meeting plan around that piece of business. You know, we're working with third parties. Third parties are a big deal. I know that third party person. Let me call them up and see what their mind, where their mind is at and what their pain point is. And let me get back with you again. Conversion. But that level of trust is really where DMOs need to be if we're really going to be essential because then it really focuses on, uh, helping the hotels where they need the, where they need it the most. Uh, Marriott's, you know, has a regional sales operation, but they also have people on the, on the ground M. But even they will admit, in fact our biggest hotel is a Marriott. They desperately need funnel reviews from us. We do them quarterly and they're, you know, wonderfully candid and they result in a lot of converted business. In fact, I've asked our sales team to, you know, um, let me know how much of our annual goal is actually coming from funnel reviews because I think a large part of it is, um, and the hotels are good with it. They don't really care if they came out of a funnel review or came out of cvent. At the end of the day it's closed, contracted business and that's all they care about.

Speaker B: Yeah.

Speaker A: So how do you start that conversation? Do you start having that CEO to CEO conversation? Do you start salesperson to salesperson? How do you get. Because this, I think there's probably a lot of DMOs that are sitting here listening, just saying, well, we just don't have that level of trust today with, with our partners. Right. We have a relationship, but it's not to that level where we're really truly integrated partners. So where do you, what's your recommendation on how to start that shift?

Speaker C: Well, you know, I think it's really got to start at the top. It's got to be between the CEO and the general managers. Um, and it's got to be a one on one kind of conversation. Uh, and you know, I, you know, it's interesting because whenever we've had a new GM or new salespeople come into the marketplace and we told them this is kind of how, how it works. They kind of stop for a second and they're like, what, what are you talking about? Um, and once we kind of explain the strategy, then they tend to get it. We, um, have had, by the way, a hotel that hired salespeople. They didn't understand this philosophy. They didn't want to share, and guess what? The GM got rid of them, said, listen, the DMO is our partner. If you can't work with them, then I'm sorry, there's no role for you. And that has happened. But that's because the GM understood it and was able to force that culture down into their team and said, this is the way we're going to work and the reason why. So, you know, when a new GM comes into town, you know, we bring them in, we do a full orientation. We make sure that they know, uh, everything that we do, why we do it, how we do it. Um, they have to feel that we're competent partners with them and that we're going to work at the same level that they are. Because it's easy to say, well, they're just a little nonprofit. They're not like a major corporation like we are. No, we kind of like to have the same mindset as a for profit corporation. Um, so, you know, that's important for them to do it, but it's got to start at the top and then it's got to funnel downward. And then you have to have good sales leader, the sales leader at the DMO level who's going to take that same philosophy and convey it to the sales leader at the property level. And then they have to bring it down to their teams. And if it's not working, then it's the sales leader talk to the other sales leader saying, hey, we're having a problem here. So it, you know, it's not like we set it up and it's running and it, you know, we don't have to worry about anymore. It's a constant process. It's a constant set of nourishment that you have to bring to these relationships. But once you're there, the hotels do see the incredible value that a DMO can bring that they wouldn't otherwise get.

Speaker A: Yeah. And I could see this sort of philosophy expanding beyond group sales. Right. It could, it could expand the marketing because a lot of the challenges we're facing with our potential, uh, irrelevance of our, uh, website, the hotels are going to face that same challenge. And so we almost become an agency of sorts to our stakeholders so that we're a confidant, we're an advisor, strategic partner. We become part of an extension of their team and integrated with their culture as well. But you keep touching on this thing of trust, and the only way that I've learned over my career to build trust is just by putting in the reps, right? You've got to demonstrate value consistently and you got to show up consistently. And so that takes time and energy. So what you just described, for a destination like Myrtle beach, you know, we have 400 plus hotels. So for us to spend that level of time engaging and with the relationships with every GM and every sales manager and every person is very overwhelming. You know, and the only hope that I have right now is the fact that we're beginning to automate so much of our process. You know, the manual work that we used to spend a lot of our time doing, we can replace that with AI right now, which frees us up to spend time with the stuff that AI can't replace, which is building relationships and building trust with our stakeholders. So it's a cool blueprint. Adam, you want to chime in a little bit?

Speaker B: Yeah, I do. I, I actually you said something fairly early on, Gary. You said our job is to do things that our stakeholders can't do for themselves. And, and I actually, in just in thinking about some of the marketing activities that I've seen in the destination marketing industry, if we asked that question around everything that we do, how many things that we're currently doing would we eliminate? So, for example, our job as a destination is to inspire travel and create demand for the destination. Is it our job to harvest that demand? Uh, or is it the job of our destination partners or our hoteliers, uh, restaurateurs, attractions, to harvest the demand that we generate? I think there's some serious conversations that need to happen around that, because we built our illusion of relevance around getting as much traffic to the destination website as we can and then distributing that traffic in the form of clicks to all of our stakeholder partners. And we called that value. Right. The reality is what we did is we optimized for lower funnel conversion so that we could provide those metrics, but the, the destination partners can do that themselves in a lot of cases. And so I, I just, and that's one example. I think there's dozens and dozens of examples of things that are happening right now within marketing teams in destination marketing organizations that if you say, wait a second, could hoteliers do this themselves? Or could attractions do this themselves? What value are we providing if we're essentially duplicating services?

Speaker C: Yeah, well, that's exactly it. And I, uh, and I, I've been talking a lot about sales, but we have a very robust marketing team and, and they employ the same strategy, uh, obviously deployed differently and with different people. But, um, it's the same sort of deep relationship, uh, building that we need to be able to work, uh, on. And you know, websites are one tool I, I have found still. And again, this is, goes to the AI question. We're still very much of a human centric business and we can use technology to help harness this. But on sales, it is still very much a people to people, uh, process. And even in marketing, the things that generate the greatest leverage for us to be able to tell our, you know, tell our story, develop our content is through developing effective relationships. Um, you know, we have a relationship with the Pasadena Tournament of Roses. Right. Um, they do the big parade every year. We have a large history with that particular destination. We've worked with them. They have an audience of 70 million people during that event. We've developed relationships with them where they bring us business. And we, we did a partnership for the next three years. We're going to be sponsoring the Rose Queens float. Um, so again, but it's people to people and then using technology to be able to implement the strategy that has to be done. People to people. And you. And I think if we get to technology first, before we deploy the people aspect and the trust and the strategy, we're missing the boat. And I think too often we rush to, you know, implementation before we've really thought out what's behind it.

Speaker A: Like, yeah, uh, I love it too. We're definitely in the people business and most of our problems are people problems. And you know, when you look at when DMOs have gotten into trouble, especially when they've been defunded, it's usually a conflict between people and it's usually one or two individuals. It's not like it's that the entire community turns on the dmo. Typically it's one elected official that turns. So I think whether it's, uh, our stakeholders, whether it's our partners, whether it's our elected officials, whether it's our residents, the majority of our time as DMO leaders has to be spent with people understanding their problems. And if you're DMO sitting listening to this and saying, I don't even know where to start, like, how do I identify what our stakeholders can and can't do on their own or what their pain points are or how do I get started is that means you're not spending enough time talking to these people. Like, if you're, if you're sitting down and breaking bread with them every day, you'll know what their pain points are because you're talking about it regularly. So you got to put in the reps, you got to spend time. If you don't have on your calendar to meet with every elected official multiple times a year, if you don't have to sit down with your stakeholders multiple times a year, not just when it's time for renewals or, uh, annual reports, then, then you're doing it wrong. You're DM, DMOing wrong. And so right, if you go, there's

Speaker B: your episode title, you're dmoing wrong, you're demoing.

Speaker A: It's got to be in the form of a question, though, Adam. Are, ah, we dmoing wrong?

Speaker B: Are we dmoing wrong?

Speaker A: Yeah. Question mark.

Speaker C: Well, and if you really want to talk about, you know, the other value of relationships is when these relationships work really, really well, they become the advocates. They're the ones who are more effective in telling your story than you can be. Because if I have a problem, uh, with an elected official to have a, uh, hotel say, do not mess with the organization, that is vital to my profitability. And I'm not messing around here because I know what these guys do, I know amount of revenue, I track it. And when you mess with them, you're messing with me. And if you mess with me, you're going to mess with yourself because you get a portion of whatever money I make through a room tax. So leave them alone. That is more valuable to me than anything I could ever say. And all this vernacular goes out the window. It's, uh, um, then it's a matter of actual performance and ROI in a very tangible way. Not by us, but by them. And the other part of this too, which you know, Stuart and I have talked about, is when the trust is there, when they see you as essential, when they see you as absolutely vital to their success, then they're more willing to step up to fund you. Which is why we have one of the country's only privately funded DMO sources. Um, our major hotels contribute 5%. They don't give it to the city, they give it to us every single month. 5%. We just get a check, whatever money they've given, and we do a 10 year deal with them. Only because that level of trust has been established because if you're going to do a 10 year deal and give me 5% of your revenue for that long, you better believe in us. You better believe in what we're doing and what that means to your business because you're not going to turn that money off. Even though it's a pass through still, you're writing us a check. But that also enables us to be free from public entanglements and it allows us to do the work that we're hired for rather than what we think our mayor wants. Although Kieran, what the mayor has to say, but I don't want to take my orders from the mayor.

Speaker A: Well, you know, and your side, I want to do a whole episode on your funding model because it's so, so fascinating. You're the first one I've heard that's so, so heavily privately funded. There are others that have a little bit of money that's voluntarily privately funded, but you guys do it in such a really cool, structured way. And it does prevent the cities, the municipalities from trying to claw some of that money back. They always want more money for policing or for infrastructure or roads, whatever it is. And so you've really created a very defensive moat around you and that's what I think you're doing. When you build advocates, when you build defenders with your stakeholders, you're creating a defensive moat around yourself that before they even can get to you to attack, you've got these people that are fending off the attacks for you. So, yes, this is great. I wish we went out of time, Gary, but we are. And this, this, this is one of those episodes I feel like could go on for two hours. But we're going to spare our audience for that. We'll just have to have you back on again soon to, to do a follow up. But what's, what's your one piece of advice to the DMOS right now? I think that in my experience, talking to a lot of folks, there's a lot, there's a lot of legitimate fear. Right. Especially for the folks that haven't been through these transitions that you talked about before. So, so what's that reassuring piece of advice you could give to these DMOs that are struggling right now?

Speaker C: I would say, um, you know, I truly believe this. Um, DMOs, um, the role of DMOs, uh, what we do, um, and the impact we make on communities is more relevant than ever. I've seen it happen, you know, certainly in our community, but in many others, um, there are, you know, when DMOs are doing their job and Firing all cylinders. I've seen the transformational aspects of what happens. You know, there was a, a study that was done a few years ago. San Diego got defunded because of a goofball mayor. They lost all their funding and there was a fascinating state tourism economics did during the year that they were literally out of business, laid off all their staff. Nobody's marketing San Diego. You had SeaWorld and the zoo doing a little of it and they did a study that said, okay, how does San Diego perform to other DMOs in its competitive set? The rest of us were all going through the roof and San Diego plummeted. The only variable was the fact that the DMO wasn't in business anymore. An established city like San Diego, a well recognized tourism city like San Diego that has well funded attractions like SeaWorld, could not turn it around because the DMO wasn't there to do it. And that should prove to all of us that we are necessary. We just need to be able to do our jobs in a different, more meaningful way. And in many ways it's a little old school when we're talking about relationships over technology, but that is really what it's going to take in this new world order. It's going to be carnishing technology with a humanistic, relationship driven strategy behind it.

Speaker A: Love it. Adam, any final thoughts from you?

Speaker B: No, uh, Gary, I feel like this, the time flew in this conversation for one thing, but I would actually love to have you back and get a little bit more into the nuts and bolts of some of the things that you guys are doing. Like the, the event that we talked about was really valuable and interesting. I would love to understand, especially on the marketing side because that's the lane that I, that I live in. Right. Some of the initiatives that you guys are working on that break the playbook and do things a little bit differently. So I'm excited to have you back for, for another episode. You haven't agreed to it yet, but I'm, ah, assuming the sale here that you'll come back and chat with us again.

Speaker C: Happy to do it. You know, no alcohol is involved in this one though, so you know, maybe

Speaker A: we can fix that next time. We can absolutely fix that.

Speaker C: Do it over beers or something.

Speaker A: Well, Gary, if people wanted to reach out to you, learn more about you on Newport beach, where can they do that?

Speaker C: Uh, you can uh, reach me directly at Gary at visitnewportbeach and of course visit newportbeach.com awesome.

Speaker A: Adam, if they want to find you,

Speaker B: Adam, the brand Revolt.com. you can find me on LinkedIn or of course, on Tourism IQ.

Speaker A: You can find me at Stuart Butler@visitmodelbeach.com. thank you for listening, everyone. This has been such a cool, interesting conversation, and I think this is the kind of conversation we need. So if you have a hot take, you want to come on the show and bring us your solutions for, for the transition that's happening, we'd love to have you. So reach out to us and we'll have you on the show. Until next time, this has been Destination Discourse.

Speaker B: Thanks, everybody.

Speaker A: Uh,

Speaker C: If you're going to sit there and beat us up every time there's a failure, that's a great way to kill creativity.