TOWARD MORE SUSTAINABLE DOWNTOWN AND MAIN STREET TOURIST INDUSTRIES

By N David Milder

TOURISM: BOON OR BANE?

Back in 2018, I posted an article with that title to my Downtown Curmudgeon blog. In retrospect, I think it did a fairly decent job of explaining why, though tourism can certainly be very helpful, it is not always a desirable strategic path for economic growth and community well-being. Recently, events such the public disorder caused by spring break tourists have also signaled that not all types of tourism might mesh with a host community’s needs and wants.

Also, there can simply be just too many tourists, and they can threaten to kill the goose that lays the golden eggs. Sometimes it’s their sheer numbers, other times it is also their behaviors. For example, these days local officials in Europe:

“…want to redirect the streams of tourists, as officials in Rome are trying to do, or even to limit them, as Dubrovnik is doing. Barcelona is no longer approving new hotels, Paris has strictly regulated Airbnb and other apartment rental platforms….”  Der Spiegel staff. “Paradise Lost: How Tourists Are Destroying the Places They Love.”  Spiegel Online.

In response to the stresses and damages tourism can cause, the concept of sustainable tourism emerged around 1990. Initially it focused on ecological issues at scenic places, but in recent years it has been expanded to also look at a location’s socio-cultural charteristics. For example, for one business consultant in Asheville, NC, sustainable tourism means: .”… making a low impact on the environment and the local culture while generating future employment for local people and ensuring a positive experience for locals and tourists alike.” See Max Hunt, Making local tourism sustainable, April 23, 2016.

Back in 2004, a plan for sustainable tourism prepared for the Downeast region of Maine noted that: “  We know that the vibrancy of such an industry (tourism) depends on the quality of the natural and cultural experiences offered. We also know that Downeast Maine has an abundance of such experiences and resources. However, tourism can be a destructive force when not properly planned or managed.”   (See: Down East Sustainable Tourism Initiative Year 2010)

Implicit in this notion of sustainability is that tourism needs, in some way, to be properly managed. This, of course, carries along with it the potential for a lot of political opposition.

In my Boom or Bane article, I also noted that “…too may downtown and Main Street leaders leap at a tourist growth strategy without properly thinking through its possible drawbacks as well as its advantages.” The objective of this article is to try to stimulate and facilitate such thinking. Considering how tourism can be properly managed to make it sustainable should be an essential part of that thinking. To my ken, while here in the USA some smaller communities and scenic regions have adopted sustainable tourism plans, tourism leaders in our larger cities and downtowns have not yet picked up on the need for sustainable tourism. Perhaps it is time they did.  

TYPES OF TOURISM

Some good starting points for understanding tourism’s complexity are that:

  • There are many different types of tourism
  • Towns and downtowns can have combinations of them
  • Some may have inherent conflicts with others 
  • They each may vary in the way they reward or harm local business and residents

Rather than vaingloriously trying to present a definitive typology of tourism, some examples of the different types will be offered here to demonstrate their existence.

Tourism Defined by Type of Stay.  Vacation homeowners (e.g., Palm Beach, the Berkshires, the Hamptons), multi-night visitors (e.g., Los Vegas, Santa Fe, New Orleans, NYC, Paris), and day trippers (e.g., Coney Island, and Belmont’s “Little Italy” in The Bronx) can create distinct types of tourism that reflect their differing incomes and spending patterns, knowledge and concern about the community, and incentives for orderly behaviors. Their impacts on local retailers and service providers are also likely to vary. All will need restaurants, but to varying degrees. Homeowners and day trippers will not need hotels. Some vacation homeowners will spend considerable parts of a year in these homes and come closer to having a range of retail and personal service needs similar to those of local residents than the overnighters or day trippers, but others will hardly ever be at one vacation home because they have so many. Those that do spend time in one location also are far more likely to be concerned about protecting the social and physical aspects of their vacation community, and to know about and be susceptible to local social and legal pressures to maintain local norms and values than the overnighters or day trippers.

In contrast, as a recent report from Key West demonstrates, lots of day trippers – in this instance from cruise ships – can have strongly adverse impacts on a downtown: “On streets where art galleries, fine restaurants and specialty shops once flourished, vendors hawk bawdy T-shirts and stores advertise ‘Everything inside $5.’” In Woodstock NY, town officials shut the popular Big Deep and Little Deep swimming holes because of the “littering and messes left behind by outside visitors.”

Defined by Type of Arrival/Departure. This is a subset of day tripper tourism. Some day trippers will travel to a location alone or in small groups, and they usually are easily absorbed into the places they are visiting. However, others arrive in a bus, or a group of buses, or a cruise ship, or a group of cruise ships. The infusion of the larger groups can mean the sudden entry of hundreds or thousands of tourists into a relatively small area. In such areas, such as downtown Key West, downtown Hamilton in Bermuda, or  Piazza San Marco in Venice they can flood the place with people in a way that changes how they normally operate, and consequently robs them of much of the charm that made them attractive and famous.

Defined by Type of Activity Sought.  Most local flows of tourists probably are based on the opportunities offered in a location to engage in various types of activities, and the experiences they offer:

  • To visit scenic sites likes the Grand Canyon or Niagara Falls
  • To engage heavily in some type of athletic or cultural activity such as to go skiing in Aspen or Killington, or play golf at Pinehurst, NC, or St Andrews in Scotland, or see Broadway shows or visit museums in NYC, or to enjoy the beaches along Florida’s long coastline
  • To do business – in many large CBDs this can be the largest source of tourists
  • To gamble, e.g., in Las Vegas or Monaco
  • To have sex : e.g., in “red light districts” such as:  De Wallen in Amsterdam; Soi Cowboy in Bangkok; Frankfurt, Germany; Montmartre – Paris; Hamburg, Germany; Villa Tinto – Antwerp; Broadway – San Francisco 
  • To legally buy and use drugs. Coffeehouses in Amsterdam can sell pot that can be consumed on the premises. It should be noted that the legalizations of various vices, e.g., drugs, and prostitution, are motivated by needs to get them under control. Gambling is more often motivated to raise government revenues.
  • To party with groups of people. This might occur in a wide variety of indoor places such as hotel rooms, restaurants, night clubs and bars, but also in many public areas such as sidewalks, streets, parks and beaches. Since partying often means consuming large amounts of alcoholic beverages and/or drugs, when it occurs in public places there is a strong built in probability that some level of public disorderly conduct will occur. Problems, such as the recent riots in Miami Beach, or those in Palm Springs back in 1986, or in Daytona Beach in 1955, or in Seattle in 2003, or Columbus, OH also in 2003 can occur when the levels of partiers and disorderly conduct get too high in public spaces.    

Defined by Expectations of Behaviors. How a town promotes tourism by signaling the types of behaviors it permits and/or values can have a big impact on the type of tourist it attracts, and how they will behave. It is no surprise that the tag line used to market Las Vegas, “what happens in Vegas, stays in Vegas,” was so successful.  Nor is it surprising that the bon mots for promoting New Orleans are  “let the good times roll.” Both overtly suggest that at least a little bit of naughtiness mixed with uninhibited festivity can be found by visitors in their cities. This theme then can become a key element of not only the image the tourism promoters are projecting, but also a crucial component in their city’s or downtown’s functional local culture.

However, the theme of naughtiness and uninhibited festivity can also meaningfully be projected by the types of behaviors visibly tolerated within a district such as:

  • Littering and public urination
  • Public drinking and drug use
  • Public drunken or drugged disorderly conduct
  • Sidewalks, street beds, and public spaces taken over by disorderly people.

While projecting such a covert image may indeed attract tourists for whom partying is a high priority activity, it conversely can make many local residents and workers, and potential tourists see the area as too disorderly and fear engendering to visit. For example, such disorderly behavior by spring break tourists in Palm Springs in 1986 provoked strong complaints by local residents that led to municipal leaders working against attracting spring break tourists.

SOME DIAGNOSTIC QUESTIONS

Answering the following questions can help local leaders to get on the path of creating and maintaining a sustainable local tourist industry.

Will//are the positive benefits of tourism be/being widely shared by residents and town businesses, while negative benefits will be/are small, adversely impacting very few residents and businesses? 

Way back in 1936, the political scientist Harold Lasswell postulated that to properly understand politics it’s extremely helpful to ask the basic question: who gets what, when and how?  Its application to tourism-based economic development strategies and programs also can be very revealing. We can expect that the answers to this question will vary depending on the type or types of tourism being considered or already implemented, and the socio-economic-cultural conditions in each specific town or downtown. Answering the what, when, and how question should provide a lot of good, evidenced-based insights into which parts of the local tourist industry needs management to become sustainable.

The What. If tied to the understanding that the “what” includes other things than the variables generally used in input-output model impact assessments – e.g., increased number of jobs, and revenues of local households and businesses — then answering Lasswell’s questions can greatly facilitate a proper assessment of the impacts of an existing or proposed tourism program or strategy, and its true value to the community.

The Use of I-O Models. Most of the established types of impacts that tourism can have on a community are beyond the variables and explanatory vocabulary that input-output models are confined to. For example, tourism can: 

  • Increase jobs, but they can be low-paying or decent paying, sustainable or unsustainable. More on this below.
  • Produce more  business opportunities, but also lead local businesses to favor tourist patrons over those who are local residents
  • Create more interesting shops and entertainments, but also higher retail and restaurant prices
  • Heighten demand for local housing and commercial properties, but also produce significantly higher prices for both, Affordable rental housing, even for those with relatively substantial incomes has become a serious issue in our downtowns, especially in our largest cities. A study in 2014 found that:” On average, more than half (52 percent) of all rental households spend more than 30 percent of income on housing in the top 25 cities.” SOURCE: Governing calculations of 2014 U.S. Census Bureau American Community Survey data (Table B25070 in “Family Housing Affordability in U.S. Cities, Governing, November 2015). In some cities, like Miami Beach, much needed affordable units are be changed into Airbnb and short-term rental uses. And to repeat: Barcelona is no longer approving new hotels, while Paris has strictly regulated Airbnb and other apartment rental platforms
  • Increase local tax revenues, but also increase the need for municipal services such as sanitation, police and fire —  and the costs of providing them
  • Create a loss of the community’s character. For example, during the pandemic, concern about this has emerged in the core of Amsterdam among local residents, Its red light district and coffeehouses selling pot, and its streets jammed with foreign tourists has made local residents wonder whose city it is, and what is still left for them to enjoy. Similar concerns have also arisen in many other European cities such as Barcelona and Venice.  It also has happened in many relatively small charming towns here in the USA where so many tourists flock to visit that their numbers and behaviors threaten the very charteristics of the place that made it an attractive tourist destination. For example, in Peterborough, NH, the  population has a very strong self and town identity. An assessment of its tourism found that for residents “a main priority was maintaining a town for the comfort of the local population and not for tourists.“ Peterborough’s charming and preserved  “New England atmosphere,” its history and old buildings, its well-known artists’ colony, the Lowell Colony, are major attractions for tourists.(See: Tomoko Tsundoda and Samuel Mendlinger, “Economic and Social Impact of Tourism on a Small Town: Peterborough New Hampshire.”  J. Service Science & Management, 2009, 2: 61-70 Published Online June 2009 in SciRes)  These are quality of life (QoL) type concerns, not about increasing the wealth of the locality, or how that increase is distributed.
  • Increase traffic and poor air quality; these are also QoL type concerns
  • Generate significantly more crimes associated with public disorder, such as public prankstering, littering, public urination, public drinking and drug use, vandalism, and rioting. This, too, is a QoL concern. One thing we know from the history of our downtowns is that public disorder and heightened public fears can have severe negative impacts on local businesses, property values, and a district’s image.
  • Too many tourists can severely diminish a downtown’s walkability, thereby making pedestrian activity far less enjoyable, and seriously wounding the district’s image as a desirable place to be. See:  Nicole Gelinas. “Planet Travel. Globalization has created a tourist boom in world cities—but masses of tourists create new challenges.” City Journal. August 31, 2018,

This analytical tool also is usually inappropriate for assessing tourism’s impact on a town or downtown because their geographies are far too small for an I-O model to be properly utilized.

Downtown leaders need to realize that some of their tourism attractions may have much more favorable impacts on some dimensions at the county or regional level than on their smaller localities. The expenditures of local theater or performing arts center, for example, can account for about half of its economic impacts on employment, and business and household revenues, but most of those jobs and revenues may well go to people and businesses located outside of the theater’s town or downtown. However, their impacts on real estate may be very local. See ND Milder, “The Impacts of Arts Events Venues on Small Downtowns,” Economic Development Journal 17 (4), 37.  

The known potential impacts listed above suggests that the “whats” that people and businesses in a locality can get from tourism can be positive or negative, and in many instances they can be conflicting.

 Tourism as an Engine for Retail Growth. My observations, and interactions with potential clients over several decades, strongly suggest that tourism is very often seen as a potential key engine for retail growth in the revitalization strategies prepared for our downtowns. This point consequently deserves some special attention.  In all too many instances, especially where the strategic focus is on gambling based tourism, it even has been seen as the growth engine for the whole local economy. Atlantic City and the new casinos in the Catskills in NY are good examples of this. This is especially true for those that are smaller and medium sized communities, and most likely to be hindered by trade areas with low spending potentials. However, in many states – see table above – retail only accounts for around 10% to 15% of tourist expenditures, and when the percentage is higher, the actual expenditure amounts, as in MS, are still often relatively low, or the expenditures for recreation and entertainment are low, as in MS and NC, so the retail percentage becomes de facto higher.  

While tourism so often seems attractive as a retail growth strategy, a strong argument can be made that downtowns that already have a robust retail presence are much better positioned to attract tourist shoppers. This hypothesis is supported by the high levels of tourist retail sales that can be reached in our larger downtowns with famed retail districts such as Madison Ave and Fifth Ave in NYC, Rodeo Drive in L.A., North Michigan Avenue in Chicago, and Newberry Street in Boston. For example, a 2018 report on the impact of tourism in NYC found that:

“Tourists account for 18 percent of all Visa transactions at retail stores in the city. They account for an even higher share of sales at the department stores (48 percent), electronic stores (35 percent), and sporting goods stores (23 percent).”

Of course, those high levels of tourist sales are also probably strongly influenced by the incredibly high number of tourists that visited the city pre-pandemic. According to NYC & Co’s annual report:  “In 2019, NYC tourism hit a record high—66.6 million individual trips, with about $47.4 billion generated in direct spending for the city ….”

NYC and several other major downtowns also attract large numbers of foreign tourists who tend to spend significantly more in retail shops than domestic tourists.

As the recent pandemic has shown, downtown retail that is heavily dependent on tourist dollars is more susceptible to the negative impacts of substantially decreased tourist flows – particularly form abroad – resulting from  severe economic recessions, natural disasters, and diseases.

Contrary to many situations where tourism may seem tempting as a potential retail growth engine, it is unlikely to be a viable, productive strategy in downtowns where the existing retail is weak, and the current tourist traffic is negligible. Such districts have no product to sell, and no market to sell to. The best way out of this situation is to first build an attractive array of retailers that are focused on local customers and products – then, there may be a potential for attracting new tourist retail customers. Also,  tourism is then best strategically positioned as an additional source of some retail revenues, but not as the primary source.

Tourism as an Engine for Job Growth. Job growth is an important metric in the economic development field, especially when it comes to justifying investments in new programs and projects aimed at stimulating or implementing growth. Tourism’s ability to produce jobs, however, is rather complicated, and worthy of a closer look.

The strongest argument I’ve seen for tourism being a strong engine not only for job growth, but also for fairly good jobs came in a report by the Center for an Urban Future, that claimed  NYC in 2018 had:

“ …nearly as many accommodations jobs, which pay $62,000 per year on average, as jobs in manufacturing, which pay an average of $58,000. To be sure, many of the jobs in the sector offer relatively low wages, at least to start. But tens of thousands of tourism positions provide critical entry points into the labor force for a highly diverse range of New Yorkers. Indeed, no other sector offers as many accessible jobs, with 91 percent of tourism jobs open to workers with less than a bachelor’s degree.”  It also claimed that tourism was driving NYC’s economic future. See: “DESTINATION NEW YORK: Spurred by 30 million more tourists over the past two decades, tourism is now driving NYC’s economic future.” May 2018, p.3.

The claim that “tourism is now driving NYC’s economic future” was startling. That the average pay in the industry now was better than that in NYC’s manufacturing industries and at $62,000/yr was very impressive. The claim that no other industry offers as many accessible jobs to those without a college degree was also credible and noteworthy.   

I then had a quibble about the use of average incomes since in an industry such as tourism, the difference between its median and average salaries could be significant, and the median could tell us more about how many of those workers had relatively low salaries. Still, the median household income in NYC in 2018 was  $63,799, the average was $67,844. The average salaries in NYC’s tourism industry were only about 9% lower than the city average household income, suggesting they may be providing close to a survivable income.

But Covid19 drastically changed things in 2020, especially in NYC. It hit very hard the jobs in the food and lodging industries, with 250,000 of them disappearing, over half of those that existed at the start of 2020. Similar losses occurred all across the nation, wherever the pandemic wreaked economic decline. And this points to some of the built-in vulnerabilities of a tourism job growth engine:

  • Tourist employment is very susceptible to economic downturns caused by depressions and recessions, natural disasters, and disease
  • According to BLS : The industry with the highest percentage of workers earning hourly wages at or below the federal minimum wage was leisure and hospitality (11 percent). About three-fifths of all workers paid at or below the federal minimum wage were employed in this industry, almost entirely in restaurants and other food services. For many of these workers, tips may supplement the hourly wages received. A large portion of the jobs associated with tourism just do not pay that well.
  • A closer look at the occupations associated with tourism, such as hotel employees, shows they do not have high salaries, e.g., in the sample of eight cities listed in the table above the median is only $38,970,  with a low of $37,038 and a high of $48,793. Importantly, none come close to providing by themselves a livable wage.
  • While in our major cities with robust tourist industries such as NYC, Washington DC, LA, and NYC there are peaks and ebbs in the flow of visitors, a significant flow is usually maintained year round, so employment has some stability. In smaller towns and cities, especially if the tourists are attracted to activity opportunities that are weather dependent, such as skiing and water sports, the tourist flows are seasonal, and so is the employment.  

Provincetown, MA, is a good example of such seasonality. It has a population under 3,000 year round, but can have 65,000 people visiting its galleries, restaurants, and beaches. “But come late fall, the beaches and bars mostly empty out. And it is not just tourists who decamp. Most second-home owners pack up, too. And, increasingly, so do people who once made Provincetown their home year-round. These days, just 2,800 hardy souls endure here through the winter. As a result — with housing and year-round jobs increasingly scarce — Provincetown is hollowing out. The winter population dropped 14 percent between 2000 and 2010. Families have left or have avoided settling here in the first place. The high school closed a few years ago.”  See: Katharine Q. Seelye, “Welcome to Provincetown. Winter Population: Dwindling.” NYTimes. Dec. 20, 2015.

Similar seasonality is found in Greenport, NY. It is located on the North Fork at the eastern end of Long Island, and has a significant waterfront with docking facilities for pleasure boats, a small fishing fleet and a ferry to Shelter Island, and a waterfront park that attracts over 300,000 visitors a year.. It also has the terminus for an important line of the Long Island Railroad. Within easy drives of the village are over 40 wineries that attract heavy tourist traffic to their tasting rooms. There are three of historical sites abutting or near the park including a working blacksmith shop and a maritime museum. It is a significant tourist destination and transit point. For example, an annual three-day Maritime Festival reportedly draws about 40,000 visitors and the less frequent, multi-day Tall Ships events can attract over 60,000. However, it only has a year round residential population of 2,200,and many of the shops, sometimes even including the local supermarket, close for the winter. Of course, their jobs go dormant, too.

Is the town primarily concerned about how tourism can improve its quality of life or in maximizing the wealth of its residents and businesses?

This question is meant to flesh out a community’s growth values that too often really have not been clarified or adequately discussed in public. However, if tourism is to be beneficially managed, clarity about these values must be achieved.

Of course, QoL and wealth are closely related topics, and some might argue that at the community level, wealth should be grown so that it can support a better QoL. My field observations, however,  strongly suggest that when tourism’s objective  is only seen as growing the community’s wealth, then it is far more likely to take on characteristics that make it more unsustainable, and more likely to conflict with the type of QoL that local residents have or are striving for.

Sure, at the real estate project level, tourist projects will regularly need to undergo an environmental review, but those reviews are often unlikely to cover some important  issues that might be disturbing to current and potential local residents, such as the attraction of tourists who have a high probability of behaving in a disorderly manner, or the loss of community identity.

Also, when a town’s tourism’s primary objective is growing wealth, the project permission’s and approvals process is more likely to adhere to the “bigger is better” adage, as well as “the more expensive a project is, the better it is” rule.

When wealth maximization is the ruling norm, then the town is more unlikely to have or to create a local tourist industry that is sustainable.

The Over-Tourism Question: Are there instances where there are just too many tourists in the town, and their presence is changing in undesirable ways the appearance of the community/downtown, its character, or how these places work?

As noted above, this is the question that is being asked by municipal leaders all over Europe, who are concerned about the strong negative impacts that simply having too many people in a relatively small public space can have. Even the Vatican is concerned about the severe overcrowding by the 6 million visitors annually to its museums – see photo below.

Here in the USA, concerns about over-tourism among downtown leaders has not so far emerged. This is probably due to their being correctly trained to believe that downtowns are successful, full of vibrancy and shoppers when there are high levels of pedestrian traffic. For instance, the managers of Times Square proudly publicize  that:  “Nearly 360,000 pedestrians enter the heart of Times Square each day. On the busiest days, Times Square has pedestrian counts as high as 450,000.”  Those pedestrian flows are equal to the entire populations of the 44th and 55th largest cities in the USA! In one day!

With most with things in our lives, there is a threshold above which a situation is deemed too much, and undesirable. Too much champagne, and one gets drunk. Too much chocolate, and one gets fat. Too many people in a boat, and it might sink, and people may drown. Drive at 150 MPH and one might have a tragic accident. But downtown leaders here in the USA do not seem to have found any pedestrian or visitor count that is too much because of their ill effects. Might 360,000 to 450,000 people trapsing through a relatively small urban area be too many? Or 15,000 passing by one corner in an hour?

The same thing can be said about many of our major tourist attractions, and particularly  here in NYC, where being “world class” is a mantle many seek and proudly proclaim.   Prior to the pandemic, for example, The Metropolitan Museum of Art had over 6.5 million visitors annually, and MoMA had over 2.2 million.  And at both museums, tourists accounted for 75% of their visitors. The net result at these museums are  overly crowded galleries, much like rush hour subway cars, where it is habitually hard to see the art either from the distance one would like or for the length of time one would prefer. This unpleasantness is compounded by the too frequent jostlings from other guests, and the annoying behaviors of people from other cultures, be they domestic or foreign. Also unpleasant are the nasty world class lines to get into too often badly maintained restrooms, or to check and retrieve your coat. Nevertheless, the managers of these museums show by their lack of appropriate action no interest in improving the visitors’ art appreciation experience, yet they yearn for even larger attendance that they can brag about. Their building expansions are like adding more lanes to our highways –they just increase the amount of space that will be filled  with overly dense visitation.

Similarly, about 66% of the eight million tickets sold annually pre pandemic for Broadway shows went to tourists, and mainly to those who could afford relatively high prices. So, while these museums and Broadway shows are world class, their overwhelmingly dominant use by tourists leaves many NYC city residents feeling that these parts of the city are no longer theirs, but taken over by those “from afar.” Some question whether these residents have a right to this sense of psychological possession and identification, while others, such as Jane Jacobs,  might argue that such a sense makes for strong communities.   

Public Disorder Question 1. Do tourists primarily want to party, or to look, listen, taste and touch to appreciate the town’s non-party assets?

During the 1970s and 1980s, public disorder and the fear of becoming a crime victim were very strong factors in the steep declines of our downtowns. As I have recently written, the problem of disorder now is resurging across the nation and in a perhaps even more powerful form, since it is much more multifaceted.  Consequently, the types of tourism that are highly likely to cause problems of public disorder need to be looked at very closely.

Where large numbers of tourists are intent on partying in public, problems of disorderly conduct are very likely. That can be very offputting to local residents as well as to other tourists who are not as intent on partying. Lots of parting tourists also means high municipal spending for public safety services than would otherwise be needed.

Naughty Los Vegas is an isolated counter example. It’s residential growth was based on the tourism growth generated by its gambling, live and let live social mores, and reputation of mob involvement. New residents knew the type of town they were moving to.

What downtown experts have learned and taught for decades is that how the people act and look when walking on a district’s sidewalks, or in its public spaces, or going in and out of its buildings has an enormous influence on the image the public at large holds of that downtown. It not only sets up expectations in the minds of observers about how people in these places will behave – as do the related  signs of disorder discussed by George Kelling and James Wilson, and Wesley Skogan – but also signals how the observers themselves probably would be allowed to behave in that locality. 

In some instances, otherwise seemingly harmless behaviors can be disorderly, but then creep into more serious criminal behaviors. In 1986, for example, Palm Springs had its most serious spring break student riot, after which town leaders decided on an anti spring beak policy. But the riot started off with the simple, prankster-like use of squirt guns, that then quickly escalated to dumping water balloons into expensive convertibles, and tearing off the tops of bikini’s worn by women in cars. Cruising rioters also blocked major roadways.

In other instances, as in Miami beach these days, toys such as slingshots, jet skis and          e-scooters can become nuisances that require regulation. 

Public Disorder Question 2. Does or will the town’s marketing feature the community’s scenic, social and cultural assets or how easy it is for tourists to party in the town?

The objective of this question is to clarify and make public some of the impacts the town’s tourist marketing is having on some of its QoL problems. This might lead to a change in the marketing, or it might spark more effective mitigation programs, such as more police who are well trained to deal with public disorder issues, or new ordinances that regulate the behaviors allowed in public places. For example, one might argue towns that market themselves as great places “to party,” and then have partiers riot, in a real sense, have been asking for it.    

Public Disorder Question 3. Are the town’s laws, and their enforcement, that govern its public spaces and sidewalks tolerant of public drinking, drug use and sale, and other forms disorderly conduct or intolerant of such behaviors?

These practices can have a big impact. It is important that town and/or downtown leaders be cognizant of them so they can be changed and improved.

They were used effectively in Palm Springs: “In the years after the riot, city leaders and police would intentionally sabotage spring break with irksome laws intended to chase away college-age tourists.” They banned thong bikinis, throwing water balloons, and shooting squirt guns.  Poolside drinking was limited, and “a special $15 fee that was added to all police citations, but only during the 10 days of spring break.” At spring break time, over 200 concrete barricades intentionally created a downtown traffic jam designed to frustrate spring break cruisers.

Sometimes, the solutions are less punitive in character. For example, lots of people walking in the street beds and congesting traffic is  a sign of disorder. But if the sidewalks are narrow and or being used by outdoor dining or retailing, then enlarging the sidewalks can be a very viable solution. Another could be providing well activated public spaces where these street pedestrians can engage in enjoyable and socially productive activities, such as those available in Bryant Park.

Is the town committed to making its tourism sustainable, and have the appropriate policies, programs, and regulatory tools needed to manage it? If not, can it create a sustainable tourism program?

Sustainable tourism does not appear organically, though the unsustainable version seems to be able to do so. It requires intention, leadership, resources, knowledge, political support, and strong coalition building. It will likely have many well placed and influential opponents, most likely including those who own or otherwise are benefiting from the unsustainable tourism assets.

If the campaign for sustainable tourism poses its benefits largely in terms of public goods like clean air and water, and general quality of life,  that everyone can enjoy, and for which the needs are not that immediate, it will likely languish. People will likely take a free ride and let others try to make it happen. (See: Mancur Olson. The Logic of Collective Action: Public Goods and the Theory of Groups. Harvard University Press, 1971). To build a winning coalition within the community, it will have to offer meaningful benefits for those related needs that are being felt with some strength and immediacy. The answers to the who gets what, when and how question can be very relevant in this context.

Disparate groups within the community will have to be brought together. Local businesses who are not benefiting from tourism, but are suffering negative influences on their revenues by the noise, traffic, and visitor behaviors tourism has brought in may well support efforts to better publicly manage the industry. Some tourist oriented businesses that do not require large numbers of customers also  may support sustainable tourism. Those operators probably focus on:

  • Customers who are wealthier
  • Not primarily tourists, except when the tourists are mostly wealthy and numerous
  • Otherwise, vacation home owners among the tourists
  • Nonparty-oriented tourists
  • Customers who are likely to be concerned about public order

Residents who are being sufficiently adversely impacted by the local tourism to want to do something about it are likely to be major supporters. They have passed the activation threshold and specific sustainable tourism remediation steps might give them needed direction, while the general sustainability framework can give them political arguing points. These motivating adverse impacts can be related to noise and traffic issues as well as disorderly public behaviors and the overcrowding of public places. Parents with preschool children and seniors, important segments of many smaller downtown populations, are prone to being adversely affected by tourists behaving in a disorderly manner. Major owners of residential properties are also likely to support sustainable tourism efforts.

How many office workers reacted to the scene in Times Square may be indicative of how they will react to other overly tourist utilized public spaces in our large CBDs. Many of these office workers did not like the overcrowding caused by the tourists because it interfered with their ability to get to and from work, and to get food and do chores at lunchtime. Nor were they delighted by the naughty costumes and behaviors of many Times Square habitués. That suggests they, too, may be strong supporters of sustainable tourism programs, especially when it comes to the issue of public disorderly behavior.

Under sustainable tourism many of the issues that need resolution will be political in nature, with important groups in the community often taking seriously conflicting positions.  These disputes will probably be best dealt with if they are informed by local “technocrats,” like planning, public safety, and economic development departments, as well as by the interested parties, but the actual decision-making power should rest in the hands of local elected officials who can be held accountable by voters.  

Recovering From the Pandemic Will Provide a Rare Opportunity to Create Sustainable Downtown and Main Street Tourism Industries

Crises are Janus-like events, creating opportunities as well as problems. Tourism across the nation has been in steep decline. Many managers and owners in the industry are being forced to think about their future, whether they wanted to or not. In communities where tourism has been an important economic engine, many political leaders are probably also thinking about the industry’s future in their towns. This creates a real opportunity to make tourism in their communities more sustainable.

However, the window for this opportunity will not stay open for long. The pent up demand to travel is strong – planes and hotels are already beginning to fill up, and reservations for the remainder of 2021 are getting harder and harder to get.

Now is the time to recognize if your town’s tourism industry needs to be made more sustainable, and then to take the steps needed to make that happen.

How Covid19 Might Impact Our Small Storefront Operators

By N. David Milder

Introduction

While I do not believe that brick and mortar retail will disappear, it was becoming of decreasing strength in many, perhaps even most, of our downtowns before the Covid19 crisis appeared. Their leaders needed to recognize that their district’s vitality was increasingly dependent on the firms and nonprofits engaged in its central social district functions such as restaurants, bars, public spaces, theaters, museums, cinemas, senior and childcare centers, houses of worship, etc.  I also argued strongly that downtown leaders should stop being snobs and looking down at pamper niche operations such as hair and nail salons, gyms, martial arts studios, spas, yoga and Pilates studios, dance studios because they brought in shoppers with discretionary dollars to spend and their shop windows were usually neither inert nor boring.1 Looking to the post Covid19 future, the recovery of the vast majority of our downtowns also will depend on the resurgence of these types of operations, not just the independent and/or chain store retailers. Consequently, this article does not focus on just small retailers.

The Pre-Crisis Situation

 In our biggest and strongest downtowns, these small operations have been disappearing from their main storefront commercial corridors for some time now as more chains entered and rents rose at a gallop. And it was not just the small retailers who were disappearing. Some, mostly small eateries, have in declining numbers hung on in side street locations. 

Pre-crisis, in many, perhaps most, smaller downtowns, finding tenants for vacant storefronts was already a prime concern. Since the Great Recession, many downtown revitalization observers have noted a strong tendency for vacant retail spaces to be filled by personal service operations and/or FIRE industry tenants. Banks, for example, for some years were taking the prime large storefronts at districts’ key intersections. In one suburban downtown, they sat at three of the corners of such an intersection.

Acceptable downtown vacancy rates rose in the pre-crisis years to a level, about 10%, that in years past would have been treated as a sign that a district is in serious trouble.

Compounding the situation was

  • The decline in small business startups.
  • The relatively short lives of most of these small firms.
  • For decades these small businesses have been fighting waves of strong new competitors that have appeared one after the other such as national retail chains, regional shopping malls, big box stores, and online merchants.

This prior situation has not been erased by the current crisis. Instead, it probably will serves as a legacy layer of conditions that will influence the recovery of small operators from the Covid19 crisis. These old challenges are unlikely to have gone away during the Covid19 crisis, but they may have mutated.

Their Survival and Adaptation During the Crisis

Since we are still in this crisis, it is impossible to accurately assess how many of the small businesses that tenant most of our storefronts in the vast majority of our downtowns will survive. That said, there are enough well established facts that suggest the number of failed/closed small firms will be very high. For example, as this chart above from a recent study of about 600,000 small businesses by the Chase Institute shows, depending on their industry, small firms are likely to have on hand only enough cash to cover their cash expenditures for between 16 and 47 days, with the median being 27 buffer days.2 Twenty five percent have less than 13 cash buffer days. Notably, two downtown strategists’ favorites,  restaurants at 16 cash buffer days, and retailers at 19, are at the lower end. The crisis induced disappearance of customer traffic and sales revenues turned this weakness into a mortal threat.

Parts of the $2 trillion CARES Act passed by Congress is aimed at addressing  this problem. However, numerous problems have emerged with its implementation. To maintain focus, they will not be detailed here. However, lots of the small firms who need this survival money most have not been funded, especially those who are “under banked” and in minority areas. Success rates for obtaining these funds have also varied significantly by state.

Under its $349 billion Paycheck Protection Program administered by the SBA, overwhelming demand has meant that funds were quickly depleted even though a loan maximum of $15,000 was imposed. The table above shows that the ability of these loans to help small firms survive depends not only on the amount of the loan, but the industry the firm is in. It should be noted that during this crisis with many non-essential small businesses closed and others having limited operations, their cash outflow needs may be lower, so these loan amounts could support them for additional days. However, even with that in mind, it should be clear that if a full economic recovery will take a year or longer to achieve, these loans will be insufficient to keep many of these small businesses afloat. They need to again have sales revenues.

The situation among the department stores is equally stressed, as noted by a recent article in Retail Dive:

“Cowen analysts said department stores have about five to eight months of liquidity before a cash crunch becomes a risk factor. J.C. Penney has about eight months of available cash, Macy’s has about four and a half months and Kohl’s has about five months, according to Cowen’s analysis. The analysts previously pegged Nordstrom at about seven months but have since revised their forecast to one year.” 3

For small merchants to have a good chance of achieving adequate sales revenues the following conditions must be met:

  • A sufficient amount of consumer demand, with allied spending power, must return. With very large numbers of unemployed and large declines in the values of 401ks and stocks, demand may not return quickly. Also, returning demand can be expected to vary with the wealth in a downtown’s trade area. 
  • Supply chain problems must be adequately healed to have adequate selections and timely access to inventory. Much of the merchandise our shops now sell  are produced offshore and Covid19 is an international crisis impeding production and transport. We may not learn about the true extent of our supply chain problems until existing in-country inventories are depleted.
  • These small firms will still have to deal with many of their old pre-crisis problems, though some may have been ameliorated for the survivors. Large scale closings of small merchants will likely result in much higher storefront vacancy rates, increasing their bargaining position with landlords. That is likely to create strong pressures for lower rents for tenants and mortgage payment problems for landlords. The overall quality of the surviving small merchants, though,  might be much higher because they were the best and fittest operators.  However, finding new tenants and high vacancy rates may be larger problems than ever for their downtown’s leaders and EDOs. Amazon, Costco, Walmart, Target et al are doing record business, a lot of it for online groceries, but their deliveries have become very problematic and uncertain. As a result, they may have lost boat loads of customer good will. Getting a food delivery time from Amazon Fresh or Costco/Instacart, for example, has become like winning the lottery. But, by the same token, if these giants right their ships, they may become even more powerful than ever because so many more consumers relied on them during the crisis, and so many more of them ordered online and learned how easy online shopping can be when the systems are not stressed beyond their capacities. Keep in mind that grocery sales have long been thought to be very resistant to being captured by online retailers, yet during this crisis a huge proportion of America’s households become dependent on them. We fall off our bikes often when we are learning to ride them.
  • Small firms will need to change the way they operate to accommodate the need for social distancing among customers and employees, to improve sanitation as the new offices will do, and to learn how to deal with more customers who are located outside of their stores and/or who care a lot about convenience and speed of service. 

On this last point of adapting to the new conditions, I’ve been noting over the recent years a growing trend of smaller merchants to use  the internet, and the younger ones are often quite adept at it. The most successful of them do so as part of an omnichannel marketing approach that ties their online operations with their brick and mortar stores, backdoor marketing to other businesses, and in-person marketing efforts at trade shows and other similar events. From some very interesting articles I’ve recently read that will appear in the June issue of The American Downtown Revitalization Review (The ADRR), it seems that during the current crisis many small town merchants have relied on the internet to maintain a revenue stream, with many of them adopting the BOPIS strategy – shoppers buy online and pickup in the store or at its curbside – that lots of large chains are using.4  The critical question that has yet to be answered is: are these revenues streams large enough to keep them afloat, with or without CARES Act loans? 

From those articles as well as  from visiting the website of Center City in Philadelphia, I’ve noticed that many pamper niche operations, especially those that involve some form of teaching have taken to the internet. Included are yoga, Pilates, dance, martial arts, and meditation studios.5 These operations also have relatively low daily cash outflows and need to capture relatively low market shares to stay solvent. They also usually do not require prime locations. Nor do they need large inventories of merchandise on hand, so they can pay a higher percentage of their annual revenues for space costs. Consequently, they may be a good group for downtown tenant recruitment efforts to target during the earlier stages of the economic recovery.

However, being able to adapt to the new conditions will also mean changes in the ways employees and shoppers use these stores so that they have cleaner air and surfaces and support any necessary social distancing. Large retail chains are already contemplating serious changes such as contactless payments and curbside deliveries, one -way and wider aisles, better air filtration, more frequent and more thorough cleaning of interior surfaces, salespeople wearing masks and gloves, and limiting access to a specific number of shoppers at any one time. Many of these steps can be quite costly for either the landlord and/or the retailer. Small merchants have far fewer resources, so two questions come to mind: 1) can they afford similar changes, and 2) if not, will consumers still feel sufficiently safe to patronize their operations? The big retailers will hire professional firms such as  Gensler to help them. Will the small merchants know who to hire, and will they be able to afford them? For many downtown EDOs the needs of their small merchants to reconfigure how their shops operate will pose challenges similar to their trying to help small merchants improve their storefront’s facade, but on an even more complex scale.

ENDNOTES

1) Milder, N. David. Nail, Hair and Skin Salons: Bane or Boon?  Downtown Idea Exchange. October 2005  https://www.ndavidmilder.com/downtown-revitalization/perspectives#g

2) Diana Farrell and Chris Wheat. “Cash is King: Flows, Balances, and Buffer Days: Evidence from 600,000 Small Businesses.” The JPMorgan Chase Institute, 2020.

3) Caroline Jansen.  “What retail could look like when stores reopen”. Retail Dive. April 15, 2020. https://www.retaildive.com/news/what-retail-could-look-like-when-stores-reopen/576041/

4) Visit www.theadrr.com 

5) See: “Support Center City Businesses: This master list will keep you connected to Center City businesses still offering services at this time.” https://www.centercityphila.org/explore-center-city/support