By Brian Beise
One way to understand Chattanooga’s tourism industry is to look at it like any business, with the out-of-towner as the consumer and “relaxation away from home” as the product. If you break that product down, it includes accommodations, food, entertainment, historical sites, outdoor activities, shopping, and so on—amenities that are also enjoyed by locals.
Since the early ‘90s, Chattanooga has continued its Renaissance with the growth of new businesses and a renewed waterfront. For the last decade, it has outpaced every other city in the state in tourism growth. Today, Chattanooga is the fourth largest tourism market in Tennessee, having passed Knoxville in 2011.
“It’s a source of tremendous pride for me as well as other Chattanoogans to see people visit and love our city,” says Chattanooga Mayor Andy Berke. “When I drive around and see our streets packed or the Walnut Street Bridge filled, it reminds me what a great city I live in.”
During the recession, when the industry saw declines in other popular destinations, Chattanooga’s tourism thrived. In fact, dollars spent by visitors to Chattanooga grew 67% in the last decade–from $534 million in 2002 to the current $893 million. Approximately 10% of employment in Chattanooga is now in the leisure and hospitality sector, with countless other jobs benefiting from tourism.
“Accommodations have changed with newer, updated products being built,” says Hiren Desai, chief executive officer of 3H Group Hotels. “Chattanooga has become a popular city for family getaways. Instead of one night, guests are staying the weekend.”
Key to the success of the city’s tourism industry in the post-recession market is its proximity to so many potential visitors. Approximately 14 million people live within 150 miles of Chattanooga, in an area that includes Atlanta, Birmingham, Huntsville, Knoxville, and Nashville. Of Chattanooga’s approximately 3 million visitors each year, 80% come from less than three hours away.
“Chattanooga is a great place for families to visit on a budget,” says Mitch Patel, president and CEO of Vision Hospitality Group, Inc. “It’s a convenient drive from surrounding major markets and has numerous family-oriented as well as couple-oriented attractions, including a burgeoning restaurant and arts scene. Further, Chattanooga has successfully promoted its outdoor amenities through outdoor festivals like RiverRocks, earning it accolades like ‘Best Town Ever’ from the readers of Outside magazine.”
The Scenic City’s Lure
So what attractions are drawing visitors to Tennessee’s hidden gem? Research shows that tourists are drawn to cities for shopping, museums, theatres, concert halls, and convention centers, all of which Chattanooga has downtown combined with ample parking and free electric shuttles. Tourists also come for historic sites, which they can find in Chattanooga on both sides of the river. They come for music festivals and concerts like Riverbend and Nightfall, and for secure, lively streets like Market Street and Frazier Avenue. In addition to these downtown attractions, the surrounding mountains and rivers are ideal for a wide variety of outdoor activities, from biking and hiking to whitewater rafting and fishing. With over 75 parks totaling approximately 4,000 acres, 9 private and 14 public golf courses, 3 area rivers, numerous mountain ranges, 67 hotels and motels (9,000+ rooms), and more than 40 area attractions, Chattanooga offers a variety of entertainment like no other destination in the state.
Among the most notable tourist attractions is the Tennessee Aquarium. Opened in 1992, it remains the world’s largest freshwater aquarium, and continues to bring visitors to the center of Chattanooga’s downtown waterfront.
“The Aquarium’s direct, annual economic impact on this community is more than $77.4 million each year,” says Charlie Arant, president and CEO of the Tennessee Aquarium since 1995. “Thanks to ongoing community support, we’re able to continue to create new and exciting exhibits that draw people to the city.”
“It’s one of the most beautiful places you could ever visit,” says Mayor Berke. “We have physical surroundings like the Tennessee River, the mountains, and our lakes. Having a valley that is surrounded by these God-given landmarks makes Chattanooga a phenomenal location. We also have a burgeoning downtown that is vibrant and a great deal of fun for families and individuals alike.”
This variety of activities and attractions means Chattanooga tourism isn’t confined to one season. The Chattanooga Convention & Visitors Bureau reports that while tourism peaks in summer (approximately 34% of visitors come in the summer), it remains high during both spring and fall (roughly 33% of visitors come during the spring and 22% come during the fall). This allows for more stability in tourism-related employment, which accounts for 8,500 jobs in Chattanooga and Hamilton County.
In addition to the general draw of local attractions, shopping, and entertainment, annual conventions and new businesses bring visitors to Chattanooga. According to Patel, business tourists account for a significant increase in hotel occupancy. “Chattanooga has become a very business-friendly city,” he explains. “Because of this, the economic downturn did not hit us as hard as it did in other areas. With the arrival of lightning-fast internet speeds up to 1 gigabit per second and the rebranding of Chattanooga as the “Gig City,” many companies—including Amazon and Volkswagen with its support companies—have taken root here and increased our business travel demand exponentially. We now see a trend of business travelers arriving on Monday instead of Tuesday, and checking out on Thursday instead of Wednesday. This is bringing more business in on what used to be a shoulder night, which benefits Chattanooga’s hotels in a great way.”
The Role of Marketing
So there’s lots to do and see and enjoy in Chattanooga, but any businessperson knows that it’s one thing to have a great product, and another for people to know about it. Tourism is a peculiar business in that the product cannot be stored up for better business days. If a hotel room, restaurant, theater, or whitewater raft is empty for a day, that loss is permanent. That’s where the Chattanooga Convention & Visitors Bureau (CVB) comes in, working to spread the word about the Chattanooga product around Tennessee, Georgia and beyond.
Of course, the CVB is not alone in its efforts to spread the word about Chattanooga. “We invest about $1 million each year in our marketing efforts, along with the CVB, to bring more visitors to our city,” says Aquarium CEO Arant. “But we also recognize the importance of word-of-mouth and review websites like TripAdvisor and Yelp. Focusing on visitor satisfaction and the overall Chattanooga experience can pay huge dividends. When people have a great time at the Aquarium and around the city, they want to tell others about their experience here.”
A Boon for the Locals Too
So as the word is spreading, more visitors are making their way here for long weekends of pedestrian-friendly fun. But what about the locals? Should residents of Chattanooga feel wary of more and more out-of-state license plates on their streets? Bob Doak, president and CEO of the Chattanooga Convention & Visitors Bureau, was involved in the beginning of Chattanooga’s Renaissance, and he has a firm answer to this question. “We built our city based on building quality attractions and quality entities that would draw residents and tourists alike,” he says. “If it’s attractive to tourists, it’s attractive to residents.”
By that token, much of the tourism product that draws new and returning visitors is also part of the reason residents come to stay. “Right around $900 million is left in this county by tourists every year and that number continues to grow,” says Doak. “If you think about the waitress that makes tips from tourists and goes out and buys a car, allowing a salesman to get his commission, you can start to see how the money circulates back through the community.”
As the industry thrives, sales tax revenue in Hamilton County has increased too, from $11.9 million in 2000 to $19.2 in 2011, and Doak notes the ways that benefits residents. “The number of people impacted by tourism is much larger than the number of people directly employed by the industry,” he says. “Up to 50% of that $19.2 million goes directly to the school system. That’s the way taxes work in Hamilton County. And we have research that tells us that each household’s tax bill is approximately $500 lower because of the impact of tourism.”
Additionally, every year, the CVB hosts a series of hospitality training sessions, and Doak notes that it’s not just tour guides and hotel clerks who attend. “There were probably 50 Chattanooga police officers that attended this year. This is an industry that has a huge economic impact, collects a lot of sales tax, employs a lot of people, and helps to contribute to the vitality of this city.”
Continuing the Trend
Clearly, Chattanooga’s tourism business offers a desirable product—one which is gaining recognition and popularity. It’s all good news, but again, anyone who runs a business will tell you that last year’s success means little this year, and even less next year. Now that we understand the upswing in tourism, the question to ask is: what must be done to continue this trend?
“A vibrant downtown is the key to continued growth in Hamilton County,” says Doak. “We need a new attraction–a new ride, if you will. Walt Disney was the one who said to build a new ride every year to keep them coming back. We’ve not done that in the last eight years. We need vision, planning, collaboration, and then to execute the plan in a methodical and quick manner in order to stay competitive. We’ve been so successful working together as a community, and we need to return to that. We need to return to the ‘Chattanooga Way:’ new vision, new planning, new collaboration, and new execution.”
Those four steps have benefited Chattanooga in the past. The Tennessee Aquarium was built with private funds and continues today as a private, nonprofit attraction at the center of downtown. Likewise, public entities and private citizens worked together in 1998 to build Finley Stadium, which boasts 20,000 seats and draws sports fans from all over Hamilton County and beyond. Doak believes that kind of collaboration and forward thinking will bring about the next steps in Chattanooga’s development.
“We’ve had a powerful transformation from ‘the dirtiest city in ‘America’ to ‘Gig City,’ the home of Volkswagen, and an energetic downtown,” says Mayor Berke. “That work has been done by a number of different sectors, from private industry to nonprofits to the government, all coming together to have a meaningful impact. As we look to the future, we’ll re-establish those relationships that can move our city to the next level.”
It Starts with Local Support
To do that, experts say the best, most sustainable draw for tourism is an active, employed, and entertained local population. “You’ve got to capture the local market first,” says Steven Schmader, president and CEO of the International Festivals & Events Association. “If you’re only worried about driving people from outside in, and your local audience never adopts the event, it’s worthless. I’ve seen people literally go on vacation so they don’t have to be in their home market when a certain event is going on, and that’s not what you want. You want your local audience looking forward to these events, and when you’re at Riverbend, you can tell Chattanooga’s got a lot of that going on. The people that live here want to have something that adds to their quality of life, and having those things will make other people want to come here.”
Bottom line? Chattanooga needs to continue offering a lifestyle that residents enjoy—and visitors will want to come and experience it too.