This article first appeared on the Vail Centre Blog.
Resort towns often rely on one main attraction — like skiing — to draw visitors to the area and then build up hospitality-driven industries and more businesses around this. The town of Vail began as a small community with a ski area, then over time emerged to become a world-class destination for skiing, fine dining, live music, art, hiking, mountain sports, weddings and so much more.
However, resort towns with a strong focus on the hospitality industry have a downside. Many of these communities rely on events for economic sustainability, which can potentially inhibit growth of more stable and lasting businesses and industries.
The Pros and Cons of an Event-Heavy Local Economy
At first, it’s easy to see why resort towns focus so much of their attention and funding on events. Hosting a major sporting event — like the FIS World Alpine Ski Championships or the Burton US Open — can help a resort area gain notice and increase a town’s profile. Events that draw thousands of attendees can also help create jobs and serve as a short-term boon to the local economy.
On the flipside, events can have a negative impact on a community. Costly stadiums and other venues built for a specific function might not have much use after the event is over. Certain events — like music festivals — can actually draw visitors away, as vacationers don’t want to deal with increased traffic or big crowds. Security measures and safety concerns are also an issue, which cities and towns often have to deal with and pay for.
Following an event, unfavorable coverage of a host city can also have a damaging affect on the economy long-term. Several cities around the world that have hosted either the Winter or Summer Olympics have been criticized heavily in the media — like Rio de Janeiro in 2016 — or not seen the return on investment they expected — like Vancouver in 2010.
Envisioning Growth Far into the Future
While big-name events will always be a popular way to attract visitors to a resort town, it’s important that these communities turn their focus toward creating lasting organizations in tandem with short-lived entertainment options and sporting events.
In any industry, the true business leaders are the ones with long-term goals and a vision for their company’s success. Hiring managers often ask candidates about their five-year plan, but companies should really be asking themselves about their own 50-year plan. Compared to stalwart industries of yesteryear, most companies today fail to last even two decades. In the 1920s, successful companies lasted an average of 67 years. Now, the average length of a successful company is 15 years.
In the business world, so much attention is given to buzz-worthy companies that introduce an exciting new product or service. However, few of these companies — particularly in the tech world — have well-thought-out business plans for how they will succeed several decades from now. Rideshare companies like Uber and Lyft are extremely popular at the moment, but their chances of long-lasting success remain unclear. Uber’s vision for its future involves self-driving cars — yet the company has already hit several snags in this plan, facing new lawsuits and recently it was banned from testing self-driving cars in the state of California.
What Companies Should Do to Establish a Lasting Business Model
It’s difficult to determine what challenges a business will face in the future, but there are ways companies can prepare and create a strategy for long-term growth. Lasting and sustainable organizations focus on certain key elements to ensure that they have a well-designed business model that can build upon itself.
Developing a structure for product and business innovation — Organizations with an eye on long-term gains don’t just focus on making their product or service run smoothly. They also have a system in place for making a product better, and creating new products. Expect your business model to change at least every two years. Lasting organizations are always watching market trends and actively gauging how their customers are responding to a product during each stage of its development.
Creating strong relationships with customers and communities — Companies need to engage with customers to discover what they value and focus on client satisfaction above all else. If your customers aren’t happy, they will gladly take their business elsewhere. The same goes for communities. In order to create a sustainable business model, companies must partner with communities and establish solid relationships with government leaders and local organizations. As in the case of Uber, companies who fail to work together with state agencies face a much harder time getting their innovative products into the hands of customers who want them. Music festivals can also be a culprit of ignoring a city’s rules and regulations, creating animosity between a local community and festival organizers.
Investing in employees and building the future leaders of your organization — Out of all the best practices for long-term growth, companies tend to neglect this area the most. Even major companies like Amazon and Google have an average turnover rate of one year. How can any organization build a lasting business model if the majority of its employees jump ship just a few years after being hired? Investing in your employees isn’t just a good idea: it’s a necessary component of long-lasting success and sustainability for your company.
Making Leadership and Education a Key Priority for Long-Term Success
Not only is it imperative that companies invest in their employees and create an environment that encourages professional development, it’s also important for organizations look at how they can build a team of future leaders who are simultaneously engaged and innovative. Even CEOs themselves sometimes forget that in order for a company to keep growing, they must create leaders within the organization as well as designing new products or services.
Many executives want a cohort of future leaders and trailblazers working alongside them, but that’s easier said than done. Businesses and organizations must take active steps to implement a work culture that allows for continuous training and professional development. Doing so helps companies develop talent and promote from within, which saves time and resources in the long run.
One way businesses and organizations are ensuring that employees reach their fullest potential is through alternative higher education programs. These programs give mid-career professionals the opportunity to expand their knowledge and learn new management and leadership skills. Vail Centre is a leading organization in the world of higher education for business purposes, offering certificate programs from top-level universities that focus on professional development. Distinguished professors from Yale University, Cornell University and Duke University are flown in directly to teach a three-day or week-long seminar right here on the Vail campus, giving future and current business leaders expert training and advancement tools geared towards the hospitality industry.
For more information on Vail Center’s upcoming course schedule or to register for a program, contact Todd Wallis at todd@vailcentre.org.