Wednesday 14 February 2007

The big hello and its effect on tourist numbers

Visitors to the United States of America have declined quite dramatically.

Even people in countries which ally themselves to the USA are finding other destinations more attractive. British visitors were 10% fewer compared to 2005,a surprising fact when one takes into account the value generated by an attractive rate of exchange.

One explanation is the problems of the new entry conditions and many of these could have been handled better. Another may be the real and growing unpopularity of the President.

Perhaps the overwhelming concern is the perceived unfriendliness of the American people.

On Sunday February 11th, a primetime BBC show “Top Gear” featured a journey by the show’s three idiosyncratic presenters, by road, from Miami to New Orleans. They behaved in the provocative way they always do, and were met by a great deal of aggression. Jeremy Clarkson ended the show by pointing out that the richest nation in the world had done very little to repair the damage done to New Orleans one year after Hurricane Katrina. To the Americans he said, " Shame on you", and advised British viewers not to go to the USA.

Over 4 million visits were made to the States in 2006 by the British and. this kind of publicity will make the task of the people responsible for tourism much harder.

Is it possible to brand a country?

Some countries have attempted to, and it is a very complex task. A country’s image is composed of its geography, history, economy, culture and position. Its brand identity involves foreign and domestic policy, business, trading patterns, religion, heritage as well as tourism.

It may not be possible to brand the USA in all its complexity, but it needs to address the problem posed by falling tourist numbers. My own experience in Boston suggests that most Americans are courteous and friendly. The perception of a lot of British people is, however, very different.

This perception needs to be addressed urgently.

Thursday 8 February 2007

Stupid cupidity and the exploiters

The credit card business thrives on the cupidity and stupidity of some of their customers who spend more than they can afford and delude themselves into believing that the minimum repayment makes the debt manageable.

What the borrower fails to appreciate is that not only is the level of interest much higher than a normal bank loan, but the fine print hides a far greater cost penalty.

Assume you owe £7821.00 and repay £6753.00 on the appointed day. At 1.385% a month interest, you would expect to pay £14.79 in interest based on the unpaid sum of £1068.00.
In fact you would be asked to pay £166.92. That represents an interest rate of 15.62% per month or close to 200% per annum.


Because you are charged for the entire outstanding debt - in this case the whole £7821.00, despite the bulk of it being repaid on the due date, and because the interest is charged from the moments the purchases were made. In this example three weeks before the credit card bill arrived.

The financial behemoths eagerness to lend money to people in existing financial difficulties is well documented. They thrive on Micawber type misery.

Banks also operate in the “sub prime” loans market. The HSBC, one of the top three banks in the world sensed an opportunity in lending money for house purchases, to people who wouldn’t otherwise qualify. In the United States, this has already backfired with fraud and defaults rising to record levels. Over here, the number of sub prime lenders tout their wares on television with offers to “consolidate” debts, or by remortaging their homes, allow borrowers to spend their own money on whatever they choose. The cost? More than their existing mortgage provider would charge.

And new predators are advertising their helpful services. They offer people with unmanageable debt a way out by exploiting a voluntary scheme whereby only a proportion of the sums owed needs to be repaid. Inevitably this service comes at a cost.

There really isn’t such a thing as a free lunch.

Tuesday 6 February 2007

Can the last person to leave, please switch off the lights?

You have to admire someone like Gordon Sato. A successful scientist in the United States of America, he now helps the government of Eritrea to grow mangroves.

In six years, 700,000 mangroves now grow on what was once a barren and treeless coast of Hergigo. Camels are fed the leaves, fish flourish in the sheltered shallows and a new eco-system is being created. Mr Sato is 79.

Indonesia has also embraced the benefits of mangroves. Their protection against the power of tsunamis is well documented. Over a thousand acres in Bali have been replanted with, on average, 1300 saplings per acre. And if you visit Mauritius, look out for the new mangroves growing in the south.

Countries currently benefiting from the tourism induistry need to do more to secure their future because many of them could be adversely affected by rising seawater levels. Planting forests including mangroves is one option. Reducing their own consumption of imported fuel is another.

Travel to New Delhi and you will be pleasantly surprised by the reduction in smog levels. They know that air pollution contributes to incidence of heart disease.

All tourist destinations must be seen to be doing something to counteract the effects of airline travel. Richard Branson's team is working to develop butanol as an alternative aircraft fuel, but that will take years to be adopted by airlines.

Even President Bush, perhaps for other legitimate reasons, has plans to reduce his country's dependence on fossil fuels. Ethanol type alternatives will produce less harmful emissions.

Scientists are examining ways of extracting energy from sand and making our most abundant fossil fuel - coal - more eco-friendly. And solar power is already making a difference in India.

One hundred years ago, the problem of a burgeoning population of horse drawn carriages caused concern in London. The petrol engine eradicated that problem, but left another, bigger, mess that cannot be fed to rose bushes. Human ingenuity should not be underestimated, and especially now there are financial incentives.

If we do not believe that something can be done to make this small planet survive a bit longer, then like the dolphins in Douglas Adams' "The Hitchhiker's Guide to the Galaxy", we should all fly off saying, "Thanks for the fish".

But we cannot fly off or be so selfish as to ignore a future of hazards for our grandchildren.

Friday 2 February 2007

The dangers of sponsoring reality television

Television reality shows are today’s equivalent of ancient Rome’s circuses. Instead of Christians being fed to hungry lions, naive and ill-prepared wannabees are exposed in all their frailty by so called expert judges. Many of them have monstrous egos.

Sometimes the contestants themselves are allowed to blunder into exposing their ignorance and lack of judgement, All this in the name of entertainment.

Why any right thinking person should want to see these embarrassing displays is something best left to psychologists. Much more interesting is why Advertisers would want to sponsor such shows. It cannot be for the quality of the audience. Lowest common denominator shows attract lowest common denominator viewers. So association by brand values isn’t the reason either.

Perhaps it’s the exaggerated reporting of the death of the 30 second commercial or persuasive selling by the sponsorship team that makes advertisers clamour to get on board. The dangers of supporting such high risk “entertainment” is now very clear and Charles Dunstone must be glad there was a get out clause in his contract with Channel 4.

Brands are such fragile things.

AXA Equity and Law do their sponsorship promotions very well. They support the nostalgic strand of programming on ITV 3,with specially written lines in programmes such as Rumpole of the Bailey: “I want to make sure my affairs are in order, order.” So successful is this campaign that it has been adopted by their sister company in India.

The lesson?

Make sure your brand really benefits with the programme by association, write clever strap lines, don’t rely exclusively on sponsorship and have a damage limitation campaign in place.