Category: Edmonton

‘I was there’ will sustain

Main Photo: A ‘socially distanced’ Sylvan Lake (courtesy @papercandie – https://twitter.com/papercandie)

COVID-19 has been a humbling experience for tourism and hospitality owners around the world. Every design, financial and strategic consideration in the airline, hotel, sports, travel agency and restaurant industry (amongst many others) relies on the increasing wanderlust of people seeking to be the first to experience a life-changing moment in person. The post-2009 tourism boom has finally ended – and it took a pandemic to do it.

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RevPAR was slipping but COVID-19 killed things off for good

The (someday) post-Covid world will leave a lengthy shadow of fear. Many will point to these last five months as the time period that shifted mindsets from ‘I was there’ to ‘I saw it online and that’s enough for me thanks’.

I disagree. If anything, softness in the market has been developing for years.

While tourism has grown around the world, boosted by the low cost of air travel, the content marketing and digital media industries have already consumed a significant amount of investment and consumer dollars. The content marketing business will reach $107 billion dollars in 2026, built largely from people that consume entertainment electronically from home and attendance at sporting events have decreased – and continue to decrease – significantly. Tastes are beginning to change, sports (and the value of sports teams) have become increasingly expensive for the average fan (driven largely by the ego-induced bubble of the value of sports teams). The vast majority of teams, musicians, and plays are nearly completely reliant on ticket sales, especially where television revenues have struggled to keep up.

So: Is ‘I was there’ culture gone for good?

Doubt it. There are three reasons that makes me bullish:

Social distancing exhaustion is illustrative

People clearly are not interested in staying indoors – and risking health to get outside

As frustrating and alarming as the photos of people abandoning social distancing to crowd a beach or a hiking path, it’s illustrative of how the inability to achieve ‘I was there’ has reminded people of its importance. Most people, simply put, need to be around other people. An in person shared experience still activates the senses in a manner that we can’t seem to simulate without human contact. Zoom fatigue is killing us and building trust between workplaces or within a business is a constant struggle. We can maintain existing relationships digitally but promotion, trust and sales are still extremely reliant on person-to-person communication.

Near-total reliance on tourism is widespread around the world – and increasing

Thousands of businesses, teams and nations are too heavily reliant on tourism to allow it to fail. Though many airlines have consolidated or closed completely during the pandemic those that remain will see benefit in their ability to capitalize on pent up travel demand around the world. Hotels – with significantly stricter and more reliable cleaning programs than short-term vacation rentals – will benefit from increased consumer trust. Sports teams will continue to work tirelessly to integrate the digital experience into the in-person one. Entertainers don’t have much of a choice; there’s little revenue in streaming music sales, concerts remain the most profitable way to earn money. All these stakeholders will be incredibly aggressive in dragging consumers back and it is working. Even cruise ships have convinced people to get onboard (with predictable consequences) – if anything that should be evidence enough.

Content marketing unsurprisingly needs unique content

Online content marketing requires content – and even this generates clicks

Most importantly, however, in my mind? The most digital of businesses – online content marketing – is reliant on new content and the differentiation necessary to ‘stand out’. As the space gets busier this will require a larger investment in travel, clothing and camera work to be noticed. Flaunting wealth, even in the strangest ways, will still be used to create the envy, fame and popularity that brings the sponsorships and payments to ‘influence’ that makes those stars money. Outside of talent, of course, tourism, travel, and entertainment are still the simplest method for experiential content development.

The tourism industry’s focus needs to be melding the digital and in-person experiences to create reliance on both. I imagine restaurants interactive VR guests that you can interact with at your tables or virtual cocktail creation with the ability to precisely refine ingredients to your whims. Our business will change in creative ways that we have to embrace.

People will still value ‘being there’. If we are to survive, however, we need to embrace technology and ‘level up’ our investment in interactive experiences.

A (New) Contradiction in Albertan Entrepreneurship

We’ve changed as a city.

A quick story – a long way to get to my point, but bare with me and I’ll get there:

On March 23rd, 2018, the City of Edmonton voted to permanently shutter and – in all likelihood demolish – Northlands Coliseum.

As our Mayor put plainly:

“The city considered dozens of different scenarios for the building, Iveson said. But the cost to retrofit a building from the 1970s, he pointed out, with a lot of asbestos and other building materials that were popular at that time, which is essentially a big cylinder with awkward structural elements that hold up the stands, is not going to be inexpensive.

“At best we get a buck for the building,” he said. “Lots of people have lots of zany ideas. They would have all cost tens of millions or hundreds of millions of dollars that we don’t have.”

I can understand why the City wouldn’t want to pursue this. Creativity is challenging. Zany ideas are expensive and time-consuming. It takes daring, confidence and brazen stubbornness.

Fortunately, Edmonton is built on that. We built 5,300,000 square feet of shopping mall in marshland. This same City Council has green lighted an 81-storey building – at a time where office, hotel and apartment vacancy are at 10-year highs (I’ve written about this here). We have an actual, 600-acre farm in the centre of this city.

This is Edmonton. Don’t question our stubbornness.

So Ben Gardner of Gardner Architects – had one of these zany, entrepreneurial ideas led a team to create Agora Borealis, a concept that epitomizes that confidence. That ‘big cylinder with awkward structural elements’, after all, is also a large clear-span open space (arena interior) together with well-supported and structurally sound floor elements with decent ceiling heights (concourse levels) and exceptional access to public transit. Use what you can get. Combine this with a massive chunk of transit-oriented development and instantly we’ve hit every major box in the ‘Modern Urban Planning’ checklist. We should be salivating.

Plaza de Toros de Las Arenas, Barcelona (http://blog.apartmentsbarcelona.com/arenas-de-barcelona)

This could be ‘Las Arenas’ of Barcelona or ‘Highbury Square’ of London. At least ‘Stadium Lofts’ in Indianapolis. The building already exists – awkward or not, there are spaces, well below replacement cost, for people to be able to afford.

But we’re not, of course. Council has seen to that, and maybe they’re right.

I’m biased, for sure. I believe adaptive reuse is the highest art of construction. This goes further than that though.

This goes to the heart of how Edmonton business has traditionally worked. Organic growth necessitated by little outside investment. Reutilization and repurposing of existing assets to start along a different path. Every tradesperson, machine shop and construction company embody that commitment. We build businesses, hustle like hell to sell product and services and grow employees that venture out to do the same. Business grows in iterative steps – start and succeed in one vertical or business then start and succeed in the next one. This isn’t just about ‘Wayne’s House’ being demolished rather than reborn into something bigger and better, it’s about a shift in the way we expect businesses to operate.

We have plenty of Edmonton success stories that have lived this organic growth model. Companies like PCL, the Wheaton Group, Stantec and Rexall have transitioned that success into other cities with that same Edmonton work ethic and commitment. They started purchasing other businesses to grow, but the strength of their business was built organically.

We’ve stopped believing that this is the case, though.

Over the last month, the EEDC, Startup Edmonton and TEC Edmonton have come under well-publicized fire for their management of funding for entrepreneurs. Millions of dollars spent yet Edmonton entrepreneurs are still complaining of non-existent support. It’s easy to blame the snowflakes for not being able to figure things out for themselves. But they’re right.

Facebook, Google and Twitter weren’t borne into existence at the top of their fields, yet we’ve funded bureaucracy like our start-ups are already there. Our entrepreneurs are busy discovering fire and our Government institutions are trying to fund spaceships. The tech revolution doesn’t render the ground-up methods that have borne the greatest of our homegrown businesses obsolete. We need to get back to the core of what makes Edmonton business successful.

All businesses live and die on the strength of their founders, management, teams and ideas, just as they have in the past. Our (and our government’s) support and contribution needs to ensure that is the case. Let’s help entrepreneurs set up corporations, payroll and GST numbers. Let’s ease the tax burden with local or provincial SR&ED tax credits that are constructive rather than punitive. Let’s encourage existing property owners to create affordable space for start-ups through waiver of a percentage of property tax.

If there are groups (and there are) that will take on the challenge, then sell the Coliseum for a dollar and see what happens. If there are aspiring entrepreneurs in any field (and there are) that want to try something big, then simplify their cost structure to do so. They may fail, of course. But – if they succeed – they’ll be Edmonton strong.

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