The man who sells Niagara to tourists can’t win over his critics
John Percy covers lots of ground
NIAGARA FALLS — Niagara Falls tourism always has been a contentious field.
The man on the hot seat these days is John Percy, 44, president and chief executive officer of the Niagara Tourism and Convention Corp. since 2006.
Percy, who was paid $121,600 last year, recently had his contract extended through Dec. 23, 2010, by the NTCC board of directors in a unanimous vote. He wouldn’t disclose his current salary, but last year’s was available from a public filing with the Internal Revenue Service.
“I get a raise on an annual basis,” he said.
Percy pointed to increases in hotel room occupancy rates and revenues in arguing that he has things on the right track when it comes to tourism promotion.
But he has plenty of critics, ranging from politicians to attraction operators, who feel the organization is not focused enough on bringing in tourists from North America who could drive here, while concentrating too much on trying to lure visitors from overseas.
Those critics point to a trip to India in June by Percy and other agency staffers. In March, Percy attended an international travel show in Berlin, and this month he’s off to a similar event in London.
And he’s caught in a traditional Niagara County argument over whether anyplace other than Niagara Falls should be promoted.
On each side of the county, the agency sometimes finds it hard to win.
Niagara Falls City Council Chairman Sam Fruscione said the city should go it alone and return to the days when it had its own promotion agency, although Mayor Paul A. Dyster disagrees.
In Lockport, which provides a portion of its hotel and motel tax to the NTCC, Mayor Michael W. Tucker said his city’s attractions deserve more promotion from the NTCC, while some in Niagara Falls say Lockport shouldn’t receive any promotion at all.
“I’m not saying it’s all rosy working with these constituencies,” Percy said. “I know we have our critics. I have an open-door policy. I have thick skin if they want to come in and pound their fists on the table here.”
The NTCC was formed in 2003 as a result of a merger between the old Niagara Falls Convention and Visitors Bureau and the Niagara County Tourism Office. The merger was orchestrated by State Sen. George D. Maziarz, R-Newfane, and Assemblywoman Francine DelMonte, D-Lewiston.
Besides a piece of the local share of Seneca Niagara Casino revenue, the NTCC’s other main source of revenue is the 4 percent “bed tax” on hotel and motel bills in the county.
Both sources of revenue are rising, as the NTCC’s annual budget has grown from $2 million when it was founded to more than $2.8 million this year.
“[The merger] accomplished this: It did get us 95 percent out of the tourism business. It saved us $800,000 to $850,000 a year,” said County Legislature Chairman William
L. Ross, who serves on the 17- member NTCC board. “It seems that they’re accomplishing what our local state legislators were looking for: one organization, one mission, no duplication.”
“I think they’re doing a good job,” DelMonte said. “John is well established in the field and he’s very well liked. I have complete confidence in his ability to run the NTCC.”
Maziarz seemed less impressed. “I think it’s had its pluses and minuses,” he said. “I still think having one organization is the right thing to do. I wish they’d concentrate more on publicly lobbying to improve the product, like the trolley system [from Niagara Falls] to Lewiston and Old Fort Niagara.”
Maziarz was miffed that the NTCC didn’t speak out in favor of his
bill that would have required state park revenue generated here to remain in Niagara County for capital improvements in the state parks in the county.
“The NTCC doesn’t want to take on State Parks,” Maziarz complained.
Percy said perhaps the agency should be doing more to advocate for more funding for tourism-related transportation improvements.
“As far as legislative initiatives are concerned, I think we need to tread carefully,” he said, “as that is a fine line we are crossing.”
Lockport’s case
Tucker said his city deserves better from the NTCC.
Lockport has contributed $275,000 in bed tax to the agency since 2005.
“It’s no secret I’m not satisfied,” the Lockport mayor said.
Lockport and the agency had a deal to split the $23,000 annual cost of the Tour Lockport Trolley, a hop-on, hop-off service that makes the rounds of the city’s attractions during the summer.
However, in the past two years, the NTCC ended up paying the full cost because it never sent the city a bill for its share. Lockport has agreed to make up for that by paying the full tab itself this year and next.
Another irksome issue, from Tucker’s point of view, was that a promotion DVD the NTCC produced continues to make no mention of the Lockport Cave Tour, the city’s second-largest attraction.
“I want to make sure the City of Lockport is fairly represented and we’re getting a bang for our buck. We’re the second-biggest stakeholder, and I want to make sure we get what’s coming to us,” Tucker said.
Percy said the mayor and Common Council members never responds when he seeks comments about return on investment reports. “Then I always have to hear about his concerns later and through other sources,” he said of Tucker, “never directly from him.”
The NTCC’s defenders include Mike Murphy, the owner of Lockport Locks and Erie Canal Cruises, the city’s No. 1 attraction. “Personally, I think they’re doing a good job,” Murphy said. “They’re always bringing travel writers out here and people who book conventions . . .
“Some of those people in Niagara Falls don’t want anybody to leave Niagara Falls,” Murphy added. “They don’t want to get into the 21st century. That’s not the way to build tourism.”
But Jerry Genova, chairman of the Niagara Falls Tourism Advisory Board, thinks Niagara Falls is getting the short end of the stick. He said some of the city’s organizations and business zones have been left out of the NTCC’s literature.
“Two years ago, Little Italy was left out of it. Every business association was left out of it,” he said.
Genova said the city should pull out of the NTCC contract and use the bed tax to restart its own tourism promotion effort.
“Just like we have Public Works, let’s have a Department of Tourism, and let’s begin to take back what we have,” he said.
“That’s nothing I’m considering,” Dyster said. “I don’t see a point in trying to duplicate effort.”
Percy said he hears concerns among some on the city’s Tourism Advisory Board that the NTCC shouldn’t be spending casino revenue to promote the county, but, he counters, “You have to market that other product [outside Niagara Falls] to increase the length of stay here.”
“The benefits of tourism have to come back to Niagara Falls,” said Fruscione. “It’s critical to the survival of the city. The agency is using all of Niagara Falls’ cash. It’s countywide, but it’s 98 percent city-funded.”
That’s a bit of an exaggeration, but not much. Through the first three quarters of this year, Niagara Falls has sent $760,262 in bed tax to the NTCC. Lockport sent $54,797, and Niagara County sent $20,897 through six months (its third-quarter figure was unavailable).
In short, Niagara Falls’ bed tax revenue this year was more than 10 times the other taxing entitles’ combined revenues.
“Niagara Falls always seems to pay everyone else’s bills,” Fruscione said.
Defining the NTCC
The NTCC is technically not a government agency, although it was created by an act of the State Legislature and funded through contracts signed by the county and two cities. Percy said it’s set up as a not-for-profit corporation.
“My biggest problem with the NTCC is their secrecy,” Fruscione said. “They get $2.8 million of our money and we can’t find out John Percy’s salary.”
The NTCC’s IRS Form 990 shows that it had a healthy 2007. It took in almost $4 million in revenue and had just over $3 million in expenses, finishing $967,805 in the black.
Besides bed tax, government grants and casino money, the NTCC collected $221,465 in advertising revenue from its various publications, $510,245 in commissions on tours arranged, $31,325 on brochure displays and $187,388 under “miscellaneous income.”
The NTCC budget for 2008 includes $1 million for advertising and marketing and $277,000 for trade shows.
The agency invested $138,000 in a four-week Ontario campaign that opened Oct. 20, using radio and TV commercials, Internet advertising and billboards. It also ran two advertising campaigns this year in the Cleveland, Columbus and Pittsburgh markets. A four-week June buy tried to draw families looking for summer vacations with Internet ads and radio spots. Another buy in those markets Sept. 15 to Oct. 12 was targeted at empty-nesters.
Geoffrey Reeds, vice president of sales and marketing for Sentry Hospitality, the company that markets the Crowne Plaza Hotel in downtown Niagara Falls, said his 391-room hotel had a good tourist season this year.
“But we’re comparing a year where, in the first half of 2007, I was doing a major renovation,” he added.
Data gathered by Smith Travel Research, a national firm that surveys most of the chain hotels in the county and lacks reports from most of the small independents, credits Niagara Falls with one of the nation’s largest percentage increases in hotel occupancy.
In 2007, 48.8 percent of reporting hotel room nights were sold in Niagara Falls; this year, it was 56.9 percent through three quarters of the year.
“I think this agency takes a portion of the credit,” Percy said. “I can’t sit here and say we deserve all of it.”
Reeds said, “We’re still trending below the national average [which is 65.7 percent], even though we showed one of the biggest increases in the country.”
The average daily revenue, which is room revenue divided by the number of rooms sold, was $82.73 for Niagara Falls hotels in 2007, according to Smith Travel data released by Reeds. This year, that figure jumped to $91.21.
The largest hotel in Niagara Falls doesn’t report to Smith Travel, meaning its business isn’t part of the reports we just mentioned, and it doesn’t charge bed tax, either. That’s the 604-room Seneca hotel behind the casino.
Seneca Niagara Gaming Corp. spokesman Phil Pantano said the hotel is booked solid much of the time. For the fiscal year that ended Sept. 30, the hotel’s occupancy rate was 94 percent.
“It was as high as 99 percent in our peak [summer] months,” Pantano said.
Meanwhile, the casino counted 8 million visitors in 2007, and it’s had 6 million this year, through Oct. 25.
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“We give the NTCC another attraction to talk about as they promote Niagara Falls to the world,” Pantano said.
Foreign guests aren’t a big deal for the Seneca casino, Pantano said. Only 40 percent of the casino’s guests are from outside New York State, with Pennsylvania, Ohio and New England being the key areas for out-of-state visitors.
Canadians constitute 10 percent or less of the casino attendance, since the Canadian side has its own casinos.
The domestic market still dominates Niagara Falls tourism and probably always will. Percy said 78 percent to 82 percent of visitors arrive by car.
But he said the international market is worth the investment. He wouldn’t say what his overseas trips cost, but he said only three of the 44 trade shows NTCC staffers visited last year were outside the United States.
“I think too much focus is being placed [by critics] on international when we do spend more money domestically,” he said.
The predecessor
In an e-mail exchange with The Buffalo News, David Rosenwasser, Percy’s predecessor, said that when he ran the NTCC, he took one foreign trip, not counting Canada.
He said he went to Copenhagen, Denmark, along with a representative of the Niagara Frontier Transportation Authority, to try to entice European airlines to fly tourist charter flights to Niagara Falls International Airport.
“To the best of my knowledge, we did not get any one of them to say ‘yes,’ ” Rosenwasser recalled.
He also said he told Percy to cut back on his foreign travel. Percy had been going to the World Travel Mart in London since CVB days, Rosenwasser said.
“I did not find the value to be commensurate for the investment. He did follow that request,” said Rosenwasser, who is now heading a municipal tourism agency in St. Charles, Mo.
And Rosenwasser said if he were still here, he’d stick with that policy.
“The change in the value of the Canadian dollar and the border crossing challenges have made an enormous difference in the conditions over the last couple of years. Taking into account those factors and the rising cost of gas, even with the recent drop, I would suggest that the allocation of resources spent to attract more visitors from India, Western Europe and other international sources is at best problematic in comparison to using those same resources stimulating more visitation from markets within a drive time distance of Niagara Falls,” he e-mailed The News.
Reeds, the Crowne Plaza marketing chief, said he would concentrate on domestic marketing right now.
“The international market does hold some opportunity, so I don’t think it should be ignored in any way, shape or form. Right now, with what’s happening with the economy, focusing on the domestic [market] might make more sense,” Reeds said.
He said the Crowne Plaza has done rather well booking tourists from some foreign countries, especially Germans, Italians and Asians. But Reeds noted that the lack of downtown attractions hurts.
“The Japanese, especially, don’t want to stay someplace where there’s nothing to do. They like the hustle, the bustle, the feel of walking all over,” Reeds said.
Percy said one of his key goals is to get New York Citybased tour operators, who offer multiday tour packages, including fly-and-drive vacations, to foreign tourists, to include Niagara Falls, N. Y., on their itineraries.
“We’re trying to get them to understand that the American side is a viable product,” he said.
Besides visiting international travel expositions in London and Berlin, Percy and his team cooked up the June trip to India.
“We’re trying to get some of those nations that have a hard time getting a visa into Canada,” he explained. Those include India and several southeast Asian countries.
Accompanied by NTCC director of sales Elizabeth Davis, Brad Billard of Whirlpool Jet Boats and Sheema Yohra, an official of an Indian marketing firm, Percy visited Mumbai and Delhi, trying to make connections with Indian travel agents and tour operators. He estimated that Niagara Falls received $105,000 worth of media coverage in India during the trip.
Maziarz wouldn’t criticize Percy’s overseas travel. “I’m not an expert in that field, but I think you have to travel,” he said. “If he thinks that’s important, I would defer to him.”
“We are seeing huge growth in international numbers and business due to favorable exchange rates from various countries. In addition, convention and conference business grows year after year as well,” Percy said in an e-mail.
Percy estimated that 142,000 citizens of India visited Niagara Falls last year, out of 568,000 Indians who visited the U. S. overall.
However, Britain still provides the largest number of foreign visitors to Niagara Falls, with Japan second and Germany third, Percy said.
Rosenwasser said, “Those international markets are significant and have some value to a travel icon such as Niagara Falls, but history would indicate that there is better hunting and more potential to be gained from markets far closer and more likely to select the Falls as a destination.”
Percy said one of his goals is “to try to nail down a more definitive number for how many people come here.”
That’s right; no one knows how many tourists Niagara Falls really gets in a year. Asked what he tells people at trade shows when they want to know that, Percy said he uses the number 8.4 million, but he’s just about certain it’s way off.
“It’s something that’s been used since CVB days,” he said. “The casino says they had 8 million alone [in 2007].”
Despite the uncertainty involving the numbers and NTCC, Percy, a former marketing employee for several regional malls, feels confident he knows where he and Niagara County are going.
“I’m passionate about this destination,” he said. “I believe this destination has a great future,” said Percy. “I hope to be a visionary. I hope there are more of us.”
“I hope the board keeps extending my contract for 10 to 20 years. I want to see this become a solid tourism-based economy,” Percy said.
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