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Puerto Vallarta News NetworkEditorials | Issues | April 2009 

Investing in Economic Downturns
email this pageprint this pageemail usDaniel Gomez - PVNN


Take a walk down Los Muertos Beach and you'll see a vast number of businesses working hard to improve the quality and ambiance of the area - and others that aren't.
The true effect of the economic crisis that is spreading globally may not be felt fully in Vallarta until next year. While tourism numbers appear depressed, it is too early to tell how we'll fare. Some predict the Mexican economy will suffer a ripple-effect contraction if not right out recession in stage 2 of the crisis with tourist destinations like Puerto Vallarta suffering as a result.

The natural instinct is for government and businesses to brace themselves against diminishing budgets and leaner times. Governments and businesses across the world are busy reducing the size of their non-essential functions (read marketing staff and budgets) and postponing any unnecessary investment in their assets and communications.

While this response is common during economic downturns, investing in brand assets and increasing spend in communications may be the best antidote to the crisis for Vallarta businesses and our city as a whole. Why invest in Vallarta's brand now? Brands act to increase awareness and increase emotional bonds with customers, they increase perceptions of quality thereby fostering trust.

Multiple studies show strong brands can justify a price premium - important during downturns - and that consumers are more likely to spend their money and more of it, on brands they know and trust. Knowledge of brands and the resultant trust are correlated to exposure to and quality of brand messaging. Apply this branding theory to holiday makers on tighter budgets booking a reduced number of trips this year and you may see the case for investing in brand Vallarta and its amenities.

The challenge for Puerto Vallarta over the next 18 months will be to convince the weary traveller that their tourist dollar is best spent here instead of Barbados, Cancun or Hawaii, and to convince those that arrive to come back again and again.

How? By investing in all the brand touch-points. A touch-point in 'brand-speak' is every contact a consumer has with a brand. For a destination brand like Vallarta this includes everything from the arrival at the airport, to the sunset cruise, to the gourmet dinner, to the swim in the ocean, to the walk on the beach. The challenge is in ensuring a consistency of quality and getting individual businesses to collaborate in creating a cohesive experience that will lure tourists back to our shores.

Take a walk down Los Muertos Beach and you'll see a vast number of businesses working hard to improve the quality and ambiance of the area. Vallarta institutions like El Dorado and La Palapa, along with the newly launched Beach Club and Blue Seas Resort and Spa, are examples of businesses that are investing in their assets in order to draw consumers to their businesses.

On the other side of the spectrum, a disturbingly large number of establishments are neglecting the brands they own and damaging the general image of the area. Several of the beach restaurants along Vallarta's South Shore offer rickety or broken beach furniture, ripped parasols and littered beaches to visitors.

While it is unrealistic and undesirable for every bar, hotel and restaurant to position itself as luxury, failing to reinvest in brand assets and maintain a minimum level of quality, particularly in a wounded economy, will result in an eventual loss of consumers and serve to damage a brand's equity over the long term.

Businesses that enjoy beach concessions have a responsibility to maintain one of Vallarta's more important assets. While Ayuntamiento is working to improve Vallarta's image, it need do more to support and encourage local businesses to protect Vallarta's biggest export: tourism.

The current economic crisis should be treated as a wake up call to conserve and promote the assets that have made Vallarta the desirable international destination it is. Investing in the dream by investing in the reality can only serve to improve Vallarta's desirability and appeal.

Daniel Gomez is a brand strategist and partner at Mijo. Based in Puerto Vallarta, Mijo is a strategic brand design agency servicing clients across North America and Europe to create breakthrough brand communicatiuon solutions. To learn more about Mijo Brand Strategy Design, call (322) 223-2837 or visit mijo.com.mx.

Click HERE for more articles by Daniel Gomez
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