Action:

Provide access to finance and technical assistance to help small, tourism and hospitality businesses pivot, adapt, and capitalize on new demands and opportunities in a postpandemic world.

Background:

In 2020, U.S. travel spend declined by nearly $500 million and, while the industry improved between April and September, progress stalled in the final quarter of the year due to the continued absence of business travel and another surge in COVID-19 cases.

The travel economies of every city and state were affected. Seventy percent of U.S. metropolitan regions have at least 10% of their workforce in leisure and hospitality, and during 2020, cities in more than 18 states experienced 40+% downturn in travel spending. The impact was felt most by small businesses (with fewer than 500 employees), which make up 99.5% of the tourism sector and  60.6% of employment within the sector. Many of them face a time of extreme liquidity strain and most of them entered the pandemic with very limited cash flow.

Women and minorities have also been hard hit, with women- and minority-owned businesses comprising 63.5% of U.S. accommodation and food services businesses and 46.5% of arts and entertainment businesses.

Given that COVID-19 will probably be around for a long time, many tourism businesses will need to adapt and/or reinvent themselves for “the new normal.”

How To Adopt This Approach:

The project’s success was based on strong relationships with local businesses

1. Assemble and train a group of 5–10 local business owners, who will become
your ambassadors to get other merchants on board

2. Regularly engage business owners and provide sufficient training about the sales platform, recognizing that different business owners have different levels of digital literacy. This will mean creating step-by-step guides, complete with screenshots on how to add products and make payments

3. Help merchants to become confident selling online. Just as a shop needs an attractive window display, a website needs beautiful photos. Merchants will also have to do their own marketing to drive traffic from their website to the Marketplace, for example, by posting and buying advertisements on social media.

Action:

Create strategies and partnerships that will make your destination more sustainable and inclusive. And tell that story to visitors

Background:

Numerous reports and studies have found that the pandemic has reinforced, even accelerated, people’s views on sustainability, with more consumers focused on helping to create a better, healthier world.

For example, 60% of travelers say that their future booking decisions would be influenced by sustainable initiatives at the property, even if it meant spending a modest premium.

Travelers’ behavior, loyalty, and values are also being redefined by the economic downturn, restrictions in day-to-day living caused by COVID-19, and flashpoint events highlighting systemic racism within our communities.

It is widely expected that the pandemic will accelerate the trend of travelers seeking “travel with a purpose,” with 67% of recently polled travelers saying they want their bookings to make a positive difference for communities affected by the pandemic.

Travelers are also now placing greater importance on pre-trip planning.

Destinations can respond to these trends by developing a shared understanding of what it means to be a sustainable destination.

For example, Sedona, AZ engaged the Global Sustainable Tourism Council to conduct a sustainability assessment of its tourism economy.

The goal was to enable the destination to design and target policies, programs, and campaigns which demonstrate sustainable destination management, maximize economic benefits to the host community, and minimize negative impacts on the environment.

Programs could include:

• Sector-wide sustainable guidelines.
• Technical assistance to small businesses to help them adopt more sustainable practices (e.g., relating to energy and water use, single use plastics and recycling, food procurement, laundry operations, and reporting).
• Destination management tools to “nudge” visitors around the city, to manage crowds, and/or to help tourists engage local communities.
• Investments in green infrastructure.
• Communicating the destination’s commitments to travelers.

Problem:

Microfinancing is an important tool to assist small businesses with a documented history of success. When businesses are first starting out, they often are unable to get access to capital. And yet, the costs to start a microbusiness can be quite low with some estimates at a few thousand dollars. In some cases, a larger loan may be detrimental if a recipient is not ready to expand the business quickly and will not have the necessary earnings. Through the Small Business Administration, small businesses have received almost $900M in a mix of grants and loans, and have gone on to create almost 250,000 jobs (as of 2017).

These small grants and loans can be critical to enabling businesses to start successfully and can provide an important lifeline to businesses looking to continue operations. New businesses are integral to the success of communities, accounting for high proportions of net new job creation. This funding can be particularly important for Black Americans who start businesses at a slower rate than other groups due to many barriers, chief among them access to funding. This inequality will only get worse with COVID-19.

Action:

Cities should work with local philanthropic partners and community leaders to launch a microgrant program that offers small grants (e.g., $1,000-$3,000) to individuals looking to start businesses. This can be done successfully with minimal city investment; instead, city officials should use their bully pulpit powers to convene local leaders and galvanize support.

Cities should consider leveraging CARES Act funding to jumpstart this action if they have not already allocated funds by the end of 2020. As the economy starts to recover, many people will think about starting a business, as happened after other recessions. Additionally, this action will be more effective if combined with developing an entrepreneurial ecosystem.

How To Adapt this Approach:

1. Identify local non-profits and philanthropic organizations which could fund and administer the program. The city can help facilitate the creation and initial projects while serving as an integral partner throughout.
   • This can be a small pot of money as a pilot program (e.g., $50K, $1K per grant, to offer to 50 individuals)
     If possible, partner with a non-profit which already has expertise.
   • Cities should also consider high net worth individuals and successful entrepreneurs within their communities, who may be willing to sponsor this effort.
2. Determine which industries are underrepresented in your community and are positioned to grow during the recovery. Direct microgrants to new businesses in these sectors. Kauffman’s “My Sidewalk” program can help with identifying existing resources and which industries have opportunities for growth, as well as speaking with stakeholders in the community to understand gaps
3. Secure funding from a philanthropic or corporate partner. Develop and launch the microgrant program.
4. Create a marketing and outreach campaign to relevant entrepreneurship support groups. Ensure that explicit outreach is done to groups working with disadvantaged communities and communities of color.
5. Track progress from the first cohort and provide technical assistance and support to those individuals (See template in resources section)

Background

Cites should build stronger connections between immigrant and refugee-serving organizations and mainstream business support services, to help address barriers without requiring the creation of new programming. As connections are strengthened, gaps in service delivery will become more apparent and new programs can be designed to fill specific needs.

Strategies:

A. Create an ecosystem map for community partners. Map the entrepreneurship ecosystem by first surveying existing mainstream business services and community-based organizations to identify the current landscape of services provided. Asset mapping should include programs, mentorship opportunities and events, facilities and space, legal and other business support services, financial services and funding opportunities, and immigrant and refugee-serving organizations and other community-based organizations.

• Grand Forks, ND: In August 2019, the City of Grand Forks partnered with the Grand Forks Region Economic Development Corporation to develop and share an Entrepreneurship Ecosystem Map, which was designed to help community-based organizations and interested residents locate startup support resources and guidance across the community.
• St. Louis, MO: The St. Louis Mosaic Project, a regional initiative housed within the St. Louis Economic Development Partnership and the World Trade Center St. Louis, developed a Neighborhood Business Ecosystem “to orient foreign-born immigrants toward funding, competitions, business plans and space in St. Louis for success of their businesses.”

B. Build a referral network between city agencies and community partners. Community-based organizations that directly serve immigrants and refugees have direct knowledge of the needs and skillsets that newcomers bring. Building relationships and eventually formal referral processes between these organizations and local government can help identify potential entrepreneurship program participants, but can also serve other local priorities. For example, a partnership between the City of Tulsa and the YWCA Tulsa — which has more than 35 years of experience serving immigrants and refugees — has helped the City identify bilingual contact tracers as part of its overall COVID-19 response.

C. Launch a multi-sector regional initiative focused on attracting and retaining foreign-born talent. Such efforts — which typically go beyond immigrant entrepreneurship to include workforce development and other economic development strategies — bring together a broad set of partners to foster a more welcoming and inclusive environment through marketing and communications, partnerships, and systems-change. See case study: St. Louis Mosaic Project.

Action:

Launch, or shine a spotlight on, programs that promote and connect MWBEs to new business-to-consumer (B2C) and business-to-business (B2B) opportunities, including national supply chains.

How to Adapt This Approach:

• Consider opportunities to shine a spotlight on local minority, immigrant, or other LMI small business groups
• Identify and reach out to local and national organizations that have aligned missions (such as the Urban Manufacturing Alliance or an ethnic chamber)
• While it might not be possible to replicate all the building blocks of the ORIGINS program, consider what is possible
• Use existing tactical guides, such as UMA’s Toolkit: How to Develop a Locally-Made Brand Platform.
• Provide access to dynamic City venues for exhibitions and popups, as well as City social media accounts
• Reach out to, and partner with, e-commerce platforms (such as Etsy and Amazon), and regional and national buyers that are courting makers and supporting the Black Lives Matter movement (such as Walmart and Levis)
• Also, reach out to potential sponsors and ambassadors/local celebrities

Action:

Convene thought leaders, analysts, entrepreneurs, and tech startups to focus on technology development and adoption that could reshape travel and tourism.

Background:

Thanks to the internet, the ways that people travel have changed drastically in a short span of time. Technology has made traveling safer and less time consuming, changed the way we book a flight or room, the way we are informed of events, or seek advice to sightsee a city. It has allowed us to have more personalized experiences, helped us to surpass language barriers, and even changed our packing routines. It is also impacting how destinations and those in the tourism industry market their products and services.

For example, data analytics, cloud computing and devices which are connected to the Internet-of-Things allow personalization for a better customer experience. Smart conversational interfaces have become more useful in providing feedback and answering customer questions. Free mobile connectivity not only allows travelers to share their experiences with others through social media easily, it also allows a destination to collect data about their travelers during different steps of the visit— which can help them sell the right product to the right visitor at the right time.

How To Adopt This Approach:

Identify an experienced tech accelerator partner and decide the size and cadence
of your cohorts (the Singapore Tourism Accelerator runs two rounds a year, each
with up to 12 companies).

Create an application process with clear selection criteria for admission to the accelerator. Promote the program extensively, through government colleagues, tech membership groups, incubators, universities, social media, conferences, and in person.

Design an accelerator program. The Singapore Tourism Accelerator consists of two phases:,a 2-week “acceleration” bootcamp, and a 3-month “pilot” phase. The bootcamp comprises modules, workshops, mentoring sessions, and events to help program participants define value propositions and use-cases, in collaborations with matched industry partners. During the pilot phase, participants work with industry partners to build prototypes and assess the feasibility of scaling up their solutions. The prototypes are funded by industry partner grants.

Finally, plan a demo day for participants to showcase their solutions to a wide set of industry partners and investors.

Action:

Work with nonprofit, academic, philanthropic and business partners to create and grow an entrepreneurial ecosystem tailored for underserved small businesses.

How to Adapt This Approach:

• Identify a lead for the initiative
  •  In most cases, a non-City organization (nonprofit, chamber, philanthropy, academic, etc.) is best positioned to house initiative
  • The individual leading the initiative should have extensive private sector experience, have credibility within the community of entrepreneurs where the initiative is focused, and preferably be an entrepreneur as well
  •  Cities should leverage their convening power to galvanize partners, support fundraising, and focus on City controlled areas where it can accelerate or remove barriers to entrepreneurship
• The lead organization should engage and assess the current ecosystem
  • Reach out to local business leaders and entrepreneurs to identify gaps in existing programming and opportunities
  • Outreach to communities of color and low-income individuals to understand the needs of all communities
  • Connect with startup and small business groups, local nonprofits, educational institutions, philanthropic partners, and business leaders to ensure participation. Part of the program’s benefit should be to offer networking and mentoring opportunities with established leaders
  • Use data (e.g., from Kauffman foundation’s My Sidewalk) to demonstrate where potential gaps and opportunities for entrepreneurship exist in the community
• The lead organization should build a coalition of partners to support the initiative, which could include education institutions, VCs, successful founders, corporate partners, and service providers (e.g., lawyers, bankers, accountants, real estate technical assistance providers). Ensure partners are representative of the community the initiative intends to focus on
• Work with the coalition of partners to develop a proposed initiative to build out the entrepreneurial ecosystem in the city. The initiative could include:
  • A physical center like RCIE, which focuses on providing all the support needed for a specific community of entrepreneurs
  •  An initiative to join up a network of existing coworking spaces, accelerators, entrepreneurship programs, events, etc. and connect it to MWBE or LMI entrepreneurs
  • The designation of an entrepreneurial ambassador who serves as a single point of contact to navigate and connect entrepreneurs to the ecosystemThe proposal will vary depending on the project but should include: the goal, the need/ opportunity, the coalition of partners, the program design, location, staffing, budget, metrics, and timeline/next steps
• Use the proposal to raise funds for the initiative. Pitch foundations, banks, and corporations on contributing financially, providing in-kind support, or advising the program. Start with the coalition partners who have helped develop the initiative
• Launch and implement initiative
• Track and publish KPIs on a regular basis. Include aggregated demographic and neighborhood data on entrepreneurs being served, services provided, outcomes, etc. (See KPIs section)

Problem:

The availability of funds is not enough to ensure the success of local businesses. In fact, funds without support and technical assistance can create problems for businesses. But technical assistance programs are not enough; the success of entrepreneurs depends on having a strong community of mentors that they can rely on to help them along the process of starting and scaling a business — whether it be answering questions about business planning and strategy advice, partners, the local market, funding /grants, or even getting advice on who to go to.

This ecosystem must be diverse and available to all in the community. An estimated 81 percent of funding for businesses comes through personal net worth, family wealth, or connections to networks. The lack of business role models is particularly acute for Black and brown business owners, impeding their ability to start businesses. Ensuring that these individuals have an entrepreneurial ecosystem is critical to ensuring equity in a city.

Action:

Cities should launch programs, leveraging business and community partners, to foster an entrepreneurial environment. These actions should focus around connecting entrepreneurs and facilitating access to government and support services, such as mentoring. They usually should not be led by the city, but the city has a key role to play encouraging, galvanizing, connecting, and facilitating. These actions are also incredibly important, are foundational to ensure the success of other programs in this toolkit, and are low-cost.