St. Helena economy is hurting, worth healing
Thursday, August 06, 2009
Given the economy, it’s hardly surprising that fewer people are visiting St. Helena, and fewer still are spending like they used to. If you don’t think the drop in tourism is affecting all St. Helena businesses and city revenues, think again.
St. Helena businesses, including restaurants, hotels, large and small wineries, vineyard managers and retailers, are hurting.
Five local business leaders who visited the Star’s editorial board meeting this week reported their ailments, but they also recommended remedies.
Jack Burkam, general manager of the Harvest Inn; Todd Humphries, co-owner and executive chef of Martini House; Kevin Morrisey, general manager of Ehlers Estate Winery; Peter Nissen, owner of Nissen Vineyard Services, Inc. of St. Helena and president of the Napa County Farm Bureau; and Nancy Levenberg, CEO of the St. Helena Chamber of Commerce, agreed that the county’s primary industries of agriculture and wine go hand-in hand with tourism.
The fact is, tourist dollars are essential to sustaining local government (18 percent of city income comes from hotel taxes, and a similar percentage comes from restaurants), along with the wine industry and the agricultural land which attracts travelers in the first place.
That reality led the group to discuss various ways in which local businesses can help each other attract customers, foreign and domestic.
Burkam, who said upscale inns throughout the Bay Area have suffered a 25 to 30 percent drop in revenue over the past six to eight months, noted that hotel taxes help the city balance its budget and contribute to the quality of life enjoyed in
St. Helena.
As for dining, Humphries said his catering business is off
60 percent, restaurant sales are down 20 to 25 percent and that the size of his wine cellar inventory has dropped by $50,000. That’s worrisome, because restaurants account for the lion’s share of sales tax revenues that make up 31 percent of the city’s budget. Humphries said he is optimistic that restaurants could be bolstered by promotional marketing of St. Helena by Cheers!, the Chamber of Commerce public relations campaign and fellow businesses.
Morrisey, who has seen estate wine sale “evaporate” in recent months, said he’s been forced to focus on the two things he can still control — quality assurance and customer service. But he needs customers to walk through the front door.
“We need to hang on to what we’re doing and what we can do, but we’re not sustainable if we’re not profitable,” said Morrisey.
Nissen said his viticulture business is “down like it was in 1989,” but he said vineyard managers are less affected by the drop in tourism because grapes are still in demand.
Nissen reminded the group that businesses that rely on local customers stand a better chance of surviving the economic downturn, and that marketing the whole valley, not just individual cities, is the way to promote.
“Better relationships between cities could help,” said Nissen.
The group came up with four ideas that could help improve business in St. Helena and throughout the valley:
• Public funding — Establish a stable funding source to increase Napa Valley tourism. Currently, Sonoma and Monterey counties are pouring millions of dollars into local marketing efforts to take a share of the tourism market from other counties. We’re not.
Funding could come from a bigger contribution from local cities and the county, the group agreed. For example, local governments should increase their contributions to the Napa Valley Destination Council, which works to expand demand.
In Calistoga and Yountville, municipal leaders are investing heavily in Chamber public relations campaigns and each take in $3.4 million in hotel taxes — more than double St. Helena’s TOT revenue of $1.56 million.
• Private funding — Funds could be generated from a county-wide Improvement District with contributions from restaurants, hotels and wineries. A Tourism Improvement District in Sonoma County provides a steady income stream.
• Local discounts — Encourage local businesses to give discounts to local residents and their relatives. Like the members of the Napa Valley Vintners, who offer a “Napa neighbor” discount, restaurants and hotels could attract more business from locals.
• Cross-promotion — Encourage restaurants and wine shops to promote Napa Valley wines. Encourage wineries, hotels and restaurants to promote each other.
Please suggest your own ideas for improving local business. In the meantime, check out local businesses, drink local wine, eat at local restaurants and board your guests at local hotels.
Money spent locally will help keep our town alive.
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Andie C wrote on Aug 8, 2009 2:08 PM:
Saint Helena needs more restaurants and businesses. Saint Helena needs to be more business friendly. Yountville is overtaking the city by offering more - more places to eat and sleep and spend money. Without tourists, the city would be another downtown Napa. Dead. Poor. Ugly.
Bigger plans need to be made to turn the city around. Not just little marketing moves. Bigger- the city needs to say YES to more permits and improvements and lower taxes and permit fees. If you want cheaper restaurants, you have to have more restaurants, period.
How about a better master plan that puts in more businesses in the city? more resorts, more activities, more restaurants, more spas, more anything? it's going to take a new mindset to change things in this town. "