The world-renowned consulting firm McKinsey & Company has recently released a report on the future of tourism, with several of its key points directly applicable to our island. This report is a general overview and a guide for our local tourism authorities, business owners, and stakeholders.
“The bulk of travel is close to home.” McKinsey points out that the bulk of travel worldwide is domestic, with rising intraregional (in your area) tourism. What does that mean for SPI?
We are the travel destination for the RGV, which is good news. The RGV is booming! Port Aransas has become the beach destination for San Antonio, and Destin (FL) has become the destination for Austin. The loss of direct airlift to the island from Austin and San Antonio has created permanent changes. We need to stop fighting those changes and embrace them instead.
“Consumers prioritize travel - when it’s on their terms.” McKinsey warns us that “those that fail to articulate target customer segments and adapt their offerings accordingly risk getting left behind.” What customer segment are we trying to attract to SPI?
With the shift from a three-month to a year-round economy, the island has embraced its future as an arts community. But what does that look like if we are not an art gallery? The answer is luxury travel.
“The face of luxury travel is changing.” This is critical for the island because “demand for luxury tourism and hospitality is expected to grow faster than any other travel segment today. The crucial question is: What does that mean for the island, and What does that mean for my business?
From the island's point of view, we need more 5-star restaurants. Chef-driven, luxury dining experiences are desired by the same demographics that want an art weekend. The same goes for bars. We are overflowing with traditional beach bars but short on cool, specialty bars.
No one should have to drive or park on the island. A vastly expanded bus system or a public-private effort to grow Uber on the island are both needed. We have a problem with drunk driving on SPI, but eliminating the need to drive altogether would completely eliminate impaired driving. If nothing else, it would turn driving under the influence into an IQ test.
All of our t-shirt shops could have a designer beachwear section. A few of our stores are already there, but to become a luxury destination, we all must look at our offerings and ask, How do we upgrade?
It is even more critical for our condo owners. Is your flooring, furnishings, and lighting “luxury?” If we become a beach art destination, will your rental be decorated with art from our local galleries?
Does our CVB market the island as a luxury destination? Should hotels and condos that attain specific standards be branded as “SPI Luxury” housing? This is a time for all of us to up our game. This includes our CVB.
“As tourism grows, destinations will need to mitigate overcrowding.” Our island has plenty of land in our existing footprint and vast land to the north. There is no problem with overcrowding. All the crowds are parking-related because we require our visitors to drive. If we eliminate the need to drive, we eliminate 90% of our crowding.
McKinsey makes three (3) recommendations: improve our transportation and infrastructure, build tourism-ready workforces, and preserve our natural and cultural heritage.
Beyond transportation, the most glaring infrastructure weakness is internet and cell service. With our tiny year-round population, both these issues will probably require some public-private partnerships to make dramatic improvements. We can’t settle for incremental improvements. Luxury visitors live on their laptops and phones. The same is true for our local businesses. The world is about to enter the AI era. SPI hasn’t fully embraced internet and cell service.
The most important recommendation McKinsey made for our island was to “build (a) tourism-ready workforce.” This is the smoldering ember that could burn down the island. When we look at the Valley, with UTRGV and the new medical school at one end and SpaceX at the other, we see a region ready to explode economically.
Right now, our island workforce has to drive an hour to work and an hour to get home. As the Valley matures, there will be more jobs available than workers to fill them. People won’t need to drive two hours a day for a minimum-wage job. We need to develop high-quality, affordable workforce housing. Irony: There are people who live on the island who develop workforce housing for other communities! Projects like these take time. We need to start yesterday.
At the same time, we are focusing on the arts; it is easy to preserve our heritage as a beach community, an eco-tourism destination, and support the efforts to develop a first-class museum to educate our guests on the history of the island. It preserves our heritage and gives families a place to go when they have had too much sun.
South Padre Island is a tourism economy, but we need to know and respond to the changes in regional, national, and global tourism. One of our city council members said, “We are a blue-collar destination. That’s what we will always be.” Our challenge is to remain welcoming to our “blue-collar” visitors while inviting a new demographic to enjoy our island as well.
The entire McKinsey report can be below.
