Tourism CEOs: The Link Between Pay and Performance

30.05.2024 - 15:25 / skift.com / Dawit Habtemariam / Brand / Dana Young

Skift recently reviewed the pay for more than two dozen top bosses at U.S. destination marketing organizations (DMOs) and results varied widely: From less than $200,000 a year to more than $1.5 million — 14 made more than a half-million dollars in 2022, the most recent data available. 

But determining a DMO’s value isn’t clear-cut. One issue is that it’s difficult to assess how much credit a DMO should take for tourism. After all, there are several reasons a tourist may visit that have nothing to do with marketing. 

It’s even harder to attribute results to the CEO. 

“A core part of the job is to promote the destination, but I think that the question then is how much of the success is attributable to that particular CEO,” said Michelle McKenzie, former CEO of Destination Canada. “I would be a bit wary of directly attributing a full economic impact to one person.”

As part of a CEO’s compensation review, a DMO’s board of directors considers a range of metrics, according to Mike Gamble, president of SearchWide Global, an executive recruiting firm. 

For example, did the DMO’s marketing efforts lead to higher visitor spending, convention bookings, and higher hotel occupancy rates? Those are factors that drive critical tax revenues for a local economy.

Florida’s Office of Economic and Demographic Research released a review in March and estimated, for every dollar the state invested in Visit Florida between 2019 and 2022, it received just 58 cents in return. 

That’s a low return on investment, but the researchers said Covid was to blame and that Visit Florida has typically returned much more. 

“They are absolutely the three worst Covid-impacted years to be measured against what happened in that period,” said Amy Baker, chief economist for the state legislature and coordinator for the agency.

The researchers expect the return on investment to climb to $3.30, in line with past levels, said Baker. In its analysis for the 2016-2019 cycle, Visit Florida had an estimated ROI of $3.27.

“If you’re thinking about the program going forward, we fully expect that they’re going to be back at the levels we’ve seen in the past,” said Baker, adding that those levels make it “among the top programs of the state.”

The state government invested $146 million in Visit Florida in the 2019-2022 cycle. Visit Florida CEO and President Dana Young made $214,876 in 2022. The state limits the amount of CEO compensation that can come from government funds to $120,000.  

Brand USA, America’s destination marketing organization, has shown varied results from its marketing: a return of $34.36 for every $1 spent in 2013 to as low as $1.05 in 2021 during the Covid pandemic, according to a report in November 2023 by the Congressional Research