Investors and analysts may find little reason to cheer about the weak U.S. dollar, but the currency's weakness means big gains for shopping centers and the international tourists flooding their stores.
Retailers and tour operators at malls across the country reported more traffic this past holiday season from foreign tourists looking to stretch their pounds, euros and loonies. Many of these opportunistic shoppers touch down on American soil with the bare essentials; ready to buy a fashionable shopping ensemble at the first of many designer and luxury retailers they plan to visit before purchasing luggage to transport it all back home.
“The key phrase right now is ‘America is on sale,’” says Kate Cavaliere, senior manager of tourism for Macerich.
Cavaliere says the rise in tourist traffic at Macerich's properties, among others, stems from longstanding efforts to raise their properties' visibility with international travelers through travel publications, international tour operators and partnerships with bus lines and hotels. To capitalize on the recent spike in international visitors to the United States, many have enhanced their efforts and some have even deployed new strategies.
Through its America's Premier Shopping Places program, for example,-based General Growth Properties has stepped up its marketing to consumers in Mexico and Europe, says Kathy Anderson, program manager. It also targets 14,000 travel journalists worldwide, whose reviews of properties may influence potential visitors. General Growith also partnered with MasterCard Worldwide to distribute its promotional materials in the billing statements of one million cardholders in Mexico City who have made purchases on this side of the border.
And those efforts have clearly not been in vain. “We have people that come with empty suitcases, and then go back with them full,” Anderson says.
Hotels are also fueling the bonanza by working with shopping centers to sell package visits, says Rosemary McCormick, president of the Shop America Alliance. Six Marriott hotels in Las Vegas have teamed up with General Growth's Fashion Show Mall, McCormick says, and Embassy Suites in Tucson, Ariz., is promoting Macerich's La Encantada.
During the 2007 holiday season, for the first time, Taubman Centers' Dolphin Mall in Miami developed packages with area hotels promoting the shopping center with residents in Central and Latin America. Due to the promotion's popularity, Karen MacDonald, director of communications at Taubman Center says Dolphin Mall had to add shuttles from Miami International Airport to accommodate the increase in its visitors; 85 percent of the riders hailed from outside the United States.
Also last year, Taubman attended its first trade shows for Canadian tour operators to promote its Beverly Center in Los Angeles and its Great Lakes Crossing, The Mall at Partridge Creek, Twelve Oaks Mall and Fairlane Town Center — all of which are in the Detroit area.
While malls in urban centers are well positioned to capitalize on the influx of tourists, those in secondary and tertiary markets are experiencing spikes in their foreign clientele as well. These tourists may fly into the larger cities, then rent cars for day trips to drive to large suburban regional malls and outlet centers. Also, U.S. shopping centers along the Canadian and Mexican borders also report a boost in cross-border traffic as evidenced by a surge in license plates from both nations in mall parking lots.
Still, owners are not banking on this phenomenon to last forever. “So much about tourism is cycles,” says Michele Rothstein, senior vice president of marketing for Chelsea Property Group, a division of Indianapolis-based Simon Property Group. “And we've made the commitment to be a destination for the long haul.”
Starwood at the Mall
Starwood Hotels & Resorts Worldwide has taken space within Metro National's Memorial City Mall in West Houston for a job recruitment site. There the hotelier will interview applicants for positions at one of its soon-to-be-opened hotels. The Sheraton Houston West Recruitment and Sales Center is housed at the mall to tap into the large volume of traffic and the firm anticipates many shoppers might be interested in a position at one of Starwood's properties coming on-line in the area. By 2009, three new Starwood hotels are scheduled to open in the West Houston vicinity: Four Points by Sheraton, Memorial City Sheraton Houston West and the Westin Houston, Memorial City.
More Excess Space
Excess Space Retail Services has a new proprietary management system to assist its broker network in the disposition, lease restructuring and renewal and valuation of retail real estate. The system combines a relational database, contact management system, document facilitator, property marketing feature, Web property search engine, Web client access tool, real-time client reporting and analyses, all in one platform. And, it is fully integrated into the company's redesigned Web site. The company spent the past two years creating the integrated platform to deliver enhanced results for its clients.
Forest City Nets
Forest City Ratner Companies, Barclays and the Nets have teamed up to form the Barclays/Nets Community Alliance. The Alliance, committed to the educational and physical development of youth in and around Brooklyn, will invest $1 million annually in local nonprofits that work to improve the lives of young people in the borough through various activities. It will consult with community leaders to determine which not-for-profits best meet the Alliance's goals. The first grant for $150,000 was awarded to Out2Play, Inc., which is dedicated to building and refurbishing playgrounds throughout the New York City public school system. Forest City, Barclays and the Nets began developing this Community Alliance to support local programs last year.
Adspace Goes Live
Adspace Networks, operating in 100 malls nationwide, went live at CBL & Associates Properties' Chesterfield Mall in St. Louis in November, and now bills itself as the largest digital mall network in the nation. Adspace Mall Networks has more than 1,300 digital displays, or “smart screens,” in the United States. A Nielsen Media Research study reported shoppers found Adspace Mall Networks helpful when navigating malls. Adspace carries programming such as Today's Top Ten shows that feature the 10 bestin the mall each week. Each week there are 10 featured specials running in a six-minute loop featuring local and national advertising. AdSpace's expanded exposure has enabled it to land national advertising deals with firms such as AT&T, Macy's and Lionsgate. Also, New Line Cinema recently used Adspace to promote the DVD releases of Hairspray and Rush Hour 3.