I found this very brief article interesting, as the charts and tables paint a grim picture (though realistic), as it points out this recent push toward oenotourism and tasting room ‘experiences’ might not be the smartest move, particularly in an inflationary timeframe. Also, I think it shows how BerserkerDay is important for many wineries, as an alternative method for customer acquisition 
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Like lots of things, it works until it doesn’t.
To be fair, the shift towards the “experience” has been going for years now, well before the current inflationary environment.
Also, when you’re a smaller winery with little practical access to interstate distribution, how else are you going to sell your wines?
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And the “experience” isn’t always pleasant. $$$$
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I don’t have a tasting room, but have heard from several compatriots that they are indeed getting crushed. The push towards more expensive “experiences” and reservations seems to mirror the general trend in wine sales - which is that the high-end is the only segment providing sufficient returns.
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I wonder how much of this is weather related? CA weather has been unseasonably bad relative to previous years so far this year. Tablas Creek in the blog post sure seems to think it’s a factor, although that wouldn’t explain OR and WA’s decline unless their weather has been equally poor.
I also wonder about the state of the economy, etc and it’s effect. Us wine drinkers like to pretend like we’re impervious to poor economies, but current financial conditions are negatively impacting many spending sectors for a great number of consumers.
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There is no doubt that visitations to nearly ever wine region are down year to year vs 2022. This certainly is the case in Santa Barbara County. I believe this is due to a number of factors:
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The cost of visiting wine regions has truly sky rocketed the past few years. This includes increased costs of housing, of restaurants and at wineries (tasting fees + cost of wine).
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Changes in how folks spend their time - less travel OR if it is travel, perhaps day trips instead of longer stays combined with going further away and non wine related for the same price
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The overall economic environment and worry about personal finances
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Cooler and wetter weather has definitely kept some away
I guess we’ll see what the rest of the year holds - Tablas says that April is up slightly for them, but I also look at Tablas as a ‘destination stop’ for many and different than many other places.
Cheers
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Larry, what’s the general foot traffic around downtown Los Olivos?
Noticably down?
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There are still plenty of visitors, especially on the weekend. But there are also ‘more attractions’ now than ever - more restaurants, the new Auberge hotel, more tasting rooms.
In speaking to others nearby, traffic and sales have definitely been down so far this year. By what percentage I could not tell you. It does not look like a ghost town at all - just not as many folks tasting the way they used to.
Would love to hear from other active wineries on here that have tasting rooms . . .
Cheers
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If I win mega Millions, I am buying you a combination tasting room and Hi Fi space.
It would be a “Wine Kissa.”
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It feels like the pendulum could swing back some towards slightly more reasonable tasting fees. That would at least be the typical market correction to shrinking demand.
But I know labor and other costs are very high so I’m not sure which effect is greater.
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The weather in Oregon has been miserable and even long-timers (I’m one) have been getting sick of it. This week is the first time we have broken 65 degrees and really the only sustained stretch of sunny weather since harvest. We don’t get many visitors the first two months of the year as it is so it’s hard to tell anything there. I would say we haven’t been super busy since March 1 but, again, the weather has sucked and even those two months aren’t some sort of wheelhouse for us. We had a club pick up weekend that was very busy in March.
I recently got back from Jamaica and read that tourism visits are up 94% (!!!) over the first 3 months of 23 compared to 22. I think there is an element of wanting to GO somewhere in play. We’ll see. For us the make or break time is June-September. Our spring club run was great so it could be WHERE people are going more than anything.
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That is exactly what I would do if I won the Mega Millions, too
I feel like there is tons of travel this year. Like even more than pre pandemic.
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International travel is off the hook.
Years of pent up demand and airline credits.
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I could maybe imagine that if big travel is booming, maybe fewer people are doing short outings to California and Oregon wine country?
Larry, would you guess what percentage of Santa Barbara tasting room visiting is from people who can day trip there from Southern Cal or the Central Valley, versus people who come from farther away? Feels like a very high percentage of visits would be people who live within, say, 200 miles. That would include LA, Inland Empire, OC, Fresno, Bakersfield, North San Diego County.
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This is what I actually HOPE for the industry, though I don’t own or operate a tasting room so I can’t say that it’s smart for the business itself. When Jen suggests ‘let’s do a day of wine tasting while we’re up in XYZ’ I decline as it has changed so much, it’s long-term ‘experiences’ rather than fun, casual wine tasting.
Another market correction is as outlined in the OP and article - don’t rely just on tasting room experiences to gain customers!
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I can see why it’s declining. Used to be you could find yourself in Napa and stop into a tasting room. Most were free but some had a modest fee. As my uncle once said though, “But look at the ones we bought from”. He was always looking for a deal but his sentiment was probably widely shared.
Then all started having fees. Then fees went up. Then it became appointment only.
I realize producers have to cover their costs - that’s a given in any business and you can’t be pouring wine for free so people can get drunk. But if a customer pays $10 for a tasting, it’s not such a big thing, esp if it’s waived for purchasing a couple of bottles. But if you pay $50 and more per person, you feel like you’ve covered their costs and don’t feel compelled to buy.
And it’s self-reinforcing. To cover the increased visitors and the freebies they offered, producers raised the prices of their tastings and their wines. That changed the profile of visitors. Instead of a casual outing as in “what do you want to do this afternoon?”, it became necessary to plan ahead and budget. My uncle lived in Napa and would just head out when the mood struck. But I could fly out from NY and we could simply head out with no plan.
Post-pandemic, wineries realized that the curated appointment-only tastings brought in more money and sales, so those became even more widespread.
But what happens when a hobby becomes too expensive for the casual consumer? The casual consumer finds something else to do. And the customers who are willing to pay for the expense change their expectations. They want spas, fine restaurants, golf courses, and entertainment for their kids. Kids don’t belong in wine tasting settings but people don’t want to hear that so further entertainment is set up. Maybe build a Six Flags in Napa? All of that infrastructure costs money.
Although wine has been around for thousands of years, wine tourism has not. Tastes can change and people can get priced out. The remaining customers will be fewer and they will pay more. A lot of tasting rooms closed during the pandemic and I was able to find great deals on wines that were stuck in a supply chain that were sold at fire-sale prices.
Kidding aside, Berserker Day is probably a better bet for many wineries than relying on drop-in customers.
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We assume most of our visitors come from South of us. Places east of us like Fresno and Bakersfield have historically visited Paso in higher numbers and my gut feeling is that this continues today.
All of that said, the majority of folks in LA, OC and SD counties are more likely to visit Paso than SBC and this continues to be the case. There are, of course, exceptions to that rule, but it continues to hold.
Something interesting to note - visitations are not that far down in Temecula compared to previous years, and they just passed a BID, or business district fee, that will put more than $1 Million per year into their associations coffers to spend on marketing, something our members chose not to approve a few years back.
Cheers
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Evan Martin from Martin Woods already did that in McMinnville
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