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HomeMy WebLinkAbout1999-11-30 Support Documentation Town Council Work Session Xd.- dx4ii-w, P ~ ~-~~e 'qy VAIL TOWN COUNCIL SPECIAL WORK SESSION TUESDAY, NOVEMBER 30, 1999 2:00 P.M. IN TOV COUNCIL CHAMBERS AGENDA NOTE: Times of items are approximate, subject to change, and cannot be relied upon to determine at what time Council will consider an item. 1. Approval of the Vail Marketing District Operating Plan and Budget for Steve Thompson the Year 2000. (1 hr.) Frank Johnson Vail Marketing BACKGROUND RATIONALE: The operating plan is required by law to be Advisory Board approved by December 5'. The newly formed advisory board will submit to the Town Council a proposed operating plan and budget for the year 2000. Enclosed for your review is the proposed operating plan and budget dated September 30, 1999; the amended budget; a description of the proposed year 2000 marketing program; and a budget resolution. The resolution and marketing plan should be approved on November 30 to meet the state filing deadline. 2. Adjournment - 3:30 p.m. NOTE UPCOMING MEETING START TIMES BELOW: (ALL TIMES ARE APPROXIMATE AND SUBJECT TO CHANGE) THE NEXT VAIL TOWN COUNCIL WORK SESSION WILL BE ON TUESDAY, 12/7199, BEGINNINGAT 2:00 P.M. IN TOV COUNCIL CHAMBERS THE FOLLOWING VAIL TOWN COUNCIL REGULAR WORK SESSION WILL BE ON TUESDAY, 12/14/99, BEGINNING AT 2:00 P.M. IN TOV COUNCIL CHAMBERS THE NEXT VAIL TOWN COUNCIL REGULAR EVENING MEETING WILL BE ON TUESDAY, 12/7/99, BEGINNING AT 7:00 P.M. IN TOV COUNCIL CHAMBERS Sign language interpretation available upon request with 24 hour notification. Please call 479-2332 voice or 479-2356 TDD for information. F:WGENDA.NEWTC 1 » S'EP 27' 99 14 : 36 FR Ca:L I NS AMD COG'KFEL 3039861755 TO 19704792157 P. 03/06 s M. ~ PROPOSED OPERATING PLAN AND BUDGET OF THE VAIL LOCAL MARKETING DISTRICT FQR FISCAL YEAR 2000 in the Town of Vail, Eagle County, Colorado September 30, 1999 . ~ LMMsft4hvN+nv..i.. M...e.*.e,g . SEP 27'99 14:31 FR COLLINS AM COCKFEL 3039861755 TO 19704792157 P.04/66 PROPOSED OPER.ATING PLAN AND BUDGET FOR FISCAL YEAR 2000 OF THF VAIL LOCAL MARKETING DISTRICT Puroose. The Vail Local Marketing District ("District") is being organized within the Town of Vail ("Town") to provide , certain public services in accordance with the provisions of the "Local Marketing District Act", Part 1 of Article 25, Title 29, C.R.S. ("Act"), and Town Ordinance No. 99-21 ("Ordinance") establishing the Aistrict. The Ordinance will become effective if the establishment of the District and authorization of a new marketing and promotion tax are approved by District electors at the general election on November 2, 1999. For purposes of this Operating Plan and Budget, it is anticipated that (i) the establishment of the District and authorization of the marketing and promotion tax will be approved by District electors, and (ii) the District will begin operating after compliance with all provisions set forth in the Act and Ordinance sometime on or after January 1, 2000. Operating Plan. Section 20-25-110, C.R.S., requires that the District file an operating plan and proposed budget for the next fiscal year no later than September 30 of each year. In accordance with the Act, this proposed Operating Plan and Budget for fiscal year 2000 is filed in order to commence Dietrict operations in compliance with statutory requirements. The information in this Operating Plan and Budget is preliminary in nature and may be stipplemented, amended or modified from time to time in accordance with the provisions of the Act. Board of Directors. Until the members of the Board of Directors of the District ("Board") have been appointed in accordance with Section 29-25-108, C.R.S., the Town Council will serve as the ex officio Board of the District. Members of the Board must be electors of the District. After their appointment, the Board will review this Operating Plan and Budget to determine if changes or additions are necessary and will process amendments as appropriate. The Board will have all powers and authorities set forth in the Act, unless otherwise limited by the Ordinance. Boundaries. The boundaries and service area of the District include all property with the legal boundaries of the Town. District boundaries may be changed from time to time in - SEP 27'99 14:31 FR CCI LINS AND COCKFEI_ 3039861755 TO 19704792157 P.05/06 accordance with the provisions of the Act. The Town may require that, as a condition of approval, any property annexed into the Town will be included into the District after compliance with all Town ordinances and other laws. DPRcrintion of Services. The District is being organized to provide the following services: (i) organization, promotion, marketing and management of public events, and (ii) coordinating tourism promotion activities. Marketin_g and Promotion Tax. The District will levy and collect a marketing and promotion tax ("Tax") within the District on the purchase price paid or charged to persons for rooms or accommodations in accordance with Section 29-25-112, C.R.S., if approved by District electors at the general election on November 2, 1999. The Tax will be levied at a rate not to exceed 1.4% commencing on January 1, 2000, and is expected to raise $1,725,000 in the 2000 fiscal year to provide funds for organizing and operating the District and furnishing services. Proposed Budget. The proposed Budget for the 2000 fiscal year is based upon the 2000 Marketing Program Proposal prepared by the Vail Marketing Board as follows: . Revenues Taxes $ 1,725,000 Earnings/Other 0 Total Revenue $ 2,000,000 Expense.a Destination Marketing $ 540,000 Front Range Marketing 320,000 Groups and Meeting Marketing 520,000 Public ReZations and Photo 280,000 Internet 40,000 Research 40,000 Creative/Production 240,000 Professional Fees/Misc.. S 20,000 Total Expenses $ 2,000,000 After establishment of the District and appointment of its members, the Board will review the Budget, consider the costa of services, and supplement the Budget ae appropriate. The Town Council acting as the ex officio Board will conduct a public 2 - SEP 27'99 14:32 FR COLLINS AM COCKREL 3039861755 TO 19704792157 P.06/06 hearing and adopt the Budget for the 2000 fiscal year before December 31, 1999. Additional Information. The Operating Plan and Budget of the District will be filed annually with the Town in accordance with Section 29-25-110, C.R.S., and be subject to the provisions of the Act. The District may, from time to time, provide written notification to the Town of any activiCy proposed to be undertaken by the District during the fiscal year. The Operating Plan and Budget rnay be supplemented and amended in accordance with the provisions of the Act. 3 Vail Local Marketing District Amended Budget For Fiscal Year 2000 Revenues: Lodging Tax Revenue 1,500,000 Business License Fee 318,000 Total Revenue 1,818,000 Expenditures: Marketing Program Destination 390,000 Front Range 225,000 Groups & Meetings 415,000 Public Relations & Photo 215,000 Internet 35,000 . Research 20,000 Ad Agency 200,000 Total Expenditures 1,500,000 Increase in Fund Balance 318,000 Beginning Fund Balance o Ending Fund Balance 318,000 Mktbdg00 4 11 /24/99 Recommended Year 2000 Marketing Program Budget Recap Destination $ 390,000 26% Front Range $ 225,000 15% Groups &.Meetings $ 415,000 28% Public Relations & Photo $ 215,000 15% Internet $ 35,000 2% Research $ 20,000 1% Ad Agency $ 200,000 13% Total $1,500,000 100% 5 Vail Valley Markering Board , 2000 Marketing Program Proposal Proposed Year 2000 Marketing Program Overall Marketing Plan Considerations The overall goals of the Vail Marketing Program for the year 2000 are to balance the town s seasonal economy, increase off-season business for local merchants, lodging and service providers, and increase sales tax revenues. Our challenge in executing this program will be to communicate Vail's rich and diverse product-- the environment, aciivities and special events--in a marketplace already saturated with resort advertising. Our strategy for accomplishing these goals is to leverage the budget by developing mechanisms that provide information to prospective travelers as cost effectively as possible. To leverage our budget most effectively we recommend targeting three market segments: • Destination travelers Families with household incomes of $75,000 who reside outside the state of Colorado • Front Range visitors People living along Colorado's Front Range, primarily Denver metro, boulder and Colorado Springs • Groups and Meetings travelers Visitors attending corporate, professional and association meetings of 50 or more persons The Vai12000 Marketing Program will integrate a variety of communications vehicles including advertising, public relations, direct mail, telemarketing, direct sales and the Internet. Past marketing initiaiives have primarily covered the time period from Memorial Day through Labor Day. To take advantage of additional opportunities, next year's program will also incorporate the "shoulder periods"-- April through the third week in May, and the third week of September through the first two week of December. 6 Vail Valley Marketing Board 2000 Markering Program Proposal Destination Marketing The word "Destination" refers to prospective Vail visitors who live outside the borders of Colorado and come from key domestic markets--Dallas, Adanta, Chicago, Washington D.C., New York, Phoenix and California. As mentioned previously, their total household income is $75,000 or more. Our marketing communications will be designed to appeal to travelers from these areas who also fall into one of three profiles: • Active iravelers interested in activities such as hiking, biking, skiing, rafting, etc. • Families traveling with children • Empty nesters or couples without children The goal of our Destination advertising strategy is to provide information that is relevant to our target groups during their travel planrung time frame. Our advertising program consists of small-space black and white ads placed in the travel sections of targeted national magazines. The call-to-action in these ads encourages people to call an 800 number to order a Vail Summer Guide or to visit the Web site for more information. This strategy is extremely efficient because the ad schedule achieves both reach and frequency, and targets people already interested in travel. Using the Vail Summer Guide and Web site as fulfillment for prospective visitors also allows us to communicate with varied audiences and showcase all that Vail has to offer in a cost-etfective way. Research among travelers has shown that obtaining information is a major hurdle in travel planning. Both of these vehicles provide easily accessible information that is broad based enough to appeal to all of our targets. For the year 2000, the Destination plan will be augmented with: • Increased Internet advertising. Upscale travelers use the Internet extensively to gather information. Migrating people from ordering the Summer Guide to using the Internet will also reduce fulfillment costs. • E-mail marketing. Accumulate and market to a database of travelers who have indicated that they would like to receive information on travel specials via e-mail. • Co-op newspaper packages in drive markets. Advertise specials during the shoulder periods that target people whose planning time frame is shorter because they live within driving distance of Vail. Budget (including fulfillment) $390,000 , 7 Vail Va!(ey Markering Board 2000 Markering Prograrn Proposal Front Range Marketing The objectives of the Front Range marketing program for next year are: • To capture market share of residents who take overnight trips to mountain resorts, and • To create demand among residents for whom visiting mountain resorts is not top-of-mind. Our strategies will consist of: • Positioning Vail events as the "hook" for prospective visitors to choose Vail over other mountain resort options, • Promoting Vail's unique personality and Bavarian ambiance, • Communicating with consumers more directly about available lodging/special deals, and • Developing a co-op advertising program to involve businesses in Vail in the advertising efforts. Recommended media include newspaper ads in the Denver Rocky Mountain News, Denver Post and Boulder Daily Camera, radio spots, television spots, ads in targeted Denver magazines, outdoor (billboards, bus signs, bus shelters) the Internet and e-mail. During the shoulder periods, we will modify our objectives to capture market share of the ski/snowboard crowd and convert day-trips in overnight trips. • Spring Shoulder Period, Communicate price and special promotions. Partner with Vail Resorts to promote Vail Mountain Madness and discounted lift tickets through newspaper and radio advertising, television partnerships with FOX TV, public relations and the Internet. • Fall Shoulder Period, Communicate information about terrain/lifts, snow accumuIation, parking, price, and shopping opportunities through advertising, public relations and the Internet. Budget $225,000 8 Vail Valley Markering Board 2000 Marketing Program Proposal Groups & Meetings Markefiing The Vail Groups and Meetings marketing strategy will focus on the five key markets that extensive research has identified as having high-growth opportunity: • New York City • Dallas • Chicago • Los Angeles • W ashington DC. Our objective will be to double the amount of income generated in those five markets from $1.4 to $2.8 million, while maintaining the revenues generated by all other markets - a total increase in group sales of 35%. Qur communications objective for Vail is to become the top-of-mind destination tivhen a meeting plariner considers holding a meeting in a mountain location. We must, therefore, create a"Vail presence" by being in those markets as much as possible. Our targeted efforts will include attendance at trade shows, direct sales, sales trips to local markets, magazine advertising, direct mail and memberships in local professional organizations. These memberships will provide the highest visibility with our target audience. Associations and organizations we will target include: • State Association Executives, • Professional Conference Management Association, and • Meeting Planners International. Attendance at these shows and meetings will be complemented with sales meetings with prospects. Although there has been limited participation in the past from Vail lodges and businesses, we recommend gething as many businesses as possible involved to show "one Vail" at these meetings and trade shows. Past Groups and Meetings advertising has been limited to national meeting planner publications. In the year 2000 we recommend reducing ad sizes to save dollars, and applying those savings to new insertions in publications that target meeting planners in the five key markets. Other tactics include: • familiarization trips(FAM), • Front Range meeting planner reception, • direct mail to key secondary markets, • telemarketing, and • generating more sales in Denver. Budget $415,000 9 Vail Valley Marketing Board 2000 Marketing Program Proposal A- Public Relations What is public relations? It's non-paid printed or spoken material that relays messages to convince readers or viewers to purchase products. The primary objective of the Public Relations program for Vail in the year 2000 is to continue to increase awareness of Vail as a highly desirable summer destination. We will achieve this goal by: • Capitalizing on the foundation laid with national, regional and Front Range media. • Maximizing and increasing the use of broadcast media opportunities. To reach our target audiences we will focus on pitching our messages to: • trendy lifestyle magazines, • family-style, value-oriented national publications, • major city newspapers, • broadcast media, • travel/trade publications, • all Front Range and local media, • Internet news groups, and • media focused on specific lifestyles like iravel, health, fitness and spa. jNe also recommend increasing communicaiions with community stakeholders to give them more information on how the program is progressing. To reach out-of-state media most effectively we recommend increasing the number of national press hostings, staging a New York City media event, mailing monthly tip sheets to key national editors, and targeting select markets with a"beat the heat" message. We will also continue to send over 3,500 media l:its to qualified journalists while increasing the emphasis on vacation opportunities available during the months of May, September and October. Tactics specific to the Front Range market will differ somewhat because of the high level of knowledge the media already has about Vail. We recommend continuing to use media events in Denver and Vail to pitch new messages, coordinating with the Front Range advertising committee to piggy-back on the programs they're executing, as well as coordinating with the Groups & Meetings committee to generate more stories about Vail as a meeting destinaiion. Budget (including photography) $215,000 10 Vail Valley Marketing $oard 2000 Marketing Prograrn Propasal e Internet Marketing Plan Internet strategies have been integrated into all the other committee plans, but there are additional ideas and recommendations that should be considered. For travelers, the Internet is becoming more and more useful as a planning tool and people are relying more and more on being able to access specific information about their travel destinations on-line. Our objective for each consumer who visits our site will be to provide easy, click-of-a-button access to comprehensive information about Vail during the summer and shoulder periods. Additional enhancements should include: • an on-line database of activities and resources in Vail that will allow the visitor to connect direcdy with the source of information. • utilizing links between the Vail summer site and local business • promoting the Vail summer web site in all print, radio and TV ads. To ensure that each visitor to our web site is able to access the appropriate information, Web site navigation should be as user-friendly as possible with content relevant to consumers, meeting planners and the press. We also recommend expanding the use of banner ads on targeted Web sites to drive more people to the site as well as using of e-mail newsletters to provide specific information to people who request it. Budget $35,000 Vail Valley Marketing Board 1 1 . 2000 Marketing Pragram Proposaf ~ , RESOLUTION OF VAIL LOCAL MARKETING DISTRICT TO ADOPT BUDGET WHEREAS, the Vail Town Council acting ex officio as the Board of Directors of the Vail Local Marketing District has requested the Town Finance Director to prepare and submit a proposed budget for the 2000 fiscal year to the board; and WHEREAS, a proposed budget has been submitted to this Board for its consideration; and , WHEREAS, upon due and proper notice, published in accordance with the law, the proposed budget was open for inspection by the public at a designated place, and a public hearing was held on November 30, 1999, and interested electors were given the opportunity to file or register any objections to the proposed budget; and WHEREAS, the budget has been prepared to comply with all terms, limitations and exemptions, including, but not limited to, reserve transfers and expenditure exemptions under Article X, Section 20 of the Colorado Constitution ("TABOR") and other laws or obligations which are applicable to or binding upon the District; and WHEREAS, whatever increases may have been made in the expenditures, like increases were added to the revenues so that the budget remains in balance, as required by law. NOW, THEREFORE BE IT RESOLVED by the Board of Directors of the Vail Local Marketing District: . 1. That estimated expenditures for each fund are as follows: General Fund: $1,500,000 2. That estimated revenues are as follows: General Fund: From unappropriated surpluses $ - p - From sources other than the mazketing and promotion tax $ 318,000 From the marketing and promotion tax 1 500 000 Total $1,818,000 12 r 3. That reserves have been or aze hereby established for each appropriate fund or combined as a single reserve fund as set forth in the budget in order to preserve the spending exemption for reserves under TABOR, and a11 such reserves shall be transferred or expended within any fund as set forth in the budget. 4. That the budget, as submitted, amended and herein summarized by fund, be, and the same hereby is, approved and adopted as the budget of the Vail Local Marketing District for the 2000 fiscal yeaz. 5. That the budget, as hereby approved and adopted, shall be certified by the Town Clerk to all appropriate agencies and is made a part of the records of the District. TO APPROPRIATE SUMS OF MONEY WHEREAS, the Board of Directors of the District has made provision therein for revenues in an amount equal to the total proposed expenditures as set forth in said budget; and WHEREAS, it is not only required by law, but also necessary to appropriate the revenues provided in the budget to and for the purposes described below, as more fully set forth in the budget, including any interfund transfers listed therein, so as not to impair the operations of the District. NOW, THEREFORE BE IT RESOLVED by the Board of Directors of the Vail Local Marketing District that the following sums are hereby appropriated from the revenues of each fund, to each fund, for the purposes stated: General Fund: $1,500,000 Adopted this -7k., day of IN~'~!(~~X' , 1539 Secretary ~ • 13