HomeMy WebLinkAbout1999-11-30 Support Documentation Town Council Work Session
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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.
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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
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. 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
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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
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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.
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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%
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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
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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
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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
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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
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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
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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
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