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Home My WebLink About2012-09-18 Agenda and Support Documentation Town Council Special SessionVAIL TOWN COUNCIL SPECIAL MEETING AGENDA VAIL TOWN COUNCIL CHAMBERS 75 S. Frontage Road W. Vail, CO 81657 11:00 A.M., SEPTEMBER 18, 2012 NOTE: Times of items are approximate, subject to change, and cannot be relied upon to determine at what time Council will consider an item. Public comments on work session item may be solicited by the Town Council 1. ITEM/TOPIC: VAIL LOCAL MARKETING DISTRICT (VLMD) - SEPARATE MEETING 2013 Vail Local Marketing District Operating Plan and Budget Discussion (30 min.) PRESENTER(S): John Dawsey and Pete Hayda with the Vail Local Marketing District Advisory Council and Kelli McDonald, Economic Development Manager for the Town of Vail ACTION REQUESTED OF COUNCIL: Vail Local Marketing District Advisory Council recommends that the Vail Local Marketing District listen to the presentation, ask questions and provide direction for the 2013 Operating Plan and Budget. Staff will return October 16 with a resolution for approval for VLMD expenditures in 2013. BACKGROUND: The mission of the VLMD is to market and promote Vail to attract overnight destination guests primarily during the May-October time frame, creating economic vitality by increasing both the visitor base and sales tax revenues. Results to date show an increase in sales tax collected lodging occupancy and event attendance over the summer of 2011. The marketing objectives outline in the VLMD operating plan are: Continue the momentum and build on the powerful leadership position of the year- round Vail brand in order to: * Increase May – October occupancy * Increase sales tax revenue * Increase group occupancy * Optimize visitor mix * Increase net promoter score * Increase Vail brand awareness 9/18/2012 VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: September 18, 2012 ITEM/TOPIC: VAIL LOCAL MARKETING DISTRICT (VLMD) - SEPARATE MEETING 2013 Vail Local Marketing District Operating Plan and Budget Discussion PRESENTER(S): John Dawsey and Pete Hayda with the Vail Local Marketing District Advisory Council and Kelli McDonald, Economic Development Manager for the Town of Vail ACTION REQUESTED OF COUNCIL: Vail Local Marketing District Advisory Council recommends that the Vail Local Marketing District listen to the presentation, ask questions and provide direction for the 2013 Operating Plan and Budget. Staff will return October 16 with a resolution for approval for VLMD expenditures in 2013. BACKGROUND: The mission of the VLMD is to market and promote Vail to attract overnight destination guests primarily during the May-October time frame, creating economic vitality by increasing both the visitor base and sales tax revenues. Results to date show an increase in sales tax collected lodging occupancy and event attendance over the summer of 2011. The marketing objectives outline in the VLMD operating plan are: Continue the momentum and build on the powerful leadership position of the year-round Vail brand in order to: * Increase May – October occupancy * Increase sales tax revenue * Increase group occupancy * Optimize visitor mix * Increase net promoter score * Increase Vail brand awareness ATTACHMENTS: 2013 VLMD Operating Plan 9/18/2012 To: Vail Local Marketing District From: Vail Local Marketing District Advisory Council Date: September 18, 2012 Subject: 2013 Operating Plan and Budget I. SUMMARY A first look at the 2013 Vail Local Marketing District (VLMD) Operating Plan and Budget. II. BACKGROUND The mission of the Vail Local Marketing District is to market and promote Vail to attract overnight destination guests primarily during the May ± October time frame, creating economic vitality by increasing both the visitor base and sales tax revenues. Results to date show an increase in sales tax collected, lodging occupancy and event attendance over the summer of 2011. The marketing objectives outlined in the VLMD operating plan are: Continue the momentum and build on the powerful leadership position of the year-round Vail brand in order to: x Increase May ± October occupancy x Increase sales tax revenue x Increase group occupancy x Optimize visitor mix x Increase net promoter score x Increase Vail brand awareness III. BUDGET DETAIL Revenue from lodging tax collections is estimated at $2,200,000 for 2013. The DVVXPSWLRQVIRUWKLVSURMHFWLRQDUHFRQVLVWHQWZLWKWKHWRZQ¶VH[SHFWHGWD[UHYHQXHIRU 2012. Regarding expenditures, the attached budget proposal includes $2,345,725 for 2013 programs in Plan A. The ending fund balance currently present for 2013 Plan A of $777,146 is 35% of annual revenues. An additional proposal includes $2,571,725 for 2013 programs in Plan B. The ending fund balance currently present for 2013 Plan B of 1 - 1 - 1 9/18/2012 Town of Vail Page 2 $551,146 is 25% of annual revenues.&RXQFLO¶VGLUHFWLYHLVDPLQLPXPIXQGEDODQFHRI 25%). The following shifts are recommended from the 2012 forecast to the 2013 Plan A budget to address recent successes and opportunities and to achieve the outlined marketing objectives: x Destination budget remains flat (less $30,000 in 2012 for Hiking Map and Hiking and Biking App) to provide continued emphasis in international marketing and presence, specifically in Latin American countries as well as key markets domestically x Front Range budget stays intact to maintain presence and share of voice x Groups and Meetings budget remains flat with emphasis on medical meetings, corporate meetings and participatory sports tournaments x PR budget stays intact to maintain a prominent presence regionally, nationally and internationally x Research budget increases $14,000 to conduct another Burke Brand Research study as was done in 2011 x Web site budget decreases by $10,000 since Vail Mountain Marketing is providing services without a 3rd party vendor x Email marketing budget decreases by $21,000 since Vail Mountain Marketing is providing services without a 3rd party vendor x Professional Fees increase by $20,000 as a result of additional time spent traveling domestically and internationally and hosting international guests and media in Vail x Event Marketing increases by $30,000 as a place holder for an iconic event in 2013 not yet identified The 2013 Plan B budget would reflect the following additional shifts: x Destination budget increases $153,500 from Plan A to include additional digital media efforts, advertising and PR events in destination and international markets x Groups and Meetings budget increases $110,000 to add staff to the sales team The budgetary changes outlined above reflect the goal of shifting dollars to attract more overnight destination guests to Vail through additional outreach and programs in 2013. 1 - 1 - 2 9/18/2012 Town of Vail Page 3 IV. ACTION REQUESTED OF VAIL LOCAL MARKETING DISTRICT Vail Local Marketing District Advisory Council recommends that the Vail Local Marketing District listen to the presentation, ask questions and provide direction for the 2013 Operating Plan and Budget. Staff will return October 16 with a resolution for approval for VLMD expenditures in 2013. ATTACHMENTS VLMD Draft 2013 Operating Budget VLMD 2013 Presentation 1 - 1 - 3 9/18/2012 Vail Local Marketing District 2013 Draft Operating Plan 20112012201220132013 ActualAmendedForecastPlan APlan B Income 310 · Lodging Tax2,145,988 2,000,000 2,200,000 2,200,000 2,200,000 399 · Interest Income857 1,200 1,200 1,200 1,200 Total Income2,146,845 2,001,200 2,201,200 2,201,200 2,201,200 Expense 6301 · Destination380,658 703,000 699,500 670,000 823,500 6302 · Front Range342,395 376,000 412,000 410,000 410,000 6303 · Groups and Meetings318,241 427,500 427,500 427,500 537,500 6304 · Public Relations Expenses79,453 92,000 92,000 92,000 92,000 6306 · Photography / Video107,861 75,000 80,000 85,000 85,000 6307 · Research73,800 71,225 93,425 107,225 107,225 6308 · Web Site49,885 30,000 55,000 45,000 45,000 6310 · Admin Miscellaneous3,492 7,500 7,500 7,500 7,500 6315 · Email Marketing24,407 24,500 24,500 4,000 4,000 6320 · Branding44,600 75,000 30,000 25,000 25,000 6400 · Contingency- 49,500 34,800 37,500 - 7000 · Professional Fees 7001 · Legal and Accounting20,000 20,000 20,000 20,000 20,000 7003 · Advertising Agent Fees50,000 50,000 50,000 50,000 50,000 7007 · Marketing Coordination-VVP/TOV125,000 125,000 125,000 125,000 125,000 7008 · PR - Professional Fees90,000 90,000 90,000 110,000 110,000 7010 · Strategic Advisory Fees- - 7011 · Partnership Fees 7015 · Ft Range Promotion Fees40,000 30,000 30,000 30,000 30,000 7016 · Strategic Alliance Fees & Trvl82,221 - Total 7011 · Partnership Fees122,221 30,000 30,000 30,000 30,000 7013 · Concierge Program- Total 7000 · Professional Fees407,221 315,000 315,000 335,000 335,000 9000 · Special Event Funding 9000.01 · Pro-Cycling Challenge100,000 - 9000.02 · New Iconic Event Marketing8,500 95,000 70,000 100,000 100,000 Total 9000 · Special Events108,500 95,000 70,000 100,000 100,000 Total Expense1,940,512 2,341,225 2,341,225 2,345,725 2,571,725 Net Income206,333 (340,025) (140,025) (144,525) (370,525) Beginning Fund Balance855,363 1,061,696 1,061,696 921,671 921,671 Ending Fund Balance1,061,696 721,671 921,671 777,146 551,146 %age Fund Balance (25% required)49%36%42%35%25% 1 - 1 - 4 9/18/2012 VAIL LOCAL MARKETING DISTRICT 2013 OPERATING PLAN & BUDGET September 18, 2012 1 - 1 - 5 9/18/2012 TOWN COUNCIL ECONOMIC GOALS Improve economic vitality Embrace an international focus in our destination strategy ± flights, events, marketing Improve the quality of group business Be proactive in our event partnerships Advance well-being Improve the quality of the resort experience and ensure we are on the cutting edge of technology 1 - 1 - 6 9/18/2012 1 - 1 - 7 9/18/2012 2013 OBJECTIVES 1 - 1 - 8 9/18/2012 2013 MARKETING OBJECTIVES Continue the momentum and build on the powerful leadership position of the year-round Vail brand 1.Increase May ± October Occupancy 2.Increase Sales & Lodging Tax Revenue 3.Increase Group Occupancy 4.Optimize Visitor Mix 5.Increase Net Promoter Score 6.Increase Vail Brand Awareness 1 - 1 - 9 9/18/2012 2013 STRATEGIES 1 - 1 - 10 9/18/2012 WHAT¶S NEW FOR SUMMER 2013 Gondola 50th Anniversary Epic Discovery (Phase I) New Retail & Restaurants Welcome Center Lionshead bus stop & plaza 1 - 1 - 11 9/18/2012 Refine key brand messages to support world-class outdoor recreation, culture and well-being Use Burke Brand Research findings to deliver communication of the ³reasons to come´ ± outdoor recreation, friends & family, events, lodging offers Bring the brand to life in unexpected ways, including non- traditional methods and alignment with events Continuously deliver fresh content keeping the year-round Vail brand dynamic 2013 STRATEGIES 1 - 1 - 12 9/18/2012 2013 STRATEGIES Maximize high traffic periods (Fri ± Sun), optimize off peak (Mon ± Thurs) periods with groups and events Continue to leverage the loyal customer Improve % of Destination and Mexico/Latin American guests while retaining Front Range guests (optimize mix) Improve the resort experience through guest service initiatives and technology Lay the foundation for Vail to be relevant to a younger demographic 1 - 1 - 13 9/18/2012 MEASUREMENTS & METRIC GOALS 1 - 1 - 14 9/18/2012 2013 Goal: Increase YOY Occupancy 3% LODGING OCCUPANCY 1 - 1 - 15 9/18/2012 1 - 1 - 16 9/18/2012 SALES TAX REVENUE 2013 Goal: Increase Sales Tax Revenue Exceed annual inflation, as measured by the Consumer Price Index (consistent with the Economic Council goals) 1 - 1 - 17 9/18/2012 SALES TAX REVENUE (As Of: 7/31/12) SALES TAX 2011 ACTUAL 2012 ACTUAL YOY Change YTD INCREASE MAY $473,292 $472,576 -.2% JUNE $898,270 $959,431 6.8% JULY $1,481,239 $1,559,274 5.3% 4.8% $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 MAYJUNEJULY 2011 ACTUAL 2012 ACTUAL-.2% +5.3% +6.8% 1 - 1 - 18 9/18/2012 TOV LODGING TAX REVENUE (As Of: 7/31/12) LODGING TAX 2011 ACTUAL 2012 ACTUAL YOY Change YTD INCREASE MAY $ 60,012 $ 61,075 1.7% JUNE $210,859 $237,903 12.8% JULY $386,954 $410,142 6.0% 7.8% +1.7% +6% +12.8% $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 MAYJUNEJULY 2011 ACTUAL 2012 ACTUAL 1 - 1 - 19 9/18/2012 GROUP & MEETINGS OCCUPANCY 2013 Goal: 5% Overall YOY Increase 1 - 1 - 20 9/18/2012 1 - 1 - 21 9/18/2012 OPTIMIZE VISITOR MIX 2013 Goal: Increase In-State Overnight, Out of State and Int¶l 1 - 1 - 22 9/18/2012 1 - 1 - 23 9/18/2012 AWARENESS LEVEL 2013 Goal: Increase Vail¶s Awareness from 89% to 96% 2013 Goal: Increase Recent Visitation from 6% to 8% 1 - 1 - 24 9/18/2012 1 - 1 - 25 9/18/2012 2013 Goal: 86 NET PROMOTER SCORE 1 - 1 - 26 9/18/2012 NET PROMOTER SCORE 0 10 20 30 40 50 60 70 80 90 100 2007201020122013 GOAL 62 2013 Goal: 86 82 72 1 - 1 - 27 9/18/2012 1 - 1 - 28 9/18/2012 OVERVIEW OF BUDGET SHIFTS 1 - 1 - 29 9/18/2012 2013 BUDGET Lodging Revenue Projections: $2.2 Million VLMD Expenses: Plan A: $2,345,725 (flat YOY) Plan B: $2,571,725 1 - 1 - 30 9/18/2012 2012 VLMD Budget: $ 2,341,225 $509,000 , 22% $190,500 , 8% $412,000 , 18% $427,500 , 18% $92,000 , 4% $80,000 , 3% $93,425 , 4% $55,000 , 2% $7,500 , 0% $24,500 , 1% $30,000 , 1% $34,800 , 2% $315,000 , 14% $70,000 , 3% Destination International Front Range Groups and Meetings Public Relations Photography/Video Research Web Site Admin Misc Web & Email Marketing Branding Contingency Professional Fees Event Funding 1 - 1 - 31 9/18/2012 2013 VLMD Budget A: $2,345,725 $463,500 , 19.8% $206,500 , 8.8% $410,000 , 17.5% $427,500 , 18.2% $92,000 , 3.9% $85,00 0 , 3.6% $107,225 , 4.6% $45,00 0 , 1.9% $7,500 , 0.3% $4,000 , 0.2% $25,00 0 , 1.1% $37,500 , 1.6% $335,000 , 14.3% $100,000 , 4.3% Destination International Front Range Groups and Meetings Public Relations Photography/Video Research Web Site Admin Misc Email Marketing Branding Contingency Professional Fees Event Funding 1 - 1 - 32 9/18/2012 2013 VLMD Budget B: $2,571,725 $557,000 , 21.7% $266,500 , 10.4% $410,000 , 15.9% $537,500 , 20.9% $92,00 0 , 3.6% $85,000 , 3.3% $107,225 , 4.2% $45,00 0 , 1.7% $7,500 , 0.3% $4,000 , 0.2% $25,000 , 1.0% $335,000 , 13.0% $100,000 , 3.9% Destination International Front Range Groups and Meetings Public Relations Photography/Video Research Web Site Admin Misc Email Marketing Branding Professional Fees Event Funding 1 - 1 - 33 9/18/2012 QUESTIONS? THANK YOU! 1 - 1 - 34 9/18/2012