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Home My WebLink About2013-09-17 Agenda and Support Documentation Town Council Special SessionVAIL TOWN COUNCIL SPECIAL MEETING AGENDA TOWN OF VAIL' VAIL TOWN COUNCIL CHAMBERS 75 S. Frontage Road W. Vail, CO 81657 12:30 P.M., SEPTEMBER 17, 2013 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 ITEM /TOPIC: Vail Local Marketing District 2014 Operating Plan and Budget (30 min.) PRESENTER(S): John Dawsey and Davy Ratchford, Vail Local Marketing District Advisory Council members ACTION REQUESTED OF COUNCIL: The Vail Local Marketing District Advisory Council recommends the VLMD approve the 2014 Operating Plan and budget of $2,800,000. 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 for 2013 show an increase in sales tax collected, room nights and event attendance over the summer of 2012. 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: Increase May- October occupancy Increase sales tax revenue Increase group occupancy Optimize visitor mix Increase net promoter score Increase Vail brand awareness The budgetary changes outlined in the plan reflect the goal of shifting dollars to attract more overnight destination guests to Vail through additional outreach and programs. 2. ITEM /TOPIC: Adjournment 9/17/2013 rowx of vn' ii1 VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: September 17, 2013 ITEM /TOPIC: Vail Local Marketing District 2014 Operating Plan and Budget PRESENTER(S): John Dawsey and Davy Ratchford, Vail Local Marketing District Advisory Council members ACTION REQUESTED OF COUNCIL: The Vail Local Marketing District Advisory Council recommends the VLMD approve the 2014 Operating Plan and budget of $2,800,000. 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 for 2013 show an increase in sales tax collected, room nights and event attendance over the summer of 2012. 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: Increase May- October occupancy Increase sales tax revenue Increase group occupancy Optimize visitor mix Increase net promoter score Increase Vail brand awareness The budgetary changes outlined in the plan reflect the goal of shifting dollars to attract more overnight destination guests to Vail through additional outreach and programs. ATTACHMENTS: 2014 VLMD Operating Plan and Memorandum 9/17/2013 TOWN OF VAIL � Memorandum To: From: Date: Subject Vail Local Marketing District Vail Local Marketing District Advisory Council September 17, 2013 Vail Local Marketing District 2014 Operating Plan and Budget 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, room nights and event attendance over the summer of 2012. 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: • Increase May — October occupancy • Increase sales tax revenue • Increase group occupancy • Optimize visitor mix • Increase net promoter score • Increase Vail brand awareness BUDGET DETAIL Revenue from lodging tax collections is estimated at $2,600,000 for 2014. The assumptions for this projection are consistent with the town's expected sales tax revenue for 2014. Regarding expenditures, the attached budget proposal includes $2,800,000 for 2014 programs. The ending fund balance currently present of $946,570 is 36% of annual revenues, Council directive is 25% of annual revenues. The following shifts are recommended from the 2013 forecast to the 2014 budget to address recent successes and opportunities and to achieve the outlined marketing objectives: 9/ 17/2013 1 -1 -1 • Destination budget increases 16% to provide emphasis in key markets domestically in an effort to optimize overnight guests as part of the visitor mix • International budget stays flat, recognizing successes from 2013 and building on the inroads made in the Latin American /Mexican markets • Front Range budget decreases 11 % to shift emphasis to destination overnight guests • Groups and Meetings budget increases 6% to provide additional emphasis on medical meetings, corporate meetings and participatory sports tournaments as well as a new collateral piece for the meetings market trade shows • PR budget stays intact to maintain a prominent presence regionally, nationally and internationally • Research budget decreases $40,000 because Burke Brand Research study was done in 2013 and is only scheduled every other year • Photography /video increases by $25,000 (31 %) to continue to build the archives with new and exciting still shots and video opportunities • Branding increases 38% ($30,000), partially due to savings in 2013 and also to evolve the look and feel for summer to be parallel to and consistent with ski season branding • Professional Fees increase 2% • Event Marketing increases by 4% for expanded scope of work for the event liaison and with a placeholder for the USA Pro Challenge 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 2014. Town of Vail 9/17/2013 Page 2 1 -1 -2 III. ACTION REQUESTED OF VAIL LOCAL MARKETING DISTRICT VLMDAC recommends that VLMD approve the 2014 Operating Plan and budget of $2,800,000. ATTACHMENTS VLMD 2014 Operating Plan and Budget VLMD 2014 Strategic Plan Town of Vail 9/17/2013 Page 3 1 -1 -3 Income 310 Lodging Tax 399 Interest Income Total Income Expense 6301 • Destination 6302 • Front Range 6303 • Groups and Meetings 6304 • Public Relations Expenses 6306 • Photography / Video 6307 • Research 6308 • Web Site 6310 • Admin Miscellaneous 6315 • Email Marketing 6320 • Branding 6400 • Contingency 7000 • Professional Fees 7001 • Legal and Accounting 7003 • Advertising Agent Fees 7007 • Marketing Coordination -TOV 7007 Marketing Coordination -VVP 7008. Professional Fees 7011 Partnership Fees 7015 • Ft Range Promotion Fees Total 7000 • Professional Fees 9000 • Special Event Funding 9000.01 Pro- Cycling Challenge 9000.02 New Iconic Event Marketing Total 9000 • Special Events Total Expense Net Income Beginning Fund Balance Ending Fund Balance %age Fund Balance (25% required) Vail Local Marketing District 2014 Operating Plan 2012 2013 2013 2014 Actual Amended Forecast Proposed 2,452,910 2,200,000 2,500,000 2,600,000 289 1,200 800 2,000 2,453,199 2,201,200 2,500,800 2,602,000 611,842 806,500 820,350 954,342 393,022 405,000 424,843 380,000 420,844 537,500 537,500 570,000 103,249 92,000 92,000 92,000 100,000 111,500 80,000 105,000 97,425 110,725 110,725 70,158 45,000 45,000 45,000 45,000 3,193 7,500 7,500 7,500 12,257 4,000 4,000 4,000 30,000 102,000 80,000 110,000 20,000 20,000 20,000 22,000 50,000 50,000 50,000 50,000 85,000 85,000 85,000 90,000 40,000 40,000 40,000 40,000 93,000 110,000 110,000 110,000 44,375 30,000 30,000 30,000 332,375 335,000 335,000 342,000 11,666 100,000 100,000 100,000 58,334 15,000 15,000 20,000 70,000 115,000 115,000 120,000 2,219,207 2,671,725 2,651,918 2,800,000 2335992 (4705525) (151,118) (198,000) 1,061,696 1,295,688 1,295,688 1,144, 570 1,295,688 8255163 1,144,570 946,570 53% 37% 46% 36% 9/17/2013 1 -1 -4 9/17/2013 1 -1 -5 h. Like nothin n Bart' 2014 STRATEGIC OPERATING PLAN &BUDGET "Skate to where the puck is going, not to where it has been." - Wayne Gretzky Situation Assessment 2013 Results To Date (thru Sept. 2, unless noted) 2013 GOAL RESULT YTD Sales Tax Exceed annual inflation +3.3% (May, June & July) Destimetrics Occupancy +3% +2% (thru August) Destination Mix 60% 43% (down from 56 %) International Mix 5% 2% (flat) IS Overnight Mix 20% 19% (flat) Total Overnight Visits NA 64% (down from 78 %) Group Room Nights +5% +5% Awareness 96 89% (2012 result) NPS 86 80 (flat) Business Goals 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 Marketing Objectives 2014 Marketing Objectives Continue the momentum and build on the powerful leadership position of the year -round Vail brand 1. Increase Sales Tax Revenue 2. Increase May — October Occupancy 3. Increase Group Occupancy 4. Optimize Visitor Mix 5. Increase Net Promoter Score 6. Increase Vail Brand Awareness 2014 STRATEGIES What's New For Summer 2014 • Gondola One • Adventure Ridge (Epic Discovery Phase 2) • New on- mountain activities include Zip Line and Ropes Courses • 2014 activities include summer tubing and Rock Climbing (Pending Forest Service approval) • New Retail & Restaurants • New Events & Activation (Feast Vail, Vail /BCRestaurant Week, King of the Mountain, 4t" of July, Guided hiking & biking) 2014 Strategies • Deeper integration of Health & Wellbeing into brand positioning and messaging across all disciplines • Refine key brand messages to support world -class outdoor recreation, culture and well -being • Use Burke Brand Research findings to deliver communication of the "reasons 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 2014 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, Front Range Overnight and Mexico /Latin American guests while retaining Front Range day guests (optimize mix) • Improve the resort experience through guest service initiatives and technology • Lay the foundation for Vail to be more relevant with a younger demographic 2014 METRICS &MEASUREMENTS Sales Tax Revenue 2014 Goal: Increase Sales Tax Revenue 5.2% (2013 Goal: Exceed annual inflation, as measured by the Consumer Price Index; consistent with the Economic Council goals) $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 TOV Sales Tax Revenue 2014 Goal: increase Sales Tax -r::.; c 5.2 +5.9% +5.0% +1.38% "do" MAY JUNE JULY AUGUST SEPT OCT TOTALS 2011 2012 2013 SALES TAX 2011 2012 2013 YOY Change MAY $473,292 $4897056 $5183088 +5.9% JUNE $898,270 $9647989 $11013,678 +5.05% JULY $11481,239 $1,576,016 $1,5977747 +1.38% AUGUST $1,311,048 $1,3373341 SEPT. $890,383 $9497214 OCTOBER $6247457 1 $5627168 9/17/2013 • ONAh. Like nothing on Lodging Occupancy 2014 Goal: Increase YOY Occupancy 4% (2013 is up 2% May - August; 2012 was up 6.7 %) Uccunancv/ On The B Jve ra I I Yu Total Vail Bed Base: 3,954 short term DestiMetrics Represents: +/- 60% 9/1 / 01 September & October are YTD /pacer 21 numbers Like nothing n ears; Group &Meetings Occupancy 2014 Goal: 8% Overall YOY Increase in Room Nights (2013 was Increase of 5% YOY) 14000 12000 10000 :111 •111 111 2000 Group &Meetings Occupancy 2014 Goal: 8% Overall YOY Increase 11,149 WF P9 , 11,814 011 2012 2013 Optimize Visitor Mix 2014 Goal: In-State Overnight to 32% Out of State to 50% International (Mexico) to 3% 70.0% 60.0% Optimize Visitor Mix (thru Sept. 2, 2013) 2014 Goal: 50.0% increase in -State Overnight, 40.0% M it nf Statp and I nt' I 30.0% 20.0% 10.0% n no/ I M I 1 0 In-State Day Overnight _JOut of State JPW I IW MEL I 2013 STD 9/17/2013 ' 2014 Goal 11.0% TT 1 -1 -25 % 32.0% 50.0% 3 .% IVISA-PIVISA (Excluding Colorado) (thru Sept. 2) Three of the top ten MSA -PMSAs of Vail summer visitation are in Texas. Dallas,, 5.71 TX 6.9% Houston TX 5.1% ' 4.1°./0 Chicago, IL 4.9% Kansas City, MOB -KS, MO Minneapolis -St. Paul, MN -Wl, MN New York, NY Phoenix -Mesa, AZ San Diego, CA Austin -San Marcos, TX 6.2% 4.3% 2.9% 3.8% 3.1°x'0 3.6% 2.3 3.3% 2.5% 2.5 1.6% 2.31 2013 3.31 Fort Worth - Arlington, TX 1.3% 2.1% 2% 4% f% 2012 8% 10% IVISA-PIVISA (Including Colorado) (thru Sept. 2) Denver, CO 20.8% Boulder - Longmont, CO 4.76.4% Dallas TX 1 4.3% 3.9% Houston TX Houston., 3.2% 2.8% Chicago, IL 3.1% 4.3% Kansas City, MO -KS, MO 2 .7% Colorado Springs, CO 23 2 0 Minneapolis -St. Paul, MN -WI, MN Z r° New York, NY Z.1 1.6 % 2013 . Phoenix -Mesa AZ 2.0% 1.7% 0% 5% 10% 15% 20% 26.3°! 2,012 25% 30% Awareness Level 2014 Goal: Increase Vail's Awareness to 96% Same Goal as 2013 Aware Awareness Level (Burke Brand Research 2011) 2014 Goal: Increase Vail's Awareness from 89% (2011) to 96% Aspen Vail Beaver Brecken- Keystone Heavenly . , Net Promoter Score 2014 Goal: Increase NPS Score to 86 Same Goal as 2013 0 9/17/2013 1 -1 -31 h. Like nothin n Bart' 2014 Summary of Goals Sales Tax Increase: +5.2% Destimetrics Occupancy: +4% Group Occupancy: +8% Destination Visits: 50% of Mix International Visits: 3% of Mix IS Overnight Visits: 32% of Mix Awareness: 96% NIPS: 86 OVERVIEW OF BUDGET 2014 Budget Lodging Revenue Projections: VLMD Expense Budget: $2.6 Million $2.8 Million *Additional funds coming from fund balance, potential 2013 lodging tax revenue increase and /or a combination of 2013 savings 2013 VLMD Budget: $2,671,725 $115,000 Destination $19,807 4.3% International 0% Front Range 335,00+0 $577,850 $80,0003% 13% 21.6/ Groups and Meetings Public Relations $7,500 0% $49,000 2% Photography /Video $110,725 $242,500 Research 4% 9.1% Web Site $80,500 Admin Misc 3% Branding $92,000 $424,843 Savings 3.4% $537,500 16% Professional Fees 20% Event Funding 2014 VLMD Budget: $2,800,000 $110,000 4% $7,500 0% $49,0002% $70,158 2.5% $105,000 3.8% In $92,000 3.3% giio,000 IN $342,000 12% $570,000 20% $719,342 25.7% $235,000 8.4% $380,000 13.6% Destination International Front Range Groups and Meetings Public Relations Photography /Video Research Web Site Admin Misc Branding Professional Fees Event Funding 2013 vs. 2014 Budaet Comparison 2013 Amended 12014 Plan Destination $ 5771850 21.6% $ 6921P342 24.7% International $ 242,500 9.1% $ 262,000 9.4% Front Range $ 424,843 15.9% $ 380,000 13.6% Groups and Meetings $ 537,500 20.1% $ 570,000 20.4% Public Relations $ 92,000 3.4% $ 92,000 3.3% Photography /Video $ 80,000 3.0% $ 105,000 3.8% Research $ 110,725 4.1% $ 70,158 2.5% Web Site $ 49,000 1.8% $ 49,000 1.8% Admin Misc $ 71500 0.3% $ 7,500 0.3% Branding $ 801000 3.0% $ 110,000 3.9% Savings $ 19,807 0.7% 0.0% Professional Fees $ 335,000 12.5% $ 3421000 12.2 Event Funding $ $ 115,000 2,671,725 4.3% 1 100%1 $ $ 120,000 2,800,000 4.3% 1 100% Questions? Thank you! VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: September 17, 2013 ITEM /TOPIC: Adjournment 9/17/2013 rowH Of vnKK i i1