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Home My WebLink About14. 2018 VLMD Operating Plan and Budget Updated 2017-09-19 To: Vail Local Marketing District From: Vail Local Marketing District Advisory Council Date: September 19, 2017 Subject: Vail Local Marketing District 2018 Operating Plan and Budget I. 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. To date, 2017 summer results show a mix in sales tax performance, with a decrease in May and increases in June and July as compared to the same time period in 2016. The overarching goal is to strengthen Vail’s position as a year-round destination that appeals to a broad audience by elevating the summer brand position. 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 • Monitor net promoter score (due to new methodology) • Increase consideration percentage as measured by Burke II. BUDGET DETAIL Budgeted revenue from lodging tax collections is proposed at $3,200,000 for 2018. The assumptions for this projection are conservative and consistent with the town’s expected sales tax revenue for 2018. Proposed budgeted expenditures are $3,400,000 for 2018 programs. This is a $350,000 decrease from 2017 budgeted expenditures when $500,000 of fund balance was utilized. However, this is a $240,000 increase from 2016 expenditures. The 2018 ending fund balance is projected to be $943,733, which is 30% of annual revenues, and within Council’s directive of 25% of annual revenues. The following shifts are recommended from the 2017 budget to the 2018 budget to address recent successes and opportunities and to achieve the outlined marketing objectives: o Keep Vail in the leadership position and maintain our competitive edge among other mountain destinations o Increase our ability to be in market longer and during key timeframes o Allow us to reach more of our target personas nationally, within destination markets and in the Front Range o Increase the momentum for reaching annual and 5-year goals • Destination budget decreases 2% by realizing a savings in Search Engine Marketing and increased overall digital media efficiencies • International budget decreases 6% with the elimination of the Panama market • Front Range budget decreases 16% with increased digital media efficiencies and elimination of some traditional sources • Groups and Meetings budget increases slightly to provide additional sales efforts as well as targeted partnerships • PR budget decreases 26% with savings in fees due to reduced scope and the elimination of Panama • Research budget decreases 38% to reflect that there is no Burke Brand Research study in 2018, it is every other year • Web/email marketing/social media increases 13% in order to provide more content and social efforts • Photography/video decreases 39% since a significant investment was made in 2017 to build the video assets and photo archives • Branding/production decreases 13% since the new brand marketing was executed in 2016 and production in 2017 so realizing a savings in fees and production costs due to reduced scope of work • Professional Fees decrease 2% commensurate with the reduction in scope of work at the new budget level • Special event funding, no budget for this 2018 line item because no event has been identified. Should an opportunity arise, dollars from the fund balance would be utilized. The budgetary changes outlined above reflect the goal of shifting dollars to optimize the visitor mix of destination, front range and international travelers; to drive revenue by focusing on the core audience while broadening and increasing relevancy with a younger demographic; to maximize off peak, mid-week and shoulder seasons and to increase awareness of Vail as a group and meeting destination and drive quality leads to the lodging community through additional outreach and programs in 2018. III. ACTION REQUESTED OF VAIL LOCAL MARKETING DISTRICT VLMDAC recommends that the Vail Local Marketing District approve the 2018 Operating Plan and budget of $3,400,000. Town of Vail Page 2 Vail Local Marketing District 2018 Proposed Budget 2 2016 2017 2018 Actual Budget Budget Income Lodging Tax 3,198,625 3,300,000 3,200,000 Interest Income 1,722 2,000 2,000 Total Income 3,200,347 3,302,000 3,202,000 Expense Destination 1,032,293 1,285,500 1,182,548 International 180,704 241,000 235,052 Front Range 247,368 264,000 222,000 Groups and Meetings 700,248 752,965 756,375 Public Relations Expenses 101,693 115,000 85,200 Content/Influencer Strategy - - 100,000 Photography / Video 152,180 185,000 112,000 Research 71,966 136,088 84,365 Web Site 45,000 104,000 50,000 Admin Miscellaneous 4,991 7,487 8,000 Email Marketing 6,500 6,500 6,500 Branding 202,289 110,000 98,000 Professional Fees Vail App - - 35,000 Legal and Accounting 22,000 25,000 25,000 Advertising 50,741 58,000 48,000 Advertising Agent Fees 45,000 45,000 45,000 Marketing Coordination-TOV 90,000 95,000 95,000 Marketing Coordination-VVP 40,000 40,000 40,000 Professional Fees - MYPR 125,589 132,460 124,960 Ft Range Promotion Fees 22,000 22,000 22,000 Total Professional Fees 395,330 417,460 434,960 Special Event Funding Special Event Funding 21,250 100,000 - Pro-Cycling Challenge - - - Event Liason - 25,000 25,000 Total Special Events 21,250 125,000 25,000 Total Expense 3,161,811 3,750,000 3,400,000 Net Income 38,536 (448,000) (198,000) Beginning Fund Balance 1,552,198 1,590,733 1,142,733 Ending Fund Balance 1,590,733 1,142,733 944,733 %age Fund Balance (25% required)50%35%30% VAIL LOCAL MARKETING DISTRICT 2018 OPERATING PLAN & BUDGET SEPTEMBER 19, 2017 •Creative Review •Goals & Results •Insights & Trends •VLMD 2018 Budget, Strategy & Operating Plan •Discussion/Questions AGENDA / •Sample videos to feature 2017 CREATIVE / GOALS & RESULTS VLMDAC OVERARCHING GOAL / STRENGTHEN VAIL’S POSITION AS A YEAR-ROUND DESTINATION THAT APPEALS TO A BROAD AUDIENCE, BY ELEVATING THE SUMMER BRAND POSITION. VLMDAC MARKETING OBJECTIVES / CONTINUE THE MOMENTUM AND BUILD ON THE POWERFUL LEADERSHIP POSITION OF THE YEAR-ROUND VAIL BRAND. •INCREASE SALES TAX REVENUE •INCREASE MAY-OCTOBER OCCUPANCY •INCREASE GROUP OCCUPANCY •OPTIMIZE VISITOR MIX •POSITIVELY IMPACT NET PROMOTER SCORE •INCREASE CONSIDERATION PERCENTAGE AS MEASURED BY BURKE 2017 OVERVIEW /BUDGET Drive Overnight & Out-of-state Visitation Mkt Production Branding Research 2017 Budget: $3.750 Million 27% 73% Destination FR Overnight International Web/CRM/Social Public Relations Groups 47% 10% 8% 27% 4% 4% Digital Social Traditional PR 46% 7% 7% 40% 2017 NEW APPROACH & INCREMENTAL $500K / •A ONE-TIME INCREMENTAL BUDGET OF $500K WAS ALLOCATED ACROSS KEY INITIATIVES •SHIFTED STRATEGIC APPROACH FROM A GEOGRAPHIC AND FUNCTIONAL FOCUS TO A CONSUMER BASED FOCUS (DYNAMIC FAMILIES/ACTIVE PROFESSIONALS/SUPER BOOMERS). •NEW STRATEGIC APPROACH BUILDS INTEGRATED TACTICS AROUND PERSONAS IN ORDER TO BETTER ACCOUNT FOR TRAVEL MOTIVATIONS & BEHAVIORS, AS WELL AS MEDIA CONSUMPTION BEHAVIORS. •ALLOWS US TO BECOME HYPER-TARGETED TO PERSONAS IN DIGITAL AND TRADITIONAL MEDIA, WITH INCREASED EFFICIENCY OF DOLLARS AND MESSAGING. •PRIORITIZE HIGH QUALITY PLACEMENTS AND EXECUTIONS THAT WERE PROVEN IN 2016 TO YIELD BEST ENGAGEMENT AND CONSIDERATION OF VAIL. •CONTINUES TO BUILD THE MOMENTUM FOR REACHING ANNUAL AND 5-YEAR GOALS. •ALIGNS WITH VAIL MARKETING WINTER STRATEGIC APPROACH 2017 NEW APPROACH & INCREMENTAL $500K / HOW DID IT WORK 30% budget increase in digital 224% increase in digital video impressions 2X digital video views +71% Content Impressions 38% budget increase in traditional media 70% increase in traditional media top funnel impressions Expansion into addressable TV with data driven one to one targeting (and included Chicago) 9% budget increase in PR More than 1M static impressions and story views through the influencer program 7% budget increase in Groups Increased CVENT engagement resulted in 18.6% increase in leads and 21% increase in room nights generated 39% budget increase in photo/video Accomplished professional brand photo/video shoots speaking directly to personas GOALS AND RESULTS TO DATE / 2016 Results 2017 Goals 2017 Results 2018 Goals 5 year Goals Sales Tax May - Oct. +7% May - Oct +3% May - 1%; June +3.3% May - Oct. +3% Overall +15% DestiMetrics/ Occupancy May - Oct. +5% (49% overall) May - Oct +2% May - Oct. +.43% May - Oct. +2% Overall +10% Group Occupancy 30% 4% 6% 4% 20% Out of State Overnight Visits 49% of mix 60% of mix 49% of mix 60% of mix 65% of mix International Visits 5% of mix 11% of mix 6% of mix 11% of mix 15% of mix In State Visits 25% of mix 20% of mix 24% of mix 20% of mix 20 - 25% of mix Consideration measure in 2017 55% in 2015 results in October 2% increase 5 - 8% increase Net Promoter Score 80 84 in 2015 84 mid summer (intercept only) 83-84 84-85 5 YEAR RESULTS TO DATE / 2014 Baseline 2015 Results 2016 Results 2017 Goals 2017 Results YTD 2018 Goals 5 year Goals 2014-2016 Results Sales Tax $7M May - Oct + 8% May - Oct. +7% May - Oct +3% May - 1%; June +3.3% May - Oct. +3% Overall +15% +15% DestiMetrics/Occupancy 43% occupancy May - Oct May - Oct - 1% May - Oct. +5% May - Oct +2% May - Oct. +.43% May - Oct. +2% Overall +10% +6% Group Occupancy 8,570 room nights down 15% up 30% up 4% up 6% grow 4% grow 20% +15% Out of State Overnight Visits 55% of mix 58% of mix 49% of mix 60% of mix 49% of mix 60% of mix 65% of mix 54% International Visits 9% of mix 9% of mix 5% of mix 11% of mix 6% of mix 11% of mix 15% of mix 7% In State Visits 19% of mix 19% of mix 25% of mix 20% of mix 24% of mix 20% of mix 20 - 25% of mix 22% Consideration NA 55% 55% in 2015 55% in 2015 results in October 2% increase 5 - 8% increase 55% Net Promoter Score 75 84 80 83-85 84 mid summer (intercept only) 83-84 84-85 82 INSIGHTS & TRENDS 2018 INSIGHTS / •Net promoter scores (NPS) are strong in general •Geographic origins remain similar to those observed in past years –International is our top out-of-state market (6%) –Mexico is a top out of state market for first time •30% of respondents are on their first visit to Vail •More direct bookings at the expense of OTA bookings •30% of overnight stays are 1 or 2 nights •Recommendations are cited from friends/family, Google searches, and review sites and destination sites 2018 INSIGHTS / Each audience has a unique source of travel inspiration and influence Mobile’s influence on travel continues to grow Visual information is on the rise and a key part of all parts of the travelers decision making process 2018 INSIGHTS / •80% of Gen Zs and 74% of Millennials report that social media influences their shopping habits •76% of consumers believe the content people share is more honest than advertising •Millennials are particularly receptive to user-generated content over traditional marketing •54% of female consumers purchased a product/service after seeing it recommended by an influencer 2018 OPERATING PLAN, STRATEGIES & BUDGET •Strengthen Vail’s position as a year-round destination by unifying the brand message in winter and summer •Leverage Summer research to increase consideration •Focus on core audience while broadening and increasing relevancy with younger demographic •Maximize off peak, mid-week and shoulder seasons •Increase Customer Relationship capacity to maintain repeat guests and re-engage lapsed guests 2018 STRATEGIES / •Optimize mix to drive revenue: Percent of Destination, Front Range Overnight and International (Mexico/Latin American) guests •NEW - Develop Content Marketing plan to provide new ways to reach consumers with key Vail messages •Increase awareness of Vail as a group & meeting destination and to drive quality leads to the lodging community •Support EGE flights with targeted and integrated efforts in flight markets •Leverage summer events and identify new events to build overnight guests and mid week traffic 2018 STRATEGIES / •I-70 Vail Underpass will be completed 2017 ski season and will relieve congestion along frontage roads and roundabouts. •Expanded summer bus service to continue, servicing East Vail, Vail Golf Course and Sandstone neighborhoods •New accommodations: Hotel Talisa, The Lion, Doubletree Hotel •New restaurants/retailers •New/expanded events: Taste of Vail Fall Food & Wine Discovery, Craft Beer Festival •Continued expansion of Vail Epic Discovery 2018 WHAT’S NEW / SUMMER BUDGET Drive Overnight & Out-of-state Visitation 2018 Budget: $3.4 Million ($350,000 REDUCTION YOY) 79% Destination FR Overnight International Web/CRM/Social Public Relations Groups 47% 8% 8% 28% 3% 5% Digital Content Traditional PR 44% 6% 2% 43% 2018 OVERVIEW / BUDGET Mkt Production Branding Research 21% Other 5% 2018 VS. 2017 BUDGET COMPARISON Budget by Category 2018 BUDGET % of Budget 2017 Budget % of Budget 2018 vs. 2017 %Change 2016 BUDGET % of Budget 2018 vs. 2016 %Change Destination Efforts $ 1,257,348 37% $1,285,500 34% -2% $1,119,000 34% 12% Front Range $ 222,000 7% $264,000 7% -16% $225,000 7% -1% International $ 226,552 7% $241,000 6% -6% $220,000 7% 3% Branding/Production $ 146,000 4% $168,000 4% -13% $110,000 3% 33% Groups $ 756,375 22% $752,965 20% 0% $702,500 22% 8% PR $ 85,200 3% $115,000 3% -26% $103,000 3% -17% Research $ 84,365 2% $136,088 4% -38% $74,000 2% 14% Photo/Video $ 112,000 3% $185,000 5% -39% $124,000 4% -10% Web/Email/Social $ 125,200 4% $110,500 3% 13% $101,500 3% 23% Professional Fees/Admin $ 359,960 11% $366,947 10% -2% $351,460 11% 2% Event Support $ 25,000 1% $125,000 3% -80% $120,000 4% -79% TOTALS $ 3,400,000 $3,750,000 -9% $3,250,460 5% 2018 BUDGET SHIFTS •ADDING: •New content/influencer strategy •Vail app maintenance and expansion •Group PlanIt initiative •ADJUSTING: •Savings in professional fees with efficiencies and reduced scopes of work •Right sizing all addressable TV markets, resulting in the reduction in spend •Reduction in TV/video productions and asset gathering; focus on capitalizing on 2017 video and photo efforts •Reduction in research with off-year of Burke Brand research •Shift Cactus agency fees by maintaining current “For Those Who” creative platform with refreshed executions showcasing new photography, video and headlines. Savings will be used to support new initiatives 2018 BUDGET SHIFTS •ELIMINATING: •Front Range print - Destination print Official State Vacation Guide participation (will still maintain presence with Lodging co-op) •Front Range TV brand messaging (will keep Event TV that includes some branding) •Special Event line item – No budget for this 2018 line item because no event has been identified. Should an opportunity arise, dollars from the fund balance would be utilized. QUESTIONS? THANK YOU!! APPENDIX PERSONAS / Dynamic Families Active Professionals Super Boomers MEDIA TARGET AUDIENCES / ?DO WE NEED THIS HERE? National Audience Dynamic Families Active Professionals Super Boomers Definition Adults overnight past summer trip to CO, UT, NM National: HHI $200K+ Adults 35-54 with children, overnight past summer trip to CO, UT, NM Destination (Houston, Dallas, Chicago): HHI $100K+ Denver: HHI $75K+ Adults 25-35 without children, overnight past summer trip to CO, UT, NM Destination (Houston, Dallas, Chicago): HHI $100K+ Denver: HHI $75K+ Adults 55-65, overnight past trip to CO, NM, UT Destination (Houston, Dallas, Chicago): HHI $100K+ Denver: HHI $75K+ Dynamic Families Active Professionals Super Boomers Travel Motivations -I want to spend lots of time with my family -I’m looking for a kid-friendly adventure, something the whole family can enjoy -I hope I can get some time in to just rest and relax -Adventure and sightseeing are at the top of my list -I’m not in the office, so it’s time to play -Vacation is also my break; when I’m not playing, I’m ready to kick back and relax -Rest and relaxation are my number 1 vacation goals -I’m ready to get out of the city and spend time in nature -I plan to do lots of sightseeing Buying Behavior -When I find a travel destination/brand I like and trust, I stick to it -I buy based on quality, not price -I support destinations/brands that reflect my style -I research a lot and read reviews before I invest in a trip -If it’s a travel destination/brand I trust, I’ll buy it even if it’s slightly more expensive -I support destinations/brands that reflect my style -I buy based on quality, not price -I buy based on quality, not price. -If I trust the brand, I’ll buy a product even if it’s slightly more expensive. -It’s important to me that salespeople be knowledgeable about the products/brands TRAVEL MOTIVATIONS AND BUYING BEHAVIOR / ?NEED THIS HERE? 2018 SPEND AND TACTICS BY AUDIENCE OVERVIEW / Video Display Banner Social Native Display Addressable Cable TV Advanced Linear Cable OOH Destination - Dynamic Families x x x x Front Range – Dynamic Families x x x x x Destination – Super Boomers x x x x x Front Range – Super Boomers x x x x x x Destination – Act Professionals x x x Front Range – Act Professionals x x x x x Destination – All audiences Families only Families only Families only Front Range – All audiences x 2018 DIGITAL MEDIA STRATEGY / •DIGITAL MEDIA WILL DRIVE DESTINATION INTEREST ACROSS AUDIENCE SEGMENTS BY BRINGING VAIL TO LIFE ACROSS ENGAGING AND IMMERSIVE MEDIA EXPERIENCES. Continued investment in video, consider new formats such as 360 Expanded use of social media to promote and support influencer content as well as campaign assets Introduce native display and content marketing as new tactics for 2018 2018 VAIL SUMMER SOCIAL, WEB & EMAIL / STRATEGIES WEB •Responsive Website Integration •Leverage new interface & content functionality to present a fully integrated summer web experience, year-round EMAIL •Expand and reimagine summer email campaigns with VR learnings and targetability enhancements (messaging beyond the summer preference list) •Utilize the full breadth of dynamic sending and increased personalization capabilities – Note: Phased innovations & investments from VR SOCIAL •Increase focus on Video related postings, supported by investments in “Boosting” content to maximize reach •Capitalize on the evolving content strategy to maximize reach against a new audience, while improving engagement and loyalty of existing followers 2018 Budget – Proposing a -1.5% reduction in budget gained from operational efficiencies in web/email. Proposing incremental $1.2K investment to support “boosting” campaign to increase reach against new guests. 2018 TRADITIONAL MEDIA / DESTINATION STRATEGY •Eliminate the OSVG Print buy with the CTO (covered by lodging co-op/PR) •Right-sizing all markets (Chicago, Houston, Dallas) and personas in addressable TV and advanced zoned cable •Extend flight time with no hiatus 2018 Budget Implications: Reduces Traditional media destination budget by 20.8% 2018 TRADITIONAL MEDIA / DESTINATION STRATEGY •Recommendation: Data Driven TV is the cornerstone of our recommendation, as we have the ability to target spots as never before (much like online). 2018 TRADITIONAL MEDIA / FRONT RANGE STRATEGY •Maintain Out Of Home Summer/Brand messages •Focus on summer events/lodging/mid-week TV messaging through Addressable Cable, Advanced Linear Cable •Add Video on Demand across all personas to increase exposure to coincide with summer viewing habits •Include Active Professionals within the Addressable Cable approach •With high Front Range brand awareness and recognition, remove Brand TV & Print (Denver Post and 5280) 2018 Budget Implications: By eliminating Brand TV and print messages, we reduce the budget by 17% 2018 DOMESTIC PUBLIC RELATIONS / STRATEGY •In-Market Media Visits •Continue to focus on NYC and Chicago while rotating in a third market •Continue smaller group activities and one-on-one meetings in the Front Range •Media Visits •Mix of individual and group •Timing focused on early and late summer •Community Relations •Continue to grow restaurant, lodging and activity partners •Media Center •Enhancements to support new website design •Drive more visits to and expand content on the summer media center 2018 Budget – cut expenses 12% by eliminating winter cross sell budget and tightening spending in admin and in-market trips. NOT loosing key tactics. Shifting $16K in expenses and $7500 in fees to collective content/influencer program. 2018 INTERNATIONAL PUBLIC RELATIONS / STRATEGY •Mexico •Continue to refine the Mexico City media mission •Media Visits •Explore opportunities to possibly split the group in two to cover early summer and the Vail Dance Festival – tie with Dance MX •Panama •MYPR will not be involved in the Panama mission 2018 Budget – Cut fees by 30% removing Panama. 2018 INTERNATIONAL MARKETING / STRATEGY DANCE FEST •Reimagine event format and pulling up a dance master class during the summer to capture a larger audience of high end families OPTIMIZING EXISTING EFFORTS : •Golf - continue Vail Summer presence at top Mexican golf clubs and events all through the year. •Camps - Kids camps both day and overnight (through two top companies dedicated to high end families kids ‘summer programs) NEW OPPORTUNITIES: •Running – Host a 10K , triathlon or well-designed race for Mexicans to align with their personal health goals and training regiment. 2018 Budget – Eliminating efforts against Panama due to limited opportunity, resulting in a 13% budget decrease (4% net decrease accounting for reallocation to International PR and still 10% above 2016 levels) 2018 GROUP SALES / STRATEGY –Convention PlanIt •ConventionPlanit.com is an advertising distribution channel to increase group business. Meeting planners have free access to marketplace listings, RFP sourcing tools, and industry information when they’re buying. –Event Hosting Fees •Governor’s Conference on Tourism, Future Business Leaders of America, Colorado Bar Association, baseball event (tentative), etc –Industry Group Engagement (expanded presence) •Destination Colorado, Meeting Planners International (MPI), Colorado Society of Association Executives (CSAE), American Society of Association Executives (ASAE), Financial & Insurance Conference Planners (FICP), etc. 2018 Budget – Minor shifts in tactical budget items and addition of ConventionPlanIt.com (Request for Proposal) tool to increase new lead generation resulting in a flat budget. 2018 VAIL APP SUPPORT •Town of Vail database, research interactive map, new lodging platform and guest service enhancement Budget Implications: New allocation of $35,000 investment from VLMDAC RESEARCH / DESTIMETRICS Same scope of work as 2017 •Reservation Activity Reports •Daily Occupancy Reports (including mid-month updates) •Guest Profiler •Hotel v Condo breakout •Group v Leisure breakout •Event overlays (including industry wide) •Comp set reports Budget Implications: Flat YOY with same reports RESEARCH / SUMMER INTERCEPT STUDY RRC Associates summer guest intercept study •Short Intercept Study (approximately 1,500) •Web Follow Up Study (approximately 400) •Mid-season & end of season reports Budget Implications: Flat YOY with same reports/scope