HomeMy WebLinkAbout07. VLMD 2019 Operating Plan and Budget
To: Vail Local Marketing District
From: Vail Local Marketing District Advisory Council
Date: September 12, 2018
Subject: Vail Local Marketing District 2019 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,
2018 summer results show an increase in sales tax collected, room nights, and event
attendance over the summer of 2017.
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 goals outlined in the VLMD operating plan are to:
Continue the momentum and build on the powerful leadership position of the year-round
Vail brand in order to increase, on a year over year basis:
• Sales tax revenue (May-October)
• Lodging tax revenue (May-October)
o Note: This is a new proposed goal for 2019
• Overall Occupancy (May-October)
• Group Occupancy (May-October)
II. BUDGET DETAIL
Budgeted revenue from lodging tax collections is proposed at $3,300,000 for 2019. The
assumptions for this projection are conservative and consistent with the town’s
expected sales tax revenue for 2019. Proposed expenditures are $3,300,000 for 2019
programs, a $300,000 decrease from 2018 amended budget. The 2019 ending fund
balance is currently projected to be $864,297, 26% of annual revenues, and within
Council’s directive of 25% of annual revenues.
The following shifts are recommended from the 2018 budget to the 2019
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 mountain resort destinations
o Increase our ability to be in market during key timeframes through
strategic targeting
o Allow us to effectively engage our target personas:
Destination Dynamic Families with older children (13-17)
Destination and Front Range Super Boomers
Front Range for Event Messaging
o Maintain the momentum through the final year of our 5-year goals (2018)
and set new goals for 2019-2021
Budget Shifts: Highlights - Savings and Efficiencies
• Professional Fees have decreased 6.5% by creating efficiencies and optimizing
scope of work for all vendors
• Branding and strategic planning decrease 25% since the 2018 strategy and
creative campaign is being continued in 2019
• Asset capture expenses were streamlined for TV and video production, by
capitalizing on 2018 productions and reusing existing assets
• Media targeting strategy (focusing on target audiences in need time periods)
has been carried forward, with increased efficiencies
• Destination budget decreases 6.5% by realizing a savings in Search Engine
Marketing and increased overall digital and traditional media efficiencies
• Front Range budget decreases 8% with strategically focused digital and
traditional media effort
• Research expenses reduced through elimination of Destimetrics Multi-
Destination comparison and refinement of Burke Research scope of work
• Web/email marketing/social media decreases 31% with reduced website fees
due to completion of the responsive site as well as rightsizing branded search
terms based on previous learnings
• International budget decreases 23% with efforts focused solely on Mexico
• Groups and Meetings budget decreases 10% with reductions to direct sales and
event recruiting fees
• Public Relations budget decreases 11% with savings in expenses and reduction
of in-market visits from three to two
Budget Shift: Highlights - Additions
• Additional discovery line item to explore research initiatives and opportunities
around the VLMDAC customer relationship management program
• Addition of long format, organic social video asset capture, production, and
distribution
• Groups and Meetings added market intelligence technology, with the Knowland
Data group and meeting Customer Relationship Management (CRM) tool and
ConventionPlanIt.com lead generation platform
Town of Vail Page 2
• Research budget increases 43% to reflect the Burke Brand Research study for
2019, as it takes place every other year
• Special event funding for the Colorado Classic represents $200,000 of the 2019
budget, mirroring 2018’s amended budget for this event support
The budgetary changes outlined above reflect the goal of shifting dollars to drive
revenue by focusing on strategic personas; to maximize occupancy in off peak, mid-
week and shoulder seasons; to increase awareness, consideration, and conversion of
Vail as a group and meeting destination; and to drive quality leads to the lodging
community.
III. ACTION REQUESTED OF VAIL LOCAL MARKETING DISTRICT
VLMDAC recommends that the Vail Local Marketing District approve the 2019
Operating Plan and budget of $3,300,000.
Town of Vail Page 3
Vail Local Marketing District
2018 Proposed Budget
4
Proposed
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%
TOWN COUNCIL2019 VLMDAC OPERATING PLAN & BUDGETSEPTEMBER 18, 2018
AGENDA / • GOALS & RESULTS• VLMD 2019 STRATEGIES & BUDGET• DISCUSSION
GOALS & RESULTS
Objectives: Specific direction for how we will reach our goals.DEFINITIONS /Goals: The ultimate results we are hoping to achieve.Strategies: Means we will employ to achieve our goals and objectives.Indicators: How we measure the success of our objectives.
Strengthen Vail’s position as a year-round destination that appeals to a broad audience, by elevating the summer brand position.VLMDAC OVERARCHING GOAL /
5 YEAR GOALS VS. 2014 – 2017 RESULTS / Sources2014Baseline2014-2018Goals Net Growth2014-2017TrendResults*Sales Tax (May – Oct)TOV $7,000,000+15% +20% ĹLodging Tax (May – Oct)TOV$645,892 New goal +27% ĹOverall Summer OccupancyInntopia43% +10% 49% ļGroup Occupancy (May – Oct Room Nights) VVP 6,606+20% -7% *NOTE: 5thYear Results to be updated with 2018 after completion of summerGroups on the books May – October 2018 +106% from 2017
GOALS & INDICATORS / 2014 – 2017 RESULTS ACTUALS BY YEARSources2014 Baseline 2015 Results 2016 Results 2017 ResultsSales Tax (May – Oct)TOV$7,000,000 $7,560,000 $8,141,190 $8,370,154 Lodging Tax (May – Oct)TOV$645,892 $711,854 $769,299 $822,825 Overall Summer OccupancyInntopia43% 42% 53% 49% Group Occupancy (May - Oct Room Nights) VVP 6,606 4,077 6,453 6,096Out of State Overnight Visits Intercept55% 58% 54% 53% International Visits Intercept9% 9% 5% 6% In State Visits (Overnight) Intercept18% 19% 25% 19% Consideration Burke 55 55 NA 47 Net Promoter Score Intercept 75 84 8076 (web)83 (on site)
• Increase YOY sales tax revenue• Increase YOY lodging tax revenue2019 PRELIMINARY GOALS /Sources2014 Baseline2014-2018 Goals Net Growth2014-20172019 Goals(Preliminary)Results*Sales TaxTOV $7,000,000 +15% +20% +3%Lodging Tax TOV $645,892 N/A+27% +5%Overall OccupancyInntopia43% +10% 49% +3%Group Occupancy (May – Oct Room Nights) VVP 6,606+20% -7% +5%• Increase YOY overall occupancy• Increase YOY group occupancy*NOTE: 5th Year Results to be updated with 2018 after completion of summerGroups through May – October 2018 +106%
2019 STRATEGIES & BUDGET
• Brand: Strengthen Vail’s brand position as the world’s premier mountain resort by constantly elevating our industry leadership and tradition of excellence • Storytelling: Develop compelling and consumer-centric stories to bring the Vail brand to life throughout the decision making/purchase funnel • Data: Continue to understand and use our summer research and data to impact awareness, consideration, and conversion• Focus: Continue to target personas that are most likely to consider and convert2019 STRATEGIES / PRIORITIES THAT EFFORTS MUST DELIVER
AUDIENCES / Destination Dynamic Families w/ TeensFront Range (All Personas)Destination + Front Range Super Boomers
DESTINATION DYNAMIC FAMILIES WITH KIDS 13-17 / • Tend to stay longer, bring more people and in turn spend more for lodging and activities.• 84% stay 3+ nights• Most likely to have 8+ people • Experience is catered towards older children and there is a strong affinity for Vail amongst this audience• Reported a higher NPS • Most likely to return of all audiences• Children aged 13-17 are also a targetable audience• Competitors are not marketing to this audienceRRC, 2017
DESTINATION AND FRONT RANGE SUPER BOOMERS / • Most likely destination travelers that stay longer.• 81% were overnight visitors from out of state• Slightly ahead of families in terms of length of stay• Travel during off peak times to take advantage of value and less crowds• Baby boomers prefer to travel during spring or summer, with fall only slightly less• Retirees have the luxury of traveling when they can find a good rate• Top digital media performer for Fall and mid week in 2017RRC, 2017; AARP 2017
FRONT RANGE (ALL PERSONAS) / • Target Dynamic Family with Teens, Active Professionals and Super Boomers as appropriate by event message• 70% of summer visitation is from the Front Range• Event marketing provides a reason to drive urgency • General awareness keeps Vail top of mindRRC, 2017
2019 BUDGET / $3.3 MILLIONThe 2019 proposed budget fulfills a 10% (-$300,000) YOY decrease in overall budget.• Strategy has remained intact• Decreases achieved through efficiencies and highly focused approach
DriveOvernight & Out-of-state VisitationStrategyBrandingResearchPhoto/Video Fees2019: $3.3 MillionYOY BUDGET BREAKOUT / 2019 VS. 2018DriveOvernight & Out-of-state Visitation71%DestinationFR OvernightInternationalWeb/CRM/Social Public RelationsGroups41%14%7%29%5%4%StrategyBrandingResearchPhoto/Video Fees29%75%DestinationFR OvernightInternationalWeb/CRM/Social Public RelationsGroups47%8%8%28%3%5%25%2018: $3.6 Million
2019 BUDGET SHIFTS / SAVINGS• PROFESSIONAL FEES:• Efficiencies and reduced scopes of work across partners for reductions• BRANDING AND STRATEGIC PLANNING:• Continuation of current strategy and creative campaign • ASSET CAPTURE:• Streamlining TV/video productions and asset gathering• Capitalizing on 2017/18 asset capture•MEDIA:• Continued focus and refinement of messaging and targets in need time periods• Reduction in Vail App marketing support• INFLUENCER:• Leverage efficiencies discovered in 2018. This includes utilizing existing resources to track influencer performance as opposed to using a managed platform.
2019 BUDGET SHIFTS / SAVINGS• PUBLIC RELATIONS• Expenses decreased and reduction in in-market visits from 3 to 2•WEB • Reduced website fees with the launch of responsive site complete; maintenance mode• Rightsizing branded search terms based on summer learnings• INTERNATIONAL EFFORTS• Sales, marketing and PR effort reduced to sole focus of Mexico• RESEARCH• Elimination of Inntopia multi-destination comparison report• Refinement of 2019 Burke Brand Research methodology to better address our media targeting and more accurately measure Awareness, Consideration, and Conversion funnel metrics•GROUPS• Reduced direct sales fees• Reduced event recruiting fees
2019 BUDGET SHIFTS / ADDITIONS• BRANDING AND STRATEGIC PLANNING:• Addition of discovery line item to explore and streamline research initiatives and build VLMDAC database program• WEB/SOCIAL/EMAIL:• Addition of long format organic social video asset capture and production•GROUPS• Added Knowland database (national group & meeting CRM tool) • Added ConventionPlanIt.com lead generation platform• RESEARCH• Burke Brand Research to be conducted in 2019• EVENT: • $200K in Colorado Classic event support
2019 VS. 2018 BUDGET COMPARISON / Budget by Category2018 BUDGET% of Budget2019 BUDGET% of Budget % Change YOYDestination Efforts$1,035,782 29% $968,560 29% -6.5% Front Range$358,114 10% $329,689 10% -8% International$226,552 6% $175,000 5% -23% Branding/Production$146,000 4% $109,400 3% -25% Groups$756,375 21% $680,738 21% -10% PR$85,200 2% $75,500 2% -11% Research$84,365 2% $120,929 4% +43% Photo/Video$98,000 3% $124,100 4% +27% Professional fees$359,960 10% $336,800 10% -6.5% Web/Email/Social$225,200 6% $154,284 5% -31% Event Support$225,000 7% $225,000 7% 0%TOTALS$3,600,000 $3,300,000 -8%
2019 MARKETING TIMELINE / 2018 2019 September October November December January February March April - 9/18: Town Council Presentation - 9/20: VLMD monthly meeting - Finalize Goals based on 2018 results - Continue to refine budget based on year-end results - Review and apply insights from YOY results and research - Develop specific objectives & tactical plans for how we will reach our goals -Present media strategy - Develop & update brand creative for 2019 season -Present creative & begin production -Present detailed media plan - Final production and trafficking - Creative in-market according to tactical plan
DISCUSSION/QUESTIONS?THANK YOU!
APPENDIX
CREATIVE REVIEW