HomeMy WebLinkAbout150302 VLMD Supp
To: Vail Local Marketing District
From: Vail Local Marketing District Advisory Council
Date: March 2, 2015
Subject: Vail Local Marketing District 2015 Incremental Budget Request
I. BACKGROUND
The Vail Local Marketing District (VLMD) approved the 2015 Operating and Plan and
Budget on September 16, 2014 and the Vail Town Council approved on October 21,
2014.
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.
The marketing objectives outlined in the 2015 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
II. OPPORTUNITIES
• Increase Guest Visitation during Mid-Week & Off Peak Time Periods
• Increase Presence & Guest Visitation from Dallas, Houston & Chicago
-Leisure Travel
-Group Business
Town of Vail Page 2
III. RATIONALE
a. Doubles our spend and penetration into our top 3 destination markets, building on
our top geographic strengths
i. Dallas +48% over baseline budget
ii. Houston + 54% over baseline budget
iii. Chicago +76% over baseline budget
b. With record sales tax collections the last two summers, we need to build on that
momentum to maintain our leadership position, ensuring market growth and no
slippage
c. We have increased our percentage of destination guests, who stay longer and
spend more money, and need to capitalize by increasing our presence in the top 3
markets,
d. Allocates dollars strategically where and how we can have the most impact and
track Key Performance Indicators/ROI
e. Traditional marketing spend in zone cable buys will be hyper-focused on exact
neighborhoods in Dallas and Houston that match our demographic target
f. Flight markets opportunities
i. Houston market is still in development, and marketing investment directly
benefits and could reduce our costs on the revenue guarantee
ii. We saw a large increase in local visitation on last year’s Houston flight,
which seems to be a reflection of our marketing penetration in that market,
with more people knowing about the flight and choosing Vail because of the
access
iii. United has non-stop service to 8 cities in Colorado, only 2 of which are
mainline jet service, Denver and Vail. We hold the competitive advantage on
aircraft service, and need to continue to use this advantage to grow our
market share from Houston
iv. Dallas remains a critical market for us to support; if loads decrease, we risk
losing service – not something we want.
v. Houston & Dallas are our primary gateway beyond Texas to key markets in
the Southeast and Mexico, where we are trying to grow visitation in the
summer
vi. We know a guest flying into EGE in the summer is a Vail guest, and if our
guests fly into Denver, they have many more choices
g. Chicago is in our top 3 markets with little effort and investing wisely through digital
and group efforts will allow us to test and track our impact and determine future
opportunity and investment direction
h. Leverages Vail Resorts winter focus on these markets
Town of Vail Page 3
IV. BUDGET DETAIL
The request for an incremental allocation of $350,000 is recommended to be spent as
follows:
Digital/Online $200,000
Traditional Media $117,000
Groups & Meetings $25,000
PR $8,000
The incremental allocation will increase the percentage spend in our top three markets
as follows:
Houston increase in budget by 54%
Dallas increase in budget by 48%
Chicago increase in budget by 76%
In addition we are requesting to re-appropriate $17,500 from 2014 for the second half of
the Mikaela Shiffrin sponsorship that will be paid out in 2015.
The incremental amount will be allocated from the VLMD year end fund balance of
$1,361,786 (48% of annual revenues). Using that same number as the beginning
balance for 2015, and increasing expenses by $367,500, would leave a $996,286
ending fund balance in 2015 (34% of annual revenues), which is well over the
recommended 25% fund balance.
V. ACTION REQUESTED OF VAIL LOCAL MARKETING DISTRICT
Vail Local Marketing District Advisory Council recommends that the Vail Local
Marketing District listen to the presentation and approve the requested incremental
budget of $350,000 and a re-appropriation of $17,500.
ATTACHMENTS
VLMD incremental Budget
Vail Local Marketing District
2015 Proposed Amended Budget
2014 2014 2015 1st 2015
Amended Actual Budget Supplemental Proposed
Income
Lodging Tax 2,600,000 2,796,770 2,900,000 2,900,000
Interest Income 2,000 636 2,000 2,000
Total Income 2,602,000 2,797,406 2,902,000 - 2,902,000
Expense
Destination 954,342 876,285 1,079,500 317,000 1,396,500
Front Range 407,000 412,736 250,000 250,000
Groups and Meetings 570,000 512,726 580,000 25,000 605,000
Public Relations Expenses 92,000 139,079 92,000 8,000 100,000
Photography / Video 105,000 86,875 120,000 120,000
Research 140,158 145,389 157,000 157,000
Web Site 45,000 45,000 45,000 45,000
Admin Miscellaneous 7,500 4,958 7,500 7,500
Email Marketing 4,000 4,000 7,000 7,000
Branding 140,975 150,591 95,000 95,000
Professional Fees - -
Legal and Accounting 22,000 20,000 22,000 22,000
Advertising Agent Fees 50,000 60,000 50,000 50,000
Marketing Coordination-TOV 90,000 85,000 90,000 90,000
Marketing Coordination-VVP 40,000 40,000 40,000 40,000
Professional Fees 110,000 104,000 120,000 120,000
Ft Range Promotion Fees 30,000 30,000 25,000 25,000
Total Professional Fees 342,000 339,000 347,000 - 347,000
Special Event Funding
Team Shiffrin 35,000 17,500 - 17,500 17,500
Pro-Cycling Challenge 100,000 100,000 100,000 100,000
Event Liason 20,000 15,000 20,000 20,000
Total Special Events 155,000 132,500 120,000 17,500 137,500
Total Expense 2,962,975 2,849,139 2,900,000 367,500 3,267,500
Net Income (360,975) (51,733) 2,000 (367,500) (365,500)
Beginning Fund Balance 1,413,520 1,413,520 1,052,545 309,241 1,361,786
Ending Fund Balance 1,052,545 1,361,786 1,054,545 996,286
%age Fund Balance (25% required) 40% 49% 36% 34%
4
RESOLUTION NO. 1, SERIES 2015
VAIL LOCAL MARKETING DISTRICT
A RESOLUTION AMENDING A BUDGET AND MAKING APPROPRIATIONS
TO PAY THE COSTS, EXPENSES AND LIABILITIES OF THE VAIL LOCAL
MARKETING DISTRICT, FOR ITS FISCAL YEAR JANUARY 1, 2015
THROUGH DECEMBER 31, 2015.
WHEREAS, the Vail Local Marketing District board received and approved the
operating plan and budget for the fiscal year 2015 on September 16, 2014; and
WHEREAS, in accordance with C.R.S. §29-1-106 a notice of budget hearing has
been published; and
WHEREAS, notice of this public hearing to consider the adoption of the proposed
Vail Local Marketing District budget was published in the VAIL DAILY on the
26th day of February, 2014; and
NOW THEREFORE, LET IT BE RESOLVED by the Vail Local Marketing
District of Vail, Colorado, as follows:
The Vail Local Marketing District Board adopts the submitted budget for
marketing related expenditures beginning on the first day of January, 2015, and
ending on the 31st day of December, 2015.
Attested: Signed:
_______________________________ ___________________________________
Jenn Bruno, Secretary Andrew P. Daly, Chairman