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HomeMy WebLinkAbout2016 VLMD Operating Plan Memo 090115 To: Vail Local Marketing District From: Vail Local Marketing District Advisory Council Date: September 1, 2015 Subject: Vail Local Marketing District 2016 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. Results to date show an increase in sales tax collected, room nights and event attendance over the summer of 2014. 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 Revenue from lodging tax collections is estimated at $3,032,500 for 2015. The assumptions for this projection are consistent with the town’s expected sales tax revenue for 2016. Regarding expenditures, the attached budget proposal includes $3,250,460 for 2016 programs. The ending fund balance currently present of $778,133 is 26% of annual revenues, Council directive is 25% of annual revenues. The following shifts are recommended from the 2015 forecast to the 2016 Town of Vail Page 2 budget to address recent successes and opportunities and to achieve the outlined marketing objectives: • Destination budget decreases 10% to reflect savings realized in the Search Engine Marketing line item that is now being handled in house by Vail Resorts. • International budget increases 2% to add additional events in Mexico which have proven successful this summer. • Front Range budget increases 14% to add newspaper and magazine back into the media mix • Groups and Meetings budget increases 16% to provide additional emphasis on medical meetings, corporate meetings and participatory sports tournaments as well as to host large conferences • PR budget stays intact to maintain a prominent presence regionally, nationally and internationally • Research budget decreases 47% to reflect that the Burke Brand Research study is scheduled every other year and the next study will be in 2017 • Web/email marketing increases 95% in order to contract with a Content Provider Agency • Photography/video stays flat to continue to build the archives with new and exciting still shots and video opportunities • Branding increases 15% in anticipation of revised creative executions • Professional Fees decreases 1% • Event Marketing decreases 13% since there will not be the Team Shiffrin expense as in 2015 The budgetary changes outlined above reflect the goal of shifting dollars to optimize the visitor mix of destination 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 2016. Town of Vail Page 3 III. ACTION REQUESTED OF VAIL LOCAL MARKETING DISTRICT VLMDAC recommends that the Vail Local Marketing District approve the 2016 Operating Plan and budget of $3,250,460.