HomeMy WebLinkAbout2019-17 1st Budget Supplemental for the VLMD 2019 RESOLUTION NO. 17
SERIES OF 2019
A RESOLUTION APPROVING AN AMENDED OPERATING PLAN AND
BUDGET OF THE VAIL LOCAL MARKETING DISTRICT,FOR ITS FISCAL
YEAR JANUARY 1,2019 THROUGH DECEMBER 31,2019
WHEREAS, the Town of Vail (the "Town"), in the County of Eagle and State of
Colorado is a home rule municipal corporation duly organized and existing under the
laws of the State of Colorado and the Town Charter(the "Charter"); and
WHEREAS, the members of the Town Council of the Town (the"Council") have
been duly elected and qualified; and
WHEREAS, C.R.S. §29-25-110 requires the Council's annual approval of the
operating plan the Vail Local Marketing District (the "VLMD").
NOW THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE
TOWN OF VAIL, COLORADO THAT:
Section 1. The Council approves the operating plan and budget of the VLMD
for marketing related expenditures beginning on the first day of January, 2019, and
ending on the 31st day of December, 2019.
Section 2. This Resolution shall take effect immediately upon its passage.
INTRODUCED, PASSED AND ADOPTED at a regular meeting of the Town Council of
the Town of Vail held this 2nd day of April, 2019.
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Resolution No. 17,Series of 2019
TOWN OF VAIL '
Memorandum
To: Vail Town Council
From: Vail Local Marketing District
Date: April 2, 2019
Subject: Vail Local Marketing District 2019 Re-Allocation & Incremental Budget
Supplemental
I. BACKGROUND
The Vail Local Marketing District (VLMD) approved the 2019 Operating and Plan and
Budget on September 18, 2018 and the Vail Town Council approved on November 13,
2018.
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 goals outlined in the 2019 VLMD operating plan are:
Strengthen Vail's position as a year-round destination that appeals to a broad audience,
by elevating the summer brand position, increasing the following May— October
metrics:
• Sales tax
• Lodging tax
• Overall occupancy
• Group occupancy
II. OPPORTUNITIES
• Increase overall overnight visitation during May— October, with an emphasis on
need time periods
• Increase presence in and visitation from Dallas, while supporting the EGE Flight
• Increase visitation from Front Range
• Capture additional brand assets
• Produce and distribute additional social media video assets
• Expand media/public relations push in Fall in the Front Range
• Expand social influencer program
• Expand email marketing efforts in late summer and fall to drive visitation from the
Front Range
• Conduct in-market research to better understand our primary audience
III. RATIONALE
a. Overall budget re-appropriation and incremental allocations place dollars
strategically where and how we can have the most impact and tie efforts to results
via Key Performance Indicators/ROI
b. Destination media budget increases spend and penetration into our top
destination market, building on our geographic strengths. The focus on Dallas
(direct flight market) continues building on previous momentum, maintains our
leadership position, and ensures market growth
i. Destination Media budget +13% over baseline budget; with the incremental
dollars focused on Dallas (baseline increases 33% for Dallas, spends
already allocated to Houston & Chicago, as well as "Nationwide" digital)
ii. Dallas remains a critical market for us to support; if flight loads decrease, we
risk losing service — not something we want.
iii. We know a guest flying into EGE in the summer is likely a Vail guest, and if
our guests fly into Denver, they have many more destination choices
iv. The Dallas market continues to be strong in ability and desire to visit Vail,
with the direct flight and audience base. There is a reason the Houston flight
went away; we should focus dollars where they are clearly working.
v. Destination guests stay longer and spend more money, therefore we need
bring the marketing spend back to levels more similar to 2018
vi. Dallas is consistently the #2 DMA (behind Denver) at typically 5%, with other
major DMA's, including Houston at only 2%.
vii. According to the Guest Profiler Research, Dallas shows strength with
consistent early bookings and strong late bookings.
viii. Traditional and digital media buys will be hyper-focused on exact
neighborhoods and personas in Dallas
ix. Fall is an opportunity for growth from Super Boomers and Active
Professionals in Dallas, with flights, specific fall messaging and lower lodging
rates
c. Front Range media budget increases spend and penetration, bringing levels back
to 2017-2018
i. Front Range budget +30% over baseline budget
ii. Maintains our top of mind awareness in an always growing market
iii. Allows messaging of new summer events, especially in need time periods
iv. Fall is an opportunity for growth from Super Boomers and Active
Professionals in the Front Range, with events, specific fall messaging and
lower lodging rates
d. Brand asset capture budget increases to include greater variety of footage,
scenarios, and widen the talent pool to reflect our target audiences.
i. Develop additional assets using existing footage for use in 2019 campaign
ii. Capture additional video assets, including 360 degree video for use in
organic social, web, etc.
Town of Vail Page 2
iii. Build library with engaging footage & compelling stories for future campaign
use
e. Social Video budget increase to capitalize on successful long form social edits for
Instagram, Facebook, Youtube, email and web that continue to build stories with
unique points of view that exemplify the Vail brand and target personas.
f. Public Relations budget increase to expand Fall messaging and expand
influencer program
i. PR efforts driving fall business, with Fall Harvest Dinner and with CBS travel
editor Peter Greenberg's radio show/podcast
ii. Additional family influencer to extend message throughout summer to our
primary Dynamic Family with teens persona
g. Destination Research budget to allow the use of focus groups in three key
destination markets to gain a much deeper understanding of our target audience of
teens, their travel motivators, and how to authentically communicate with them and
their parents
h. Paid Email Marketing budget allows us to employ a complementary strategy to
the organic email approach, with an emphasis on the late summer and fall to drive
visitation through demographic and behavioral email targeting.
i. Specifically targets audiences in the Front Range to encourage travel in
need periods
i. Summer Retail or Crisis budget sets aside easily accessible dollars for an
integrated communications plan should the need arise
Town of Vail Page 3
IV. BUDGET DETAIL
Budgeted revenue from lodging tax collections is proposed to be increased by $200,000
to reflect actual collections in 2018. 2018 lodging tax collections of$3,489,289
increased 5.6% from 2017 actuals. The 2019 amended revenue budget for lodging tax
is proposed at $3,500,000, flat with 2018. The $200,000 increase in revenue will be
used to offset the incremental funding request below.
Budgeted expenses of$200,000 originally earmarked for the Colorado Classic are
requested to be re-appropriated. In addition, an incremental increase of $200,000, or
6% is requested. The amended 2019 budget is proposed at $3,500,000, flat with 2018
actuals.
The request for a re-appropriation of the $200,000 and an incremental allocation of
$200,000 is recommended to be spent as follows:
• Destination & Front Range Media $200,000
• Brand Asset Capture $30,000
• Social Videos $51,000
• PR $25,000
• Destination Audience Research $30,000
• Email Marketing $20,000
• Summer Retail/Crisis $44,000
$400,000
The 2019 amended fund balance is projected to be $1,272,453, 36% of annual
revenues and within Council's 25% directive of annual revenues.
V. ACTION REQUESTED OF VAIL LOCAL MARKETING DISTRICT
Vail Local Marketing District recommends that the Vail Town Council consider the
presentation and approve the requested incremental budget of$200,000 and a re-
appropriation of $200,000.
ATTACHMENTS
VLMD Fund Statement
Town of Vail Page 4
VAIL LOCAL MARKETING DISTRICT 2019 BUDGET
SUMMARY OF REVENUE EXPENDITURES AND CHANGES IN FUND BALANCE
Unaudited
2018 2019 1st 2019
Actual Budget Supplemental Budget
Income
Lodging Tax 3,489,289 3,300,000 200,000 3,500,000
Interest Income 1,397 2,000 2,000
Total Income 3,490,687 3,302,000 200,000 3,502,000
Expense
Destination 1,241,886 1,121,000 149,500 1,270,500
International 192,603 185,000 185,000
Front Range 189,401 190,000 81,500 271,500
Groups and Meetings 701,231 680,738 680,738
Public Relations Expenses 70,714 75,500 9,500 85,000
Content/Influencer Strategy 74,480 60,000 9,500 69,500
Photography/Video 122,000 124,100 20,000 144,100
Research 86,864 117,578 30,000 147,578
Web Site 50,211 53,000 53,000
Admin Miscellaneous 5,410 8,000 8,000
Email Marketing 6,500 5,850 5,850
Branding 113,000 77,200 77,200
Professional Fees
Vail App 16,999 16,034 16,034
Legal and Accounting 25,000 25,000 25,000
Contingency 44,000 44,000
Advertising 32,272 32,200 51,000 83,200
Advertising Agent Fees 45,000 60,300 60,300
Marketing Coordination-TOV 95,000 91,000 91,000
Marketing Coordination-WP 40,000 40,000 40,000
Professional Fees-MYPR 124,960 112,500 5,000 117,500
Ft Range Promotion Fees 22,000 - -
Total Professional Fees 401,231 377,034 100,000 477,034
Special Event Funding
Special Event Funding 200,000 200,000 (200,000) -
Event Liaison 25,000 25,000 25,000
Total Special Events 225,000 225,000 (200,000) 25,000
Total Expense 3,480,531 3,300,000 200,000 3,500,000
Revenue over(Under)Expenditures 10,156 2,000 - 2,000
Beginning Fund Balance 1,260,297 862,297 408,156 1,270,453
Ending Fund Balance 1,270,453 864,297 1,272,453
Fund Balance(25% required) 36% 26% 36%
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