HomeMy WebLinkAbout03. VLMD Second Supplemental
TO: Vail Local Marketing District
FROM: The Vail Local Marketing District Advisory Council (VLMDAC)
DATE: June 2, 2020
SUBJECT: Vail Local Marketing District Second Supplemental
I. SUMMARY
This supplemental proposes budget adjustments needed for the “Crisis” phase of the
recession plan in response to the economic impacts of COVID-19 public health crisis. In
this phase lodging tax revenues of $3.75 million are reduced nearly 50% ($1.85M) to
$1.9M for 2020. To make up for the short fall in revenue, the VLMDAC is proposing to
reduce expenditures by $1,115,000 or 30% from amended budget and use $704,160 of
reserves. This will result in an ending fund balance of $645,948 or 18% of a normal year
of lodging tax revenues and below Council’s 25% directive.
Year to date lodging tax collections (January through March) total $1.5M, down 18% from
prior. April sales tax collections for accommodation services totaled $14,980, down
95.7% down from prior year.
II. BUDGET REDUCTIONS
• 23% reduction in Paid Media (digital, television and print) in Destination markets.
• 100% reduction in EGE air marketing
• 92% reduction in Mexico efforts including PR, sales and advertising.
• 69% reduction in Video and Photo brand and tactical asset capture.
• 12% reduction in Partners’ Professional Fees.
• 63% reduction in Organic Social Media and influencer efforts.
• 19% reduction Group Sales travel trade efforts.
• 100% reduction in Contingency funds ($70K).
• Re-branding and associated production increase by 3%;
offset by above expense and fee reductions
- 2 -
III. ADJUSTED MARKETING PLAN
Given the current situation with COVID -19, the VLMDAC has shifted our strategy and
many of our Marketing, Public Relations and Group Sales tactics, along with our overall
Brand messaging. Below outlines our adjusted plan:
• New brand creative campaign “Find What You’ve Been Missing” developed including
video, print and digital executions
• Media focus is on the Front Range, with digital efforts extending to short-haul drive
markets with all efforts driving to DiscoverVail.com where images, video and messages
on Vail being open and unique offerings are featured
• Short-haul markets are those within a 500-mile radius and that research has shown
travel to Vail and/or Colorado
• Messaging delayed from late March to launch June 1, with flexibility and fluidity to
stop/start as needed
• Social videos showcasing Vail’s offerings and unique experiences in this new situation
• Public Relations focused on Front Range and long lead publications
• Group Sales effort focusing on longer leads
• Event messaging eliminated with potential to market late summer/fall events as
appropriate/to be determined
IV. ACTION REQUESTED OF VAIL LOCAL MARKETING DISCTRICT
The Vail Local Marketing District Advisory Council recommends that the Vail Local
Marketing District approve the 2020 second supplemental budget, resulting in an ending
fund balance equal to 18% of annual revenues and below the 25% minimum.
2020 Budget
1st
Supplemental
2020 Amended
Budget Crisis
2020
Amended
Budget
Income
Lodging Tax 3,590,000 3,590,000 (1,724,160) 1,865,840
Interest Income 2,000 2,000 2,000
Total Income 3,592,000 - 3,592,000 (1,724,160) 1,867,840
Expense
Destination 1,014,512 (15,000)999,512 (347,603)651,909
International 205,000 205,000 (189,832)15,168
Front Range 223,000 223,000 (21,500)201,500
Groups and Meetings 680,738 680,738 (132,148)548,590
Public Relations Expenses 92,500 92,500 (19,550)72,950
Content/Influencer Strategy 83,750 10,850 94,600 (26,350)68,250
Photography / Video 218,000 25,014 243,014 (169,000)74,014
Research 85,000 85,000 (10,000)75,000
Web Site 17,000 17,000 (17,000)-
Admin Miscellaneous 8,000 8,000 (3,000)5,000
Email Marketing - - -
Branding 249,500 249,500 (2,000)247,500
Professional Fees
Database Warehousing and Research 112,500 72,000 184,500 184,500
Discover Vail professional Fees 60,295 60,295 60,295
Website Marketing - 10,000 10,000 10,000
Vail App 10,000 10,000 (4,501)5,499
Legal and Accounting 25,000 25,000 25,000
Contingency 50,000 20,000 70,000 (70,000)-
Advertising 86,000 86,000 86,000
Advertising Agent Fees 62,000 62,000 (44,875)17,125
Marketing Coordination-TOV 95,000 95,000 (14,500)80,500
Marketing Coordination-VVP 40,000 40,000 (24,000)16,000
Professional Fees - MYPR 117,500 117,500 (15,300)102,200
Total Professional Fees 598,000 162,295 760,295 (173,176)587,119
Special Event Funding
Special Event Funding - 3,841 3,841 (3,841) -
Event Liaison 25,000 25,000 25,000
Total Special Events 25,000 3,841 28,841 25,000
Total Expense 3,500,000 187,000 3,687,000 (1,115,000) 2,572,000
Revenue over (Under) Expenditures 92,000 (187,000) (95,000) (704,160)
Beginning Fund Balance 962,453 1,350,108 1,350,108
Ending Fund Balance 1,054,453 1,255,108 645,948
Fund Balance (25% required)29%35%18%
VAIL LOCAL MARKETING DISTRICT 2020 AMENDED BUDGET
SUMMARY OF REVENUE EXPENDITURES AND CHANGES IN FUND BALANCE
RESOLUTION NO. 2, SERIES 2020
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, 2020 THROUGH DECEMBER 31, 2020.
WHEREAS, the Vail Local Marketing District board received and approved the operating plan and budget for the fiscal year 2020 on October 15, 2020; 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 29th day of May, 2020; 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 amended budget for marketing related expenditures beginning on the first day of January, 2020, and
ending on the 31st day of December, 2020. Attested: Signed:
_______________________________ ___________________________________ Kim Langmaid, Secretary Dave Chapin, Chairman
VLMDAC CREATIVE CAMPAIGN, MARKETING PLAN
& SECOND SUPPLEMENTAL BUDGET
JUNE 2, 2020
Agenda
•Research Analysis and Planning
•Revised Creative Campaign
•Reduced Budget and Revised Marketing Plan
Research, Analysis and Planning
-Identified resources to understand travelers' sentiment
-Delayed start of all marketing
-Identified new markets to target
-Explored budget reduction (International, Air, Professional Fees, etc.)
-Reduced Group Sales and PR travel and hosting
-Creative modification of PR efforts (Virtual Happy Hour with Denver Media)
-Reworked creative approach of all marketing materials
REVISED CREATIVE
Find What You’ve Been Missing
The past couple of months have taught us that too much of the same thing, is a boring thing. That life isn’t about staying in and settling for standard, it’s about getting out and seeking out more. So, chase what makes you feel alive. Wander wherever your curiosities take you. Try something new, meet someone new, go somewhere new. Take advantage of every opportunity to seek new adventure. Because you deserve a life full of endless possibilities, here in Vail, you can find the freedom to explore them all.
In Vail, you can find what you’ve been missing.
Find What You’ve Been Missing
:30 Video/TV Spots: Joy, Spark, New Dawn
:15 Video/TV Spots (1 & 2):06 Spots (1, 2,3 &4)
Password: summer
“Find What You’ve Been Missing –New Dawn” was aired in the Front Range on May 24 during “The Match II”, featuring Phil Mickelson & Tom Brady vs. Peyton Manning & Tiger Woods. This was the most-watched golf telecast in the history of cable television.
Find What You’ve Been Missing -Print
Find What You’ve Been Missing –Digital
ADJUSTED BUDGET AND MARKETING PLAN
Crisis Level Budget Reductions
•Lodging Tax Revenues at Crisis level proposes a $1.7M, or 48% decrease from the
2020 original budget
•Expenditures are proposed to decrease $1.1M or 30% from the 2020 amended
budget
•Proposes using additional fund balance of $609,160 resulting is a fund balance equal
to 18% of annual revenues; below the 25% minimum
Budget Recession Plan
Crisis Level: 30% Reduction
Budget Reductions:
•23% reduction in Paid Media (digital, television and print) in Destination markets.
•100% reduction in EGE air marketing
•92% reduction in Mexico efforts including PR, sales and advertising.
•69% reduction in Video and Photo brand and tactical asset capture.
•12% reduction in Partners’ Professional Fees.
•63% reduction in Organic Social Media and influencer efforts.
•19% reduction Group Sales travel trade efforts.
•100% reduction in Contingency funds ($70K).
•Re-branding and associated production increase by 3%; offset by above expense and fee reductions
Revised Marketing Plan
Given the current situation with COVID -19, the VLMDAC has shifted our strategy and
Marketing, Public Relations and Group Sales tactics, along with our overall brand
messaging. Below outlines our adjusted plan:
•New brand creative campaign “Find What You’ve Been Missing”
•Media focus on Front Range and <500 short-haul drive markets
•Marketing efforts point to DiscoverVail.com
•Marketing launch June 1
•Videos and media showcasing Vail’s wide open spaces, outdoor activities and unique experiences
•Public Relations focus on Front Range media and long lead publications
•Group Sales efforts around relationship building, top of mind presence, longer leads
•Removed event messaging in favor of outdoor dining and activities with potential to market late
summer/fall events as appropriate
Post Media Launch Next Steps
Following launch of media, our next steps are:
•Two weeks after each launch, determine which markets are driving bookings
•Gather data on user behavior to deliver up timely, relevant and compelling Vail messaging
•Launch traditional media, digital video, and paid email in the top-performing markets in July
•Focus remainder of digital to support top-performing markets
•Monitor user behavior on DiscoverVail.com,use data to inform improvements to website
•Continuously adjust media presence to account for fluctuations in COVID situation within each market
•Continue strong marketing efforts through the fall
QUESTIONS AND THANK YOU