The URL can be used to link to this page

Home My WebLink About02. VLMD 2021 Operating Plan & Budget To: Vail Local Marketing District From: Vail Local Marketing District Advisory Council Date: September 15, 2020 Subject: Vail Local Marketing District 2021 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 non-ski season timeframe, creating economic vitality by increasing the visitor base, sales tax and lodging tax revenues. The overarching goal of the VLMD is to strengthen Vail’s position as a year-round destination that appeals to a broad audience by elevating the non-ski season 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 non-ski season timeframe occupancy • Increase sales tax revenue • Increase lodging tax revenue • Increase group occupancy II. BUDGET DETAIL Budgeted revenue from lodging tax collections is proposed at $2,100,00 for 2021. This is a 12% decrease from the 2020 amended budget and a 43% decrease from 2019 actual collections. The assumptions for this projection are conservative and consistent with the town’s current projected sales tax revenue for 2021. Proposed budgeted expenditures are $2,044,024 for 2021 programs. This is a 21% ($579,976) decrease from the 2020 amended budget. The 2021 ending fund balance is projected to be $1,383,989, which is 37% of annual revenues, and above Council’s directive of 25% of annual revenues. Town of Vail Page 2 The VLMDAC is recommending a 2021 strategic plan and budget that continues the approach established in 2020, in addition to helping us recover from the impacts of COVID and setting us up for success in the years to come. The 2021 Operating Plan and Budget aligns with these established strategies: • Data-driven marketing – Continue to build out available data to drive efficient and personalized content that leads to conversion • Data Systems Enhancements – Continue to drive and amplify efforts to get the right audience into our data systems so we have 1st party data available for future use • Content Refinement – Use data to identify and prioritize content needs within our website and social channels With a 42% budget reduction from 2020, the VLMDAC recommends the following shifts to our 2021 budget: Overall resources allocated to driving overnight visitation has been reduced from 72% to 63% as a result of reductions in the following areas: • Paid Media efforts in Destination and Front Range markets have been decreased overall by 48% with the removal of traditional media (TV/Print/Out of Home) with the emphasis placed on digital media efforts. In addition, funds allocated to overall digital efforts have been reduced by 10%. Digital media’s lower cost per impression and tracking ability allows us to be the most efficient with our dollars. Digital media efforts will focus slightly higher on the Front Range market, as this is our largest opportunity given current market conditions. However, should the situation with COVID improve, or additional revenue becomes available, Destination media will increase. • A strategic shift in Groups with a budget reduction of 50% by cutting direct sales, travel/tradeshows, industry memberships, site tour/FAM tours and event recruiting. Group sales efforts will focus on industry relationships, local lodging community relationships, targeting meeting plans, promoting Vail through marketing services (CVENT) and positioning Vail for a quick recovery when group and meeting business rebounds. • Resources allocated to Mexico have been reduced by 95%, as the travel restrictions from this market restrict non-essential and non-second homeowner travel at this time. Basic exposure and awareness will be maintained through public relations efforts and will be ready to re-allocate dollars once the conditions warrant. In addition, budget reductions have been implemented in the following areas: Town of Vail Page 3 • Public Relations efforts by 32% by reducing in market media travel, community relations, media gifts, PR Newswire distribution and other expenses. • Creative development, branding and production expenses by 63%, as the 2021 creative will be a refinement of existing creative rather than the development of new assets. • Asset acquisition of new photography and video footage by 66% with the removal of a large scale “brand” shoot. • Overall partner fees by 43% with reductions in scopes of services and some movement of responsibilities to the Town of Vail. • Social video asset acquisition and production by 87% by using existing assets/produced pieces in social marketing efforts. • Removal of any contingency line item. Budget levels will remain consistent from 2020 to 2021 in the following areas: • Data systems/Warehousing annual software investments and partnerships with Adara, SalesForce and Air DNA • The social media influencer program returns to previous 2020 levels allowing for additional influencer opportunities • Asset acquisition of tactical photography and video footage utilizing local partners and talent. Areas of budget increases will allow for new initiatives, as well as additional investment in existing programs including: • New investment in Data Systems Roadmap Development/Acceleration Initiative • New investment in Lodging Task Force/Liaison Initiative • Continued support and investment to optimize and enhance DiscoverVail.com (47% increase) III. ACTION REQUESTED OF VAIL LOCAL MARKETING DISTRICT VLMDAC recommends that the Vail Local Marketing District approve the 2021 Operating Plan and budget of $2,044,024. 2020 Budget 1st Supplemental 2020 Amended Budget 2nd Supplemental- Crisis 2020 Amended Budget 3rd Supplemental Proposed 2020 Amended Budget Proposed 2021 Budget Income Lodging Tax 3,590,000 3,590,000 (1,724,160) 1,865,840 525,000 2,390,840 2,100,000 PY Lodging Tax - - - 208,765 208,765 - Interest Income 2,000 2,000 2,000 2,000 300 Total Income 3,592,000 - 3,592,000 (1,724,160) 1,867,840 733,765 2,601,605 2,100,300 Expense Destination 1,014,512 (15,000) 999,512 (331,603) 667,909 (231,587) 436,322 393,082 International 205,000 205,000 (189,332) 15,668 15,668 - Front Range 223,000 223,000 (21,500) 201,500 243,587 445,087 243,082 Groups and Meetings 680,738 680,738 (156,148) 524,590 524,590 250,000 Public Relations Expenses 92,500 92,500 (19,550) 72,950 72,950 50,000 Content/Influencer Strategy 83,750 10,850 94,600 (50,350) 44,250 44,250 50,100 Photography / Video 218,000 25,014 243,014 (14,705) 228,309 (191,309)37,000 93,000 Research 85,000 85,000 (10,000) 75,000 75,000 75,000 Web Site 17,000 60,295 77,295 66,215 143,510 143,510 220,200 Admin Miscellaneous 8,000 8,000 0 8,000 8,000 8,000 Email Marketing - - - - 360 Branding 249,500 249,500 (128,500) 121,000 191,309 312,309 118,000 Professional Fees Database Warehousing and Research 112,500 72,000 184,500 (79,010) 105,490 40,000 145,490 118,700 Website Marketing - 10,000 10,000 (10,000)- - - Vail App 10,000 10,000 (4,501) 5,499 5,499 - Legal and Accounting 25,000 25,000 25,000 25,000 25,000 Contingency 50,000 20,000 70,000 (70,000)- - - Advertising Agent Fees 148,000 148,000 (62,375) 85,625 85,625 150,000 Marketing Coordination-TOV 95,000 95,000 (14,500) 80,500 80,500 95,000 Marketing Coordination-VVP 40,000 40,000 0 40,000 40,000 37,500 Professional Fees - MYPR 117,500 117,500 (15,300) 102,200 102,200 92,000 Total Professional Fees 598,000 102,000 700,000 (255,686) 444,314 40,000 484,314 518,200 Special Event Funding Special Event Funding - 3,841 3,841 (3,841) - - Event Liaison 25,000 25,000 25,000 25,000 25,000 Total Special Events 25,000 3,841 28,841 25,000 - 25,000 25,000 Total Expense 3,500,000 187,000 3,687,000 (1,115,000) 2,572,000 52,000 2,624,000 2,044,024 Revenue over (Under) Expenditures 92,000 (187,000) (95,000) (704,160) 681,765 (22,395) 56,276 Beginning Fund Balance 962,453 1,350,108 1,350,108 1,350,108 1,327,713 Ending Fund Balance 1,054,453 1,255,108 645,948 1,327,713 1,383,989 Fund Balance (25% required)29%35%17%36%37% VAIL LOCAL MARKETING DISTRICT 2020 AMENDED BUDGET SUMMARY OF REVENUE EXPENDITURES AND CHANGES IN FUND BALANCE VLMDAC TOWN COUNCIL PRESENTATION SEPTEMBER 15, 2020 Agenda •2020 Revenue Update and Supplemental •Approach •2020 Accomplishments •2020 Creative •2021 Operating Plan + Budget 2020 REVENUE UPDATE & SUPPLEMENTAL •Year to date lodging tax collections (January-July) total $1.9M •21.6% increase from the 2020 Amended Budget •21.5% decrease from 2019 Actuals •Exceeds the annual 2020 Crisis Lodging Tax revenue projection of $1.86M •The supplemental proposes to reflect an increase of $525,000 in lodging tax collections (totaling $2.39M) •Amended forecast will total $2.39M (35.5% decrease from 2019 Actuals) •The additional revenue will be used to replenish the VLMD fund balance and increase 2021 marketing efforts 2020 Revenue Update To kick start new 2021 efforts, it is recommended that the below initiatives begin in 2020: 1.Data Systems Roadmap and Acceleration: $40,000 –This roadmap will complement and increase effectiveness of current data systems with a 3-year outlook 2.Lodging Liaison: $12,000 –This position will work with the lodging community to create a cohesive voice and encourage open dialogue with regular reporting of VLMD strategies, of messages and results. 2020 Budget Shifts: 1.$11,400 from Public Relations Expenses to Photo/Video Asset Acquisition 2.$243,587 from Destination media to Front Range media 3.$191,309 from photo/video asset capture to new brand concepting and development in response to COVID 19 4.$2,000 from Intercept Survey to Social Channel Growth 5.$1,500 from Trip Giveaway to Enhanced Website Server With additional revenue, results in Fund Balance of $1.33M (36% of 2019 Annual Revenues) 2020 Supplemental Request APPROACH 2019 –1 Year Ago We were missing a large part of our data story and we set out to find solutions to fill in this missing information. BOOKING CONVERSION EXPERIENCE SHARING / Word Of Mouth ADVERTISING AWARENESS 2020 -Today Today due to the $300,000 supplemental investment, we have: -Our own website -Multiple sources of data inputs -Outputs that we can utilize to impact our revenue and Net Promoter Score (NPS) goals. BOOKING CONVERSION EXPERIENCE SHARING / Word Of Mouth ADVERTISING AWARENESS BOOKING CONVERSION EXPERIENCE SHARING / Word Of Mouth ADVERTISING AWARENESS 2021… We will continue to use the data collected to make informed and rapid optimizations that will impact our revenue and Net Promoter Score (NPS) goals. We have developed a strategic operating plan and budget that continues the approach established in 2020, will help us recover from the impacts of COVID and set us up for success in the years to come. 2020 and Beyond Approach Continue to build out available data to drive efficient and personalized content that leads to conversion 1. Data-Driven Marketing Continue to drive and amplify efforts to capture the right audiences into our data systems 2. Data Systems Enhancement Use data to identify and prioritize content needs within our website and social channels 3. Content Refinement 2020 ACCOMPLISHMENTS •Secured DiscoverVail.com URL •Developed and launched new website on March 5 •We control content •Incorporated BookDirect lodging integration •Robust and inclusive shopping, dining, activities content •Groups RFP submission •Media Center section •COVID-19 Travel section DiscoverVail.com Launched •Brought together world-class data partners and providers to build a robust data system for the future •We now own data that was not previously available to us •We now track paid media impressions, to website interactions, to lodging bookings Data System Up and Running Customer Relationship Management Advertising 3rd Party Data Data Management Platform Website / Email, TOV Wifi gating, Event Registration, Vail App Conversion, Path to Purchase, Booking window etc. Paid Media: Click Thru Rate, Video Completion Rate, Cost Per Click, etc. Data Systems Outputs: Analysis + Optimization Platform Inputs: Sources Feeding our System •Using over 100K+ data points •Created 37 consumer filters to: •Uniquely message to specific audiences •Create and target lookalike audiences •Retarget audiences and messaging •Making data driven/smarter marketing decisions •Optimize tactics, messaging, audience, timing, etc. •Inform 2021 planning •Establish new metrics and baselines, and measure return on ad spend Generating Data for Optimization •Developed and rolled out new visual look and feel •Created expanded community resource toolkit New Visual Identity Established •Shifted campaign strategy in early March to address consumer travel during COVID •New media plan focused on drive markets with weekly review to account for changing situation •Updated creative to reflect Vail social distanced and open-air activities •Created all new tactics including digital, video, social, print, email, PR and groups •Reduced 2020 budget of $3.687M by 30% (=$1.115M) to crisis level budget of $2.572M COVID-19 Campaign Strategy 2020 CREATIVE Family Digital Banner Creative Active Professional Digital Banner Creative Adventure Digital Banner Creative DiscoverVail.com 5280 Magazine June & July 2020 Digital Video / TV •Joy :30 •Spark :30 •Spark :15 •New Dawn :15 •Fall :30 •Fall :15 Password: summer Fall messaging in market through mid-October: •Front Range Media: digital banners, social, email, 5280 Magazine, TV •Public Relations •Fall Events 2020 Fall 2021 OPERATING PLAN + BUDGET 2021 Budget –Overview •$2,100,000 total Lodging Tax Collections •Staff will continue to analyze and update revenue forecasts •$2,044,024 Total Expense Budget •21% reduction (= $527,000) from 2020 $2.62M amended budget •42% reduction (= $1,455,976) from 2020 $3.5M original budget •Results in an ending Fund Balance of $1.38, 37% of 2019 annual revenues 2020 Budget –$2.6M Amended StrategyBrandingResearchPhoto/Video Fees DriveOvernight & Out-of-state Visitation Destination FR Overnight International Groups Public Relations Web/CRM/Social 28% 72% 25% 22% 7% 26% 3% 15% Digital Traditional 54% 46% 5%7% Contingency3% Note: Fund Balance at 36% International 2021 Budget –$2.04M (-42% YOY) Strategy Branding Research Photo/Video Fees Drive Overnight & Out-of-state Visitation Destination FR Overnight Groups Public Relations Web/CRM/Social 37% 63% 19% 26% 1% 20% 4% 31% Digital100% Note: Fund Balance at 37% 2021 Budget –Increases/ New Initiatives •New investment in Data Systems Roadmap Development/Acceleration Initiative •New investment in Lodging Task Force/Liaison Initiative •Continued support and investment to optimize and enhance DiscoverVail.com (47% increase) 2021 Budget –Maintenance •Data Systems & Data Warehousing annual software investment •Digital advertising in Destination and Front Range markets remains strong, with 10% reduction from 2020 •Influencer Program returns to pre COVID levels •Photo/Video Tactical Asset Acquisitions 2021 Budget –Decreases •Creative/branding and production reduced by 65% •Photo/Video Brand Asset Acquisition reduced by 66% •Partner fees reduced by 43% •Traditional (TV, Cable, Streaming) media advertising in Destination and Front Range markets cut entirely •Public Relations by 32%, reducing in market media travel, community relations, PR Newswire distribution and expenses •Groups reduced by 63%, shifting from traditional group sales (travel trade, lead generation) to hybrid group sales/group marketing/destination support •International (Mexico) reduced by 95%, with remainder focused on exposure/awareness •Burke Brand Research removed 2021 Budget –Decreases 2021 Budget Prioritized Initiatives Should additional budget become available,and if/when COVID circumstances improve, we would prioritize scaling up the following: •Increase paid media (prioritize Front Range TV) •Reinstate Public Relations in-market travel and Newswire •Increase Mexico efforts if/when travel restrictions are lifted •Evaluate Group Sales strategy and tactics •Reassess Partner Professional Services & Fees •Reinstate Burke and/or other brand research QUESTIONS & THANK YOU APPENDIX Traditional vs. Digital Media •Minimum investment of $75K for Front Range would only result in a 35% reach with an average frequency of 3.3 •Digital media allows for shorter lead times for planning and materials making it more flexible •Digital media can be tracked from media performance metrics to directional impact on bookings •Digital has a lower impression cost and can be purchased on cost per action helping to stretch dollars further Traditional vs. Digital Media •Digital reaches all audiences including 55+ •Social media accounts for the largest share of time spent online among adults 55+ nationally (source: Global Web Index, 2019) •A55+ in Denver-Boulder spend the most online time using social media followed by news content, according to Nielsen-Scarborough data –Spend an average of 22-44 hours weekly on social media (source: Nielsen, 2020) –Spend an average of 10-22 hours weekly consuming online news (source: Nielsen, 2020) •Super Boomers in the Front Range were the top performing audience on Facebook/Instagram in 2019 –In 2019, they had the top CTR at 0.33% and highest VCR at 92% Groups –Background •Events and gatherings (groups) have been severely impacted by COVID social distancing requirements and gathering sizes •Historical DestiMetrics reports show group business exceeds leisure business in Town of Vail in the months of May, June, September, and October •We understand the budgetary reductions and restrictions and will work to ensure a strategic shift within VLMD budget allotment to position group sales for a strong rebound when conditions merit Groups –Trends •Many 2020 group programs have rebooked to 2021 or beyond •Smaller group programs expected (with exceptions such as Mountain Travel Symposium, still planning on April 2021) •Site tours and group leads are still coming in, albeit at a lower pace Groups –Strategic Shifts •Shift efforts from traditional group sales (travel trade, lead generation) to a hybrid group sales-group marketing-destination support role at the request of the VLMDAC –Focus on industry relationships with group & meeting industry on behalf of the brand –Strengthen local lodging community relationships –Position Vail for a quick recovery when group & meeting business rebounds •Lead community marketing services (primarily CVENT) to increase brand awareness and group consideration of Vail –Ensure we are targeting meeting planners and promoting Vail and Vail lodging partners as a group destination, with leads sent direct to lodging partners Groups –Tactical Shifts •Focus on database 1,705 Colorado meeting planners with key message: Vail is Open for Business –We’re Ready When You Are. –Efforts to focus on drive market, SMERF events, and being flexible to adapt to industry trends as needed to drive group business •Reduced budgets for direct sales, travel/tradeshow, industry memberships, site tour/FAM tour, and event recruiting