HomeMy WebLinkAbout06. VLMD 2021 Operating Plan
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
Strategy
Branding
Research
Photo/Video
Fees
Drive
Overnight &
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