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Home My WebLink About05. VLMD 1st Budget Supplemental MemoTo: Vail Local Marketing District From: Vail Local Marketing District Advisory Council Date: May 3, 2022 Subject: Vail Local Marketing District 2022 1st Supplemental Budget Request I. BACKGROUND The mission of the Vail Local Marketing District (VLMD) is to market and promote Vail to attract overnight destination guests primarily during the non-ski season time frame, creating economic vitality by increasing the visitor base, sales tax and lodging tax revenues with a focus on mid-week and lower demand time periods. The overarching goal of the VLMD is to drive responsible revenue growth in Vail by focusing on quality of guest, length of stay and guest spend, while effectively communicating community values. II. BUDGET DETAIL The Vail Local Marketing District’s 2022 Operating Plan and Budget was finalized in October of 2021. At that time revenue projections were forecasted conservatively as impacts of COVID-19 to the 2021/2022 winter season were still uncertain. Since then, the town has experienced increased visitation as well as higher ADR across the months. The updated 2022 lodging tax projection totals $4,435,000, up 4% from 2021 actual collections and up 20% from 2019 actual collections. This will generate an additional $610,000 in revenues from the current budget. Expenditures are being proposed to increase by $655,964 for various initiatives including web search optimization, branding and production, and data infrastructure. Details of each request are outlined below. The amended 2022 expenditure budget will total $4,855,964 up $1,208,037 or 33% from 2021 actuals. The 2022 budget utilizes $419,964 of fund balance and is projected to end the year with $2,290,898 of reserves, 52% of annual revenues and above Council’s directive of 25%. During 2020 and 2021, the VLMD reserves increased due to better than expected revenues combined with conservative budgeting and spending during the pandemic. The Vail Local Marketing District Advisory Council (VLMDAC) has identified and prioritized future spending and investments should revenue continue to increase. Examples of future considerations include funding of signature summer events, EGE air alliance guarantee support, on-site research on visitor behavior such as trail usage, and Steward Vail implementation tactics. Town of Vail Page 2 III.SUPPLEMENTAL REQUEST The VLMDAC is recommending a supplemental budget increase of $655,964. The majority of this request focuses on search optimization, database infrastructure, and contingency. A total of $146,350 is requested to create a robust and intentional approach to web search engine optimization and match the search terms to comprehensive website content with enhanced reporting and analytics to manage growth and scale. This will include the following: - Website: $59,350 o Foundational structure for ongoing optimization of web search terms o Web search terms to own our space completely o Website and user experience improvement, management and training - Branding and Production: $29,100 o Updated email templates o Content creation including frequent long-form blog creation - Email Marketing: $57,900 o Triple the amount of outgoing emails with increased segmentation and personalization An additional $191,500 is requested to invest in data, primarily to grow the level of insight on existing customers in the database to enable personalization and drive better engagement and conversion. This will include the following: - Database Infrastructure and Enhancements: $141,500 o 3rd Party Data Append o Data-Driven Media/Measurement Pilot o Email Acquisition - In-resort Data-Capture: $50,000 o Create in-village marketing efforts to drive newsletter signups and website visitation through targeted collateral and interactive event activation The VLMDAC is also requesting $200,000 to replenish and increase the contingency budget. The board has utilized a total of $98,000 of contingency to date. The board appropriated $75,000 of contingency funds to the Travel Classics media event ($75,000) which will occur In the fall of 2022. The VLMD will sponsor and host the premier travel media conference in the world, connecting top freelance travel writers and editors in North America. Contingency was also used to fund a new public relations influencer tool ($3,000), and a Destination Stewardship SMARI Visitor Research study to gather data to inform strategy on value-based marketing ($20,000). These shifts are reflected in the attached fund statement. Town of Vail Page 3 The remaining $118,114 is requested for the following: - $18,475 for an owned photo/video asset management tool that will allow VLMD to enhance availability of visual assets for partners and community. - $19,000 for in-market research in Mexico to understand competition within US mountain resorts and gauge visitor travel expectations. Additionally, a partnership with Santander, the largest credit card company in Mexico, for a fall mid-week promotion. - $25,000 for a social campaign and fall media buy in Mexico. The social campaign will monitor in-market business and the fall media buy will drive September and October visits. - $20,000 to develop a co-op program to encourage influencer hosting by offsetting hosting expenses. - Re-appropriation of $35,639 for items budgeted in 2021 that were not fully completed including giveaway items delayed due to supply chain issues and video and digital production for the “Dream” campaign. IV. BUDGET SHIFTS In addition to the $98,000 of contingency shifts listed above the VLMDAC shifted $45,027 of media spend from Front Range media to Destination media to target audiences more likely to stay off-peak, mid-week, and for a longer period of time. V. ACTION REQUESTED OF VAIL LOCAL MARKETING DISTRICT The Vail Local Marketing District Advisory Council recommends that the Vail Local Marketing District approve the supplemental budget of $655,964. 2021 Actuals Under/(Over) Budget 2022 Budget Budget Shifts 1st Supplemental 2022 Amended Budget Income Lodging Tax 4,271,879 871,879 3,825,000 610,000 4,435,000 PY Lodging Tax 4,850 4,850 - Interest Income 281 (719) 1,000 1,000 Misc Income 2,970 2,970 - Total Income 4,279,980 876,010 3,826,000 - 610,000 4,436,000 Expense Destination 943,457 (6,256) 835,000 45,027 880,027 International 44,090 910 56,000 44,000 100,000 Front Range 449,774 15,189 218,500 (60,027) 158,473 Groups and Meetings 201,894 48,106 265,000 265,000 Public Relations Expenses 98,000 13,000 177,000 (55,000) 122,000 Content/Influencer Strategy 50,149 (49) 88,000 3,000 20,000 111,000 Photography / Video 158,752 (17,752) 240,000 15,000 18,475 273,475 Research 64,218 10,782 143,000 21,250 164,250 Web Site 173,449 37,569 213,300 59,350 272,650 Admin Miscellaneous 4,663 13,337 8,000 8,000 Email Marketing 14,003 12,608 94,640 57,900 152,540 Branding 564,936 52,564 479,500 30,000 64,739 574,239 Contingency 11,532 130,760 (98,000) 200,000 232,760 Destination Stewardship Mgmt Plan - 100,000 100,000 Database Warehousing and Research 421,969 42,631 591,300 (41,250) 141,500 691,550 In-Market Marketing 2,982 (2,982) 105,000 50,000 155,000 Professional Fees Legal and Accounting 25,000 - 25,000 25,000 Lodging Liaison 43,175 4,825 48,000 48,000 Advertising Agent Fees 191,000 4,000 160,000 10,000 170,000 Marketing Coordination-TOV 95,000 - 95,000 95,000 Marketing Coordination-VVP 37,500 - 41,500 41,500 Professional Fees - MYPR 38,917 16,083 60,500 130,000 190,500 Total Professional Fees 430,592 24,908 430,000 140,000 - 570,000 Special Event Funding Event Liaison 25,000 - 25,000 25,000 Total Special Events 25,000 - 25,000 - 25,000 Total Expense 3,647,926 256,098 4,200,000 - 655,964 4,855,964 Revenue over (Under) Expenditures 632,053 1,135,077 (374,000) - (45,964) (419,964) Beginning Fund Balance 2,078,809 2,710,862 2,710,862 Ending Fund Balance 2,710,862 2,336,862 2,290,898 Fund Balance (25% required) 63% 55% 52% VAIL LOCAL MARKETING DISTRICT 2022 AMENDED BUDGET SUMMARY OF REVENUE EXPENDITURES AND CHANGES IN FUND BALANCE RESOLUTION NO.1, SERIES 2022 VAIL LOCAL MARKETING DISTRICT A RESOLUTION ADOPTING A BUDGET AND MAKING APPROPRIATIONS TO PAY THE COSTS, EXPENSES AND LIABILITIES OF THE VAIL LOCAL MARKETING DISTRICT, FOR ITS FISCAL YEAR JANUARY 1, 2022 THROUGH DECEMBER 31, 2022. WHEREAS, the Vail Local Marketing District board received and approved the operating plan and budget for the fiscal year 2022 on September 21, 2021; and WHEREAS, in accordance with CRS section 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 26th day of April, 2022; 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 budget and appropriates $4,855,964 marketing related expenditures beginning on the first day of January, 2022, and ending on the 31st day of December, 2022. Attested: Signed: _______________________________ ___________________________________ Travis Coggin, Secretary Kim Langmaid, Chairman