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HomeMy WebLinkAbout2006-08-20; Carlsbad Tourism Business Improvement District; 0206-4; CTBID Marketing PlanCARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT AGENDA BILL AB# 0206-4 MTG. 2-8-06 TITLE: MARKETING PLAN CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT (CTBID) DEPT. ADMIN SERVICES ORIGINATO CITY ATTY RECOMMENDED ACTION: Accept the report from staff. The Board may also accept a report from the Carlsbad Convention and Visitors Bureau regarding the Tourism Marketing Plan for a Business Improvement District Funded Bureau. Following the presentations, the Board may provide appropriate direction to staff. ITEM EXPLANATION: The primary purpose for forming the CTBID was to allow the tourism industry to take charge of the marketing and promotion activities that are essential to creating a healthy tourist based economy, and to provide a funding source that would provide sufficient revenue to support these activities. The creation of the district and the CTBID Board has given the tourism industry both the control and the funding to embark on a significant marketing program. As part of the initial formation process, the City Council advanced the funds needed to finance a comprehensive marketing study that looked at Carlsbad's tourism industry and those activities that would bolster the existing tourism economy. A copy of the marketing plan developed by SMG - Strategic Marketing Group - is attached for the information of the Board. Since the plan was prepared for the CTBID and the Carlsbad Convention and Visitors Bureau (CCVB), the Board may ask the CCVB president, Kurt Burkhart, to provide a brief overview of the marketing plan at this time. Following the presentations, the Board may wish to direct staff to return with contract documents necessary to implement the marketing plan. FISCAL IMPACT: This is an information item. EXHIBITS: 1. Carlsbad Convention & Visitors Bureau Tourism Marketing Plan for a Business Improvement District Funded Bureau DEPARTMENT CONTACT: Jim Elliott, 760-602-2409, e-mail: ielli@ci.carlsbad.ca.us Carlsbad Convention & Visitors Bureau Tourism Marketing Plan for a Business Improvement District Funded Bureau SMG STRATEGIC MARKETING GROUP 3M P.O. Box 10109 South Lake Tahoe, California 96158 (530) 541-2462 FAX (530) 541-8720 www.smgonline.net Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Table of Contents Section 1: Project Overview 2 I. Introduction 2 II. Project Goals & Objectives 2 III. Elements of Carlsbad Tourism 6 Section 2: Macro Trends 8 I. California Macro Trends 8 II. California Economic Trends 9 III. California Demographic Trends 10 IV. Travel, Social and Cultural Trends 13 Sections: Micro Trends 15 I. Size and Scope of the Carlsbad Tourism Market in Perspective 15 II. City of Carlsbad Lodging Industry Overview 18 Section 4: Carlsbad Product Experience 21 I. Product/Experience Profile 21 II. Visitor Benefits 23 III. Carlsbad Strengths, Weaknesses, Opportunities and Threats 24 Section 5: The Competition 28 I. Direct Competitors 28 II. Indirect Competitors 31 Section 6: Carlsbad CVB Mission, Goals & Objectives 33 I. Carlsbad CVB Mission Statement 33 II. Goals 33 III. Core Objectives 34 Section 7: Marketing Opportunity & Target Markets 35 I. Carlsbad Marketing Opportunity 35 II. Target Markets 37 Section 8: Marketing Strategies 39 I. Branding/Positioning 39 II. Differentiate the Destination 41 III. Generate Room Nights 41 Section 9: Carlsbad CVB Business Model 43 Section 10: Carlsbad CVB Business Model Action Plan 46 Brand Building Stage: 46 I. Advertising/Promotions/SalesA/isitor Information 46 II. Strategic Partners 50 III. Public Relations/Community Education 51 Implementation Stage: 53 I. Website Enhancements/Visitor Communication 53 Brand Loyalty Stage: 55 I. Collect Visitor Information/Measurement 56 Section 11: Organizational Structure 58 Section 12: Carlsbad CVB Budget 60 Appendix 62 SMG Carlsbad Convention & Visitors Bureau Strategic Marketing Plan ; Project"•*:<* I. Introduction For many years, tourism funding for tourism promotion organizations has primarily been funded through the collection of Room Tax (Transient Occupancy Tax) levied on visitors when they stay at a local lodging facility. The tax is then collected by the appropriate jurisdiction, either County or City, and the collected tax funds flow into a general fund. At that point local jurisdictions have funded tourism by reinvesting those collected funds towards programs implemented by tourism promotion organizations. In some cases, the amount funded is decided by formula, but in many cases it is allocated based on competing budget priorities, often times against popular programs like police and fire protection, recreation, etc. To date, many tourism promotion organizations have been able to maintain funding and, in some cases, increase funding levels through this model. But times are changing. Over the past five years, the State of California has faced significant budget challenges. State politicians have increasingly turned to appropriating local funds as one method of balancing the State budget. This action has put increased pressure on local cities and counties and, as a result, many regions have seen tourism funding reduced or cut entirely. To combat this trend and restore a source of funding that cannot be allocated for other purposes, many tourism communities are implementing Hotel/Tourism Business Improvement Districts (BIDs). These improvement districts have been formed in a number of situations by local lodging operators to specifically fund tourism promotion efforts. In the BID process, local lodging operators agree to self-assess themselves, collect the money and pass the funds onto a designated tourism promotion organization, most often the convention and visitors bureau. This process has already been implemented in a number of communities in California and will continue to occur in the future. Quite a few communities are planning to develop a BID as a hedge against potential future reductions that would threaten tourism-based economies. This process should be viewed as an investment by the lodging community. Not unlike the investment an individual might make with their own hard-earned dollars. To this end, the Strategic Marketing Group (SMG) was retained by the Carlsbad Convention and Visitors Bureau to develop the following marketing plan in conjunction with the Carlsbad tourism community. In this plan SMG seeks to clearly identify the potential challenges and opportunities, marketing programs, organizational structure and Return on Investment (ROI) the Carlsbad tourism community may achieve with the anticipated BID funds. This plan should aid potential participants in assessing the viability of this tourism investment and identify the future direction for tourism marketing efforts. II. Project Goal & Objectives A. Project Goal To provide the Carlsbad Convention & Visitors Bureau (Carlsbad CVB) and the local tourism community with a comprehensive plan for future tourism promotion efforts utilizing anticipated BID funds. SMG Carlsbad Convention & Visitors Bureau Strategic Marketing Plan B. Project Objectives 1. Solicit input for the development of a marketing plan/strategy for the Carlsbad tourism community assuming the projected BID funds are realized. 2. Identify a transition strategy from the current CVB status to that of being fully funded under the BID. 3. Identify and assess potential cooperative opportunities with other area convention and visitor bureaus. 4. Develop 3 and 5 year Return on Investment (ROI) models to illustrate the impact of the BID funds on the lodging industry. C. Study Area The area of study included the City of Carlsbad in general along with the surrounding areas as indicated in the map below. :,.-,v,^. >i,4V>f '"^|;:i;/4:i4>,:a4;{i4fel™£.n SMC3 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan D. Project Design The project design consisted of the following three phases: Carlsbad Project Scope Phase 1 !-fv K '"-;^Phase2}l!:"^\ K . Phase 3y- Data/linformation | \ Data/Information | \ Business Model Collection^I/ Analysis IK I/ Development/ Final Marketing Plan Phase I: Data/Information Collection Data and information collection consisted of a number of distinct activities that included interviews, a review of information from Carlsbad, as well as industry information from outside the area. 1. Local Interviews SMG conducted individual interviews with key members of the Carlsbad tourism community. Interviews included individuals from local government, the lodging industry, and the Carlsbad Convention & Visitors Bureau. While these interviews were wide ranging, several important themes became apparent and are summarized below: - There is very good support for the Business Improvement District in Carlsbad with the funds to be used for tourism promotion. - There is a strong interest in the funds going to the Carlsbad Convention & Visitors Bureau to implement tourism promotion programs on behalf of the community. - Those interviewed recommended that a key program should be to help build the Carlsbad brand and increase awareness within the marketplace. A number of those interviewed indicated the BID funds were also necessary because additional lodging inventory would be available within the next few years and would have an impact on the lodging industry. Developed programs need to be able to benefit all aspects of the lodging industry and be measurable and actionable. 2. Carlsbad Information SMG reviewed a significant amount of information from Carlsbad and the tourism/hospitality industry including the following: All materials produced by the Carlsbad Convention & Visitors Bureau including the current CVB Marketing Plan Lodging and Transient Occupancy Tax data and information Smith Travel lodging information Correspondence regarding the Business Improvement District Relevant newspaper clippings Carlsbad Convention & Visitors Bureau Strategic Marketing Plan 3. Industry Information Travel data relevant to Carlsbad and San Diego County was obtained from the California Office of Tourism including the following: - California Travel Impacts by County, 1992-2003 California Transient Occupancy Tax by Jurisdiction Phase II: Data/Information Analysis SMG conducted a thorough analysis of the collected data in order to fully understand the current marketplace, the competition, and Carlsbad's strengths, weaknesses, opportunities and threats. Phase III: Final Strategic Marketing Plan Following the comprehensive analysis, SMG developed a long-term plan outlining target markets, marketing opportunities, strategies and action steps for achieving Carlsbad's identified goals and objectives. SMS Carlsbad Convention & Visitors Bureau Strategic Marketing Plan III. Elements of Carlsbad Tourism When considering tourism in general and Carlsbad specifically, it is important to understand the elements that comprise the tourism experience. These elements are outlined by Mclntosh, Goeldner and Ritchie5, and include the following: Tourism Element Characteristics 1. Natural Resources Natural assets unique to the region. 2. Infrastructure Roads, utilities, air access, etc. All elements that help support the visitor's experience. 3. Hospitality Human elements that interact with and serve the visitor. 4. Visitor Services Lodging, F&B, and retail services designed to assist the visitor. 5. Attractions Natural and man-made facilities, events and local residents that provide visitors with experiences. 6. Organizational Organizations and processes that work to attract visitors to the destination using a variety of promotional techniques. It is clear that Carlsbad possesses all of these elements. However, if any of these elements are not working together, it impacts the overall tourism effort. As such, it is important to understand that these elements, in and of themselves, are not enough. To truly maximize Carlsbad's efforts, the following support is necessary: • A market-focused and market-driven strategy Too often organizations and regions can lose focus of a market-driven strategy for tourism promotion and become concerned with other political matters that arise. Unfortunately, marketing strategies and programs often get displaced by political issues and discussions. • Funding In order to realize its stated goals, an organization needs to have the necessary funding levels to achieve the identified tasks. 5 Tourism, Principles, Practices and Philosophies, and the Strategic Marketing Group SMG Carlsbad Convention & Visitors Bureau Strategic Marketing Plan • Cooperation The primary tourism organization needs to foster cooperation between other tourism promotion organizations as well as the greater political community. • Vision The primary tourism organization needs to provide a vision for the greater community. Community Benefits If all of these components work in unison along with the necessary resources and funding, the local community should benefit in a number of areas including: • Positive Return on Investment (ROI) to those that have invested in tourism promotions • Enhanced quality of life - Recognition of the importance of protecting natural elements which add to visitor satisfaction as well as local quality of life. • Improved infrastructure and local services - Tourism generated tax dollars can play an important role in municipal and county funding for local services. • Jobs and business improvement - Tourism often adds to the revenues that, in turn, increase employment and strengthen local business. • Enhanced image and economic development value which will help to attract and retain business entities With the advent of the BID, Carlsbad will have made a significant change in how it funds tourism, which has historically been funded through the general fund. SMQ Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Section 2: Macro ; '4, \ , "V» ft ».B> ft ',' - .J, Within the travel and tourism industry, significant changes are occurring in the macro environment that impact tourism destinations like Carlsbad. Following is a summary of the key tourism, economic and demographic trends that will help to provide a comprehensive context for the development of Carlsbad's strategic direction. I. California Macro Trends A. Tourism in California The tourism industry in California is one of the major economic sectors within the state. In fact, California is the most visited state in the United States and accounted for 10.7% of all domestic travel in 2003.6 Each year, millions of California residents and visitors travel within the state to experience its wide variety of attractions, scenic beauty and mix of people. According to the state of California, $82.5 billion was generated by direct travel spending in 2004, a 7.4% increase over the preceding year. Additionally, this travel spending translated into 892,600 jobs with earnings of $26.5 billion. The tourism industry is one of the top industries in the State of California providing significant tax revenue and employment. As a tax generator, tourism generated approximately $5 billion in revenues for state and local governments. Figure 1 below outlines the tax revenues generated by travel spending within the state over the past nine years. Figure 1 California Tax Revenues Generated by Travel Spending ($ Billions) $1.0 $0.0 1996 1997 1998 1999 2000 2001 2002 2003 2004 I Local Taxes D State Taxes d Total Tax Receipts Source: Dean Runyan Associates ' California Travel & Tourism Commission SMB Carlsbad Convention & Visitors Bureau Strategic Marketing Plan B. 2003 Total California Travel In terms of tourism trends within the state, visitor volumes have been fairly consistent over the past several years with Californians representing the lion's share of the state's travel and tourism industry. In 2003, the state of California received an estimated total of 303 million "person trips" to and through the state. Of this total "person trips", 254 million or 85% were made by California residents, 45 million or 15% were made by U.S. resident out-of-state visitors, and 4 million or 1% were made by international travelers. Figure 2 2003 Total California Travel Visitor Volume (Millions) 15% 85% 03International HCA Resident DOut-of-State Source: California Travel & Tourism Commission With regard to business and leisure travel within the state, approximately 75% of individual "person trips" are for leisure purposes and 25% for business. II. California Economic Trends The California economy can best be characterized by its size and strength. As indicated by the following key economic indicators listed in the table below, it is estimated that total taxable sales in 2004 was $486 billion and is projected to grow to $566 billion by 2007. Table 1 Key California Economic Indicators Taxable Sales Unemployment % Personal Income Growth Consumer Price Index 2000 $441 b 5% 6.9% 3.7% 2001 441 b 5.3% 2% 3.9% 2002 $440b 6.7% 1 .7% 2.4% *2Q03 N/A 6.7% 3.7% 2.4% 2004 $486b 6.2% 5.6% 2.7% 2005f $513b 6.2% 5,8% 2,9% 2006t $541b 6.3% 6.0% 2.5% 2007f $566b 6.3% 5.8% 2.4% Source: Slate of California, Department of Commerce As can be seen in Table 1 above, the California economic picture has brightened significantly since 2002. Taxable sales and personal income have continued to grow while unemployment has decreased. Furthermore, it is expected that the increase in personal income projected for 2004 and beyond combined with low inflation should have a positive impact on the travel and tourism industry within the state. Carlsbad Convention & Visitors Bureau Strategic Marketing Plan III. California Demographic Trends Since the late 1990s, population in the state of California has increased steadily. Over the next decade, the California population and personal income levels are projected to change significantly. Change will occur in several noteworthy areas including those listed below. Table 2 California Growth Indicators 2003-2012 Population (Millions) Households (Millions) Total Personal Income (Billions 1997$) Per Capita Personal Income (1997$) Avg. HH Income (1997$) 2003 34 12 $1,192 $33,326 $100,923 Projected 2012 40.8 13.7 $1,746 $42,700 $126,000 :- ' ••''' :-i %Chahge; 20% 14% 47% 29% 25% Source: Center for Continuing Study of the California Population During the 2003-2012 time period, the California population is projected to increase from 34 million to 40 million, a 20% increase. Additionally, personal income levels for Californians are projected to increase by 47% and average household incomes by 25%. A. Population Increase In addition to the overall population increase for California by 2012, population increases are projected for each of the major regions within the state as indicated in the table below. The Sacramento region is projected to grow the fastest at 19% followed by San Diego at 17%. Table 3 California Population Growth by Selected Regions 2003-2012 Sacramento Area Bay Area Los Angeles Basin San Diego 2003 • 2,100,000 6,900,000 17,629,000 2,900,000 Projected 2012 2,500,000 7,600,000 19,910,000 3,400,000 - Projected ^Growth 2003-2012 19% 10% 13% 17% Source: Center for Continuing Study of the California Population Carlsbad Convention & Visitors Bureau Strategic Marketing Plan B. Household Income Within the California market, average household income in 2003 was significant with Los Angeles and the San Francisco Bay Area households averaging over $100,000. Income is projected to grow between 2.2% and 2.6% annually through 2012 for the three major California regions listed in the table below. Table 4 Selected California Counties 2003-2012 & Per Capita Income Growth Rates Los Angeles Basin San Francisco Bay Area Sacramento Region /./"Average "• 2003 Household Income $100,087 $123,503 $88,945 Projected Annual •'" AvgV Change 2003-2012 2.6% 2.5% 2.2% Source: Center for Continuing Study of the California Population C. Aging Population Much has been written about the Baby Boomers, and as a target segment it continues to offer significant opportunity. Figure 3 below illustrates that by 2012, 50% of the California population is projected to be 35 years or older and 50% is projected to be less than 34 years. While the boomer segment continues to offer opportunity, it is the younger market segment that may offer Carlsbad additional opportunity over the long-term as this segment is less likely to have formed opinions about destinations. By interesting this younger segment earlier about Carlsbad, it may be possible to establish the destination as a preferred location as this segment ages. Figure 3 Projected Population Changes: 2003-2012 (Millions) 4.0 6.0 8 C 132003 B2012 Source: Center for Continuing Study of the California Population 11 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan D. Changes in Ethnicity Another dynamic that is also changing the demographic picture is California's growth of various race/ethnic groups. Specifically, rapid growth is occurring within the Hispanic and Asian segments. As can be seen in Table 5 below, the Hispanic segment is projected to be the single largest ethnic segment in California by 2012. Table 5 Projected California Population Change by Race/Ethnic Groups 2003-2012 (OOO's omitted) Caucasian Hispanic Asian Black Multi-race/American Indian Pacific Islander Total 2003 16,048 11,083 3,700 2,200 831 111 33,973 Projected 2012 15,533 16,123 4,900 2,700 1,200 160 40,616 % Change -3.2% 46% 32% 23% 44% 44% 19.6% Source: Center for Continuing Study of the California Population It should be noted that the recent increases in the Hispanic and Asian population have also changed the composition of the California labor force. Among the Asian population, the composition of these segments may not be fully understood. For example, while the Asian category represents recent immigrants, it also represents 5th generation Japanese citizens. These segments and their relation to the travel industry need to be better understood. 12 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan IV. Travel, Social and Cultural Trends In addition to the changing economic and demographic characteristics, Americans' travel, cultural and social changes, as well as recent terrorist attacks are also impacting travel and tourism throughout the country. Below are several important trends occurring nationwide: • The Importance of Families The American family is becoming an important focus fueled primarily by the aging of baby boomers, the inward turn or "cocooning" of the family unit, and continued threats of terrorism. This trend stresses the importance of quality family time and demands that destinations address the needs of this important market in order to stay competitive. It is important to note that this trend involves a broad definition of families including traditional families, blended families and single head of household families. Additionally, as the population ages more focus has been placed on intergenerational vacations, which might include grandparents and grandchildren, involved in activities that engage both. • An Increasing Focus on Children Along with the importance of family travel is the trend to focus vacation plans around children. This increasing interest in the family and children offer many destinations a growth opportunity for the future. • An Increasing Interest in Health and Fitness Americans are becoming more aware of health and fitness issues and their importance. As such, interest in outdoor activities like hiking, biking, golf, tennis, birding, fishing, etc. has grown. • Increased Value Today, people are constantly looking for increased value, no matter what the purchase. Destinations must continually look for ways to provide additional value and benefits to increase visitation. • Increased Cultural Awareness More and more travelers are celebrating the cultural differences that exist within the country. As a result of this trend, greater numbers of travelers are interested in attending a variety of arts and cultural activities and events when considering a vacation destination. 5MG 13 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Environmental Issues are Priority Americans are increasingly more interested in environmental issues. This issue impacts the selection of destinations as well as the selection of activities while on vacation. Those destinations that place a strong emphasis on the environment will have a competitive advantage over those that do not. Correspondingly, the rural atmosphere has taken on more significance as travelers become more directly involved in rural activities. View Time as Money As people become increasingly pressed for time due to the hectic nature of their lives, the impact is seen on vacation and travel. As has been written many times, vacation trips have become significantly shorter in duration. Additionally, consumers are looking for hassle free vacations placing greater importance on ways of booking, and travel to and from destinations. Look for an Educational Component to their Vacations A growing number of travelers are not only considering activities, scenic beauty and location in their trip decision criteria, but in many cases they are also looking to be educated while on vacation. Local culture, skill development and general increased knowledge are all becoming more of a priority. The Impact of Technology There can be no doubt about the impact of technology on society and the changes that have resulted. This impact is also occurring within the travel industry with the advent of the Internet, which has dramatically impacted distribution channels as well as provided an advertising platform for even the smallest of destinations and businesses. As technology has improved, many organizations now have the ability to book live reservations beyond lodging. Many websites have even become a central component of an organization's marketing efforts. SMG 14 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Section 3: Micro Trends I. Size and Scope of the Carlsbad Tourism Market in Perspective Within the state of California, San Diego County as a whole generates approximately $8.8 billion in travel spending7. Within the San Diego region, the City of Carlsbad is one of the top three areas of visitation, as measured by lodging revenue, following the City of San Diego and Coronado. Table 6 San Diego Region Market Size as Measured by Lodging Revenue Area T.O.TRate T.O.T Revenue Lodging Revenue Share CarlsbaB Chula Vista Coronado Del Mar El Cajon Encinitas Escondido Imperial Beach La Mesa Lemon Grove National City Oceanside Poway San Diego San Marcos Santee Solano Beach Vista Total: 10% 10% 8% 10.50% 10% 10% 10% 10% 10% 6% 10% 10% 10% 10.50% 10% 6% 10% 10% '•' "S "s $ s s s s s s s s s s '$'s s s $ s , " * "' *9,246'^36*' 1,884,500 7,991,000 1,489,000 997,000 1,000,300 1,189,000 233,000 820,000 28,600 1,010,000 1,824,000 167,000 110,306,700 279,000 116,000 561,000 356,000 139,498,936 "T" ' s $ s $ $ $ s $ $ $ s s $s s s $ s " 92,468,360 18,845,000 99,887,500 14,180,952 9,970,000 10,003,000 11,890,000 2,330,000 8,200,000 476,667 10,100,000 18.240,000 1,670,000 1,050,540,000 2,790,000 1,933,333 5.610,000 3,560,000 1,362.694,812 '6.80%' 1.39% 7.34% 1.04% 0.73% 0.74% 0.87% 0.17% 0.60% 0.04% 0.74% 1.34% 0.12% 77,24% 0.21% 0.14% 0.41% 0.26% 100.19% Source: City of Carlsbad California Travel & Tourism Commission Carlsbad Convention & Visitors Bureau Strategic Marketing Plan The City of Carlsbad has a 6.8% share of the lodging revenue generated within San Diego County behind the City of San Diego (the largest generator of revenue) and Coronado. Overall, it is estimated that the City of Carlsbad generates approximately $497 million in travel spending.8 A profile of visitor spending patterns within Carlsbad can be seen below. Figure 4 Carlsbad Travel Spending by Type of Business Service ($ Millions) Accommodations, $92 Retail Sales, $103 Recreation, $108 ating & Drinking est., $128 Ground Transport, Food Stores, $16 $44 Source: SMG estimates using California Travel Impacts by County, March 2005 Between 2000 and 2002, lodging revenue within Carlsbad fell by 8% and has subsequently increased to more than $92 million by 2004. Figure 5 Estimated Carlsbad Lodging Revenue Growth2000-20049 (Millions) 2000 2001 2002 2003 2004 Note how revenue was approximately $91 million in 2000 followed by the post 9-11 drop off through 2002 which left revenues at $83.7 million. Since that time, revenues have climbed back to more than $92 million. 1 SMG estimates using California Travel Impacts by County, March 2005 ' City of Carlsbad SMB 16 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan In contrast, lodging revenue growth at selected coastal areas within California during the same time period has been mixed as indicated in the figure below. Figure 6 Selected Competitor Lodging Revenue Growth % 2000-2004 Carlsbad Santa Barbara Santa Monica Oxnard Laguna Beach 0% 2% 4% 6%10% 12% 14% 16% Source: SMG estimates SMQ 17 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan II. City of Carlsbad Lodging Industry Overview Within the City of Carlsbad there are thirty-five lodging properties with 3,375 available rooms. A list of the properties and their room count can be found below in Table 7. Table 7 Carlsbad Lodging Inventory Property BEACH TERRACE BEACH VIEW BEACHWALK VILLAS CARLSBAD INN HOTEL CARLSBAD LODGE CARLSBAD SEAPOINTE COURTYARD BY MARRIOTT EXTENDED STAY AMERICA FAIRFIELD INN FOUR SEASONS RESORT GRAND PACIFIC PALISADES HOTEL HAMPTON INNS HILTON GARDENS HOLIDAY INN COMFORT INN (FORMALLY INNS OF AMERICA) INNS OF AMERICA SUITES on AVENIDA ENCINAS LA COSTA HOTEL - KSL LA COSTA RESORT MOORING (OCEAN VILLA @ CARLSBAD) MOTEL 6 #1021 MOTEL 6 #471 OCEAN PALMS BEACH RESORT (OCEAN MANOR) OLYMPIC RESORT PELICAN COVE RAMADA INNS RED ROOF INNS INC. (MOTEL 6 #1351) changed in May 04 RESIDENCE INN (CARLSBAD HHG HOTEL DEVELOPMENT) SCANDIA SEA SLOPE SEABREEZE HOTEL/VILLAGE REALTORS SEASHORE RESORT SUPER 8/SUNCOAST SURF MOTEL TAMARACK BEACH RESORT THE VILLAGE REALTORS TRAVEL INN Total Source: City of Carlsbad Rooms Share 49 41 9 194 66 78 145 106 111 331 233 0 162 145 126 98 478 9 109 160 57 78 10 121 142 121 15 4 12 11 47 28 23 15 41 3,375 1.5% 1.2% 0.3% 5.7% 2.0% 2.3% 4.3% 3.1% 3.3% 9.8% 6.9% 0.0% 4.8% 4.3% 3.7% 2.9% 14.2% 0.3% 3.2% 4.7% 1.7% 2.3% 0.3% 3.6% 4.2% 3.6% 0.4% 0.1% 0.4% 0.3% 1.4% 0.8% 0.7% 0.4% 1.2% 100.0% SMG 18 Carlsbad Convention & Vis/tors Bureau Strategic Marketing Plan In terms of property size, Carlsbad offers a fairly balanced lodging supply. Approximately 31% of the rooms represent properties with 200 or more units, 49% represents properties with 100- 199 units, and 20% of rooms represent properties with 99 or less units. Figure 7 % of Rooms by Property Size 60% 50% 40% 5 30% 20% 10% <200 100-199 Property Size >99 Source: Carlsbad Convention & Visitors Bureau While no comprehensive city-wide lodging data exists, one way to understand the lodging trend in Carlsbad is to use collected T.O.T. revenue. The T.O.T. rate for the City of Carlsbad is 10% of total lodging revenue. The figure below tracks collected T.O.T. revenue from 1993-2005. Figure 8 City of Carlsbad (Fiscal Year) T.O.T. Collections 1993-2004 (Millions) ?' f**&"*'... . $>*?,***& &.&'**.. & ^?A^...l T^M^-sf^.f^K ##" &-*K.f 'f **,.> \> I Ml.*.. - * & 95/1996 96/1997 97/1998 98/1999 99/2000 00/2001 01/2002 02/2003 03/2004 04/2005 Source: City of Carlsbad SMG 19 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan As a result of the lack of comprehensive data, (a reporting mechanism for occupancy would be desirable and highly useful to the tourism industry) there are no concrete numbers for annual occupancy and average daily rate (ADR). As such, SMG has developed an annual occupancy rate of 69% and an average daily rate of $108/night. Table 8 Estimated Lodging Data Total Rooms 3,375 Available Rooms 1,231,875 Estimated Occupancy 69% Occupied Rooms 849,994 Room Revenue $92,468,360 ADR $108.79 Notes: 1. Rooms = Number of total rooms available in Carlsbad 2. Available Rooms = Rooms x 365 nights 3. Occupancy = SMG estimate 4. Occupied Rooms = Available Rooms x Estimated Occupancy 5. Room Revenue = City of Carlsbad annual lodging revenue 6. ADR = Room Revenue/Occupied Rooms It should be noted that Smith Travel estimates occupancy at 63% and ADR at $109 for the Carlsbad/Oceanside market. With regard to market seasonality, demand for Carlsbad peaks during the summer season followed by Quarter 2 and Quarter 1. Quarter 4 has the lowest demand. Figure 9 Calendar Year Lodging Demand Seasonality % of Total Lodging Revenue Quarter 1 Quarter 2 Quarter 3 Quarter 4 Source: City of Carlsbad SMG 20 Carlsbad Convention & Vis/tors Bureau Strategic Marketing Plan ,.. I. Product/Experience Profile The City of Carlsbad is located north of San Diego which is a major national destination. Carlsbad is competitive with other locations/resorts within San Diego County as well as locations outside of the county. Carlsbad has a variety of lodging properties from branded major resorts to limited service hotels, retail shopping, outdoor recreation, cultural events, entertainment, historical activities and attractions like LEGOLAND. Carlsbad has excellent access to Southern California markets as well as destination markets via the San Diego Airport. Carlsbad Product/Experience Matrix Special Events/ Entertainment Meetings/ Conference Facilities Table 9 Carlsbad Product Elements Land based: LEGOLAND Sea World San Diego Zoo SD Wild Animal Park Birding K1 Speed Lagoons/nature walks Biplane Adventures Carlsbad trail system Biking Flower Fields Golf Spas Skateboard Park Children's Museum Outdoor adventures Public parks - Balboa Park Water Based: Kayaking Surfing Fishing Swimming Boating Historical: Historic Highway 101 Historic Walking Tour Historic Tree Tour The Magee House Leo Carillo Ranch Bario Museum Cultural Activities: Music museums Gemological Institute Barrio Museum Geneology Library Balboa Park Shoppin Westfield Shoppingtown Village of Carlsbad The Forum Premium Outlet Farmers Market Car Country Antiques Carlsbad Marathon Accenture Match Play Carlsbad 5000 Carlsbad Triathlon Acura Tennis Classic Arts & Crafts Faire Art Splash Fiesta del Barrio Woodies on 101 Oktoberfest Village Street Faire Art Splash Entertainment: Shakespeare Festival Jazz in the Park Live Theater Music festivals Nightclubs Cannon Art Gallery Balboa Park Best Western Terrace Best Western View Lodge Four Seasons Resort Grand Pacific Palasades Hilton Garden Inn Inns of America Suites La Costa Resort & Spa Olympic Resort Ramada Inn Residence Inn Carlsbad Inn Beach Resort SMG 21 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan As can be seen from Table 9 on the previous page, Carlsbad offers a wide variety of tourism activities and experiences for visitors to enjoy. In addition, the area is in close proximity to a number of regional attractions not located in Carlsbad but accessible to the Carlsbad bed base. These attractions serve as major demand drivers and provide an important opportunity to leverage Carlsbad's price/location differential. Figure 9 Regional Demand Drivers Disneyland Local Business LEGOLAND Mexico San Diego Zoo City of Carlsbad Major Golf Courses San Diego Wild Animal ; Park Casinos Sea World San Diego 22 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan II. Visitor Benefits Carlsbad's product attributes translate into a variety of visitor benefits ATTRIBUTES Recreation Historical/ Cultural Shopping Events Meetings and Conference Facilities Translate into BENEFITS > Fun Experience > Quality Vacation Experience > Price/Value : > Choice .• > Fun Experience Carlsbad's local character and availability of activities make it a classic California beach town that provides a generally fun experience for all visitor segments. > Quality Vacation Experience Conveniently located close to visitor markets, the natural beauty of the California coast and proximity to major world class attractions allows for a high quality vacation experience. > Price/Value Carlsbad provides visitors with a strong price/value experience. Prices that are very competitive with other destinations for the unique combination of activities and experiences create a strong sense of value that is very attractive to visitors. > Choice Carlsbad offers visitors a wide variety of choices that include seasons to visit, recreational attractions, events, historic exhibits, lodging, dining and shopping 23 Strategic Marketing Plan III. Carlsbad Strengths, Weaknesses, Opportunities and Threats In order to build a sustainable competitive advantage, it is important to review the strengths and weaknesses of Carlsbad as well as the opportunities and threats that will impact its future success. Carlsbad SWOT Analysis Strengths • Accessible Location • Range of Lodging • Beaches/Environment • Attractions • Lodging, Shopping and Dining Infrastructure . , ,, tV t^.« .-.,. - • *• -"-- - -• - Threats • Increased Competition • Indigent Population • Local Community Receptivity to Tourism Promotion • Weak Corporate Travel .> ., ... - , .,„! of Visitor" .-"*f 'Se'rvfcei' ;»iV'-f:*:i-' '' •: lack-fif'aty^ide-Vtsitor - - * - Shoulder anti, Off Reasons" Funding v^-if'-^' .-••: Extended Stays; .v . ,.. Aquatic Cefrtef ' -,'' Proximity to Markets' Environment '^v* ;•• . A. Destination Strengths • Accessible Location Carlsbad is located immediately adjacent to Interstate 5 with excellent proximity to core Southern California markets. The area is also located about 30 miles north of San Diego which provides excellent air access both domestically and internationally. Carlsbad also has a local airport with two flights daily from Phoenix and six flights with connecting service through Los Angeles. • Range of Lodging The City of Carlsbad offers an excellent variety of lodging opportunities that include major destination resorts, mid-size branded properties and small locally-owned properties. This variety satisfies the needs for a variety of customers at a number of different price points. • Beaches/Environment Carlsbad boasts excellent beaches and provides visitors with an excellent natural attraction. Carlsbad has excellent beach access and supports a wide variety of water based recreational activities. 24 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan • Attractions The City of Carlsbad has a number of world class attractions within close proximity for guests to enjoy. A few of these include LEGOLAND, San Diego Zoo, Sea World and the San Diego Wild Animal Park. • Lodging, Shopping and Dining Infrastructure Carlsbad possesses significant retail shopping and dining establishments as well as a variety of lodging properties (including full service La Costa to limited service with a breadth of price points) that benefit from individual proprietary distribution systems. B. Destination Weaknesses • Interstate 5 Traffic One key area of weakness is the traffic that is currently generated by Interstate 5 that forces many Carlsbad visitors to wait to access the destination. High traffic hours can force visitors arriving from both north and south substantial wait times. • Visitor Signage A second weakness is the lack of a comprehensive visitor signage program for tourism areas. This lack of signage can make it difficult for visitors to easily find locations and move about the destination. • Shuttle Service Additionally, the community lacks an integrated, in-town bus shuttle system between the hotels and the major attractions. • Local Knowledge of Visitor Services An important area to improve the visitor experience is a need to develop a more informed local community that can provide visitors with necessary knowledge and information. • Lack of City-wide Visitor Profile Data The Carlsbad tourism community does not have any city-wide visitor profile data. This data is critical in order to form consensus opinion regarding the development of tourism marketing programs. SMG 25 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan C. Destination Opportunities • Shoulder and Off Seasons As was identified in the lodging seasonality section of this report, Carlsbad has significant opportunity to increase its shoulder and off season visitation patterns. • Funding Perhaps one of the strongest aspects of Carlsbad is the fact that the lodging sector has coalesced to support the creation of a Business Improvement District (BID) thus ensuring tourism promotion funding for today as well as the future. • Extended Stays A significant opportunity is the potential to increase visitor length of stay. With the potential of additional funding, Carlsbad may be able to attract segments that stay longer and provide the destination with increased economic impact. • Aquatic Center An additional opportunity for the area is the development of a new Aquatic Center that will allow for youth sports and competitions to be held in Carlsbad. • Proximity to Markets Southern California markets have excellent access to Carlsbad. While this proximity can also cause a significant weekend visitor orientation, on the other hand it represents a significant opportunity for attracting new visitor segments or mid-week business from nearby under-developed markets. • Size The fact that the Carlsbad tourism community is small and manageable is a significant advantage. The tourism community can maximize this advantage by using a consensus process and getting ideas to the marketplace quicker than other larger competitors. • Environment As mentioned previously, one of the foremost attributes of the destination is the environment which can provide long-term strategic opportunity for the destination and the CVB. Developing sustainable tourism practices will protect the environment while providing a revenue stream for the destination. Carlsbad would benefit by communicating to visitors the importance and emphasis on maintaining/improving the environmental quality of the destination. This not only helps to further position Carlsbad as a "good citizen" committed to environmental preservation, it also coincides with a major consumer trend. SMC3 26 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan D. Destination Threats • Increased Competition One of the biggest challenges facing tourism communities is increased competition. Communities throughout the state have recognized the importance of tourism promotion as an economic development tool and, as a result, the competition is keen for the tourist dollar as evidenced by similar BID's coming online throughout the state to increase promotional spending. • Indigent Population A second threat of concern is a growing indigent population. Tourism industry supporters must work closely with local government to monitor the issue and to minimize the impact to area visitors. • Local Community Receptivity to Tourism Promotion A potential final threat is local community reaction to increased levels of tourism. While not apparent at this time, it is absolutely important for the local community to be educated about the benefits of tourism. • Weak Corporate Travel While leisure travel continues to grow, corporate travel has remained sluggish, and may remain so for the future. Many companies which reduced travel after 9-11 have continued to do so in an effort to reduce expenses. SMO 27 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Section 5: The Competition The current level of competition within the tourism industry has never been so intense. Within the coastal regions alone, competition is significant. Major destinations continue to improve tourism offerings as well as access to their destinations. For the purpose of this report, SMG has identified two types of competitors: direct and indirect. Direct competitors are those that offer experiences similar to Carlsbad. Indirect competitors are those that offer experiences that are slightly different from Carlsbad and offer consumers in Carlsbad's target market an alternative. Competitive Scope Direct Competitors Carlsbad Indirect Competitors I. Direct Competitors Santa Barbara Strengths: • Recreational/shopping opportunities • Natural beauty/focus on environment • Air access • Upscale image l/l/ea/oiesses: • Congestion • Weekend orientation • Vacation costs www.santabarbara.com Competitive Focus: America's Riviera 28 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Oxnard Strengths: • Strong business/meeting segment • Harbor • Group market appeal • State beaches Weaknesses: • Distinct downtown www. oxnardtourism. com Competitive Focus: Gateway to the Central Coast l IstilwJs Indw Rbn f= The 5th Annual Cha of Ventura and wld> M«t icnnr-iogt wit .ndud. a Q&A «th IKa • internet Newport Beach Strengths: • Beach location/water recreation • Air and auto access • Shopping • Weather Weaknesses: • Lack of awareness • Need for more appealing destination www.newportbeach-cvb.com Competitive Focus: The Colorful Coast —> - O ,«3 ., / v^"--:*? C" -*%.M'HiJ^^Ty.,|-K< I \l^5fc- =- t» SMG 29 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Santa Monica Strengths: • Central Los Angeles location • Proximity to shopping/dining • Beach • Air and auto access Weaknesses: • Crowding • Weekend orientation www.santamonica.com Competitive Focus: The Real Life Alternative O--J •! Jj J: ,, •— ,—- «_•„-• ti San Diego www.sandiego. org Strengths: • Location, climate • Excellent recreational opportunities • Shopping/dining • Excellent attractions • Beach • Air and auto access Weaknesses: • Crowding • Weekend orientation Competitive Focus: Beach Plus SMC3 30 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan II. Indirect Competitors Palm Springs Strengths: • Proximity to markets • Excellent recreation • Shopping, dining • Gaming available • Favorable winter weather Weaknesses: • Perception of old people • Unfavorable summer weather www.palmspringsusa.com Competitive Focus: Experience 'it - Las Vegas www. vegasfreedom. com Strengths: • Very strong gaming/entertainment leader • Favorable winter climate • Fly/drive accessibility • Strong image • Outdoor recreation/proximity to Grand Canyon • Affordable Weaknesses: • Feeling of big size • Summer heat • Minimal outdoor activity • Traffic • Crime • Air quality Competitive Focus: What happens here stays here. HCICOHE TO IAS VEGAS SMG 31 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan www.gohawaii.comHawaii Strengths: • Exotic location • Favorable year-round climate • Strong culture • Strong image • Outdoor recreation Weaknesses: • Location • Parts of islands are over commercialized Competitive Focus: The Islands of Aloha a, - Mexico Strengths: • Exotic location • Favorable year-round climate • Strong culture • Favorable costs • Recreation alternatives Weaknesses: • Perceived language barriers • Perceived safety issues www. visitmexico. com SMC3 32 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Section 6: Carlsbad CVB Mission, Goals & Objectives I. Carlsbad CVB Mission Statement In an effort to describe the long-term vision of the Carlsbad Convention & Visitors Bureau, the mission statement was developed by the organization to guide its efforts on behalf of the community. "To successfully promote Carlsbad as a preferred year-round leisure travel destination, with the primary emphasis on travel spending within the city, generating additional tax revenues and expanding travel and tourism related employment within the City of Carlsbad. " II. Goals The Carlsbad CVB has three primary goals to be achieved and maintained over the long-term: 1. To maintain and strengthen a unified community effort (public and private sector) to achieve the organization's goals and objectives. 2. To make Carlsbad a "top of mind" destination among trial and repeat target segments, and to assist the private sector in an effort to increase occupancy by 7% over the next 3 years.(from 69% citywide occupancy to 76%) 3. For the CVB marketing activities to generate a minimum of 2% of lodging occupancy on an annual basis. The above goals are interrelated and one cannot be achieved without the other. To effectively position the destination and to increase occupancy, the community must work together. SMC3 33 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan III. Core Objectives A. Branding/Differentiation/Communication 1. Build and strengthen the Carlsbad brand by positioning the destination as truly unique and different from its competitive set. (See Section 5 page 28.) 2. Distinguish Carlsbad from the competition by positioning the destination within the context of its core attributes: beach, recreation, community and culture. Additionally, reinforce Carlsbad's position by utilizing and linking the available regional icons including LEGOLAND, San Diego Zoo, Sea World, etc. 3. Increase brand loyalty through increased awareness of Carlsbad as a unique destination with a reliable and unique visitor experience. 4. Effectively communicate key points of differentiation about the destination and the visitor experience to target segments through a comprehensive marketing mix leveraged by private and public sector strategic partners. B. Targeting/Attracting 1. Target segments and educate them about the benefits Carlsbad offers in fulfilling their vacation needs and desires by effectively positioning the destination's activities in a way that encourages maximized travel spending. 2. Increase visitations from existing target segments to encourage repeat visits for different times of the year and different occasions. C. Strategic Partners 1. Strengthen existing public and private sector strategic partners from within Carlsbad as well as outside Carlsbad. D. Technology 1. Increase the use of technology to the fullest extent possible in an effort to attract new and repeat visitors and to improve marketing efficiencies. SMG 34 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Section 7: Marketing Opportunity & Target Markets I. Carlsbad Marketing Opportunity If the CVB and the community can increase room sales through the CVB's leadership and expanded marketing efforts, there can be significant room and revenue growth. Following are two scenarios that outline potential Return on Investment (ROI). Scenario 1: The Static Scenario • No new inventory is added. • Average Daily Rate increases at 3% annually. • Occupancy increases at about 1 % annually. • CVB will be responsible for generating a minimum of 2% of occupancy. Scenario 1 5 Year Projection Hotel Rooms Rooms Available Occupancy Rooms Sold Incremental Rooms ADR Incremental Revenue Incremental Cost ROI Base 3.375 1,231,875 69% 849,994 0 $108 Year 1 3.375 1,231,875 71% 874,631 24,638 $111.24 $2,740,675.50 $849,994 $3.2 Year 2 3,375 1,231,875 73% 899,269 24,638 $114.58 $2,822,895.77 $874,631 $3.2 year 3 3,375 1,231,875 74% 911,588 12,319 $118.01 $1,453,791.32 $899,269 $1.6 year 4 3,375 1,231,875 75% 923,906 12,319 $121.55 $1,497,405.06 $911,588 $1.6 YearS 3,375 1,231,875 76% 936,225 12,319 $125.20 $1,542,327.21 $923,906 $1.7 Gross 3 Year Incremental Analysis Rooms Sold 73,104 Revenue $8,378,491 Cost $2,623,894 ROI 3.19 Gross 5 Year Incremental Analysis Rooms Sold 123,190 Revenue $14,536,420 Cost $4,459,388 ROI 3.26 Wet 3 Year Incremental Analysis Rooms Sold Revenue Net Revenue Cost ROI 73,104 $8,891,255 $7,113,003.70 $1,835,494 3.88 Net 5 Year Incremental Analysis Rooms Sold 123,190 Revenue $14,536,420 Net Revenue $11,629,136.0 Cost $1,835,494 ROI 6.34 Source: SMG Assumptions: 1. CVB will contribute to a 2% annual increase in occupancy. 2. ADR will increase at 3% annually. Notes: 1. 2. 3. 4. The above revenue analysis is calculated on projected room revenue. Incremental rooms are the difference between the current level of rooms sales and the projected increase in room sold. Note the base is 0 and year 1 is 24,638. Incremental cost in the projected CVB that will be used to generate incremental room sold. Incremental analysis is calculated at 8% net revenue to hotels. 35 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Scenario 2: Increased Inventory Scenario • New inventory is added. 332 units are added for two years. • Average Daily Rate increases at 3% annually. • Occupancy decreases and then recovers. • CVB will be responsible for generating a minimum of 2% of occupancy. Scenario 2 5 Year Projection Hotel Rooms Rooms Available Occupancy Rooms Sold Incremental Rooms ADR Incremental Revenue Incremental Cost ROI Base 3.375 1.231.875 69% 849.994 0 $108 ' ' "Yearl 3.375 1,231.875 70% 862,313 12,319 S111.24 $1,370,337.75 $849,994 $1.6 Year 2 3.707 1,353,055 68% 920,077 57,765 $114.58 $6,618,540.50 $862,313 $7.7 "?/'" year 3*i 4.041 1,474,965 66% 973,477 53,400 $118.01 $6,301,916.15 $920,077 S6.8 ;-- Year 4 4.041 1,474,965 69% 1,017,726 44,249 $121.55 $5,378,678.97 $973,477 $5 5 Years 4,041 1,474,965 70% 1,032,476 14,750 $125.20 $1,846,679.78 $1,017,726 $1.8 3 Year Incremental Analysis Rooms Sold 78,576 Revenue $8,564,784 Cost $2,632,384 ROI 3.25 5 Year Incremental Analysis Rooms Sold 132,332 Revenue $14,556.520 Cost $4,623,586 ROI 3.15 Source: SMG Assumptions: 1. CVB will contribute to a 1% annual increase in occupancy. 2. ADR will increase at 3% annually. 3. It is anticipated that approximately 667 new rooms will come on the market which is an increase in capacity of approximately 20%. It is not known when the new rooms will come on the market and, as such, an assumption has been made to split the inventory over 2 years. It should be noted that in either scenario it will be important for the destination to increase overall demand and focus CVB efforts to that end. Additionally, acts of terrorism and economic uncertainty, increased competition as well as other issue may have a dramatic and negative impact on either scenario presented in this reports 36 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan II. Target Markets A. Geographic Markets Based on proximity, Carlsbad traditionally attracts both business and leisure visitors from the Southern California market, specifically Los Angeles County, Orange County, San Bernardino, Las Vegas and Arizona. It should be noted that while the primary source of the destination's visitors arrive by automobile, there is air access into Carlsbad Palomar Airport. America West has two arrivals daily from Phoenix and United Express has six flights a day from LAX with connections through out the country. Based on information collected in the destination, the following target market summary has been developed. Table 10 Target Market Size and Characteristics Median Age Median Household Income Average household income Total Population Total Households Activities on Domestic Vacation Go to beach General sightseeing Attend event Shopping Play golf Bicycling Running/jogging Other outdoor sport/recreation Visit relatives/fnends Visit spa Domestic Travel Business Vacation or honeymoon Personal reasons Combined Business & Vacation Means of Travel Charter Plane Scheduled plane Rented car Car Charter bus Motor homo Los Angeles-Long Beach ,*Cr CA(MSA) 33.3 $45,695 $66,433 9,980,265 3,253,577 805,529 1,261,120 503,683 925,514 168,025 111,963 91,635 445,928 936,532 80,569 679,848 2,603,551 1,052,700 185,209 258,906 1,826,949 462,884 2,212,091 80,448 67,186 Orange County CA(MSA)j; ~' Las VegasNV , 34.6 $63,748 $83,329 2.991,519 989,208 11 10% 17.40% 6 90% 12 70% 2 30% 1 50% 1 30% 6 10% 12 90% 1.10% 9.40% 35.80% 14 50% 2 50% 3 60% 25 10% 6 40% 30 40% 1 . 1 0% 0 90% 299,259 458,058 179461 332,413 65,299 48,059 35,262 165,907 330,289 32339 246.847 918,422 350976 67210 93,701 658.823 158,190 772.555 26878 23949 36.5 $28,343 $36,868 29,529 11,304 13.60% 20.80% 8.20%o 15.10% 3.00% 2.20% 1.60% 7.50% 15.00% 1.50% 1 1 .20% 41.70% 15.90% 3.10% 4.30% 29.90% 7.20% 35.10% 1 .20% 1.10% 2,014 3,345 2,015 2,416 562 89 257 1,051 2,349 233 1,597 7,103 2,891 567 784 2,852 709 7,877 263 437 Phoenix-Mesa AZ (MSA) 33.6 $48,886 $62.924 3.698,598 1,390.757 9.10% 15.10% 9.10% 10.90% 2.50% 0.40% 1 .20% 4.70% 10.60% 1.10% 7.20% 32.00% 1 3.00% 2.60% 3 50% 12.90% 3.20% 35.50% 1.20% 2 00% 338,704 522.170 223.556 396.637 79,621 53,967 41,940 181,598 398,911 33,304 283,798 1,066,678 424,926 77,138 99,823 720,126 173,902 908,362 40,563 27,681 12.60% 19.50% 8.30% 14.80% 3.00% 2.00% 1 .60% 6.80% 14.90% 1 .20% 10.60% 39.70% 15.80% 2.90% 3.70% 26.80% 6.50% 33.80% 1 .50% 1 .00% Source: PCensus 37 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan B. Target Segments 1. Individuals * Vacation The CVB should target potential vacation/getaway visitors by positioning Carlsbad as an attractive location with a wide range of activities. * Business Travelers Key to increasing occupancy and visitation is mid-week attraction of this segment. <• Families with Children Carlsbad offers a wide variety of recreational and cultural activities for the family segment. * Seniors With the California population aged 60 and over expected to increase significantly, Carlsbad should seriously consider marketing to this growing segment. 2. Groups Corporate & Incentive - Sales and reward based meetings. Associations - State or National Associations SMERF - Sports, Military, Educational, Religious and Fraternal groups Government - State or Federal employee meetings Carlsbad CVB Target Segment Matrix Year ; Year 1 Year 2 YearS Year 4 YearS Target Rooms 25,000 27,000 27,540 28,091 28,653 Group Rooms 7,500 8,100 8,262 8,427 8,596 FIT Rooms 17,500 18,900 19,278 19,664 20,057 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Section 8: Marketing Strategies In order to achieve its stated goals and to establish an effective long-term competitive advantage, the Carlsbad Convention & Visitors Bureau must assist in successfully implement three core strategies. These include destination branding, successfully differentiating the destination, and facilitating the conversion of room sales by the private sector Carlsbad Core Strategies Branding • Differentiation * Conversion I. Branding/Positioning Located in close proximity to San Diego, Carlsbad needs to increase awareness of the destination among its identified target segments by promoting its brand in every marketing initiative. Brand Identity: A brand is the way in which visitors perceive or distinguish a destination. Carlsbad's brand, "Village by the Sea", helps to bolster one, all-inclusive identity that integrates all of the destination's primary attributes - environment, recreation, community and culture - to create an indelible impression in the mind of the consumer. Carlsbad Brand Identity: "Village by the Sea" Environment • Recreation * Community • Culture Target Market Segments Brand Awareness: Educate Target Segments via Carlsbad CVB Business Model A brand not only serves to unify all of the assets/attributes of a destination under one ideniity. It also works to unify the community and encourage it to provide the highest quality standards and customer service that will further strengthen the brand and customer loyalty. Brand Awareness and Customer Loyalty: As time becomes increasingly scarce, consumers will first turn to highly visible brand names when planning a purchase decision. Consumers want an assurance of quality when they don't have the time, opportunity or ability to inspect alternatives. This positive behavior is reinforced by the constant visibility of a brand using mediums and communication efforts that reach the target segment. A brand representing leadership, success, quality and excitement can create a genuine connection with the consumer. These positive associations can motivate a buying decision that is both emotionally and functionally driven and is positively reinforced when the experience meets the expectation. As such, the Carlsbad CVB, lodging properties, attractions and all visitor oriented businesses should strive to consistently offer exceptional customer service beginning with the information gathering process to the actual visitor experience. The continual and dedicated commitment by each community member, tourism agency and business to provide a positive overall experience will help to build brand awareness, reinforce positive brand associations, and generate customer (brand) loyalty Brand Recognition: Familiarity of the Carlsbad brand leads to Recall & Preference Brand/Customer Loyalty: Increased Visitations to Carlsbad Carlsbad Convention & Visitors Bureau Strategic Marketing Plan among target segments. Above all, a highly loyal customer base can be expected to generate repeat visitations and revenue flow. It is critical that the key points of differentiation that help to build the Carlsbad brand continue to be interwoven and communicated throughout all aspects of the CVB's and the private sector marketing efforts over the long-term. With only a limited budget (even with the added BID funds), the CVB can increase the visibility of its brand through the following marketing and promotional initiatives: * CVB website and collateral materials. * Logo exposure on all partner (private sector) promotional pieces, i.e., website, signage, brochures, etc. * Strategic partnerships with public and private sector inside and outside of Carlsbad. •:* Public relations efforts that are targeted to key segments. »:* Sales activities that represent the destination. All of these efforts must be of the highest quality possible to support and complement the Carlsbad brand identity and to continually build positive brand associations for both new and repeat visitors. SMQ 40 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan II. Differentiate the Destination Part of successfully building the Carlsbad brand is to clearly differentiate the destination and make it relevant in the mind of consumers. Carlsbad should differentiate its offerings from the competition through an emphasis of its key attributes, translating them into believable and meaningful benefits for its new and repeat target market segments. III. Generate Room Nights As was identified previously in this plan, the CVB is accountable for generating a minimum of 2% of occupancy within the City of Carlsbad. To that end, the CVB must focus its efforts and measurements on activities that will generate the target room nights. Within this core strategy there are several key steps the CVB can take to ensure it focuses on generating room nights. A. Develop Increased Shoulder Season Business As was identified in a number of community interviews, many felt the CVB should focus on building shoulder season demand. Interviewees emphasized that summer is very strong and CVB programs during other times of the year would greatly benefit the entire community. This can be achieved with special events. Special Events: One of the best tools for stimulating demand for a low season is the use of special events. Events can be used to create awareness in the marketplace for Carlsbad as a place to visit. Currently, Carlsbad offers a variety of special events throughout the year including the following: Month January February March April May June July August September October November December 'rt'^Evint'-"- '-"' /'-' • Carlsbad Marathon World Golf Championship Accenture Match Play Championship Flower Fields Carlsbad 5000 Carlsbad Village Street Faire Carlsbad Triathlon Acura Classic at La Costa Resort & Spa Art Splash Fiesta del Barrio Woodies on 101 Oktoberfest Carlsbad Village Street Faire Carlsbad may want to consider arcing these events together with additional ones, if needed, to create a perception of a season instead of individual events. This newly created season could be positioned with a theme. Lodging properties and attractions could provide favorable rates and promotional tie-ins, and over the long-term, successfully develop the season. Carlsbad could also build shoulder season business by creating specific seasons that complement and promote the Carlsbad experience. For example, Carlsbad could create a sports season during the January, February and March time frame. 41 Carlsbad Convention & Vis/tors Bureau Strategic Marketing Plan B. Increase Frequency of Existing Visitors In addition to attracting new users as a core strategy to increase occupancy levels, the Carlsbad CVB and the local community must continue to implement programs to increase the frequency of its existing visitors and to build brand loyalty. Creating awareness for another season or specific events provides visitors with new reasons to consider the destination and make another trip. At the property level, bounce back (return guest) programs and the distribution of future event and activity information can be implemented. Frequency should be based on providing visitors with another reason to visit/return. C. Increase Length of Stay Another effective strategy is to increase the length of stay of visitors. This can be accomplished by presenting the destination to potential new visitors as a multi-day visit by continually promoting the wide variety of activities available. Additionally, private sector incentives can be included such as special packages or other value-added promotions/programs in an effort to increase visitor length of stay. 5MG 42 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Section 9: Carlsbad Convention & Visitors Bureau Business Model I. What is the Business Model? In order to implement the core strategies, the Carlsbad CVB needs to develop a Business Model to reach its objectives. Whereas the Business Model will describe how systematically all the pieces of the organization fit together, Carlsbad's competitive strategy focusing on brand building and differentiation will direct its communication and promotional efforts to build awareness. The Business Model will describe how the strategy will work and the results it should deliver. The Carlsbad CVB Business Model must do four things: 1. Clearly identify Carlsbad's current and potential customers. 2. Communicate how Carlsbad is different from the competition and how it makes sense and adds value to the identified customers. 3. Implement the identified value proposition to target segments. 4. Describe how visitors will economically impact Carlsbad, when efforts will become profitable, and what the trade offs will be between different options under consideration. Key to the success of the Business Model is the integration of the Carlsbad CVB website. There can be no doubt about the impact and significance the Internet has had on the concept of marketing and the travel industry. The Internet has moved through three distinct transition phases -- informational, transactional and marketing centered -- each phase increasing productivity and return on investment to a greater degree than the last. From information gathering to actual transactions, the Internet has evolved into a tool to be considered not only as an add on to existing traditional marketing efforts, but as a central component of an organization's marketing efforts. At the core of the Business Model are two simple principles: • The best organization to book a room is a lodging property. • The best organization to create awareness and brand differentiation/positioning is the Carlsbad Convention & Visitors Bureau. Using this fundamental approach, responsibilities of the CVB are clearly defined using this new model, the CVB can continue to effectively continue measuring its brand building efforts, understanding its users, and more efficiently directing potential visitors to area lodging properties and attractions. In order to identify continual improvements to generate brand loyalty, the CVB can collect information about who is using the site in order to proactively target and convert existing and new users. This model allows the CVB and the tourism community to capture and implement a strategy that is designed to create a competitive advantage. SMG 43 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Carlsbad CVB Business Model - Competitive Strategy - Implementation - Advertising - Promotions - Sales - Visitor Information Strategic Partners Public Relations/Education Target Market Segments: Take Action New & Repeat (Increased frequency) J_eJsur_eJrayel • Business/Meetings/Confe_ren_ces_ visitcarlsbad.com > Transfer to Lodging Property Book Vacation Positive Experience Internal Education - Newsletters - Reports - Annual Conference - Collect Information - Measure Programs - Make Adjustments and Refinements A. How the Carlsbad CVB Business Model Works 1. Marketing/brand building efforts (advertising, promotions, sales, partners and public relations) are used to attract the target market segments and to build a database for future tourism marketing efforts. Once the target segment is attracted, they either show interest (go to website) or not. 2. Once they go to the portal website, at some point they link to a lodging property. At that time it becomes the responsibility of the lodging property to make the sale either online or over the phone. 3. Based upon their experience, new visitors either become repeat visitors going back to the lodging property directly, or back to the Carlsbad website to choose another lodging property, or they fall out of the entire system. 4. The CVB can continue to measure its effectiveness at several points. First, it can continue to measure how many user sessions are generated overall by its marketing efforts. Second, it can continue to implement online surveys to determine how people got to the website. Third, the CVB can measure how many users (leads) it provides each connected lodging property. 5. At each visitor contact, information is collected. This information is then used to continue to keep customers educated as well as to refine the approach in each subsequent customer attraction cycle. It also helps to build the CVB database for future marketing efforts. Currently the CVB has over 12,000 email addresses in its data base for marketing purposes. 44 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan B. Benefits of the Business Model • Allows the CVB & lodging properties to do what they do best. There is no question that the lodging properties are the best source to make the sale. • Effectively directs the customer to the property quicker.. .the entity which can best make the sale. • Dramatically improves efficiency; it allows the CVB to measure the effectiveness of the specific media, promotion, sales activity or partner driving people to the website. • Assists with accountability issues by clearly defining a systematic approach for implementing and measuring marketing activities designed to drive visitors more efficiently to lodging properties. C. Smart Marketing System© In continuing to build the Carlsbad brand through differentiation and an emphasis on a quality experience, it is important that the CVB efforts continue to be systematic in its efforts to attract new and repeat customers, build a customer database and to assist in the evaluation and refinement of its future marketing programs. The Carlsbad Smart Marketing System© will establish a continuum for achieving the following objectives that will, in turn, continue to successfully build business levels over the long-term: 1. Create awareness of Carlsbad's activities, tourism assets and lodging properties. 2. Increase new and repeat visitations from target market segments. 3. Establish an efficient call to action. 4. Create a continual system for quantifying transferred leads to constituencies to address tourism accountability issues and return on investment strategies. 5. Produce ongoing evaluations of the marketing efforts based upon visitor input and behavior, community feedback and visitation results. Carlsbad Smart Marketing System© Time Over time, the Carlsbad CVB Business Model will produce a cyclical system that will refine marketing programs to achieve optimal results. For example, successful marketing programs that work to drive visitors through the Business Model to lodging properties and attractions will continue to be implemented and strengthened while less productive efforts will be eliminated. Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Section 10: Carlsbad CVB Business Model Action Plan In order to create the Carlsbad CVB Business Model, following is an action plan to get the new system functioning from brand building to brand loyalty. • Brand Building Stage Brand Building -BIDS - Co-op $s - Advertising - Sales - Visitor Information Strategic Partners Public Relations/Education The Carlsbad CVB should focus on building the brand through differentiation of the Carlsbad vacation experience to target segments through advertising, promotions, sales, visitor information, strategic partners, public relations and educational activities. These initiatives should be implemented concurrently to leverage each effort to communicate the primary reasons to visit Carlsbad and to promote www.visitcarlsbad.com. I. Advertising/Promotions/Sales/Visitor Information In order to increase the brand awareness of Carlsbad and to promote the Carlsbad website, the Business Model engine, advertising, promotions and sales efforts must be carefully developed and placed in mediums that reach and identify with Carlsbad's target market segments. Objectives: 1. Increase awareness of Carlsbad's key points of differentiation among identified target segments. 2. Position Carlsbad as a unique destination experience to previously identified target segments. 3. Create excitement and interest to visit www.visitcarlsbad.com to learn more about the area's experience and offerings. 4. Effectively position Carlsbad as a desired location for meetings and conferences and generate approximately 7,500 room nights annually. 5. Increase website user session by 30% annually. 46 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan A. Advertising CORE TACTICS: (Note A = In progress by CVB) > Short-Term 1. Create "high concept advertisements" (advertising with a specific concept or message) that effectively position and promote the core Carlsbad vacation experience attributes with messages and images that support the brand. Include regional icons (where appropriate) as part of sub messages. These messages should present the destination as a multi-day visit and be used across all mediums and functions. A 2. Position Carlsbad as its own destination separate and apart from other San Diego areas. A 3. Continue to update images and messages used on www.visitcarlsbad.com and all communication materials to ensure they reflect the Carlsbad's brand identity and identify with expanded target market segments. A 4. Build exposure for www.visitcarlsbad.com, the call to action, in every ad in order to drive potential visitors to the site to discover more reasons to visit Carlsbad. A 5. Develop advertising that is specifically designed to tie-in with shoulder season special events that create awareness and stimulate visits to the destination. (It should be noted that the CVB should not be in the business of developing special events, but rather could be a catalyst to develop and promote themed seasons of existing and new events in conjunction with current event proponents.) 6. Identify credible and successful branding consultants to work with Carlsbad CVB to create a strategy and timeline for rolling out and fully implementing the Carlsbad brand. 7. Develop an annual, integrated media plan that includes all media (print & online.) 8. Carlsbad should seek online ads and links as a value added component in all print media buys, as well as opportunities through state tourism organizations. 9. The CVB should identify targeted websites for online advertising, seeking geo-targeted programs where possible (to ensure efficacy with its investment). 10. Online ads should be reviewed regularly over the course of the campaign to determine if copy and call to action needs modification to encourage greater click throughs. 11. Maximize the CVB budget. Look for opportunities to leverage the proposed $800,000 CVB budget. CVB efforts should consider a $1 :$1 leverage as a goal creating the impact of a $1.6 million budget. A 12. Work with specific publications to create "Carlsbad co-op sections" in order to maximize the CVB media budget and to create awareness for the destination. The CVB would provide the seed money for the section and the publication sales rep would sell ads to lodging properties and/or other partners to create a much larger presence for the destination. 13. Develop specific measurement of all advertising efforts to determine if efforts are driving segments to www.visitcarlsbad.com, and creating positive brand associations. These measurements can be informal (tic marks on a sheet of paper made by staff) or tied to the website and other research. A SMC3 47 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan B. Promotions CORE TACTICS: (Note A = In progress by CVB) > Mid-Term 1. Develop unique promotions on a regular basis designed to keep Carlsbad top of mind among target market segments and to attract new and repeat visitors year-round. Carlsbad may want to consider retaining a promotions firm to develop promotions paid on a commission basis. 2. Identify promotional partners that reflect the core destination attributes and values of Carlsbad. Potential partners could include: • Automobiles, SUVs • Department stores • Financial services (Bank affinity programs) • Specific retail partners such as Best Buy, Circuit City, Macy's, Target etc. • Develop promotions that include print and online media support to help build awareness for Carlsbad and promotional partner(s). > Long-Term 3. In order to build shoulder season business, work with the tourism community to develop a promotion to support the special events and seasons. 4. Identify key annual signature promotion/event that helps to reinforce Carlsbad's image and brand identity, as well as to attract visitors during targeted seasons. 5. Link promotions with media placements as value-added elements. 6. Develop a system to measure the effectiveness of promotional efforts at building the brand in the minds of target market segments and for driving usage to www.visitcarlsbad.com. C. Sales CORE TACTICS: (Note A = In progress by CVB) > Short-Term Currently, the CVB sales effort is contracted out to the San Diego North Convention & Visitors Bureau via a separate contract with the City of Carlsbad. In the future, the Business Improvement District may continue that arrangement or have the Carlsbad CVB develop and implement a sales program internally managed by the bureau. The following action items are identified in case the BID Advisory Committee decides to do the latter and bring sales in-house to the Carlsbad CVB. 1. Act as a catalyst to the private sector for developing a unified approach for attracting meetings and conferences to Carlsbad. The CVB should serve as a catalyst for the Carlsbad lodging community and develop approaches that create awareness for the destination as a meetings and conference location, and allow the private sector to make the sale. sivie 48 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan 2. Develop annual sales plan to target Corporate/Incentive, Association, SMERF and Governmental segments in an effort to meet group sales rooms sold goals. 3. Develop an appropriate sales material kit in conjunction with the private sector to present a unified destination presentation. 4. Develop a Sales Committee from the private sector to assist and support the CVB sales efforts. 5. Adapt the core Carlsbad creative message to the group meeting segment stretching the Carlsbad brand beyond the leisure travel segment. 6. Encourage add-on days to meeting and conference visitors by presenting the destination as one that offers much to see and do beyond business. 7. Develop collateral support materials that can be used to get the attention of target segment decision makers. 8. Develop a measurement system that properly identifies the CVB role in assisting the private sector as well as the number of groups and room nights the CVB books. 9. Continue to distribute Carlsbad promotional CD/video to educate target segments about the area. A > Mid-Term 10. Provide meeting and conference organizers with a "Carlsbad Tool Kit" that includes all the elements needed to sell the destination, i.e., photos, brochures, etc. and other materials as needed. 11. Implement specific communication programs to targeted publications and online media database resources that serve meetings and conference organizers. 12. As part of the website, develop a meetings and conference section, in conjunction with the private sector, which is designed to direct meeting and conference planners to a final property. 13. Implement "Carlsbad on the Road" concept as outlined in the exiting CVB marketing plan to key contacts in both regional and drive markets through a coordinated series of sales and media presentations. D. Visitor Information CORE TACTICS: (Note A = In progress by CVB) > Short-Term 1. Continue to operate the Carlsbad Visitor Information Center providing comprehensive information to Carlsbad visitors and residents. A 2. Continue to publish the Carlsbad Visitors Guide. A > Mid-Term 3. Work with the City to improve directional signage throughout Carlsbad to the Carlsbad Visitor Information Center. SMB 49 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan 4. Develop satellite information kiosks at various locations in Carlsbad in an effort to communicate to visitors the variety of activities in the area. II. Strategic Partners Based on Carlsbad's limited financial resources even with BID funds, establishing strong strategic partners are an important part of potential future success. Solicited partners must serve to drive and support the Business Model and to help build the exposure of the Carlsbad brand. Appropriate partners should have similar objectives as the CVB such as high quality standards, message and brand exposure, and target market segments. Objectives: 1. Leverage Carlsbad's advertising, public relations, sales and marketing activities through mutually beneficial programs with identified strategic partners a minimum of a $1 :$1 ratio. 2. Reinforce the quality and uniqueness of Carlsbad's destination experience through the alliance with appropriate strategic partners that project and promote the same high quality. 3. Enhance the positive image and brand identity of Carlsbad to strategic partner audiences. CORE TACTICS: (Note A = In progress by CVB) > Short-Term 1. The Carlsbad CVB should maintain strong partnerships with the San Diego Convention & Visitors Bureau as well as the San Diego North Convention & Visitors Bureau leveraging the efforts of these and other private sector partners. These organizations should review the potential for increased cooperation in the following areas: • Leisure Sales Trade Shows - Identify shows that can be executed cooperatively when possible, designed to represent the entire region utilizing collateral materials and sales personnel. • Website - Maintain links between each organization. A • Advertising - Explore the development of a cooperative advertisement to be used for specific media placements and to leverage the CVB media budget. 2. The CVB should maintain and further strengthen a strong partnership with the constituent lodging industry as well as other pubic and private sector attractions. A > Mid-Term 3. The CVB should continue to identify potential opportunities with the State of California Office of Tourism given the state's shift to encourage more in-state travel. Identify potential public relations and website opportunities. A 50 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan III. Public Relations/Community Education Objectives: 1. Leverage advertising and promotional efforts to build the Carlsbad brand and to promote the Carlsbad CVB website. 2. Continue to generate coverage of Carlsbad in travel publications, websites and travel sections of newspapers in identified markets that reach target segments in an effort to increase ad equivalency 10% annually through targeted public relations efforts. 3. Educate the Carlsbad community about benefits of the expanded Carlsbad tourism promotion program. A. Public Relations CORE TACTICS: (Note A = In progress by CVB) > Short-Term 1. Continue to develop and implement annual public relations plan that include existing public relations efforts. Evolve content and focus to reinforce Carlsbad branding and message elements to achieve the public relations ad equivalency objective. Plans should include the following: • Event press releases A • Seasonal features A • Targeted features A • Special interest press releases A • Photo development and distribution A 2. Continue to develop unique "hooks" designed to attract attention for Carlsbad and develop story ideas that tie into the Carlsbad experience. These hooks should continually emphasize the points of differentiation that Carlsbad offers that would be pertinent to the target segment. A 3. Continue to target meetings and conference planner publications to position Carlsbad as a meeting and conference destination. 4. Continue developing a Public Relations Committee with members from the tourism community to solicit input and support for CVB public relations efforts. A 5. Develop multi-purpose informational kits (press kits) designed to be distributed to the press. A > Mid-Term 6. Continue to integrate CVB advertising and positioning into all public relations materials. A 7. Within www.visitcarlsbad.com, continue to publish new and updated content. A 8. Drive the Business Model by ensuring that every press release and public relations initiative prominently promotes www.visitcarlsbad.com. A SMG 51 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan 9. Host an annual Carlsbad familiarization trip that attracts writers from targeted publications that match the target segments. 10. Continue to offer individualized familiarization trips to targeted writers and publications. A 11. Continue to leverage and support paid media placements with public relations activities. A 12. Continue to target media in specific markets to support the overall marketing efforts. A 13. Develop an annual public relations blitz where the community visits targeted Southern California media and provides them with press kits, promotional items and story ideas. 14. Continue to utilize the existing advertising equivalency system for measuring the effectiveness of public relations efforts. A > Long-Term 15. Develop a content analysis to assess the written articles to ensure they include the core message elements. 16. Implement a survey for targeted writers and publications to establish a baseline of perceptions regarding Carlsbad. Conduct periodical reviews with these journalists by developing additional surveys to measure changes in perception. B. Community Education CORE TACTICS: (Note A = In progress by CVB) > Short-Term 1. Continue ongoing communication programs with strategic partners as well as city and local tourism industry officials. A 2. Continue to educate and obtain support from the local community for Carlsbad tourism. Develop an Executive Director weekly or monthly email to lodging, tourism and government officials designed to keep them up to date on CVB activities. A 3. Explain to local tourism officials how the new CVB Business Model will work to provide even more opportunities for businesses to improve their marketing programs, as well as to track the number of inquiries (leads) that are generated via the CVB. 4. Develop a specific approach to educate locals about how tourism can help preserve the quality of life while generating revenues for city/community services. > Mid-Term 5. Develop an annual tourism conference inviting all aspects of the Carlsbad community to inform and educate them about the continued importance of tourism to both the economy and the environment. 6. On a rotating basis, concierge and front line staff from Carlsbad resorts and hotels should be invited to participate in the monthly hotel committee luncheons. SMS 52 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Implementation Stage Implementation Brand Building/Marketing Efforts lr Target Market Segments: Take Action New & Repeat (Increased frequency) Leisure Travel • Business/Meetings/Conferences visitcarlsbad.com As the central component or engine of the Carlsbad CVB Business Model, the CVB website should be upgraded on a continual basis in order to better assist target market segments with their information gathering, and to direct them more efficiently to the lodging properties. As stated earlier, the portal website design will allow the Carlsbad CVB to focus on building brand awareness and the lodging properties to focus on closing the sale. Additionally, a destination website that features updated and relevant travel information regularly will continually educate new and repeat target segments about the multitude of reasons to visit Carlsbad throughout the year. I. Website Enhancements/Visitor Communication Objectives: 1. Improve interface opportunities with potential visitors to facilitate their information and travel booking needs. 2. Enhance the website's portal structure to drive users to the lodging properties. 3. Increase user sessions to 600,000 over the next three years. 4. Increase page views within the CVB site. 5. Reinforce the positioning of the destination in the mind of the user by integrating the Carlsbad brand and key message points into the website and all email communication. 6. Continue to build a visitor database in order to continually communicate with target market segments about the benefits of visiting Carlsbad year-round. A 7. Ensure the site is achieving its objectives by implementing a monthly measurement system to track tourism promotion efforts and to continually improve the site's usefulness and efficiency. A. Website Structure/Usability CORE TACTICS: (Note A = In progress by CVB) > Short-Term 53 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan 1. In order to ensure that the primary marketing objectives are achieved, the Carlsbad website should be reviewed to confirm that the site's structure encourages visitors to take the desired actions (i.e. sign up for email newsletters, click through to properties, etc.). Clicks to the desired actions should be minimized as much as possible, and copy should be reviewed to ensure that it encourages desired actions. A 2. The individual pages within the site should be reviewed to ensure that the title tags include relevant keywords (note: while many of the pages accessed by the top navigation bar to feature individual title tags, those pages accessed by the left hand navigation bar do not. It is unclear if that is caused by the site's structure or not.) A 3. Carlsbad should consider adding a blog to its site as a means of drawing visitors back to the site regularly, creating new content (thus making it more search engine friendly), and extending the Carlsbad brand. Other destinations have begun implementing blogs with success (i.e. http://www.visitrenotahoe.com. http://www.visitpa.com/visitpa/home.pa ) B. Search Engine Marketing CORE TACTICS: (Note A = In progress by CVB) > Short-Term 1. Continue to investigate implementing a paid search campaign (i.e. Google Adwords), in order to compete with neighboring destinations and others who use the Carlsbad brand to drive traffic. A 2. Continue to refer to its web logs to determine what keywords and keyword phrases are driving traffic. It should also determine what other websites are using those words and phrases in paid search campaigns, and whether those sites should be competed against (i.e. San Diego CVB) or not (i.e. a Carlsbad property). A C. Email Marketing/Visitor Communication CORE TACTICS: (Note A = In progress by CVB) > Short-Term 1. Carlsbad CVB should continue to grow its email database through more prominent sign up forms, sponsorships/ads in other targeted travel email newsletters, and promotions. A 2. An editorial calendar should be developed for the year, and a consistent send date should be determined (i.e. second week of every month). 3. The newsletters should have trackable links for measurability. To that end, the CVB should continue working with its outsourced email service provider. A 4. The CVB should continue list segmentation, in order to ensure that its subscribers receive only that information that interests them. Categories for consideration include 'specials and deals', 'outdoor adventures', etc. A 5. Review of the open and click through rates of each newsletter must be implemented in order to revise copy and strategy as needed. • Brand Loyalty Stage 54SMG Carlsbad Convention & Visitors Bureau Strategic Marketing Plan "roE visitcarlsbad.com Transfer to Lodging Property Book Vacation Positive Experience - Collect Information - Measure Programs - Make Adjustments and Refinements As the CVB continues to build brand awareness and to educate new and repeat visitors about all the reasons to visit Carlsbad, the local community will be integral to the success of building and maintaining brand loyalty. Once the target segments take action to connect to a lodging property, it is the responsibility of that property to close the sale. Once the reservation is made, it is up to the individual property to build brand loyalty and customer satisfaction through the delivery of the highest quality experience that exceeds the expectation of the visitor. If the expectation is met, a positive brand association for all of Carlsbad will be achieved. Once a loyal customer relationship has been established, to ensure the visitor will consider Carlsbad in its decision set for a future vacation, the lodging property should provide the visitor with a retention item. Frequency building initiatives such as a thank you card with a discount offer for a repeat visit or a guest referral could encourage repeat visitations. Whatever the tactic, it is essential that a strong customer relationship is cultivated in order to build strong brand loyalty for a property and the destination. Imagine if every property sent every visitor a thank you card or note. In addition to building customer loyalty, the portal design ofwww.visitcarlsbad.com also serves to build loyalty with lodging properties, attractions and partners who will have the opportunity to track the leads it receives from www.visitcarlsbad.com. As loyalty increases due to increased profits and Carlsbad brand visibility, it will strengthen the unified effort between the CVB and the private sector helping to increase the overall budget in order to fuel the successful Business Model and virtuous marketing cycle. New & Repeat Visitors Brand Building: - Advertising - Promotions - Sales - Visitor Information - Partners - PR/Education Virtuous Marketing Cycle Brand/Customer Loyalty: - Post-experience follow-up - Measurement/research -Adjust Business Model & marketing programs Increased Travel Spending Increased Tourism Funding Call to Action: Carlsbadca.org Lodging Property Overall Quality Experience: - Info gathering & booking - Destination/property visit ICustomer Satisfaction 55 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan I. Collect Visitor Information/Measurement In order to determine if the new Carlsbad competitive strategy is achieving the stated goals and objectives, it is imperative that the CVB creates a comprehensive system to measure the effectiveness of all marketing initiatives that are driving the Business Model. In addition to measuring marketing programs, the CVB should implement the appropriate research in order to better understand its current visitor behavior, to identify specific target segments and to determine membership needs. Together, these measurement tools will assist the CVB in the further refinement of its efforts to build the Carlsbad brand and to increase business levels over the next 3 years. Objectives: 1. To refine marketing and promotional efforts which drive the Carlsbad CVB Business Model in order to improve marketing efficiencies and to maximize limited resources. 2. To understand the CVB target market segments in order to adjust marketing programs to fit their needs and to match communication mediums. 3. To continue to gather useful feedback from the Carlsbad lodging properties and attractions about the new Business Model, marketing strategy and specific programs in order to assess future programs and membership participation. 4. To create a virtuous marketing cycle to help identify which programs are fulfilling the continual process for success. CORE TACTICS: (Note A = In progress by CVB) > Short-Term 1. Select and implement appropriate tracking measures. Included in the appendix section of this plan, SMG has provided a wide variety of measurements for consideration. Continue to collect and distribute data generated from the website including user sessions and tracking to individual Carlsbad lodging properties. 2. Develop an Internet survey to track the effectiveness of media placements and all marketing programs in order to make continual improvements to the overall system. 3. Encourage each lodging property and attraction to collect demographic and marketing data in order to provide more information and insight to the CVB about the Carlsbad visitor. 4. Develop current visitor profile collection process and develop a periodic year-round visitor profile study of visitors to the Carlsbad area. The visitor profile study should include questions that identify the characteristics, behaviors and attitudes of visitors to the area and should include information collection throughout the city. The collected information should be made available to the private sector in an effort to gain insight about the Carlsbad visitor. The CVB should also use the collected information to adjust and refine efforts. 5. As was mentioned previously, the CVB should also invest in research of the meetings and conference segment in an effort to refine and improve marketing efforts. 6. As was mentioned previously, the CVB should develop a study of Carlsbad public relations efforts designed to understand targeted publications' and writers' perceptions of Carlsbad. SMG 56 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan 7. In conjunction with the City of Carlsbad develop updated visitor economic impact study to understand the total economic impact of visitors to the area. 8. Continue to implement and refine tracking of visitors to the Carlsbad Visitor Information Center including the collection of year-round visitor data as well as specific seasonal information. A 9. Continue to collect PKF and/or STAR lodging information and utilize on an ongoing basis. A > Mid-Term 10. On a quarterly, annual or semi-annual basis, the CVB should develop a report using all available tourism performance indicators. A 11. Work with the City of Carlsbad to publish a monthly T.O.T. lodging report that would include the following: • Total rooms available • Total rooms sold • Average room rate • Total room revenue • RevPar • Total T.O.T. collected • Room availability by property size (# of units) • Rooms sold by property size (# of units) • Average room rate by property size (# of units) • Occupancy SMQ 57 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Section 11: Organizational Structure With the addition of BID funds, consideration will have to be given to potentially adding positions. Currently the CVB has two professional positions that include an Executive Director and a Director of Public Relations. With the advent of additional funds, it is conceivable that the organization would need to add a marketing manager and a sales manager in an effort to successfully implement the proposed marketing plan. (It should be noted the CVB has long had an interest in becoming a full service agency that includes a sales function, however the sales manager position may or may not be needed if the sales function was subcontracted with the San Diego North CVB). Potential Carlsbad CVB Organizational Structure , Executive Director [,> *Jt£- '• ^ * Office - — Manafier/ConiFolier j | 1 Public Relations Marketing l 1 Sales ' ' Visitor Center }J I. Position Responsibilities The following are general responsibilities for each position. Detailed responsibilities should be developed by the Board of Directors/Executive Director where appropriate. A. Executive Director • Overall responsibility for the organization providing leadership. Responsible for the management of the staff, financial management, political management and Board of Director management. Responsible for developing the overall business plan of the organization and annual reporting and accountability for the organization. B. Public Relations • Responsible for the management and implementation of the organization's public relations program. Reports to the Executive Director. SMG 58 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan C. Marketing • Responsible for the management and implementation of the organization's marketing efforts including advertising, brand management, website enhancements, online efforts, visitor information and research and measurement programs. Reports to the Executive Director. D. Sales • Responsible for the management and implementation of the organizations sales efforts. Reports to the Executive Director. • This department would also include a Sales Assistant to implement inside sales activities. E. Office Manager/Controller • Provides overall office and financial management services. F. Visitor Center • Provides ongoing visitor information services about Carlsbad. SMQ 59 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Section 12: Carlsbad CVB Budget Based on the proposed $1 per occupied room generated from the Business Improvement District, it is estimated that the first year revenues, exclusive of any other funding, would be approximately $862,000. A five year projected revenue for growth at three different scenarios 3%, 5% or 7% annual growth can be found below: Figure 10 Carlsbad CVB 5 Year Projected Revenue $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 YeaM Year 2 YearS 15% D7% Year 4 YearS Source: SMG Below are three budget scenarios that differ based on contribution from the City of Carlsbad in addition to BID funding. Table 11 CVB Budget Scenarios /ttiwwbf >**{' Leisure Marketing Plan $240,800 28% $296,800 28% Group Marketing Programs $137,600 16% $169,600 16% Internet $43,000 5% $53,000 5% Visitor Center Operations $60,200 7% $74,200 7% Payroll & Incentives $292,400 34% $360,400 34% Special Events $17,200 2% $21,200 2% Research $17,200 2% $21,200 2% Hospitality Scholarships $8,600 1% $10,600 1% Reserves $43,000 5% $53,000 5% $860,000 100% $1,060,000 100% $352,800 $201,600 $63,000 $88,200 $428,400 $25,200 $25,200 $12,600 $63,000 $1,260,000 Notes: Scenario 1 includes BID funding only with no City contribution Scenario 2 includes a contribution of $200,000 from the City in addition to BID funds Scenario 3 includes a contribution of $400,000 from the City in addition to BID funds SMG 60 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Figure 11 Projected Budget Allocations Reserves, 5% Hospitality Schlorships, 1% Research, 2% Special Events, 2% Payroll & Incentives, 34% Visitor Center Operations, 7% Leisure Marketing Programs, 28% Group Marketing Programs, 16% Internet, 5% SMG 61 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan APPENDIX SMC3 62 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan Program Measurement Resources I. Travel Trade Sales Activity Measures, Performance Measures, and Productivity Metrics A. Travel Trade Sales Activity Measures 1. Tradeshows attended/exhibited a. Number of tradeshows b. Number of co-op partners participating c. Co-op monies generated (actual and in-kind) 2. Familiarization tours a. Number of familiarization tours b. Number of participants (travel trade only) c. Number of co-op partners participating d. Co-op monies generated (actual and in-kind) 3. Sales missions (with industry partners) a. Number of sales missions b. Number of co-op partners participating c. Co-op monies generated (actual and in-kind) 4. Number of sales calls 5. Client events a. Number of client events b. Number of participants (travel trade only) c. Number of accounts d. Number of co-op partners participating e. Co-op monies generated (actual and in-kind) 6. Number of client site inspections 7. Number of developed suggested itineraries 8. Sponsorships a. Number of client events b. Tradeshow elements/sessions c. Monies spent d. Number of people at sponsored events ("customer-exposed impressions") B. Travel Trade Sales Performance Measures 1. Leads (including confidential/internal leads) a. Number of hotel leads Lead room nights (estimate) Number of visitors (estimate) Visitor spending (estimate) SMB 63 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan b. Number of non-hotel leads Number of non-hotel leads by member category Number of visitors (estimate) Visitor spending (estimate) 2. Bookings (including confidential bookings) a. Number of bookings from hotel leads Booked room nights (estimate) Booked visitors (estimated) Booked visitor spending (estimate) b. Number of bookings from non-hotel leads Booked visitors (estimated) Booked visitor spending (estimate) C. Travel Trade Sales Productivity Metrics 1. Personnel productivity metrics a. Number of leads per sales manager (hotel and non-hotel leads) b. Number of bookings per sales manager (hotel and non-hotel leads) c. Number of booked room nights per sales manager (hotel bookings only) 2. Cost productivity metrics The three cost productivity ratios listed below measure the cost efficiency of the CVB's travel trade sales efforts as a function of its key performance measures: leads, bookings and booked room nights. a. Cost per lead = travel trade sales function direct & indirect operating costs number of leads b. Cost per booking = travel trade sales function direct & indirect operating costs number of bookings c. Cost per booked room night = travel trade sales function direct & indirect operating costs number of booked room nights 3. Leads to bookings conversion ratio (hotel leads only) The lead conversion ratio measures over a stated amount of time, the effectiveness of the CVB's lead qualifying process and the likelihood generated leads will book for the destination. This ratio is particularly useful as it can be calculated for each individual travel trade sales representative and for the travel trade sales function as a whole. (number of bookings from hotel leads) (number of leads that did not book) + (number of bookings from hotel leads) SMB 64 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan II. Marketing & Communications Activity Measures, Performance Measures and Productivity Metrics A. Marketing & Communications Activity Measures 1. Advertising Promotions a. Number of programs b. Total reach c. Total frequency d. Gross Impressions e. Total value of media placed Paid media dollars Co-op media dollars - In-kind/Barter media dollars Unpaid media dollars f. Number of co-op partners 2. Online Activity a. Number of "pay-per-click" keywords purchased per search engine (including cost per click, total # of clicks generated) b. Number of web pages of content developed 3. Media/Public Relations a. Media tradeshows Number of media trade shows attended Number of appointments b. Media missions Number of media missions Number of co-op partners Number of media contacts c. Number of media/PR calls d. Media familiarization tours Number of familiarization tours Number of journalists/media participating Number of publications represented e. Press releases Number of press releases issued Number distributed (including downloaded off website) per press release f. Number of media inquiries g. Number of media interviews Number of newsletters (including e-newsletters) produced Number of public service announcements (PSA) produced Number of accounts with activity 4. Event Marketing a. Number of events supported b. Number of events produced SMQ 65 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan B. Marketing & Communications Performance Measures 1. Advertising Promotions Performance measures and productivity metrics for advertising campaigns are typically determined by advertising effectiveness studies. Performance measures typically include (but are not limited to): Advertising awareness (aided and unaided), changes in a destination's brand image among target audiences over time as well as intent to travel. 2. Inquiries/Fulfillment a. Number of brochure requests b. Number of consumer calls handled c. Number of coupons redeemed d. Number of people who register on the CVB site each month to receive newsletter, etc. (opt-ins) 3. Online/CVB Website a. Number of user sessions b. Number of unique users c. Number of repeat visits d. Click-throughs to the CVB website (and various campaign landing pages, as relevant) e. Number of specific web page view counts f. Number of click-throughs to member/sponsored websites from the CVB website ads and/or links g. Number of web coupons redeemed h. Average length of session i. Search engine referrals - Total number of referrals - Top referring search engines Percent of website traffic attributable to search engine referrals j. Search engine results' placement of website (number of first place rankings, top five, and top ten) k. Paid search results (cost per click) I. Online conversion rates 4. Media/Public Relations a. Placements b. Number of impressions (circulation) c. Advertising equivalency ($) 5. Bookings a. Online/Central Reservations Number of room nights booked - Room booked revenue Rooms sold commission - Average length of stay b. Online ticket sales - Total tickets sold - Tickets sold revenue - Tickets sold commission c. Packages - Total packages sold Packages sold revenue Packages sold commission Number of room nights booked 66SMO Carlsbad Convention & Visitors Bureau Strategic Marketing Plan C. Marketing & Communications Productivity Metrics 1. Marketing/Conversion Studies The ultimate measure of marketing productivity is the number of individuals whose visit to the destination was clearly and significantly generated by the CVB's marketing efforts. The CVB is strongly cautioned against using the destination's total number of visitors as it is extremely unlikely that the CVB generated each and every visitor to the destination. As best practice, if the CVB spends a significant amount (or percentage) of its budget on marketing efforts, it must then be prepared to invest in the research necessary to accurately and credibly measure the effectiveness of those efforts. A common research method to measure visitors generated by the CVB is the conversion study that determines the percentage of individuals responding to a specific CVB marketing effort (e.g. requesting travel information, looking at package web pages) who eventually visit the destination. 1. Inquiry conversion Conversion of "inquiries" produced by the CVB's marketing efforts to generate visitors. Inquires can include: a. Individuals who went to a unique website address in response to a specific marketing effort b. Individuals who requested visitor information (guides, maps, etc.) via phone (does not include individuals who called and were redirected elsewhere. c. Website user sessions of a certain minimum length of user sessions for travel specific pages As a best practice the CVB incorporates in the initial program setup a step where three pieces of information are collected from the inquirer. a. How they got the phone number/website address (also known as 'lead source') b. If the consumer already decided to come to the destination before they contacted the CVB c. Permission to re-contact for a follow-up survey This information will assist the CVB in ultimately determining whether the inquiry turned into a visit to the destination and whether the visit was generated by the CVB's efforts Recommended inquiry conversion ratio: Number of visitors generated by the CVB marketing effort(s) Number of inquiries generated by the CVB marketing efforts(s) 2. Advertising effectiveness research A conversion study for inquiries by a particular advertising campaign is limited in that it does not account for visitors who were generated by the campaign but did not subsequently contact the CVB. In order to gain a full accounting of ALL visitors that were generated, the CVB should consider conducting custom advertising effectiveness research studies. These studies can also be used to measure other key advertising performance measures including awareness, destination image and perception, and intent to travel. SMG 67 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan 3. Online hotel booking function conversion a. Overall 'Look-to-Look' ratio: Number of page views for the online hotel booking date/rate availability page number of users to website b. Overall 'Look-to-Book ratio: Number of bookings through online hotel booking function number of users to website c. 'Look-to-Book ratio: Number of bookings through online hotel booking function Number of page views for the online hotel booking date/rate availability page 4. Package conversion For web-based package conversions, two conversion ratios are offered. The design of the CVB's package web pages will dictate the use of one over the other: Number of CVB offered packages purchased number of page views for the initial package web page Number of CVB offered packages purchased Number of page views for the package pricing/availability web page SMG 68 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan III. Standard Return on Investment The CVB should consider standard business ROI approaches to quantify its financial impact on its local community for convention and leisure travel. ROI formulas examine the return from the investment made by the CVB, conceptually represented by the simple ROI formula below: Amount of Return (income) Return on investment = Amount of Investment (expense) For the CVB purposes, the amount of return is typically what the organization returned to the destination (visitor spending, economic impact, tax dollars), clearly and significantly generated through its sales and marketing efforts. The amount of investment can also vary, based on which stakeholder is requesting the information. Recognizing that ROI requests come in many forms, the CVB should consider using three ROI formulas to choose to cover the majority of these requests. Two examine ROI at the function- level and one that examines ROI at the CVB-level. 1. Return on Total Operating Costs Visitor spending generated by the CVB's efforts1 Total CVB operating costs 2. Return on Functional Area Direct Operating Costs Visitor spending generated by the CVB's efforts by functional area Direct operating costs for the functional area 3. Return on Functional Area Direct & Indirect Operating Costs Visitor spending generated by the CVB's efforts by functional area Direct & indirect operating costs for the functional area 1 The sum of visitor spending generated by the CVB's convention sales, travel trade sales and marketing and communications functions. IV. Functional Area ROI Formulas A. Conference Sales Function 1. Return on Conference Sales Function Direct Operating Costs Attendee spending generated by the CVB's conference sales function (see note 1) Conference sales function direct operating costs 2. Return on Conference Sales Function Direct & Indirect Operating Costs Attendee spending generated by the CVB's conference sales function (see note 1) Conference sales function direct & indirect operating costs SMG 69 Carlsbad Convention & Visitors Bureau Strategic Marketing Plan B. Travel Trade Sales Function 1. Visitor spending generated by the CVB's travel trade sales function (see note 2) Travel trade sales function direct operating costs 2. Return on Travel Trade Sales Function Direct & Indirect Operating Costs Visitor spending generated by the CVB's travel trade sales function (see note 2) Travel trade sales function direct & indirect operating costs C. Marketing & Communications Function 1. Return on Marketing & Communications Function Direct Operating Costs Visitor spending generated by the CVB's marketing & communications function (see note 3) Marketing & communication function's direct operating costs 2. Return on Marketing & Communications Function Direct & Indirect Operating Costs Visitor spending generated by the CVB's marketing & communications function (see note 3) Marketing & communication function's direct & indirect operating costs Notel: Attendee spending is defined as: (Total Actual Attendance) x (Daily Attendee Spending) x (Average Length of Stay) a. Total actual attendance is the attendance for events meeting in the time i. period for which the ROI is being calculated, regardless when the CVB ii. booked the event ("by-year production). b. Only booked events where the CVB generated the lead/confidential lead i. can be included. Note 2: Visitor spending is defined as: (Total Booked Visitors) x (Daily Visitor Spending) x (Average Length of Stay) a. Total booked visitors only includes those visitors for which the CVB generated the lead/confidential lead (hotel and non-hotel leads). b. Booked visitor counts are estimated since actual post-trip figures are not collected. Note 3: Visitor spending is defined as: (Total Generated Visitors) x (Daily Visitor Spending) x (Average Length of Stay) Total generated visitors is the number of visitors clearly and significantly generated by the CVBs marketing efforts, a figure arrived through the studies described in detail in the section on Marketing & Communication Productivity Metrics, including advertising campaign effectiveness, inquiry conversion studies and package purchased studies. SMQ 70