Loading...
HomeMy WebLinkAbout2008-08-26; Carlsbad Tourism Business Improvement District; 08-08-34; Report From Reint Reinders & Associates Phase IICARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT AGENDA BILL AB# MTG. DEPT. 08-08-34 8-26-08 Admin Services Report from Reint Reinders & Associates and consideration of Phase II of Marketing Project CTBID STAFF (j^ GENERAL x*£) COUNSEL M?!^ RECOMMENDED ACTION: 1. Receive report from Reint Reinders & Associates on Phase I and discuss recommendations 2. Consider Phase II proposal from Reint Reinders & Associates and, if the Board chooses, adopt Resolution No. 2008-6, authorizing the Chairperson of the Carlsbad Tourism Business Improvement District to enter into an agreement for professional services with Reint Reinders & Associates ITEM EXPLANATION: During the past two years, the Carlsbad Tourism Business Improvement District (CTBID) Board of Directors has been focusing on the development of a marketing program that would support the wide range of hotel properties within the City of Carlsbad. Since the creation of the CTBID, the Board has worked with both the Wright Group and Destination Analysts, and has heard presentations from the Carlsbad Convention and Visitors Bureau (CCVB), and the San Diego North Convention and Visitors Bureau (SDNCVB) regarding services these agencies provide in support of tourism in the area. Most recently, the CTBID Board contracted with Reint Reinders & Associates (RR&A) to develop marketing strategies and programs that will strengthen the tourism activities within Carlsbad This study was conducted during the months of April 2008 through July 2008. Attached at Exhibit 1 is an outline of the work performed and resulting recommendations. Included in the recommendations is a recommendation that the Board contract with RR&A for phase II of the study. Phase II would implement the recommendations of phase I over the next 10 months at a total cost of $100,000. A detailed description of phase II work is provided at Exhibit 2. The CTBID Board should receive the report from RR&A on the results of Phase I and discuss the recommendations. Following the discussion, if the Board would like to proceed with hiring RR&A for Phase II, they should direct the General Counsel to draft the necessary documents and agreements for the signature of the Board Chairperson. FISCAL IMPACT: The proposal submitted by Reint Reinders & Associates for phase II is expected to take an additional 10 months, and has a total price of $100,000 ($10,000 per month). The CTBID's 2008-09 Budget has a $250,000 contingency fund and a $390,000 available fund balance for a total of $640,000 in available funds. ENVIRONMENTAL IMPACT: This action does not approve any projects that will have a physical adverse affect on the environment so it falls within the general rule under CEQA that this is not a project (CEQA Regulation 15738). EXHIBITS: 1. RR&A Phase I report 2. Detailed description of Phase II work to be performed by RR&A dated August 8, 2008. 3. Resolution No. 2008-6, Authorizing the Chairperson of the Carlsbad Tourism Business Improvement District to enter into an agreement for professional services with Reint Reinders & Associates. DEPARTMENT CONTACT: Cheryl Gerhardt, 760-602-2409, cgerh@ci.carlsbad.ca.us FOR CITY CLERKS USE ONLY. BOARD ACTION: APPROVED D CONTINUED TO DATE SPECIFIC D DENIED D CONTINUED TO DATE UNKNOWN D CONTINUED D RETURNED TO STAFF D WITHDRAWN D OTHER-SEE MINUTES D AMENDED D EXHIBIT 1 Xeintfieinalers, CfiA fietnt Jteinders & Associates 12380 Jiue Cheaumont San Diego, CA 92131 P&one: 760-994-9266 . com www. reintreinders. com Tuesday, August 12, 2008 Executive Summary After four months (April 1 through July 31, 2008) of comprehensive research and analysis that included: o 116 confidential interviews and meetings with Carlsbad tourism stakeholders from hotels, resorts, inns, attractions, retail, dining, transportation, government, authors of previous consultant studies, and other state and regional destination marketing officials and o Careful review of all Carlsbad tourism marketing-related performance metrics, contracts, reports, commissioned studies, surveys, and BID proposal and interpretation documents; o Attending six (6) Carlsbad community cultural and public meeting and events plus o Analysis, further research and development of findings, opinions and recommendations Reint Reinders & Associates (RR&A) has reached the following conclusions: with more than $14 million (and growing) contributed to the City's general fund last year via the local hotel industry's bed tax and with the City faced with plummeting home values resulting in potential future budget shortfalls, tourism is becoming more and more vital to the Carlsbad economy and way of life. If Carlsbad does not take swift and strong action - - becoming a legitimate player in the highly competitive tourism marketing game, upgrading Carlsbad's CVB (CCVB) into a 21st century tourism sales and marketing agency, properly funded and managed - - Carlsbad risks losing greater share of market to less attractive and less deserving Southern California coastal tourism destinations. Maintaining the status quo option? Risks: further divisiveness with largest resorts and attractions marketing unilaterally with very little or no marketing the Carlsbad destination. $440,000 to Carlsbad's CVB and an additional $1 10,000 to San Diego No. CVB (SDNCVB) will produce the same mixed results, even lower stakeholder expectations and more lost opportunities for establishing Carlsbad as a powerful brand. As for having to make the "case" for tourism in/for Carlsbad, it's a moot point: Carlsbad is a tourism destination. It became one the day that Legoland opened its doors in 1999. Case closed. Currently Carlsbad has a very wide range and assortment of attractions to offer tourists of every age, gender, pocketbook, ethnicity and nationality, e.g., weather, beaches, a world class amusement park, trophy resorts, more affordable hotels, time shares and vacation rentals, a quaint, historic shopping, dining and entertainment village and some other very unique local attractions. More positives: Carlsbad as a tourist destination has a backyard/neighborhood audience from which to draw 21 million Southern California residents, according to Jack Kyser, Los Angeles Economic Development Corporation. Furthermore, 85 percent of all "California tourists" are residents of California, according to Bruce Baltin, PKF Consulting. 1 EXHIBIT 1 Given all of these obvious features and competitive advantages, Carlsbad should be capturing a much greater share of the tourism pie. RR&A's reasons for why Carlsbad is not capturing greater market share: 1. CTBID Board's inability to make necessary decisions and take decisive action 2. Accountability (CTBID Board & tourism promotion contractors) 3. Absence of clear direction (to tourism promotion contractors) 4. Insufficient funding 5. Lack of commitment and real support by and from the City of Carlsbad RR&A recommendations (to be adopted and implemented 2009-2014): 1. New CTBID funding increased from $1 per room night to 2% of member hotel room revenues (use of the 1994 BID as a business model - - a five year commitment) 2. New, reconstituted DMO (destination marketing organization) to replace the current CCVB a. New, strong sales & marketing leadership b. New powerful, interactional website featuring strong SEO, content and linkages c. New sales associate to focus on B-to-B marketing opportunities and events as opposed to the standard B-to-C (more complete explanation provided at 8/26/08 presentation) d. A new advisory board representative of the top sales and marketing minds among Carlsbad's tourism stakeholders; provides advice, counsel, resources and potential joint marketing and partnering opportunities for the new DMO e. New powerful alliances and partnering (#1 S.D. ConVis & #2 SDNCVB) 3. Develop an RFP and solicit representative consulting firms to conduct a comprehensive Carlsbad Tourism Economic Impact study in order to produce a 2008 baseline; importance for all Carlsbad tourism stakeholders, in particular the City government, to "know the dollars" (that come from tourism locally); RR&A to present the consulting firm selection to the CTBID for approval and funding 4. A DMO, new Advisory Board, CTBID Board and City government adopted and supported campaign to unite all of Carlsbad's tourism stakeholders in support of a powerful, new Carlsbad tourism brand (through new communication, stakeholder meetings, "town hall" gatherings) 5. A new DMO/CTBID Board sponsored training program for all Carlsbad hotels designed to help hotel stakeholders capture more room nights and revenue and drive occupancy back up to annual 70 percent plus standards EXHIBIT 1 6. A new tourism initiative as part of the City of Carlsbad's Master Plan review in 2009 7. For the purposes of continuity and accountability, ownership of work scope, retaining RR&A for a Phase II engagement (9/1/08 to 6/30/09) to manage, facilitate and implement a successful transition from the current CCVB to the new reconstituted DMO that would include the recruitment of a new DMO executive director and the establishment of new metrics RR&A's Charge 1. Assessment of the CTBID initiative to date a. Review of the CTBID Board's responsibilities, decisions, performance to date b. Review of CCVB's charge, funding, activities, overall performance to date c. Review of SDNCVB's charge, funding, activities, overall performance to date 2. Deliver actionable recommendations on how tourism sales & marketing and visitor services should be conducted - - and what that will look like - - going forward a. Recommendations that will help "guide" the CTBID Board with sound visitor destination marketing initiatives b. Key deliverable: provide opinion and recommendations on how best to drive visitor demand so as to increase travel and annual occupancies to a stabilized minimum 70% 3. Manage a Phase II project to oversee, direct and supervise full implementation on all recommendations and initiatives approved and adopted by the CTBID Board Stakeholder Interviews/Feedback While the 116 stakeholder interviews produced a wide range of opinions on contractor value and overall performance to date and how Carlsbad tourism marketing should go forward, here is RR&A's interpretation of the consensus reached: o A passionate, strong-willed minority of stakeholders - representing primarily the Carlsbad Village, the beach hotel and community and some members of City government - - want to maintain the current CCVB and its leadership with greater support by the entire community but with increased funding o The other stakeholders - - those located away from the Village and the beaches - - are just as passionate and strong-willed about the need for major change in how Carlsbad is marketed as a destination; new DMO, new leadership, more funding, more accountability, greater expectations, a serious, committed campaign to build a strong Carlsbad brand and creation of a new "place" with more activities, art and culture o All stakeholders seem to be in universal agreement over disappointment of how the CTBID rolled out - - lots of frustration with the City's failure to provide matching funds EXHIBIT 1 Assessment of CTBID Board RR&A will address on August 26th RR&A's assessment on the makeup and functioning of the CTBID Board including decisions made or deferred on providing direction to and demanding greater accountability of the two contracted agencies along with recommendations for how the CTBID Board should be selected, are there areas where representation is missing, plus the role of City government with the CTBID Board going forward. Assessment of CCVB & SDNCVB A lot of hard effort has been put forth by both contractors in providing various services in promoting tourism for Carlsbad. Accomplishments have been noted despite a woeful lack of funding, clear direction, and friction between the two contracted organizations, and a divided Carlsbad stakeholder community. For more insight into RR&A's contractor assessment, revisit comments and recommendations on pages 1 and 2, from RR&A's "final conclusions reached," "reasons why Carlsbad is not capturing greater market share" and "recommendations". While there could be a contracted role (possibly marketing, advertising and P.R.) in the future for SDNCVB - - on top of the already stated recommendation for forming a stronger alliance - - a new reconstituted Carlsbad DMO would replace the current CCVB altogether with new leadership, new funding and new performance metrics. RR&A will provide more assessment details and answer questions during the CTBID Board closed meeting on the 26th. Assessment of Previous Consultant Studies, Reports, Surveys RR&A reviewed all of the various consultant studies, reports and surveys along with the CCVB marketing plan produced by SMG, one of the consulting firms that have been engaged more than once in recent years. All of the reports - - and the plan itself- - have value, but since little if any action has been authorized by the CTBID Board since, the value of the consultants' efforts and contributions has been significantly diminished. RR&A agrees with much of the consultants' findings, opinions and recommendations - - lack of awareness hurts Carlsbad's tourism promotion efforts, competition outspending Carlsbad by 3-or-4-to-l, need for increased funding, new attractions, internal communications with the City, long-term tourism strategy, cooperative alignments within the region, a need for the community to "come together" in support of tourism and necessary improvements in signage, events, beach areas and other City-controlled environments. Options for CTBID Board to Consider Going Forward 1. Continuing with current status quo (no changes); retaining CCVB & SDNCVB @ $1 BID tax; increase spending up to $200K on upgrading current CCVB website 2. Reconstituted DMO with new funding @ 2% of hotel room revenues providing DMO with a $1.4M to $2.4M more competitive budget allowing the DMO to operate on "a more level playing field" 3. EXHIBIT 1 Carlsbad SWOT Test Strengths o Weather o Beaches o Quality of life o World class amusement park (Legoland) o Unique attractions: GIA, Flower Field, Museum of Music o Trophy resorts, time shares, inns and B&Bs o More affordable hotels & vacation rentals o Historic, quaint Carlsbad Village o Shopping o Geographical location advantages - - easy access San Diego and its multitude of attractions Weaknesses o Carlsbad's "brand" has been neither established nor managed correctly o Carlsbad has no established "promise"; no "value proposition"; no real "product differentiation" o Carlsbad's current tourism promotion contractors are underfunded with limited real production o Carlsbad's numerous tourism marketing alliances (Legoland, S.D. Con-Vis, S.D. No. CVB) have been sorely underutilized o The City of Carlsbad government has not been a strong enough partner in tourism promotion with support and funding as have other competitive CA coastal cities o The CTBID Board's reluctance to take action of consultants' recommendations and spend those available funds o Carlsbad's tourism stakeholder community is not united; currently, there is no product synergism, no real consensus for or in support of a clear, consistent Carlsbad "brand" Opportunities o Current troubled economy has forced many consumers to revise all vacation travel plans and to consider new "staycations" and "daycations" trends, vacations closer to home o New pool of "displaced" vacation business from cancelled or deferred trips to Hawaii and Las Vegas (due to reduced air lifts, increased fuel costs, soft travel market) o With a more established Carlsbad brand, tourists would be more likely to stay longer, spend more money, due to increased awareness of Carlsbad's many attractions and venues o Leveraging current and potential future area visitors through new marketing alliances with powerful and well-funded partners such as Legoland and S.D. Con Vis o The forthcoming City of Carlsbad's "General Plan" revision process to address a new tourism initiative and a strong, new tourism strategy o Development of long term strategy for sustainable sales and marketing campaigns Threats o Tourism promotion loss of funding (CTBID dissolves, City fails to redirect TOT funds) EXHIBIT 1 o Continued loss of tourism market share due to lack of an established brand, insufficient funding to promote tourism, and Carlsbad becoming less top of mind as a tourism destination o Carlsbad's competitive CA coastal destinations capturing greater share due to sound funding and effective tourism marketing activities (see RR&A's "Selected CA CVB Matrix" attached) o Carlsbad's "closest" neighbors, e.g., Oceanside's new Wyndham Hotel, marina and waterfront upgrades; Encinitas, Vista and San Marcos infrastructure and visitor services enhancements o Carlsbad dropping further off tourists' radar screens as Four Seasons, La Costa and Legoland continue to not use the name Carlsbad prominently in their extensive marketing campaigns o Economy: rising gas costs, layoffs, housing mortgage crisis, cost of living, a real recession Carlsbad's Competitive Destination Overview RR&A will present a competitive set matrix with accompanying slides depicting the competitive disadvantages facing Carlsbad's tourism marketing efforts. Carlsbad, for instance, has approximately 42 hotels with an inventory just short of 4,000 rooms yet spends less than $500K a year through its CCVB. By contrast, Catalina Island claims only 25 hotels and 1,000 rooms, but its CVB has a budget of $1.3M. Another example, Laguna Beach, has only 10 hotels and 1,300 rooms, but a budget nonetheless of $1M. Newport Beach, on the other hand, has only 14 hotels and 3,000 rooms, but its budget is an astounding $3.8M. The list goes on and on. Huntingdon Beach has only 12 hotels and 1,500 rooms, yet its tourism promotion budget is $1.4M and growing higher sooner. Tourism Overview 2008-2009 RR&A intends to introduce a tourism overview - - from a 30,000 feet perspective - - on the 26th for the purpose of making a strong statement about the paradigm shift in world, national, state and regional tourism marketing. RR&A will address the importance of tourism worldwide, the impact that tourism has on California's economy, how competitive it has become at every level, what programs and funding have been redirected toward tourism campaigns and efforts just since 9/11 and how all of the above is relevant to and for Carlsbad today (and tomorrow!). A Carlsbad "Place" RR&A fully supports the efforts of the City and the heavily engaged public groups in identifying and then doing what is necessary to bring a "place" to Carlsbad - - and how vital such a venue would be for both the quality of life for Carlsbad's local residents, but also for those all-important tourists. RR&A will remind those attending the presentation on the 26th that "locals" are "tourists", too. And that anything good for locals (residents and merchants, etc.) is good also for tourists. m closing, RR&A would like to thank the CTBID Board and the City of Carlsbad government for this great opportunity to be of service. And RR&A would be remiss in not commenting on the outstanding job the City of Carlsbad has done in delivering the type of environment, open space, facilities, safety, and the multitude of high quality City services - - all of which lead to the great quality of life that Carlsbad provides. And don't think for a moment that any of that is lost on attracting potential visitors in the future. It is not enough, however, hence RR&A recommends strongly that with the full support of City government, CTBID Board approves and adopts RR&A's recommendations for going forward. EXHIBIT 1 - ATTACHMENT b i r 4 e f paradise CTBID Board Project Carlsbad Tourism Marketing Going Forward Handouts August 12, 2008 Reint Reinders & Associates 8/15/2008 Reint Reinders & Associates Group # 1 La Costa Resort LJ Four Seasons Resort LI Sheraton Carlsbad O Grand Pacific Palisades LI Carlsbad Inn Hotel a G. P. Palisades HOA a Carlsbad Inn HOA LJ Four Season Club Carlsbad Seapointe 8/15/2008 Reint Reinders & Associates Group # 1 La Costa Resort Four Seasons Resort Sheraton Carlsbad Grand Pacific Palisades Carlsbad Inn Hotel G. P. Palisades HOA Q Carlsbad Inn HOA Four Season Club Carlsbad Seapointe 8/15/2008 Reint Reinders & Associates Group # 2 Hilton Garden Inn Motel 6 #471 Homewood Suites Holiday Inn Courtyard by Marriott -I Inns of America/ALPS Ramada Inn Residence Inns La Quinta Inn Motel 6 #1021 Extended Stay America 8/15/2008 Reint Reinders & Associates Group # 2 Hilton Garden Inn Motel 6 #471 Homewood Suites Holiday Inn Courtyard by Marriott G Inns of America/ALPS LI Ramada Inn Residence Inns La Quinta Inn Motel 6 #1021 Extended Stay America 8/15/2008 _l Reint Reinders & Associates Group # 3 Inns of America Suites Q Hampton Inn (1/08) G West Inn G Hyland Inn G Ocean Palms Beach Resort G Beach Terrace G Comfort Inn G Beach View G Carlsbad Travel Inn G Surf Motel G Tamarack Beach Resort G Scandia G Seabreeze Hotel G Seashore on the Sand G Pelican Cove Q Six (6) other properties 8/15/2008 Reint Reinders & Associates 6 Group # 3 Q Inns of America Suites a Hampton Inn (1/08) Q West Inn Q Hyland Inn Q Ocean Palms Beach Resort Q Beach Terrace Q Comfort Inn G Beach View G Carlsbad Travel Inn J Surf Motel Q Tamarack Beach Resort Q Scandia G Seabreeze Hotel G Seashore on the Sand Q Pelican Cove G Six (6) other properties 8/15/2008 Reint Reinders & Associates ltl?.-^r^Selected So. Coastal CVB Set Budgets for tourism promotion $4,000,000 i $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 $440K $1M $3.8M $1.4M E3 Carlsbad B Laguna Beach B Newport Beach B Huntington Beach 8/15/2008 Reint Reinders & Associates 8 Number of Hotels within CVB city Carlsbad (42) LJ Laguna Beach (10) Newport Beach (14) Huntington Beach (12) 8/15/2008 Reint Reinders & Associates Selected So. C/\ Coastal CVB Set Budgets for tourism promotion $2,000,000 $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 D Carlsbad 11 Catalina Island • Santa Monica • Santa Barbara $440K $1.3M $2.0M $1.8M 8/15/2008 Reint Reinders & Associates 10 Number of Hotels within CVB City Carlsbad (42) Catalina Island (25) Santa Monica (37) Santa Barbara (40) 8/15/2008 Reint Reinders & Associates 11 Monthly Occupancy rate-12Month Period - i C JjSfc .- Jp&r Month of hotel stay CTBID Carlsbad: missing in action Alameda, Davenport & Oxnard < a way. Alameda Carmel Channel Islands National Park Dana Point Davenport Encinitas Fort Bragg Half Moon Bay Huntington Beach L a Jolla Laguna Beach Long Beach Malibu Marina del Rey Monterey Morro Bay ^ vacations: 32 selections!!! Newport Beach Oceanside Oxnard Pacific Grove Pebble Beach Pismo Beach Point Arena San Clemente San Diego San Francisco San Luis Obispo Santa Barbara Santa Cruz Santa Monica Seal Beach Venice 8/15/2008 Reint Reinders & Associates 13 Projected State Tourism Office Budgets By Rank (in $Millions) 200S 1. Hawaii $85.1 M 2. Texas $63.2M 3. California $58.OM 4. Illinois $50.4M 5. Florida $42.1 M 6. Pennsylvania $31.8M 7. Louisiana $28.9M 8. So. Carolina $28.1 M 9. Arizona $25.OM 10. Colorado $22.7M Source: TIA 8/15/2008 2005 1. Hawaii $69.OM 2. Illinois $47.8M 3. Pennsylvania $33.OM 4. Texas $30.6M 5. Florida $28.5M 6. West VA $23.1 M 7. Louisiana $18.4M 8. Missouri $17.8M 9. So. Carolina $16.1 M 10. Arizona $16.OM 28. California $8.1 M Reint Reinders & Associates 14 -10%' -20%J U.S. losing world traveling overseas visitors 2000 2007 World D Number of Overseas Arrivals to the U.S.Number of Global Overseas Travelers Not Coming to U.S. 8/15/2008 Reint Reinders & Associates 15 EXHIBIT 1 - ATTACHMENT 2 Reint Reinders & Associates Selected CA CVB Matrix II 8/12/08 CVB Carlsbad Catalina Isd. San Diego San Diego No. Temecula Laguna Beach Newport Beach Costa Mesa Huntington Beach Marina del Key Santa Monica San Luis Obispo Santa Barbara City Monterey County Budget S440K S1.3M $21M S3.3M S999K $1M S3.8M S1.4M S1.4M S800K S2.M SIM S1.8M $4M Room Tax 10% City = $14M $1/RN BID 12% City = $4M 10.5% City S150M 10% City 9% County 8% City 10% County 10% City = S8.7M 10% City = $18M 6% City = S4.5M 10% City = $7M 12% County 14% City = $38M 10% City 9% Co. = $21M 12% City = $15M- 10% Co. = $16M 10% - 12% = $40M Funding 100% BID 65% public 35% private 2% BID 10% of Con Vis 2% BID 10% public 90% private 2% BID 1% Arts 1% CVB 95% public 5% private 2% BID tax 100% BID 2% BID 1% BID + S250K County 100% public 60% public 40% private 80% public 20% private 72% public 18% private Budget Allocations 100% tourism marketing 95% tourism, 5% corporate 50% conv. 50% tourism 55% conf. 45% tourism 60% conv. 40% tourism 100% tourism 40% tourism, 60% conf. 20% conv. 80% tourism 15%conv. 85% tourism 25% conv. 75% tourism 30%conv. 70% tourism 10%conv. 80% tourism 25% conv. 75% tourism 100% destination marketing Staff 3 7 63 17 3 4 16 5 6 3 12 + 3 Vis. Centers 5 10 17 Hotels/Rooms 42/3,900 25/1,000 400/56,000 84/13,600 15/1,700 10/1,300 14/3,000 10/2,050 12/1,500 6/1,000 37/3,600 85/9,200 40/4,500 250/22,000 Room Tax: TOT percentage returned to CVB for tourism promotion plus BID contribution Funding: sources that fund the CVB tourism promotion; BID, percentage of TOT, or combination of both Source; Western Association of Convention & Visitors Bureaus www.wacv.com & Reint Reinders & Associates EXHIBIT 2 fteintfieindets & Associates 12380 Jtue Cbeaumont San Diego, CA 92131 PAone: 760-994-9266 s. com www. remainders, com Friday, August 08, 2008 RR&A Proposal Phase II (2/18/08 version") After the initial four months of Phase I, the set of recommendations will be available for actionable steps to go forward with RR&A's Phase II professional services. RR&A recommends that the CTBID Board engage the RR&A team for a second phase (Phase II). Phase II is designed to ensure full implementation and detailed follow up on all recommendations the CTBID Board approve and adopt. Phase II is expected to last eight (8) months ($12,000.00 per month, total of $96,000.00). This follow up mentoring can be a real asset to the organization as it begins to execute on the marketing plans, new budgets and technology implementation. RR&A suggests a series of steps that would enable RR&A to interact with leadership and the staffs, hold weekly meetings, do coaching, teaching and continuously adjust and improve the newly agreed upon and adopted standards. RR&A will be reporting monthly in writing and in person to the BID Board, the ultimate stakeholder leadership. RR&A is confident that RR&A will be able to have a very effective functioning organization and have instituted an enterprising spirit to deliver on the Carlsbad tourism marketing initiatives. RR&A Proposal Phase II (8/8/08 version) Reint Reinders& Associates (RR&A) to be contracted by the CTBID for a Phase II deployment for a period not to exceed 10 months at a total compensation of $100,000.00 ($10,000.00 per month for ten months, 9/1/08 through 6/30/09). Phase II would commence on September 1, 2008 and end on June 30, 2009. This period will coincide with the balance of the CTBID fiscal year as well as the duration of the existing contracts with Carlsbad Convention & Visitors Bureau (CCVB) and San Diego North Convention & Visitors Bureau (SDNCVB), and will allow for a new model and program to be in place at the start of fiscal year 2009-2010. Here are the recommendations by RR&A of the specific action? to be performed during the balance of the fiscal 2008-09 year. Depending on the new level of funding starting fiscal 2009- EXHIBIT 2 10 approved by the CTBID, not all recommendations may be doable at a lower level of funding. Plans and tasks to be performed by the RR&A team: 1. RR&A will provide overall management of the implementation process for the 10- month period of time between 9/1/08 and 6/30/09. Should the CTBID Board approve and adopt all or most of the critical new initiatives recommended, RR&A will take ownership of the transition and implementation process. There is no one on the current CTBID Board to take on the responsibility and serve in that capacity 2. Develop an organization plan and template to include governance, general guidelines, and standard operating procedures (SOPs) on/for performance measurement/metrics, position descriptions, compensation, reporting and budgets for approval by the newly reconstituted Destination Marketing Organization (DM0) and by the CTBID Board; both organizations (the new Carlsbad DM0 and the CTBID) to become aligned and in synch for the explicit benefit of the Carlsbad tourism community 3. Develop a new 2009-2010 Carlsbad Tourism Sales and Marketing Plan to be adopted by the new DM0 and by the CTBID Board, the body that will be funding all of the components of the Plan 4. Engage the Mayor and the Carlsbad City Council to discuss, suggest and redefine the City's roles and involvement with the CTBID and new DM0; in addition, to resolve funding and upgrading issues of the current Carlsbad Visitor Center 5. Engage the Mayor and the City Council in a discussion, to seek buy in on certain other critical infrastructure issues of great importance to Carlsbad tourism stakeholders that will enhance and strengthen the overall Carlsbad brand 6. Engage the Mayor and the City Council members in a discussion on reformatting or revising the City's General Plan to incorporate a formal strategy for tourism 7. Engage the San Diego ConVis and SDNCVB to develop a specific plan for a new, formal alignment between the new Carlsbad DM0, S.D. ConVis and SDNCVB especially in view of the recent tremendous growth of tourism marketing dollars for these two organizations; with the introduction last year of the S.D. Tourism Promotion Corporation, ConVis will claim more than $30 million for tourism marketing in 2009; the plans and alignment initiatives will include Internet, research, advertising and promotions, public relations and sales and marketing programs and campaigns 8. Engage in dialogue with potential "sponsors" and "partners" and new alliances for the new Carlsbad DM0, e.g., Legoland and Callaway (potential sources for additional funding and/or joint marketing efforts) 9. Create a new "advisory board" for the newly reconstituted Carlsbad DM0 to consist of the very best marketing minds amongst Carlsbad's tourism stakeholders; new advisory EXHIBIT 2 board to give input on DMO's future marketing plans, strategies, initiatives and spending; opportunity for creating new synergism between DM0 and hotel stakeholders 10. Develop an RFP and solicit representative consulting firms to conduct a comprehensive Carlsbad Tourism Economic Impact study in order to produce a 2008 baseline; importance for all Carlsbad tourism stakeholders, in particular the City government, to "know the dollars" (that come from tourism locally); RR&A to present the consulting firm selection to the CTBID for approval and funding 11. Conduct a CEO search and any other key managers required to staff the new DM0; all candidates proposed to be presented for final review and approval by the CTBID Board 12. Oversee the upgrade and overall enhancement of the VisitCarlsbad.com website; work closely with Simple View (a preferred provider in CVB website construction and hosting, already engaged with the present CCVB website); develop an overall plan for the site that will include SEO (search engine optimization), functionality, navigation, content, linkages and transaction capabilities along with strategies to improve overall organic growth; present the CTBID Board with the detailed plan for funding with the intention of the new site becoming fully operational before 6/30/09 13. Implement and manage a new customized training program made available to all Carlsbad hotels for managers, revenue managers, front desk, reservations, sales, catering and conference service personnel, focusing on capturing more room nights from call ins, walk ins and past and present guests; a sustaining program featuring monthly workshops; adds value to the new BID contribution by all hotels; program is designed to help raise Carlsbad's overall occupancy back to a stabilized 70 percent plus; to be presented to CTBID Board for approval and funding 14. As a highlighted principal strategy of the 2009-2010 marketing plan process, create a "Branding Carlsbad" initiative to ensure full embracement by the Carlsbad tourism stakeholders so that, under RR&A's watch and supervision, Carlsbad can be positioned as a "unique" destination; a primary goal of this branding exercise will be to grow the F.I.T. (non group, non-business traveler, more leisure driven) business for Carlsbad and to especially strengthen the demand for leisure product during the six months of Carlsbad's off-season (Sept. through Feb.), which at present produces a less than acceptable sub-60 percent occupancy 15. Conduct meetings individually and in small groups with the tourism community stakeholders to explain (and get input and buy in on) the new DM0 organization and its sales and marketing strategies, goals and overall value going forward 16. RR&A to meet with and report monthly and/or quarterly with the CTBID Board, orally and/or in writing - - at the pleasure of the CTBID Board 17. The Phase II fee ($10,000 per month) for RR&A's services entails a maximum of 50 hours per month at the rate of $200.00 per hour; to be billed monthly 3 EXHIBIT 3 1 RESOLUTION NO. 2008-6 2 RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT, AUTHORIZING THE CHAIRPERSON TO ENTER 4 INTO AN AGREEMENT FOR PROFESSIONAL SERVICES WITH REINT REINDERS & ASSOCIATES 5 6 WHEREAS, the City Council of the City of Carlsbad adopted Ordinance No. NS-778 7 enacting Chapter 3.37 of the Carlsbad Municipal Code on November 15,2005 thereby creating 8 the Carlsbad Tourism Business Improvement District (CTBID); and 9 WHEREAS, the primary purpose of the CTBID is to promote tourism and provide 10 services to visitors to the City of Carlsbad; and 11 WHEREAS, the City Council has authorized the Board of Directors of the CTBID to 12 conduct the business of the CTBID in the time, place and manner that best suits the needs of the 13 Board of Directors of the CTBID, subject to the control of federal, state and local laws governing 14 the activities of a Business Improvement District; and 15 WHEREAS, the City Council has provided the Board of Directors with the ability to 16 contract for services necessary to carry out the purpose of the CTBID; and 17 WHEREAS, Mr. Reint Reinders, by virtue of his extensive experience in the hospitality 18 industry, marketing background, deep understanding of the tourism industry, and long tenure 19 with several successful hotel operations, is uniquely qualified to provide marketing and other 20 consulting services to the CTBID; and 21 WHEREAS, the CTBID contracted with Reint Reinders and Associates (RR&A) for 22 Phase I of a marketing study; and 23 WHEREAS, Reint Reinders & Associates completed phase I of the study and has 24 submitted a proposal for phase II dated August 8,2008; and 25 WHEREAS, the CTBID Board has reviewed the proposal submitted by Reint Reinders 26 & Associates and finds that the services to be provided by Reint Reinders & Associates will be of 27 benefit to the CTBID; 28 NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Carlsbad Tourism Business Improvement District, as follows: 1 . That the above recitations are true and correct. 2. That the CTBID General Counsel is directed to draft the documents necessary to enter into an agreement with Reint Reinders & Associates to provide all, or part of the services described in the proposal dated August 8, 2008, as may be deemed necessary by the CTBDD Board. The Board agreed to extend the current agreement for three (3) months, commencing on September 1, 2008 and ending on November 30, 2008. The fee will be $10,000 per month for three months, for a total of $30,000. Within the next ninety (90) days the Board will meet to discuss whether or not to extend the agreement further. 3. That the CTBID Chairperson is hereby authorized to an agreement between the CTBID and Reint Reinders & Associates in a form acceptable to the CTBID General Counsel for the procurement of the described services. -2- PASSED, APPROVED, AND ADOPTED at a regular meeting of the Board of day of 2008, by the following vote to wit: Directors of the Carlsbad Tourism Business Improvement District on the i"T fcAYES: NOES: ^ ABSENT: O ATTEST: APRIL SHUTE Chairperson LORRAINE WOOD x Pro Tern Clerk of the Carlsbad Tourism Business Improvement District -3-