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HomeMy WebLinkAbout2017-04-13; Carlsbad Tourism Business Improvement District; ; Tourism Marketing Services ProposalAB# MTG. CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT AGENDA BILL 04-17-140 CTBID STAFF 4-13-17 Tourism Marketing Services GENERAL Proposal COUNSEL RECOMMENDED ACTION: {'~./ Revisit CTBID governance options, review Visit Carlsbad proposal and direct staff accordingly. ITEM EXPLANATION: Since the inception of the Carlsbad Tourism Business Improvement District (CTBID), the CTBID Board has contracted with Carlsbad Convention and Visitors Bureau 501 C-6 corporation (dba Visit Carlsbad) to provide tourism marketing services for Carlsbad. The scope of those services have included operation of the visitor center, web site development and administration, print and internet advertising, public relations and various other tourism marketing activities identified in the contract for that fiscal year. In March 2016, the CTBID Board directed staff to bring back other options for the Governance of the CTBID. This was based on recommendations made in the Tourism Study performed by Strategic Advisory Group. Those options (outlined in more detail in at Exhibit A) included 1) having a non-profit board to implement and oversee the program, 2) having one board as oversight and one to implement the program (current model), and 3) have the TBID Board oversee and implement the program. After discussion, the CTBID decided to stay with the current model for the fiscal year next year but to develop measurement tools for Visit Carlsbad programs to be included in its contract. The measurement tools were to be used by the CTBID Board to evaluate the performance of Visit Carlsbad over the next year. Based on this evaluation, the CTBID Board could determine if they wished to continue having Visit Carlsbad provide tourism marketing services or implement one of the other governance options which may require issuing a Request for Proposal (RFP). The Visit Carlsbad Board has developed the 2017-18 proposed budget and program of work presented at Exhibit 2. The CTBID Board should receive the report and discuss the proposal. Following the discussion, if the CTIBD Board would like to contract with Visit Carlsbad to provide these services for 2017-18, the CTBID Board should direct staff to bring back the contract for adoption at the next Board meeting. If the CTBID Board would like to entertain one of the other Governance options, the CTBID Board should discuss the next steps and direct staff accordingly. FISCAL IMPACT: For the fiscal year 2017-18, projected revenues for the CTBID are estimated at $1,200,000. The total payment for these proposed services for the twelve-month period is $1,287,535. The CTBID has a fund balance of $642,595. ENVIRONMENTAL IMPACT: This action does not qualify as a project under the California Environment Quality Act ("CEQA") and will not have a physical adverse effect on the environment. (CEQA Regulation 15378(b). EXHIBITS: 1. BID governance options 2. Proposed budget and program of work for tourism promotion services from Visit Carlsbad for the period July 1, 2017 through June 30, 2018. A. Visit Carlsbad Group Incentive Program B. Visit Carlsbad planned tradeshows for 2017-18 DEPARTMENT CONTACT: Cheryl Gerhardt, 760-602-2425, chervl.gerhardt@carlsbadca.us EXHBIT 1 BID GOVERNANCE MODELS Presented to the CTBID Board at its March 23, 2016 Board Meeting In researching the different governance models being used in the industry staff researched comparable cities online (summarized at Exhibit E) as well as reached out to Civitas. Civitas is a company that provides expertise in forming, modifying and renewing improvement districts. They have guided over 100 districts through the formation, modification and renewal process including Carlsbad. They provided the 3 governance models shown at Exhibit D used in forming districts. Majority of the organizational structures chose to contract for services with a third party organization but here are pros and cons of each option. Options Based on the above research, staff has identified the following options for the CTBID to consider if they want to change their current governance structure: Option 1: Existing Nonprofit Corporation -Under this option the City council appoints a body to implement the program. In many cases this body is the DMO which is subject to the Brown act and other reporting and record keeping requirements. Some of the cities that have used this are Huntington Beach and Santa Monica. This model seems to work well in where there are other funding sources for tourism and the BID money is essentially an additional funding source. Pros: One Board oversees the money the programs which is more efficient than having two boards. Cons: To change to this type of structure we would need to go back to council and change the ordinance to eliminate the CTBID board and have the City council appoint a body to implement the program, instead of the CTBID Board deciding how to implement the program. Since Visit Carlsbad does not have other funding sources than the CTBID assessment, this model would not work as well using them since their existence is dependent on CTBID funding. Option 2: New Corporation Oversight and Existing Corporation Implementation -This is the model that Carlsbad currently uses. The CTBID provides the oversight and they contract with the Visit Carlsbad to provide program implementation. If the CTBID Board decides to stay with this option they can direct staff on any changes they may want to make to the contract for the next fiscal year. Pros: This is the model currently used by the CTBID so no changes would need to be made to the ordinance. The contract between the CTBID and the DMO is an annual contract and the CTBID could add additional language regarding performance and transparency to the contract to address accountability and performance. CTBID can exercise a different contract through a request for proposals (RFP) process to contract with a different agency if they are not happy with the current provider. EXHBIT 1 Cons: As was stated in the Tourism Study having two governing boards is not efficient or effective. Although the CTBID controls the CTBID budget once they give the money to Visit Carlsbad the oversight and day to day implementation is governed by the Visit Carlsbad Board and the executive director reports to the Visit Carlsbad Board. The contract with the digital marketing provider and public relations firm are with VisitCarlsbad so the CTBID does not have input on that contract language. The CTBID Board is limited to the contract language and on their influence of program implementation. The disconnect between the two boards is confusing. Option 3: New Corporation Oversight and Implementation-Under this model the TBID is the governing board. They contract or employ an executive director that is charged with the general supervision and management of the corporation's affairs and staff. The TBID board approves the budget and contracts of the corporation. This creates a singular governing board with committees that are focused on the key areas for Carlsbad tourism such as group sales or leisure. This is the model that SAG is recommending and is similar to what Coronado uses. Pros: Having one board allows for better oversight and accountability. Everyone is on the same page as to what the goals are. Experts can be brought in to serve on committees for their area of expertise and advise the board. The Executive Director has one board that they report to. Areas of duplication between the two boards is eliminated. Contracts for services are all with the CTBID. Cons: Currently Visit Carlsbad which is a not for profit corporation and has employees and contracts for services. If the CTBID were to take over the governing currently done by the Visit Carlsbad Board, the employees, contracts and assets of Visit Carlsbad would need to be brought under the CTBID. The details of how this would be done would need to be worked out since there are different ways this could be done. FY2018 --PROGRAM of WORK for LEISURE MARKETING and GROUP SALES-PROPOSED VISIT CARLSBAD Timing Strategy and Tactics Q1 Q2 Q3 Q4 Budget Comments Prioritize and develop ma rket intelligence on the leisure travel segment STR subscription to include key competitive markets Manage digital marketing agency Program of Work v pay-per-click advertisi ng, display advertising, email Outside se rvices for website maintenance an d updates v Lead Generation for Meetings Market and Events v Groups leads/Site visits/FAMs/marketing/tradeshows Manage Public Relations Program of Work v Including PRevents/programs, media FAM s, active pitching Manage visitor publications and fulfillment v Visitor center maps Earn unpaid media exposure through public re lations Coordinate media FAMs with PR agency v Develop partnerships and coop advertising opportunities v Travel & Entertainment v Partnerships & subscriptions with regional/national tourism orgs. v Association memberships TOTAL PROMOTIONAL PROG RAM OF WORK 6,000 v v v v v 300,000 v v v 9,000 v v v 453,320 v v v 113,000 v v v 5,000 25,000 v v v v v v 50,000 v v v 10,000 v v v 2,000 973,320 STR Report TBD HIP Solutions Group Meetings Direct Wagstaff Worldwide DMO FY18 Budget DRAFT vl.O 4/12/2017 Visit Carlsbad Budget Line Item Explanations 1. Sales Bonus $20,000-This item is new and is for the Group Sales Manager's bonus for both 2016-17 and 2017-18. The 2016-17 bonus budget is $10,000 and is merit based and will be decided by the Visit Carlsbad Board based on the Group Sales Manager's 2016-17 performance. The 2017-18 bonus budget is $10,000 and will be based on achievement of goals. These goals will be established by the Visit Carlsbad Board based on data from 2016-17. 2. Advertising& Production $50,000-This line item increased by $44,000 to funding production of videos and air shots for promotional purposes. 3. Digital Marketing $300,000-This line item increased by $50,000. At this point this is a placeholder since the current digital marketing provider, Civilian, has indicated they will not continue after 2016-17. Visit Carlsbad will return to the CTBID Board with their plans on how they plan to use this budget at a later date. 4. Website Maintenance $9,000-This is a new line item for 2017-18. In 2016-17 a new provider was hired to create a new website for Visit Carlsbad. After that Civilian would not maintain the site so the creator of the site was hired to do the maintenance. The $9,000 will be for maintenance that includes all requests, regardless of whether it is web programming or graphic design related, and Word Press updates (i.e. plugins, database, security, etc.) 5. Public Relations Events $25,000-This line item increased by $21,000. This is to help pay for dinners/lunches for visiting travel writers, paying for travel expenses such as airfare and rental cars, and help hotels cover costs associated with hosting writers at their hotels. In the past the hotels where the writers stayed covered these costs but they have asked to have Visit Carlsbad cover them going forward. 6. Group Incentive Program $50,000-This is a new program to incentivize groups to come to Carlsbad. The rules of the program are outlined at Exhibit A. 7. Group Sponsorship/Partnership $36,000-This is a new line item to further detail the Marketing/Advertising budget for group. (that line item had $89,750 in it in 2016-17 and now only has $10,000) This is for partnerships with HelmsBriscoe and other large third party companies. We are also researching opportunities to sponsor industry meetings/events to increase visibility (i.e. SITE, MPI, and MSR). 8. Meeting Planner FAMs $50,000-There was $34k budgeted last fiscal year as part ofTradeshows and we hosted one FAM in March. We broke it out this year and increased it so we can have 2 FAMs in 2018; one in the Fall and one in the Spring. In addition, we allotted funds specific for client site visits. 9. Contingency $86,000-The Visit Carlsbad Board is requesting an $86,000 contingency fund for commitments to future groups as incentive to bring their meetings to Carlsbad. City staff is not recommending this since we cannot contract for future years. 10. Tradeshows $123,000 -A list oftradeshows that Visit Carlsbad plans to attend in 2017-18 is shown at Exhibit B. This list was presented and approved by the Visit Carlsbad Board as well. 11. Professional Services $11,800-This budget has been increased by $6,200 to fund legal services needed to deal with various personnel matters that may arise.