2012 2013 Annual Meeting 2012 2013 Board of

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2012 -2013 Annual Meeting

2012 -2013 Annual Meeting

2012 -2013 Board of Directors • • C. Terry Brown Chairman Richard Bartell Vice

2012 -2013 Board of Directors • • C. Terry Brown Chairman Richard Bartell Vice Chairman William L. Evans Treasurer Luis Barrios Secretary Patrick Duffy Mohsen Khaleghi Robert A. Rauch, CHA Keri A. Robinson President, Atlas Hotels President, Bartell Hotels VP / Managing Director, Evans Hotels GM, Best Western Hacienda Hotel GM, The Hilton La Jolla Torrey Pines GM, Hyatt Regency La Jolla Aventine GM/Partner, Hilton Garden Inn Del Mar Area Managing Director, Starwood Hotels & Resorts San Diego • John Schafer VP / Managing Director Manchester Grand Hyatt San Diego

01. 23. 13 Meeting Overview • SDTMD FY 2012 Annual Report • Five-Year Recap

01. 23. 13 Meeting Overview • SDTMD FY 2012 Annual Report • Five-Year Recap of Initial District Results • Overview of District Renewal • Information Sessions: • Lodging Businesses: Changes to Reporting Requirements • Applicants for Funding: FY 2014 Funding Guidelines and Application Introduction

WWW. SDTMD. ORG

WWW. SDTMD. ORG

FY 2012 Results (pending performance audits) $29 million deployed • Supported production of 3,

FY 2012 Results (pending performance audits) $29 million deployed • Supported production of 3, 747, 771 room nights • $528 million in room night revenue • Approximately 18: 1 ROI •

What We’ve Done: Competitive Application

What We’ve Done: Competitive Application

3 rd Party Performance Audits

3 rd Party Performance Audits

5 -Year Recap Initial TMD Results • • • Created accountability through standards, measurement,

5 -Year Recap Initial TMD Results • • • Created accountability through standards, measurement, audits and transparency ROI measured in TMD Hotel Room Nights Relieved pressure on City General Fund ($10. 4 million in FY 2009) Stabilized TOT against economic downturn Held our own or out-pacing other cities to attract tourist spending

THE GREAT RECESSION National Decline in Hotel Production August 2008 to August 2009 Room

THE GREAT RECESSION National Decline in Hotel Production August 2008 to August 2009 Room occupancy: • Average daily room rate: • Revenue per available room: • • Source: STR Global, Oct. 2009 down 7% down 10% down 13%

FY 2009 RESULTS $26. 7 million deployed • Supported production of 2, 650, 856

FY 2009 RESULTS $26. 7 million deployed • Supported production of 2, 650, 856 room nights • $433. 7 million in room night revenue • Approximately 16: 1 ROI •

FY 2009 SD Gaining Market Share Against Regional Competitors City Los Angeles Anaheim Phoenix

FY 2009 SD Gaining Market Share Against Regional Competitors City Los Angeles Anaheim Phoenix Seattle San Diego San Francisco Source: Smith Travel Resources Change ’ 09 vs. ‘ 08 -0. 56% 0. 01% 0. 07% 0. 17% 0. 25%

FY 2010 RESULTS $21. 5 million deployed • Supported production of 3, 545, 500

FY 2010 RESULTS $21. 5 million deployed • Supported production of 3, 545, 500 room nights • $481. 5 million in room night revenue • In excess of 18: 1 ROI • SDTMD Hotel Occupancy 2. 6% Higher than County • SDTMD OTA Trend Continued in Nights/ Revenue •

SDTMD Properties Ranked #7 2010 National Rev. PAR New York Oahu Miami San Francisco

SDTMD Properties Ranked #7 2010 National Rev. PAR New York Oahu Miami San Francisco Washington Boston San Diego TMD $176. 10 $110. 54 $97. 82 $97. 75 $92. 90 $90. 77 $88. 56 Los Angeles New Orleans Anaheim Seattle $75. 34 $70. 09 $70. 05 $69. 39 Philadelphia Chicago Phoenix Denver Orlando Minneapolis $68. 70 $65. 02 $55. 45 $55. 44 $55. 19 $52. 87 Nashville Tampa Houston Atlanta St Louis Dallas Norfolk Detroit $49. 93 $49. 83 $48. 41 $45. 09 $44. 96 $44. 39 $43. 12 $37. 95

FY 2011 Results $22 million deployed • Supported production of 3, 267, 501 room

FY 2011 Results $22 million deployed • Supported production of 3, 267, 501 room nights • $458 million in room night revenue • Approximately 20: 1 ROI • US NEWS Travel Ranked San Diego as #3 Best Vacation Destination • Collaboration and Economy of Scale •

Is It Working? SD Hotel Industry Oversight and Direction in Partnership with the City

Is It Working? SD Hotel Industry Oversight and Direction in Partnership with the City of San Diego • TMD & City Double Filter of Checks and Balances • Funding = Aggressive Application, Vetting and Audits • ROI (est. ) : • • • 2008 - 2012: Over $112 million TMD funds deployed Directly supported production of over 15 million SD room nights Generating approximately $2. 18 Billion in SD room night revenue Overall estimated ROI of 19: 1

Is It Working? • There are now 74 TMDs in California.

Is It Working? • There are now 74 TMDs in California.

John Lambeth President & CEO and SDTMD General Counsel

John Lambeth President & CEO and SDTMD General Counsel

Statewide & National TMDs • 74 TMDs currently in California • Including “comp sets”

Statewide & National TMDs • 74 TMDs currently in California • Including “comp sets” San Francisco, LA and Anaheim California, Montana, Oregon, and Washington have established TMDs • Texas, Florida, South Carolina, Oklahoma, and Colorado in process of starting TMDs •

SDTMD RENEWAL SDTMD Initial Term Ended on 12. 31. 2012 • 40 -Year Procedural

SDTMD RENEWAL SDTMD Initial Term Ended on 12. 31. 2012 • 40 -Year Procedural Ordinance Passed by City • CA Prop 26 Passed November 2010 • • Mandates enhanced restrictions on funding • Revised Management Plan and Contract Approved by Industry and City 11. 26. 12

PROP 26 OVERVIEW Taxes require 2/3 voter approval • Not a tax if “A

PROP 26 OVERVIEW Taxes require 2/3 voter approval • Not a tax if “A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged” • And “which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege” •

PROP 26 OVERVIEW continued Not a tax if “A charge imposed for a specific

PROP 26 OVERVIEW continued Not a tax if “A charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged” • And “which does not exceed the reasonable costs to the local government of providing the service or product” •

NEW DISTRICT MANAGEMENT PLAN • • Reconstructed to Accommodate PROP 26 Refined District Created

NEW DISTRICT MANAGEMENT PLAN • • Reconstructed to Accommodate PROP 26 Refined District Created for Assessed Hotels SDTMD Contractor Funding Not Guaranteed Annual Distribution: • • 90% Sales & Marketing Programs 5% Contingency 5% Admin including fully loaded City Fees Two Major Benefit Categories Created – Benefit Category A: • TMD Meeting & Group Sales / Consumer Direct Sales & Marketing • Payor Universe = Lodging businesses in City of SD with thirty (30) rooms or more • Assessment @ 1. 45%* – Benefit Category B: • Destination Marketing with Specific Call to Action for TMD Lodging Businesses • Payor Universe = All Lodging Businesses in City of SD • Assessment @ 0. 55%* * All TMD lodging businesses of 30 or more rooms pay Categories A + B for total assessment of 2%

Benefit Category A • A 1 - Meeting and Group Sales & Marketing Programs

Benefit Category A • A 1 - Meeting and Group Sales & Marketing Programs and TMD Consumer Direct Sales & Marketing Programs • A 2 – Sub-Regional Targeting • A 3 – Competitive Targeting • Payor Universe = Lodging businesses in City of SD with thirty (30) rooms or more assessed at 1. 45%

Benefit Category B Destination Marketing with Specific Call to Action • Benefit Category B

Benefit Category B Destination Marketing with Specific Call to Action • Benefit Category B advertising campaigns and earned media to drive sales demand for San Diego TMD lodging businesses. • Payor Universe = All Lodging Businesses in City of SD assessed at 0. 55%. • • Includes revenue from businesses with 1 -29 rooms*; and Includes revenue from businesses with 30 rooms* or more. * % estimates to be provided by City • All campaigns must have proportional other-source funding reflective of benefits.

STEPS & ACTIONS • • • B&F recommended adoption of revised Ordinance: July 20,

STEPS & ACTIONS • • • B&F recommended adoption of revised Ordinance: July 20, 2011 City Council approval of revised Ordinance: October 6, 2011 B&F approval of in concept the management plan: July 25, 2012 City Council approval of ROI & management plan: September 25, 2012 Ballots sent out: October 10, 2012 Public Hearing: October 23, 2012 Ballot count & City Council approval of renewed district: November 26, 2012 Effective date of new district: January 1, 2013 Approve / publish FY 2014 applications: January 2013 SDTMD Annual Meeting & City Workshop: January 23, 2013 • FY 2014 Application Deadline: February 8, 2013 • Public Application Presentations: February - March 2013 •

Q & A John Lambeth New District Formation

Q & A John Lambeth New District Formation

Tricia Mendenhall Transient Occupancy Tax Accounting Supervisor, Accounting Program, Treasury Operations Division Office of

Tricia Mendenhall Transient Occupancy Tax Accounting Supervisor, Accounting Program, Treasury Operations Division Office of the City Treasurer

Office of the City Treasurer Changes to the Reporting Process • TOT/TMD Return •

Office of the City Treasurer Changes to the Reporting Process • TOT/TMD Return • Online Payment Option • Mandatory Online Payment Requirement

Office of the City Treasurer New TOT/TMD Return On January 31, 2013: • Updates

Office of the City Treasurer New TOT/TMD Return On January 31, 2013: • Updates to Office of the City Treasurer’s Website • TMD is now split into two categories

Office of the City Treasurer Online Payment Option - Changes • First step –

Office of the City Treasurer Online Payment Option - Changes • First step – select reporting period • Actively confirm TOT Certificate number • Auto calculation of TMD amounts

Office of the City Treasurer Mandatory Online Payments • Online will be mandatory July

Office of the City Treasurer Mandatory Online Payments • Online will be mandatory July 1, 2013 • Lobby Payment Option • Exemption • Benefits

Q & A Tricia Mendenhall Changes to Reporting Requirements

Q & A Tricia Mendenhall Changes to Reporting Requirements

INTRODUCTION: FY 2014 APPLICATION & GUIDELINES

INTRODUCTION: FY 2014 APPLICATION & GUIDELINES

“Hot Buttons” Incremental Room Nights and Leads for TMD Assessed Lodging Businesses • Cannot

“Hot Buttons” Incremental Room Nights and Leads for TMD Assessed Lodging Businesses • Cannot Benefit Non TMD Paying Lodging Businesses • • Example – Coronado / Carlsbad / Casinos, etc. Off-Peak Events and Promotions Geographical - Programs in Sub-Regions Possibility of Creating Long-Term / Legacy Events Quantifiable Results through Third Party Audits Economy of Scale • Example - Collaboration with Other TMD Contractors

Benefit Category A 3 : Competitive Targeting* See Application / Guidelines - Appendix 4

Benefit Category A 3 : Competitive Targeting* See Application / Guidelines - Appendix 4 • A 1. 1 - Hotel Meeting Sales • A 1. 2 - Event Management and Group Sales Dev. • A 1. 3 - Tourism Development including Travel & Trade • A 1. 4 - Group Meeting Direct Marketing • A 1. 5 - Consumer Direct Sales & Marketing Programs * Payor Universe = Lodging businesses in City of SD with thirty (30) rooms or more assessed at 1. 45%

EXAMPLE: Category A 1. 5 (see Appendix 4 ) A 1. 5 Consumer Direct

EXAMPLE: Category A 1. 5 (see Appendix 4 ) A 1. 5 Consumer Direct Sales & Marketing Programs • Placement of consumer direct sales and marketing campaigns including, but not limited to, Pay-Per-Click Online Banner Advertising and dedicated Online Travel Agency (OTAs such as Expedia, Orbitz, Travelocity) campaigns that are specifically designed to place booking opportunities for assessed businesses in the grasp of consumers who have or may have expressed an interest in traveling to San Diego. • Typical expenses include outside services such as advertising agency fees ; related events and promotions; production and advertising costs, District-related personnel salary, commissions, benefits, training, travel, printed material , promotional items, information technology, market intelligence, research, and performance audits. • Typical indirect expenses include related contractor executive management, information technology support, and general & administrative overhead.

EXHIBIT A: PROPOSED SCOPE OF WORK NARRATIVE: • By Category A 1. 1 through

EXHIBIT A: PROPOSED SCOPE OF WORK NARRATIVE: • By Category A 1. 1 through A 1. 5, specifically detail the scope of work of your proposed sales, marketing / promotional program and/or event using TMD funding. • Your proposed scope of work narrative should explain your line-by-line Exhibit B – Budget.

EXHIBIT B - BUDGET:

EXHIBIT B - BUDGET:

HOW TO REQUEST “UNLOCKED” EXHIBIT - B BUDGET TEMPLATE:

HOW TO REQUEST “UNLOCKED” EXHIBIT - B BUDGET TEMPLATE:

EXHIBIT E – ROI WORKSHEET:

EXHIBIT E – ROI WORKSHEET:

FY 2014 FUNDING CYCLE (TENTATIVE*) January 2013: • FY 2014 Applications available by download

FY 2014 FUNDING CYCLE (TENTATIVE*) January 2013: • FY 2014 Applications available by download / request February 2013: • FY 2014 Application Deadline: February 8, 2013 • Formal public board review of qualified applications March 2013: • Funding recommendations of programs by board • Notification of funding intention to City • FY 2014 final budgets from approved organizations due on or about March 15, 2013 • SDTMD submits FY 2014 Budgets with ROI projections and Scope of Work assumptions to City on or about March 21, 2013 May-June 2013: • FY 2014 Budget presentation to City Budget Finance Committee / City Council • FY 2014 Contracts Issued July 1, 2013: FY 2014 Begins *Dates and funding cycle are approximate and may change without notice.

Q & A Lorin Stewart FY 2014 Application & Guidelines

Q & A Lorin Stewart FY 2014 Application & Guidelines

Thank You…

Thank You…