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ADOPT A RESOLUTION TO APPROVE THE STOCKTON TOURISM BUSINESS IMPROVEMENT DISTRICT 2024 ANNUAL REPORT AND PROPOSED 2025 OPERATING BUDGET AND SERVICE PLAN
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RECOMMENDATION
It is recommended that the Stockton City Council adopt a Resolution:
1. Approving the 2024 Annual Report for the Stockton Tourism Business Improvement District;
2. Approving the Proposed 2025 Operating Budget, Service Plan, and Assessment for the Stockton Tourism Business Improvement District;
3. Authorizing the City Manager, or designee, to take necessary and appropriate actions to carry out the purpose of this resolution.
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Summary
The City of Stockton contracts with the Stockton Convention & Visitors Bureau (Visit Stockton) to manage assessed funds collected from the Stockton Tourism Business Improvement District (STBID) and provide tourism-supporting services as described in the approved Management District Plan. The contract requires Visit Stockton to submit an Annual Budget and Service Plan for the upcoming year, and an Annual Report from the prior year. The 2025 Annual Service Plan consists of the proposed operating budget, assessment, and anticipated goals for this calendar year.
It is recommended that City Council approve the 2024 Annual Report and the 2025 Operating Budget and Service Plan for Visit Stockton (Exhibits 1 and 2 to the Resolution).
DISCUSSION
Background
The STBID was established in December 2010 for a five-year term (Attachment A - Resolution No. 10-0406). Prior to its expiration in 2015, it was renewed and extended for an additional ten (10) years, set to expire on December 31, 2025 (Attachment B - Resolution No. 2014-11-04-1601-01). The STBID includes all lodging businesses, existing and future, available for public occupancy within the boundaries of the City of Stockton. The formation of the STBID was made possible under the California Property and Business Improvement District Law of 1994 to act as a funding mechanism to promote tourism. These businesses are assessed a 5% rate of gross revenue for short-term stays that are less than 31 days. Tourism Business Improvement Districts (TBIDs) allow lodging and tourism-related business owners to use the assessed funds for marketing, promotion, and tourism-related activities. The City of Stockton contracts with Visit Stockton to manage the funds and report annually on services and marketing activities. Its mission statement is “...to enhance the region’s quality of life by collaboratively leading the promotion of Stockton’s richly diverse community and advocating for initiatives that will enhance the City’s quality of place.”
On November 19, 2024, City Council approved the renewal of the STBID and an extension to the agreement with Visit Stockton through 2035 (Attachment C - Resolution No. 2024-11-19-1601-02). The renewal extended the STBID for an additional ten (10) year term, beginning January 1, 2025, and ending ten (10) years from its start date, unless renewed pursuant to Streets and Highways Code section 36660.
Present Situation
The Visit Stockton 2024 Annual Report summarizes the activities and services administered by Visit Stockton last year. A few of those accomplishments are listed below:
• The annual Feast at the Fox event was held at the Bob Hope (Fox) Theatre in September. This signature fundraiser for the Delta College Culinary Arts Program and the Child Abuse Prevention Council of San Joaquin County raised $7,995 and welcomed 208 guests - an increase from 2023’s 176 guests.
• The award-winning Stockton Flavor Fest marked its third year at Weber Point Events Center, where we celebrated the diverse food, music, and cultures of Stockton. In collaboration with the City of Stockton and local partners, the festival aimed to instill pride and excitement in the community. Stockton Flavor Fest was also made possible thanks to over 400 volunteers who earned their respective non-profit organizations nearly $21,000.
• Visit Stockton’s marketing campaigns aim to attract visitors and inspire exploration of the City. The “This is Stockton” podcast series showcases the people and events in Stockton and saw an increase in subscribers and new listeners.
o 2024 Podcast Stats
§ New episodes = 14 (total = 48)
§ Subscribers = 245
§ Apple podcasts = 4.9/5 stars
§ Spotify = 4.6/5 stars
• Stockton hosted Pat Pattinson for his “Best of California” TV series that included visits to local landmarks and a Ports game.
The primary goal of Visit Stockton is to increase hotel occupancy through marketing, specialized campaigns, support of sporting events, and festivals. Though it has been nearly four years since the beginning of the pandemic, the local tourism economy is slowly recovering. Visit Stockton remains vigilant in bolstering the City’s lodging and hospitality sector.
Benchmark statistics are as follows:
• Overall hotel demand decreased by 5%
• Average Daily Rate (ADR) for Stockton hotels was $114.02 per night, down 2% from 2023 ADR of $117.13
• Hotel revenue generated from overnight stays was $52,761,254, down 7.6% from 2023’s total, $57,129,202
The anticipated budget for 2025 is $1,934,850.
|
Revenue |
|
|
TBID Assessment |
$1,810,000 |
|
Events/Misc. |
$115,350 |
|
Carryover from previous year |
$100,000 |
|
Total Revenue |
$2,025,350 |
|
Expenses |
|
|
Administration & Operations |
$299,430 |
|
Sales & Marketing |
$1,635,420 |
|
TBID Contingency 5% |
$90,500 |
|
Total Expenses |
$ 1,934,850 |
The above category allocations are consistent with the STBID Management District Plan that was adopted by the City Council on November 19, 2024, and with the intent of the Tourism Business Improvement District Assessment.
The 2025 Annual Service Plan addresses the proposed budget, strategies, and objectives of Visit Stockton.
Below are some of the Visit Stockton 2025 goals:
• Continue to reclaim hotel leakage - Ongoing Hotel Awareness campaigns to boost visibility and attract visitors, reducing “leakage” to nearby cities/towns.
• Stockton Ambassador Program - Create new and improved Stockton Ambassador Program to re-engage and educate those who live and/or work in Stockton on the importance of tourism to our economy, what Visit Stockton can do to support hosted events/local businesses/non-profits, positive customer service skills, and why their involvement in our city matters.
• Digital Marketing Assistance - Launch an educational series with a goal to help organizations create more engaging content to serve their organizations’ needs while also providing Visit Stockton additional information and content to promote the City.
• Organizational Structure - Evaluate current structure within the organization to increase efficiency and position Visit Stockton to best execute necessary strategies that serve its mission.
FINANCIAL SUMMARY
Visit Stockton’s proposed operating budget consists of the assessments and other sources. The estimated income from the assessments to be paid to Visit Stockton in 2025 is $1,810,000, split into quarterly payments.
The City will retain 3% of the collected STBID assessment revenue amount (estimated to be approximately $54,300) to offset the ongoing cost of processing and collecting the assessment. These funds are received to the Maintenance District Fund, Business Development Division, STBID Program and the corresponding administration cost is budgeted through the annual budget process.
There is no negative financial impact to the City’s General Fund as a result of this action.
Attachment A - Resolution No. 10-0406
Attachment B - Resolution No. 2014-11-04-1601-01
Attachment C - Resolution No. 2024-11-19-1601-02