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2014 ANNUAL REPORT FOR THE STOCKTON TOURISM BUSINESS IMPROVEMENT DISTRICT
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RECOMMENDATION
It is recommended that the City Council adopt a motion approving the 2014 Annual Report for the Stockton Tourism Business Improvement District.
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Summary
The City of Stockton contracts with the Stockton Convention and Visitors Bureau (Visit Stockton) to manage funds collected from the Stockton Tourism Businesses Improvement District assessment. The contract requires Visit Stockton to submit an Annual Services Plan in November and an Annual Report of Activities in March of each year. The City Council is being asked to review and approve the Annual Report of Activities for calendar year 2014.
DISCUSSION
Background
Lodging business owners requested that the City of Stockton consider forming a Tourism Business Improvement District (TBID) under the Property and Business Improvement District Law of 1994 to promote tourism, and as a funding mechanism to generate revenue for tourism at the rate of 4% per room on each night’s stay. This action was approved in December 14, 2010, by Council Resolution 10-0407. The TBID was approved for a five-year period set to expire on December 31, 2015.
The City contracted with Visit Stockton to manage the funds. The contract requires Visit Stockton to submit an Annual Service Plan due in November of each year and an Annual Report of Activities due in March of each year. The Annual Service Plan (Plan) for 2014 was approved by the City Council on January 13, 2015 (Attachment A - Resolution 2015-01-13-1205). The Plan is the operating budget for Visit Stockton on a calendar year basis and is required to include any anticipated budget surplus from the prior year, planned revenue and expenditures, and proposed goals and expected outcomes. The Annual Report of Activities describes Visit Stockton’s services, activities, revenues, and expenditures for the prior calendar year of operation. The Management District Plan stipulates proportionate budget allocation to be as follows:
• Sales and Marketing - 75% or greater
• Administration and Operations - 20% or less
• Contingency/Renewal - 5% or greater
Present Situation
Visit Stockton submitted its Annual Report of Activities by March 1, 2015, as required by the contract, and staff has reviewed the report for 2014 (Attachment B - 2014 Annual Report of Activities). The two primary goals of Visit Stockton are to increase hotel occupancy in Stockton and to enhance the Stockton visitor experience. The following are activities that took place in 2014 towards reaching its goals:
• Sales
o “Bring it Home” Campaign - Encouraged local residents to bring meetings and conferences to Stockton. The local contact might receive a small cash incentive if the referral resulted in a signed contract that included Stockton hotel nights.
o Meeting Incentive Program - Offered up to $5,000 in cash incentives for booking meetings in Stockton hotels. Cash incentives were applied towards expenses incurred at the hotel meeting location.
o “Summer in Stockton” Campaign - Highlighted events that took place in Stockton during the summer months via the internet. The website was promoted in various publications.
o “Shop, Dine, Stay Local” Campaign - Reminded Stocktonians of the importance of investing in local economy.
o Attended several tradeshows and sports marketing events, such as: Meeting Planners International, Connect Marketplace, National Collegiate Athletic Association, and Travel Events & Management in Sports, which resulted in approximately 1,500 room nights and eleven sporting events awarded in 2014.
o Supported twenty-five youth and amateur sporting events in 2014 resulting in close to 4,750 hotel room nights.
• Marketing/Public Relations
o Created a new San Joaquin Farm Guide and Map to promote agricultural tourism and distributed 10,000 copies within the first six months of publication.
o Distributed 40,000 copies of the 2014 Visit Stockton Guide to local hoteliers, restaurants, arts and entertainment venues, City Hall, Downtown Stockton Alliance, University of the Pacific, and at City-wide meetings, conferences and sporting events. A mobile-friendly version of the guide is also available.
o Partnered with the Downtown Stockton Alliance, Miracle Mile Improvement District, and local restaurants in promoting several events, including: Stockton Restaurant Week, Great Stockton Asparagus Dine Out, and Stockton Beer Week.
o Expanded its Stockton Tourism Ambassador Program that was launched in 2013. The program serves to increase tourism by inspiring front-line employees and volunteers to turn every visitor encounter into a positive one. As of December 2014, more than two hundred participants have been certified as Stockton Tourism Ambassadors.
o Advertised in various print and online publications, such as: San Joaquin Magazine, The Record, San Francisco Examiner, TripAdvisor, Central Valley Business Journal, Sports Destination Management, and more.
Visit Stockton’s projected revenue for 2014 was $1,003,392 (Attachment C - 2014 Financial Report). The actual revenue received was $1,031,674 exceeding the projected revenue by approximately 3%. The hotel occupancy rate increased from 57.4% in 2013 to 58.1% in 2014. The projected expenditure for 2014 was $954,892, actual expenditure is $1,005,987. The majority of the expenditures in 2014 were as follows:
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Category |
Expenditures |
|
Sales and Marketing |
$ 868,271 (86%) |
|
Administration and Operations |
$ 137,716 (14%) |
|
Total Expenditures |
$ 1,005,987 |
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|
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Contingency/Renewal Fund Contribution |
$ 25,059 (2.5%) |
Lodging business owners approved the renewal of the Stockton TBID and on November 4, 2014, the City Council approved the renewal of the Stockton TBID for a ten-year period commencing on January 1, 2016 (Attachment D - Resolution 2014-11-04-1601-01). Visit Stockton budgeted $48,500 or 5% of its total budget towards the renewal of the TBID; however, only half of this amount was needed resulting in a 2.5% contribution in the contingency/renewal fund. The Management District Plan does allow the Visit Stockton Board to adjust budget allocations by no more than 15% each year. The above percentages and the contents of the 2014 Annual Report are consistent with the Stockton TBID Management District Plan adopted by Council in 2010.
FINANCIAL SUMMARY
The City receives 3% of the collected amount to offset the ongoing costs of processing and collection of the District assessment. There is no negative impact to the General Fund.
Attachment A - Resolution 2015-01-13-1205
Attachment B - 2014 Annual Report of Activities
Attachment C - 2014 Financial Report
Attachment D - Resolution 2014-11-04-1601-01