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APPROVE THE 2023 STOCKTON TOURISM BUSINESS IMPROVEMENT DISTRICT BUDGET AND SERVICE PLAN, AND 2022 ANNUAL REPORT
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RECOMMENDATION
It is recommended that the Stockton City Council adopt a Resolution:
1. Approving the 2023 Annual Service Plan for the Stockton Tourism Business Improvement District;
2. Approving the 2023 Operating Budget and Assessment for the Stockton Tourism Business Improvement District;
3. Approving the 2022 Annual Report for the Stockton Tourism Business Improvement District; and
4. 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 Service Plan for the upcoming year, and an Annual Report from the prior year. The 2023 Annual Service Plan consists of the proposed operating budget, assessment, and anticipated goals for this calendar year. Council is being asked to approve the 2023 Annual Service Plan, 2023 Operating Budget, and 2022 Annual Report for Visit Stockton, which are attached as Exhibits 1, 2, and 3 to the Resolution.
DISCUSSION
Background
The STBID was established in December 2010 for a five-year term. Prior to its expiration in 2015, it was renewed and extended for an additional ten years, set to expire on December 31, 2025. 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 4% 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.
Present Situation
The primary goal of Visit Stockton is to increase hotel occupancy, and while 2022 created a sense of normalcy in the travel industry, recovery is far from over. Like neighboring regions, Stockton saw a decrease in occupancy rate and overall hotel revenue, while average daily rates are at an all-time high. Benchmark statistics are as follows:
• Overall hotel demand decreased by 14.1%,
• Average hotel occupancy rate was 63.2%, down from 73.4% in 2021,
• Average Daily Rate (ADR) for Stockton hotels was $113.25 per night, up 7.3% from 2021 ADR of $105.50, and
• Hotel revenue generated $75,428,413, down 7.8% from 2021’s total, $81,820,160.
Highlights of the year included:
• Stockton Flavor Fest is the newest food, arts, cultural festival at Weber Point Events Center. This two-day event celebrating the many cultures of Stockton through food was a huge success, attracting more than 12,000 visitors. The festival was made possible by the City’s support using ARPA recovery funds to help the downtown businesses as well as professionals in the event industry recover from the effects and closures of the COVID pandemic. Flavor Fest won Best New Festival from the International Festival and Events Association during their annual conference in the fall of 2022.
• Feast at the Fox returned for its third year following a 2-year forced hiatus due to the pandemic. This farm-to-fork dinner brings the community downtown to dine in front of the historic Fox theater, known as the Bob Hope Theater. This event is a great partnership between the City and Visit Stockton, while benefiting the Delta College Culinary program.
• Nine Hosted Sporting events including high school, collegiate to professional competitions ranging from wrestling, NCAA golf, disc golf, baton twirling, cornhole and baseball.
The 2023 Annual Service Plan addresses the proposed budget, strategies, and objectives of Visit Stockton. The goals for 2023 are as follows:
• Sharing the Stockton Story - through videos, podcasts, social media, and Google partnerships.
• Data & Targeting - using new data research to identify high-value potential visitors that will convert from day to overnight stays.
• Growth of Destination- Driving Events - increase attendance and length of stay at Flavor Fest and other events using incentives and surveys to better understand and serve visitor needs.
• Future Sports & Event Opportunities - update planner guide, build relationships, and invest in training of the team on the use of the customer relationship management tool (CRM).
• Content Pillar Campaigns - Analyze digital analytics to identify content pillars to drive visitation to Stockton highlighting unique Stockton activities and attractions.
The anticipated budget for 2023 is $2,061,600.
|
Revenue |
|
|
TBID Assessment |
$1,720,000 |
|
Events/ Misc. |
$91,600 |
|
Carry over from previous year |
$250,000 |
|
Total Revenue |
$2,061,600 |
|
Expenses |
|
|
Administration & Operation |
$288,100 |
|
Sales & Marketing |
$1,687,500 |
|
TBID Contingency 5% |
$86,000 |
|
Total Expenses |
$2,061,600 |
The above category allocations are consistent with the STBID Management District Plan that was adopted by the City Council on November 4, 2014, and with the intent of the Tourism Business Improvement District Assessment.
The proposed Resolution summarizes the action items needed for approval.
FINANCIAL SUMMARY
The City will retain 3% of the collected STBID revenue amount (approx. $53,000) to offset the ongoing cost of processing and collecting the assessment. These funds are appropriated in the Maintenance District Fund, Business Development Division, STBID Program and budgeted through the annual budget process. There is no other direct financial impact to the City of Stockton with this action.