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APPROVE THE 2024 STOCKTON TOURISM BUSINESS IMPROVEMENT DISTRICT BUDGET AND SERVICE PLAN, AND 2023 ANNUAL REPORT
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RECOMMENDATION
It is recommended that the Stockton City Council adopt a Resolution:
1. Approving the 2024 Operating Budget and Assessment for the Stockton Tourism Business Improvement District;
2. Approving the 2024 Annual Service Plan and 2023 Annual Report 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 Service Plan for the upcoming year, and an Annual Report from the prior year. The 2024 Annual Service Plan consists of the proposed operating budget, assessment, and anticipated goals for this calendar year. City Council is being asked to approve the 2024 Operating Budget and the 2024 Annual Service Plan / 2023 Annual Report for Visit Stockton, which are attached as Exhibits 1 and 2 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, 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 economy still struggles to recover. Like many others in our region and valley, Stockton faced reduced foot traffic and hotel bookings. Visit Stockton remains vigilant in bolstering the City’s lodging and hospitality sector.
Benchmark statistics are as follows:
• Overall hotel demand decreased by 7.7%,
• Average hotel occupancy rate was 59.9%, down 5.8% from 2022,
• Average Daily Rate (ADR) for Stockton hotels was $117.13 per night, up 0.9% from 2022 ADR of $116.03, and
• Hotel revenue generated from overnight stays was $57,129,202, down 24% from 2022’s total, $75,428,413.
The anticipated budget for 2024 is $1,899,670.
|
Revenue |
|
|
TBID Assessment |
$ 1,700,000 |
|
Events/ Misc. |
$ 178,200 |
|
Carry over from previous year |
$ 21,470 |
|
Total Revenue |
$ 1,899,670 |
|
Expenses |
|
|
Administration & Operation |
$ 279,130 |
|
Sales & Marketing |
$ 1,535,540 |
|
TBID Contingency 5% |
$ 85,000 |
|
Total Expenses |
$ 1,899,670 |
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 2024 Annual Service Plan addresses the proposed budget, strategies, and objectives of Visit Stockton.
The goals for 2024 are as follows:
• Reclaim Hotel Leakage - Implementing Hotel Awareness campaigns to retain hotel bookings, reducing “leakage” to nearby cities/towns.
• Share the Stockton Story - Include “This is Stockton” narrative through videos spotlighting small businesses, producing podcasts, vertical video content, and collaboration with Visit California using Google Stories.
• Data-Driven Decision Making - Using and leveraging data platforms to identify high-value visitors and regions.
• Event Growth - Through widespread distribution of the Planner Guide, optimizing outreach efforts in the dynamic events market, and enhancing internal events.
The proposed Resolution summarizes the action items needed for approval.
FINANCIAL SUMMARY
The City will retain 3% of the collected STBID assessment revenue amount (estimated to be approximately $51,000) 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 other direct financial impact to the City of Stockton with this action.