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09/11/2006 - City Council RegularCity of Ea~au Memo TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS FROM: CITY ADMINISTRATOR HEDGES DATE: SEPTEMBER 11, 2006 SUBJECT: ADDITIONAL AGENDA INFORMATION FOR SEPTEMBER 14, 2006 CITY COUNCIL MEETING The proposed 2007 Eagan Convention and Visitors Bureau budget was completed late last week after the meeting agenda and packet information had been prepared and sent to the City Council. To stay on schedule and to provide timely feedback to the ECVB, staff is recommending that consideration of the 2007 ECVB budget be added to the September 14, 2006 meeting agenda as Item A of Other Business. The agenda can be amended and approved with the additional item, if that is the City Council's wish. Enclosed and referenced as pages ~s through ~~~ is a copy of background information and proposed budget to be added to the packet. City Administrator Agenda Memo Special City Council Meeting Septmeberl4, 2006 VIII. OTHER BUSINESS: A. Eagan Convention & Visitors Bureau 2007 Budget & Marketing Overview ACTION FOR CONSIDERATION: To provide direction, if any, to staff regarding the 2007 Eagan Convention and Visitors Bureau Budget and to direct that it be placed on a future regular City Council meeting consent agenda for formal ratification. FACTS: • At its September 7, 2006 board meeting the ECVB Board gave approval for a 2007 budget with modifications. • City Councilmember Peggy Carlson (a City-designated ECVB Board Member) was present for the board meeting and moved approval of the ECVB budget. • The budget has been review by City Liaison Tom Garrison and by the City's Chief Financial Officer Tom Pepper, as a member of the ECVB Finance Committee. • Mr. Garrison certifies that the money necessary to market the Civic Arena's Home & Leisure Show is contained in the attached budgets. • Under the Operating Agreement, adopted December 2005, the Eagan Convention and Visitor's Bureau promotes the City as a tourist, conference, meetings, and visitor destination. Its funding source is primarily the City's local lodging tax, supplemented by a small amount of other income. • Section 3.2 of the Operating Agreement requires that no later than September 30 of each year, the Bureau shall submit its work plan and line operating for the next year for its "review and approval." • For the first six months of 2006 ECVB revenues are $17,000 ahead of 2005 revenues and occupancy rates are slightly below those of last year. (Byway of context, national occupancy rates are lower too because of the 21 % increase in the cost of gasoline.) • The budget reflects a 3% increase over 2006. • Marketing priorities for 2007 include enhanced Web site marketing efforts and Internet advertising campaigns to position Eagan, continuing "South of the River" partnerships with the Minneapolis South cities for cost effective marketing and, a coupon book to promote Eagan's hotels, restaurants and attractions. • ECVB Executive Director Brent Cory and Communications Director Garrison will make a very brief presentation and overview and then answer any questions. ~a ~ ATTACHMENTS: ECVB organizational chart on page. 2007 ECVB Marketing Overview on pages ~~ g through Board approved ECVB budget on page ~=. ~ ~o i m i O N O d U W a~ O Q a> N O .~ N ~ O ~ N N ~ 3 t C .~-. = N 7 ~ N N N O C~~ N 3 N U N O ~ N ~ O C ~ ~ N ~ ~ ~ ~ O ~ ~ fQ ~ N O C C p N~ ~ t0 ~ "a O •N m~ ~ O ~ O a. 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C7 0 > •+~ rn~ N N E L V~~ C p p U N N Q- ~' U 0 0 w f0 C ~ C f0 C '++ ~~ ~ X ~ N U ~ ~ W N ~ c ~ ~ ca ~ ~ G1 v~ (~ ~ ~ W .~ O Zvi rn d W N p 0~ ~~ ~ U ,C ~ O~ 'N 0- N p LO ~ N W~~ c~ a~° a"i`~~ ~ ~ N ~ ~ ° ~ c`a U ~ c`v aoi 'O 1.M0..~lIIH~ ......a.~.~-r Overview As with most industries, tourism is literally being redefined by the ever-changing technologies and tactics associated with e-commerce and the Internet. In order to keep Eagan's hospitality community at the forefront of the latest trends, the Eagan Convention and Visitors Bureau's 2007 marketing objectives address the critical steps that will need to be taken in order to survive and thrive in tomorrow's marketplace. The Bureau will be launching a new and cutting-edge Web site in early 2007 which will set the tone for the next generation of marketing and promotional initiatives. Capitalizing on proven Internet marketing strategies will also help position Eagan as THE destination for tourists and business travelers for years to come. Target marketing, utilizing new market research tools and tapping into a variety of niche markets will also be exciting initiatives spearheaded by the Bureau in 2007. Strategic Goal To increase the overall sales and awareness of the Eagan region through effective targeted and partnership-based marketing strategies at the consumer, media and travel trade levels. Budget Estimates A 2% increase in lodging tax revenue is estimated for the 2007 budget. Emphasis continues to be on booking meetings, corporate lodging, group tours, sports groups and leisure travelers to visit Eagan and spend outside dollars in Eagan's restaurants, stores, hotels, gas stations and attractions. Bureau Structure In order to effectively market Eagan as a destination, the organization is structured to focus on the following core market segments: Leisure Travel Marketing Meeting/Corporate Travel Sales Group/Sports Travel Sales Leisure Travel Market: Traditionally, the ECVB has relied heavily upon traditional print media to convey its messages to leisure travelers throughout the Upper Midwest. While this method still proves to be effective in most markets, consumers are undeniably gravitating more and more to the Internet to research and compare destinations. What's more, national trends point to a growing number of consumers taking the next logical step and purchasing travel-related products (hotel rooms, rental cars, airline tickets...) online. Not only does the ECVB need to have a Web site that provides consumers with the "digital destination" information they're requesting, the Bureau also needs to position itself in highly visible areas on the Internet that will entice leisure travelers to think of Eagan first ~~ for their next trip. In order to accomplish this, the ECVB is about to embark upon the most aggressive Web site marketing efforts and Internet advertising campaigns in our organization's history. The advertising outlets the will be utilized for 2007 incorporate the best performing "traditional" media purchases along with several new avenues the Bureau has never explored. Partnerships will continue to be a strong part of the ECVB's leisure marketing efforts. The Bureau's strategic partnerships afford a much stronger regional presence in the media at a substantial savings. The Bureau's primary partnerships include Minneapolis South (Apple Valley/Bumsville/Eagan/Inver Grove Heights/Lakeville/Shakopee CVB's) and the Metro Tourism Committee (comprised of the largest CVB's in the Twin Cities). Promotions are always critical when attempting to attract leisure travelers. Traditionally, the ECVB has offered a myriad of specials such as free hotels stays, special buy-one- get-one offers and free Mall of America coupon books. In order to simplify ECVB specials for the consumer, one "universal" special will be offered up for the entire year of 2007 which will contain a variety of enticing items, such as free passes to area attractions, the popular Mall of America coupon book and discounts/coupons at restaurants. The goal is to simply overwhelm the leisure traveler with Eagan hospitality! Due to the popularity of the "Tanks for Staying in Eagan" gas card promotion during the summer of 2006, should gas prices spike during the summer of 2007, this component will likely be incorporated into the marketing mix again. Finally, in addition to the Minneapolis South Vacation Guide, a coupon book will be produced focusing on the promotion of Eagan's hotels, restaurants and attractions -this publication will replace the DVD/corresponding coupon flyer the Bureau has sent out as its fulfillment piece in the past. Meetings/Coraorate Travel Sales Simply stated, the ECVB's corporate travel sales strategy has proven to be a success. With hotel occupancy rates holding steady during the weekdays throughout the 2006 marketing campaign (specifically Monday through Thursday), marketing efforts in 2007 will once again focus on conducting corporate travel buyer sales calls, participation in trade shows and the organization of corporate familiarization tours throughout Eagan. In an effort to bolster meeting sales, the ECVB plans on increasing the number of sales missions while tapping into new markets. Direct mail efforts, specifically targeting government meeting planners, along with the development of a new meeting planner guide with enhancements to the meetings listings on the new ECVB Web site, will also be initiated during 2007. Group/Sports Travel Sales The "traditional" group tour market consisting of Red Hat groups, bank clubs and senior center travelers continues to decline on a local and national level. However, different group segments such as student and religious groups are proving to be incredibly viable markets. In addition to shifting the Bureau's focus onto more lucrative opportunities, fostering relationships with local athletic associations and facilities will also be a major initiative for 2007. Opportunities also exist with organizations such as Minnesota Youth Athletic Services (MYAS) that the Bureau plans on taking full advantage of. ~~ Media/Public Relations Promoting Eagan as a destination to travel writers and editors throughout the country has never been more important. Thanks to the Bureau's relationship with Jean Friedl (freelance tourism media/PR consultant), aspects such as the production of a comprehensive media kit, maintenance of a media list, attendance and story pitches to travel writers at shows both nationally and internationally as well as working to promote the numerous specials the ECVB spearheads will help create a broad reaching identity for Eagan. ~~ Eagan Convention & Visitors Bureau 2007 Operating Budget REVENUES Lodging tax Other income Total Income EXPENSES Personnel Other Expenses Office Expenses Marketing Expenses Travel & Entertainment Total Expenses Net Income 2004 2005 2006 2007 Actual Actual Budget Budget 720,125 728,848 731,000 745,000 27,014 29,671 20,400 23,500 747,139 758,519 751,400 768,500 208,467 161,286 327,036 273,500 78,651 148,814 64,064 133,750 4,211 8,571 13,000 13,000 397,209 336,841 294,700 325,750 - - 51,200 22,500 688,538 655,512 750,000 768,500 58,601 103,007 1,400 ~~ 1