BEVERLY HILLS CITY OF BEVERLY HILLS POLICY AND MANAGEMENT MEMORANDUM TO: FROM: DATE: SUBJECT: ATTACHMENT: INTRODUCTION DISCUSSION

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2 BEVERLY HILLS CITY OF BEVERLY HILLS POLICY AND MANAGEMENT MEMORANDUM TO: FROM: DATE: SUBJECT: ATTACHMENT: City Council Liaison/CVB/ Marketing Committee Huma Ahmed, Community Outreach Manager.#c Cindy Owens, Senior Management Analyst June 6,2018 Proposal from the Beverly Hills Conference and Visitors Bureau for Annual Work Plan and Funding Request for Fiscal Year Beverly Hills Conference and Visitors Bureau (CVB) Fiscal Year Proposal 2. Fiscal Year City Tourism and Marketing Budget INTRODUCTION This item provides a proposed work plan and funding request from the Beverly Hills Conference and Visitors Bureau ( CVB ) for the Fiscal Year ( FY ) Tourism and Marketing Budget and programs, which are funded through the City s Transient Occupancy Tax ( TOT ). Prior to the start of each fiscal year, the City Council CVB / Marketing Committee, which currently includes Mayor Gold and Councilmember Bosse, meets to discuss the Beverly Hills Conference and Visitors Bureau work plan items for the upcoming fiscal year. The Council Liaisons make recommendations regarding the CVBs work plan and provide modifications, if any, which are then presented at a future City Council Study Session. This item provides an overview of the proposal of the CVBs proposed work plan for the Fiscal Year Tourism and Marketing Budget. Attachment 1 is the CVBs Fiscal Year proposal while Attachment 2 shows the Tourism and Marketing budget proposed expenses. DISCUSSION The CVB is contracted by the City to conduct a variety of tourism and marketing programs promoting Beverly Hills. All ongoing operations and programming for the CVB are completely funded by the City s Tourism and Marketing (TOT) budget. Special event and initiative funding may be provided through other budgets as approved by the City Council. Considered a tourism and marketing extension of the City, the CVB focuses on promoting Beverly Hills as a worldwide stay/shop/dine destination through programs and events that build awareness and drive consumer revenue to the City. The Beverly Hills Conference and Visitors Bureau s proposed Fiscal Year work plan includes a mix of programming that typically recurs annually as well as new initiatives that reflect current and upcoming City Council priorities.

3 The CVB provides programming in prescribed program areas that are based on their strategic plan and previous direction from the Council Liaisons. The portfolio of services includes: Local/Holidays Events Domestic Marketing International Marketing Interactive Collateral Research Special Programs Visitor Center/Services Operations (Salaries, Taxes and Benefits) Some of the broad activities proposed for Fiscal Year , which are detailed in Attachment 1, are included by category below: Domestic Marketing New York Sales Mission Domestic Marketing and Public Relations MICE Marketing Partnership Marketing Secondary Market Sales Missions International Marketing Sales Mission Trade Shows Media FAMs In-Country Representation Tour Bus Incentive Global Summit Emerging Market Interactive Database and/or SEO/SEM Content International Social Acquisition ecommerce Visitor Services Communications Collateral Collateral Visitor Guide Fulfillment Promotional Giveaways 2 of 5

4 Each year the CVB reviews programming that was not successful or is no longer relevant in order to undertake new programs. These new programs are aimed at attracting more tourism to Beverly Hills. This year, the new programs by category include: Winter B.O.L.D. Event Marketing Expanded Businesses Open Later Days ( B.O.L.D. ) summer programming (funded separately, not in annual contract) Expanded B.O.L.D. Winter programming (included in annual contract) Grand Pop Up (still in development, no funding request at this time) Domestic Marketing Metro Marketing Campaign >> Stay, Shop, Dine initiative for the entire City. >> Additional messaging to include activities and Citywide parking programs. >> Marketing channels include digital advertising, social media content and video which will be repurposed from existing footage. >> Creative will be developed to communicate the message in the brand voice. > Target audience will include those with $150K+ household income who reside in drive feeder markets. Meeting planner lead generation tool International Marketing New agency for China ILTM Cannes with Visit California Luxury UK sales mission Interactive Social media strategy implementation Visitor Services New merchandise Expanded ecommerce development Research Destination Development Plan completion Arrivalist in-market GPS tracking Meeting and events tracking The CVBs base request of $4,857,835 for FY includes funding for Winter BOLD. This program, should it be authorized by the City Council would include re-engaging Lightswitch (LED lighting vendor) for reprogramming and replicating elements from last year and provide for potential new concepts. The total proposed cost for FY Winter BOLD. is $517,000. It should be noted, that In FY Winter B.O.L.D. was primarily funded from General Fund reserves, and the Tourism and Marketing budget (Attachment 2). The requested budget for Winter B.O.L.D. this year can be funded by the Transient Occupancy Tax (TOT) budget. Anything beyond the $4,857,835 will need to budgeted through the General Fund Surplus. 3 of 5

5 programming (excludes Grand Pop Up), the CVB has requested $4,857,835. programming, $4,003,733, which is a twenty-one (21%) increase over last year s base budget. This current funding request represents a $854,102 increase from last year s approved To carry out the proposed work plan for the upcoming Fiscal Year with no additional above due to this. 4 of 5 Tourism & Marketing budget to cover this expense. The cost of $1,250,000 for BOLD Winter 2017 is not reflected *BOLD Winter in 2017 was funded through a General Fund transfer as the TOT money was not sufficient in the Total $5,303,733 $4,857,835-8% BOLD Winter 2017 $1 250,000* N/A Transfer Funded by Business Funded by General Fund Destination Master Plan $50,000 N/A Budget not Tourism and Marketing Development Budget and Programming added after base budget adopted by City Council TOTAL $4,003,733 $4,857,835 21% 2018 business and Winter BOLD Includes 4% cost of doing Visitor Center $159,750 $75,000-53% Salaries moved to Ops Benefits $1,348,000 $1,674,720 24% Sales Salary Salaries, Taxes & New Equipment and Group Operations, including BOLD Winter 2018 *see note below $517,000 Special Programs $50,000 $50,000 0% Research $68,420 $76,688 12% Planner Research New Arrivalist / Meeting Collateral $60,800 $56,332-7% Visitor Guide Complete Interactive $405,773 $374,455-8% Chinese Site Complete International Marketing $605,600 $687,865 $50,000 14% Rotating Trade Shows Domestic Marketing $1,084,374 $1,147,919 6% Metro Marketing Events $201,016 $177,856-12% ForYourArtComplete Local/Holidays $20,000 $20,000 0% Description Budget Budget Carryover % Change Description not funded by TOT and the Destination Master Plan. The Summer BOLD. initiative for August 2018 is not reflected in this budget, as it is separately funded outside this work plan. A summary cost breakdown is provided below: Last year, the increase to $5,303,733 from the base budget is reflective of Winter BOLD other initiatives, such as Metro Marketing $150,000. At this time, Metro has not agreed to reimburse the City for these costs. Discussions ate still ongoing between the City and Metro. Four percent (4%) of this increase is to offset cost of living adjustments as well as salary and benefit increases. The remaining 17% includes additional funding for Winter B.O.L.D and FISCAL IMPACT

6 For Fiscal Year , the City s Administrative Services Department/Finance projects $49,098,000 in Transient Occupancy Tax (TOT) revenue. This resulted in a base TOT budget of $7,014,000. It should be noted, that the actual TOT revenue generated for Fiscal exceeded the budgeted revenue, therefore an additional $628,338 was added to the TOT budget for Fiscal Year The revised amount in Tourism and Marketing budget of is now $7,642,338. The funding for the $4,857,835 is budgeted in the Fiscal Year Policy and Management Department, Tourism and Marketing budget ( ) which is shared with the Rodeo Drive Committee and the City s Holiday Program. RECOMMENDATION Staff recommends that the City Council liaisons review and provide recommendations for the Fiscal Year work plan and funding request from the CVB. Pamela Mottice-Muller Approved By 5 of 5

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8 BEVERLY HILLS Conference & Visitors Bureau TOT Liaisons Budget Presentation June 2018 CONFERENCE & VISITORS BUREAU

9 CONFERENCE & VISITORS BUREAU PZrIM Sc Tourism Builds Community $ million 2 in tourism-related taxes City General Fund Informationfrom 2016 BHCVB tsitor Economic Impact Study F.. I This funding provides: a 80 police officers a 65 firefighters Tourism is the economic driver for Beverly Hills with a The City s Fiberto the Premise program to provide high-speed Internet for every household and business 2.8 billion Beverly Hills hosts W A million 1r. visitors annually They spend: a $216 billion per year a $59 million per day a $247,000 per hour in annual economic impact direct & Indlrect.lsltocspend supporting I3O local Y jobs or 20% of the city s workforce.% \ $ visitor spend for every $4 invested IbyBHCVB based on FY2016-U BHCVB budget.

10 TOT History 2009/10 $23,447,458 N/A $43,118,458 $2,158,160 $3,383,065 57% 2010/11 $24,283,657 4% $46,336,518 $2,050,000 $3,469,094 69% 2011/12 $29,789,182 23% $23,093,800 $2,120,000 $3,799,258 56% 2012/13 $31,085,808 4% $26,820,826 $2,665,000 $4,371,429 61% 2013/14 $35,397,159 14% $29,874,256 $3,283,204 $4,864,393 67% 2014/15 $36,658,589 4% $31,338,894 $3,300,000 $5,571,429 59% 2015/16 $38,989,282 6% $34,927,352 $3,914,202 $5,794,286 68% 2016/17 $43,538,369 12% $32,663,323 $3,829,202 $6,071,429 63% 2017/18*++ $44,100,000 1% $33,442,000 $4,003,733 $6,300,000 63% 2018/19* + $49,098,000 11% $32,495,000 $4,340,835 $7,014,000 62% * Forecasted +1/7 of 14% of TOT not 1/7 of total TOT. ++Does not reflect additional dollars for BOLD, BOLD Holidays and Destination Development Plan

11 CONH%RENCE & VISITORS BUREAU 2017/18 Overview

12 One of the CVB s most important core values is to keep a fresh perspective on all programming. This allows for new flourishes on existing programs as well as the execution of completely new ideas. 2017/18 Highlights Domestic Marketing BOLD summer Business Open Later Days BOLD holidays Group Sales Executive Events Revamped Chinese New Year concept to include second night Curated art event exploration Exploration of international economic development opportunities International Marketing Two GCC (Middle East) sales events in November 2017 and May 2018 Russia travel show.ai.

13 2017/18 Highlights Interactive Completion of Chinese responsive mobile website 360 video ecommerce build-out Partner portal Development of social media strategy Research Strategic Plan Refresh Destination Development Plan phase I Adhoc Programs Execution of Advocacy Plan and Celebrate Tourism Event

14 BHCVB Key Initiatives Visitor Center Chinese New Year Sales increase 82% $9K profit Visitors Up y-o-y 8% : $120,000 sponsorship (mci. in-kind) 2,000 attendees PR Globat Impact over 2,213,000,000 global PR impressions $25, in-kind global stories Group 26 Sales Leads 711 Booked room nights Sates $3,889,000 in estimated value $249,525 in estimated value Interactive Domestic website visits up BOLD (Summer & HoLiday) 50% )84o,ooo,ooo PR impressions 467,496 s sent 32,000,000 advertising impressions Social Media audience total 200, media stories

15 *To be completed FY 2018/19 Beverly Hills Conference and Visitors Bureau Strategic Direction I We enhance the economic As the official destinati omission+ VaFies Reputation Position 9 We envision a destination where every I and social vitality of Beverly generation and culture Hills by creating can create their Fresh Perspectives Leader Forest and the Trees Forward-Thinking ting organization for the city, we are the only entity Community Connector responsible for promoting the Accountable entire Beverly Hills [encesstoo Professional Growth ienceloball. t1 Imperatives Grow Demand for the Destination Key Performance Indicators Annual TOT/sales tax growth on par with City projections 35 annual room-night sales leads (Includes booked business in 2020/27) 10% annual market key domestic feeder markets, 5% growth in targeted international markets Initiatives Develop leisure/group sales plan fmary)* Develop event/activity plan fjuiie/bob)* Leverage Strategic Partnerships In-Kind $ to BHCVB Hard$toBHCVB BHCVB Sponsorships of other programs ROl Reach & Influence Create sponsor target list for all events/activities (Bob/Malarie)* Increase collaborations with other city organizations (Julie/Bob) Explore/secure opportunities for BHCVB event investments (Bob/Mary) Maintain and Continue to Grow Strong Brand Digital Engagement: 750,000 website visits per year a Social follower count to exceed 250,000 Consumer to 100,000 Increased media quantity and breadth (201 7/18 as baseline) Develop a comprehensive marketing plan (Bob/Malarie )* Complete a Destination Development Plan (Julie)* Develop plan to enhance in-market visitor experience (Malarie/Kristen)* Ensure a Vital CVB Increase or maintain Y/Y CVB funding level using 2017/18 as the baseline at a minimum, keep pace with TOT growth Achieve and maintain a minimum of 80% staff engagement on key measures City resident engagement of 75% within the plan period Develop activities that further advocacy messages (Megan)* Ensure facilities/internal resources are aligned with & support strategic plan (Julie)* Secure existing/explore new/sustainable CVB funding (Julie) Identify and invest in pro-dev opportunities for staff (All) Further engage Board in its active support of CVB mission (Julie)

16 This data is based on quarterly Visa card spend first two quarters of FY 2017/18 over first two quarters of FY 2016/17. Approximately 1/3 of visitors pay with a Visa card. Markets below are listed in order of highest to lowest total $ spent. Domestic Market Growth Although we have seen a decrease in international visitation, domestic marketing efforts have contributed to substantial growth in US visitors. FççJer Markets % increase in total spend year overyear Local/Los Angeles 3% New York 13% San Francisco 14% San Diego 15% Las Vegas (6%) Chicago 6% Washington DC 15%

17 International Market Growth International tourism represents 49% of visitors into Beverly Hills (down 13% from FY 13114). Top international market by spend is from Visa credit card data. Represented below is spend growth for the first two quarters of FY over the first two quarters An average of 20% of international visitors pay with Visa. Markets below are listed in order of highest to lowest total dollars spent. Top International Feeder Market Percentage Growth/f Loss) China+ (9%) Canada 13% Saudi Arabia* (45%) UK 10% Russia 7% UAE (30%) Australia 5% Japan (13%) Qatar (38%) EU (FR, DE, IT) 4% + Most Chinese use Union Pay and Visa no longer issues cards for China Union Pay. AliPay and WeChat Pay are growing in popularity, It is estimated that the decrease in activity is partially attrition. * Only about 15% of Saudi visitors use Visa.

18 2018/19 Program of Work CONFERENCE & VISITORS BUREAU

19 New for 2018/19 New Programs by category: Event Marketing Grand pop up (funding TED) Expanded BOLD programming summer (already funded) Expanded BOLD programming winter International Marketing New agency for China ILTM Cannes with Visit California Luxury UK sales mission Interactive Social media strategy implementation Visitor Services New merchandise Expanded ecommerce development Research Destination Development Plan completion Arrivalist in-market GPS tracking Meeting and events tracking CONFERENCE & VISITORS BUREAU pvc

20 CONFERENCE & VISITORS BUREAU i?t/ New for 2018/19 V 11 F1 JI 4 q%j 4 New Programs by category: Domestic Marketing Metro Mitigation Campaign to include the following: V Stay, Shop, Dine focus for the entire city. V Additional messaging to include activities and free and convenient parking. V Marketing channels include digital advertising, social media content and video which will be repurposed from existing footage. V Creative will be developed to communicate the message in the brand voice. V Target audience will include those with $150K+ household income who reside in the city s drive feeder markets.

21 17/18 18/19 Carryover Description Budget Budget Funds % Change Description Local/Holidays $20,000 $20,000 0% Events $201,016 $177,856-12% For Your Art Complete Interactive $405,773 $374,455-8% Chinese Site Build Complete Collateral $60,800 $56,332-7% Visitor Guide Complete Research $68,420 $76,688 12% New Arrivalist Tracking Special Programs $50,000 $50,000 0% Master Plan $50,000 BOLD Winter* $1,250,000 $517,000-59% Equipment Bought Last Year Operations, including Salaries, Taxes & New Equipment, Salaries Moved Benefits $1,348,000 $1,674,720 24% from Carryover and VC Visitor Center $159,750 $75,000-53% Salaries Moved to Ops TOTAL $5,303,733 $4,857,835-8% *s will come from remainder of Holiday 2017 contingency funds still being held by the city. CVB 2018/19 Budget Summary Domestic Marketing $1,084,374 $1,147,919 6% Metro Marketing International Marketing $605,600 $687,865 $50,000 14% Rotating Trade Shows

22 .2% 4% 24% 14% 8% B Special Programs 1% $50,000 Operations, including Salaries, Taxes & Benefits 36% $1,674,720 CVB 2018/19 Budget Overview 2018/19 Budget $4,857,835 Local/Holidays $20,000 Events $177,856 0% Domestic $1,147,919 International $687,865 Interactive $374,455 Collateral $56,332 Research $76,688 1% 2% B BOLD $517,000 11%

23 CVB 2018/19 Budget Detail R Destination $484,048 S New York $156,000 5 MICE $121,500 PR $144,531 S Partnerships $56,840 I Secondary Market $185,000 42% 14% 10% 13% 5% 16%

24 CVB 2018/19 Budget Detail U Sales Missions $56,500 Trade Shows $217,400 Media FAMs $16,765 U In-Country Representation $263,080 Tour Bus $3,120 U Global Summit $15,000 Emerging Market $116,000 8% 32% 2% 38% 1% 2% 17%

25 CVB 2018/19 Budget Detail 1% Domestic Website 4% $16,202 K ecommerce 1% $4,000 K Content 23% $85,354 Social Acquisition 11% $40,991 International 17% $64,560 SEO/SEM 41% $152,116 Database/ 3% $11,232

26 CVB 2018/19 Budget Detail VisaVue $7588 Smith Travel $6,600 1 Arriva list $40,000 Cision $10,000 B Master Plan $12,500 10% 9% 52% 13% 16%

27 CVB 2018/19 Budget Detail Communications $25,000 34% Display $25,000 33% Collateral $25,000 33%

28 CVB 2018/19 Budget Detail Visitor Guide $50,000 53% Fulfillment $5,000 9% Promotional Giveaways $20,000 38%

29 CVB 2018/19 Budget Detail BOLD Winter $517,000 Installation $207,000 40% Programming 13% $65,000 J Marketing 19% $100,000 Activities $100,000 Storage $45,000 19% 9%

30 CVB 2018/19 Budget Detail Operations $1,674,720 Special Programs $50,000 Events Local $177,856 $20,000

31 Appendix CONFERENCE & VISITORS BUREAU

32 Cost of Cost of New 2018/19 Difference Discontinued Discontinued Programs Increased Proposed Description 2017/18 from City Programs Programs New Programs 2017/18 costs* Budget $20,000 $20,000 Events $201,016 ForYourArt $30,000 $6,840 $177,856 Domestic Marketing New York $156,000 $156,000 Breakdown: spring 2019 $239,148, Metro Mitigation Destination Marketing $421,200 BOLD moved to below $100,000 $150K, fall hotel $90,400 $150,000 $8,348 $479,548 Domestic PR $138,934 $5,597 $144,531 CVB 2018/19 Budget Detail Local/Holidays i.as00 17/18 MICE Marketing $ $ Includes group sales activities $ $ Partnership Marketing $56,840 $56,840 Secondary Market Sales Missions $170,000 San Diego $15,000 $185,000 Group Sales $40,000 Moved to MICE $40,000

33 Cost of Cost of New 2018/19 Difference Discontinued Discontinued Programs Increased Proposed Description 2017/18 from City Programs Programs New Programs 2017/18 costs5 Budget CVB 2018/19 Budget Detail International Marketing Canada actuals were $1OK instead of $15K; Luxury UK, Japan. India moved to Sales Missions $58,000 $54,250 Emerging; no China $30,000 $27,500 $1,000 $56,500 ll3m North America, Cannes Trade Shows $153,390 WTM $15,662 with VCA, and China Expo $70,000 $9,672 $217,400 PR $16,120 $645 $16,765 China Combined with Social to be slightly China social included; 6CC and less then billing India represenation included Representation $178,000 separately. $1,000 $55,000 $6,080 $238,080 Tour Bus Incentive $3,000 $120 $3,120 UK Sales Mission Complete; India and India activities moved from sales GCCagencyfees missions above. moved to Emerging Markets $171,000 representation $85,000 $30,000 $116,000 Global Summit $0 $15,000

34 VB 2018/19 Budget Detail Cost of Cost of New 2018/19 Difference Discontinued Discontinued Programs Increased Proposed Description 2017/18 from City Programs Programs New Programs 2017/18 costs* Budget Interactive Collateral Database/ $10,800 $432 $11,232 SEM/SEO $146,266 $5,850 $152,116 Content $82,072 $80,000 $3,282 $85,354 International $88,000 $2,560 $90,560 Ecommerce section Ongoing licensing fees for ecommerce $14,000 build - work complete $10,000 Shopify $4,000 Partner Portal $11,400 Work complete $0 Acquisition $38,453 $39,991 $1,538 Domestic Site $15,579 $623 $16,202 Fulfillment $5,000 $5,000 Based on 2017/18 Visitor Guide $35,000 budget $5,000 $30,000 Premiums $20,512 $820 $21,332 Special Programs $50,000 $50,000

35 Cost of Cost of New 2018/19 Difference Discontinued Discontinued Programs Increased Proposed Description 2017/18 from City Programs Programs New Programs 2017/18 costs* Budget CVB 2018/19 Budget Detail Cision metrics; Destination Metrica/Research+ $68,688 strat plan $51,000 Master plan remaining; Arrivalist $57,500 $1,500 $76,688 New copier, Fiber optics/phone upgrade; computer servers; Group Sales Executive; Visitor Center Staff moved to this line Operations including Salaries, Taxes & Benefits $1,364,461 $1,348,000 item $255,681 $54,578 $1,674,720 Visitor Center Moveto Ops, Salaries, Staff $101,102 $82,500 Taxes& Benefits $101,102 Merchandise/Display** $25,000 $25,000 Communications** $26,000 $1,000 $25,000 Collateral** $26,000 $1,000 $25,000 $4,003,733] $479,064 $706,681 $109,485 $4,340,835 Master Plan $50,000 I $50,000 BOLD WINTER5 $1,250,000] $733,000 $517,000 $5,303,73j $1,262,064 $706,681 $109,485 $4,857, /19 budget reprents an average of 4% cost of doing business increase for repeated programs and operations where applicable. Budget adjusted to reflect 2017/18 spending. BOLD $59,000 from previous BOLD winter to be used. Contract and actuals differed under$25,000

36 IEVERLY I CONFERENCE & VISITORS BUREAU f 4 11 fi

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38 UPDATED MAY 31, 2018 CVB REQUEST INCREASED To Include Winter BOLD Tourism and Marketing Budget and Programs Projected Budget & Funding Requests Description Amount of Money Notes Base Budget (To still be adopted by Council) $7,642,338 FY carryover funding $0 Available to spend in FY18-19 $7,642,338 Funding Requests Description Amount of Money Notes Annual Buffer/Reserve to Covet TOT Revenue Reductions $ 200,000 Contingency Programs - Per City Attorney, please keep at Intellectual Property Legal Services $ 1 00,000 $100,000 Holiday Decor (excluding Rodeo Drive) $ Estimated costs for this year (based on last year, with no increase) is $480,877 Conference & Visitors Bureau (amount available) $ 62.9% of budget KY 17/18; % 4,857,835 KY 18/19 (includes $517K Winter BOLD) Rodeo Drive Committee (amount available) $ 2, 1 1 7,500 IruGreen Landscape 20,000 Subtotal Funds remaining to be allocated $ 23.6% of budget Fy 17/18; 27.7% FY 18/19 (includes Winter BOLD)