Council Agenda Report

Transcription

1 Council Agenda Report From: Subject: Jim Cogan, Assistant City Manager Paso Robles Tourism Improvement District First Annual Report Date: September 6, 2018 Facts 1. Travel Paso has submitted the First Annual Report of the Paso Robles Tourism Improvement District (PRTID) covering FY The privileges and services provided with the PRTID funds are marketing, sales, and communications and visitor services programs available only to assessed businesses, which are designed to increase room night sales and revenue therefrom. 3. These activities are funded through a self-imposed assessment on 291 currently inventoried hospitality businesses in Paso Robles. The annual assessment rate is 2% of gross short-term room rental revenue. 4. In , transient occupancy tax revenues grew to $5,737,972, a 6% increase from FY Travel Paso finished the fiscal year with a surplus of $194,000. $170,000 of the surplus will be allocated to sales and marketing programs with the remainder allocated to organizational management and a contingency/renewal fund. 6. Activity highlights from this first annual report include: recruitment of an executive director and a marketing and communications specialist, completion of a three-year strategic plan, story placements on social media channels, in Forbes Magazine and Sunset Magazine, and 30+ appointments with international tour operators, product buyers and media from the UK, Germany, Brazil, Japan, Korea, China and the U.S. Options 1. Take no action; 2. Receive and file the Paso Robles Tourism Improvement District First Annual Report; 3. Provide alternative direction to staff. Analysis and Conclusions The Paso Robles Tourism Improvement District is performing well and the activities of Paso Robles Destination, dba Travel Paso are consistent with the approved management district plan. The marketing efforts are resulting in media stories in high profile media outlets (Attachment 2). Staff will continue to work closely with Travel Paso to ensure that funding and activities are consistent with the approved management district plan and benefiting the city. Fiscal Impact This action is revenue neutral. The activities described in the report support increasing tourism and the occupancy rate of Paso Robles hospitality businesses, which correlates to increased revenues from transient occupancy tax. Recommendation Receive and file the Paso Robles Tourism Improvement District First Annual Report and provide feedback for future reports. Agenda Item No. 14 Page 174 CC Agenda

2 Attachments 1. Paso Robles Tourism Improvement District Annual Report 2. Media Articles Agenda Item No. 14 Page 175 CC Agenda

3 PASO ROBLES TOURISM IMPROVEMENT DISTRICT ANNUAL REPORT Submitted to the City of Paso Robles by Paso Robles Destination, dba Travel Paso, pursuant to Streets and Highways Code section for the period from July 1, 2017 through June 30, 2018 Paso Robles Destination/Travel Paso Annual Report August Agenda Item No. 14 Page 176 CC Agenda

4 CONTENTS Summary 3 Boundaries 3 Improvements and Activities 4 Marketing/Sales/Communications 4 Administration and Operations 5 Collection Fee 5 Contingency/Renewal 5 Cost Budget and Actuals Projection 6 Assessment 7 Assessment 7 Delinquencies/Penalties/Interest 7 Surplus/Carryover 8 Number of Assessed Businesses 8 Activities 8 Key Highlights Key Highlights Cover Photo Credit: Travel Paso Paso Robles Destination/Travel Paso Annual Report August Agenda Item No. 14 Page 177 CC Agenda

5 SUMMARY This annual report is in compliance with the Paso Robles Tourism Improvement District (PRTID) Management District Plan. The Board of Directors of Paso Robles Destination, dba Travel Paso, governs the PRTID. The report will outline the PRTID s boundary and potential assessment fee changes along with providing an overarching description of Travel Paso s marketing and sales activities covered by the PRTID funding. Key points in the report include: Transient Occupancy Tax (TOT) increase trend continues with $5,737,972 TOT revenue collected in FY Travel and lifestyle media interest continues to grow with journalists and social media influencers posting positive articles about Paso s emerging status as a welcoming wine country destination and experience. The Travel Paso Board, in partnership with the Paso Robles Event Center and City of Paso Robles, is exploring the feasibility of financing and developing a conference center to increase mid-week and shoulder season visitation demand. BOUNDARY There are no current proposed changes to the boundaries or assessed businesses. The Paso Robles Tourism Improvement District (PRTID) includes all lodging businesses, existing and in the future, available for public occupancy within the boundaries of Paso Robles. As used herein, lodging business means: any structure, or any portion of any structure, which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed located, campground, recreational vehicle park, or other similar structure or portion thereof. The boundary, as shown in the map on the next page, currently includes 291 Active Listings and 2,208 rooms. In 2018, the PRTID will look to create an investment path for those lodging businesses not within the district boundary but are considered in the Paso Robles Region and wish to engage with the Travel Paso marketing efforts. Paso Robles Destination/Travel Paso Annual Report August Agenda Item No. 14 Page 178 CC Agenda

6 IMPROVEMENTS AND ACTIVITIES The improvements and activities provided in FY were consistent with the approved Management District Plan. Assessment funds are to be spent on specific benefits conferred or privileges granted directly to the payers that are not provided to those not charged, and which do not exceed the reasonable cost to the City of conferring the benefits or granting the privileges. The privileges and services provided with the PRTID funds are marketing, sales, and communications and visitor services programs available only to assessed businesses, which are designed to increase room night sales and revenue therefrom. A description of the proposed activities for the initial year of operation is below; similar activities are proposed for FY Marketing, Sales & Communications A sales and marketing program developed and executed by Travel Paso will promote assessed businesses as tourist, meeting, and event destinations. The sales and marketing program will have a central theme of promoting Paso Robles as a desirable place for overnight visits. The program will have the goal of increasing overnight visitation and room night sales at assessed businesses, and may include the following activities: Digital marketing efforts, including advertising and social media, to increase Paso Robles Destination/Travel Paso Annual Report August Agenda Item No. 14 Page 179 CC Agenda

7 awareness and consideration and optimize Internet presence to drive overnight visitation and room sales to assessed businesses; Print ads in magazines and newspapers, television ads, and radio ads targeted at potential visitors to drive overnight visitation and room sales to assessed businesses; Attendance of travel trade shows to promote assessed businesses; Sales blitzes for assessed businesses; Familiarization travel trade tours of assessed businesses; Preparation and production of collateral promotional materials such as brochures, flyers and maps featuring assessed businesses; Coordinated promotions with visitor-attracting businesses, events, and attractions targeted at increasing overnight visitation to assessed businesses; Attendance of professional industry conferences and affiliation events to promote assessed businesses; Sponsorship and promotion of events marketed to overnight visitors encouraging them to stay at assessed businesses; Lead generation activities designed to attract tourists and group events to assessed businesses; Marketing Committee meetings to plan and coordinate tourism promotion efforts for assessed businesses; Development and maintenance of a website designed to promote assessed businesses. The Travel Paso Marketing Strategy will be reviewed at the September 2018 Travel Paso Board Meeting. Administration and Operations The administrative and operations portion of the budget was utilized for administrative staffing costs, office costs and other general administrative costs such as insurance, legal and accounting fees. Staff was hired in December 2017 and June City Collection Fee The City of Paso Robles retained a fee to cover its actual costs of assessment collection and administration. This fee is 2.5% of the assessment, is collected monthly and is deducted from the assessment total before remittance to Travel Paso. Contingency/Reserve In order to ensure effective provision of services, a contingency has been established to account for uncollected assessments or unanticipated program costs. If there are contingency funds collected, they may be held in a reserve fund or utilized for other program, administration or renewal costs at the discretion of PRD. Policies relating to Paso Robles Destination/Travel Paso Annual Report August Agenda Item No. 14 Page 180 CC Agenda

8 contributions to the reserve fund, the target amount of the reserve fund, and expenditure of the reserve fund shall be set by PRD. The reserve fund may be spent on programs described in this Plan in any proportion deemed appropriate by PRD. (This is quoted from the Paso Robles Tourism Improvement District Management Plan) COST Budget and Actuals The cost of providing improvements and activities for FY is consistent with the Management District Plan. The total projected budget was $1,280, The categories below reflect the projected and actual expenses budget for FY Expense Categories Budget Actual Sales & Marketing $776,491 $476,157 Administration $187,872 $157,687 Community Support $54,950 $61,276 Marketing Research $51,795 $29,717 Communications $144,892 $86,418 Contingency/Renewal $64,000 $43,329 Totals 1,280,000 $854,584 City Fee $32,000 $27,847 NOTE: The 2.5% City Fee is automatically deducted from the assessment revenue remitted to Travel Paso on a monthly basis this line item will appear in the FY budget for future tracking. Revenue Categories Budget Actual Carryover FY $192,894 $182,052 TBID Income $1,087,106 $859,556 Totals $1,280,000 $1,041,608 NOTE: The assessment revenue remitted to Travel Paso reflects a two-month delay i.e. April collections were remitted to Travel Paso in June. The revenue total for reflects 10 months of revenue collections July 2017 through April The assessment collected for May 2018 was $107,496 and June collection was $118,994. These revenues will be posted in the FY budget Projections The draft revenue projection for FY is $1,016,906. This does not include the projected carryover from FY and does not include the actual assessment from May 2018 and June The projected revenue and expense budgets for FY will be reviewed at the September 2018 Travel Paso Board meeting for reallocation consideration and approval based on final assessment reporting. Paso Robles Destination/Travel Paso Annual Report August Agenda Item No. 14 Page 181 CC Agenda

9 Assessment The annual assessment rate is 2% of gross short-term room rental revenue. Based on the benefit received, the assessment is not collected on: stays of more than 30 consecutive days; stays by any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty; and complimentary room stays. The term gross short-term room rental revenue as used herein means: the consideration charged, whether or not received, for the occupancy of space in a lodging business valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property and services of any kind or nature, without any deduction therefrom whatsoever. Gross room rental revenue shall include all changes to the transient associated with the occupancy of space in a lodging business, including room rental rates, booking fees, cleaning charges, resort fees, and other similar costs. However, gross short-term room rental revenue shall not include any federal, state or local taxes collected, including but not limited to transient occupancy taxes. The assessment shall not be considered revenue for any purposes, including calculation of transient occupancy taxes. The assessment is levied upon and a direct obligation of the assessed lodging business. However, the assessed lodging business may, at its discretion, pass the assessment on to customers. The amount of assessment, if passed on to each customer, shall be disclosed in advance and separately stated from the amount of rent charged and any other applicable taxes, and each customer shall receive a receipt for payment from the business. The assessment shall be disclosed as the PRTID Assessment. The assessment is imposed solely upon, and is the sole obligation of, the assessed lodging business even if it is passed on to customers. After the initial year, the assessment may be increased by the Travel Paso Board to a maximum of 3% of gross short-term room rental revenue. The maximum increases or decreases in any year shall be 0.5%. The PRD Board is considering a 0.5% increase in FY and in FY for the purpose of financing the planning and construction of a conference center facility. The Paso Robles City Council will be asked to approve this increase that would be effective starting the following fiscal year after approval. Delinquencies/Penalties/Interest The City shall be responsible for collection of delinquent assessments. The PRTID shall reimburse the City of Paso Robles for any costs associated with collecting unpaid assessments. If sums in excess of the delinquent PRTID assessment are sought to be recovered in the same collection action by the City, the PRTID shall bear its pro rata share of such collection costs. Assessed businesses that are delinquent in paying the assessment shall be responsible for paying: Paso Robles Destination/Travel Paso Annual Report August Agenda Item No. 14 Page 182 CC Agenda

10 1. Original Delinquency: Any lodging business that fails to remit any assessment imposed within the time required shall pay a penalty of 10% of the amount of the assessment in addition to the amount of the assessment. 2. Continued Delinquency: Any lodging business that fails to remit any delinquent remittance on or before 30 days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of 10% of the amount of the assessment in addition to the amount of the assessment and the 10% penalty first imposed. 3. Fraud: If the City determines that the nonpayment of any remittance due is due to fraud, a penalty of 25% of the amount of the assessment shall be added thereto in addition to the penalties stated in earlier paragraphs. 4. Interest: In addition to the penalties imposed, any lodging business that fails to remit any assessment imposed shall pay interest at the rate of 1% per month or fraction thereof on the amount of the assessment, exclusive of penalties, from the date on which the remittance first became delinquent until paid. 5. Penalties Merged with Assessment: Every penalty imposed and such interest as accrues under these provisions shall become a part of the assessment required to be paid. Surplus/Carryover The amount of carryover from FY is approximately $194,000, with $170,000 attributed to sales and marketing programs, $20,000 attributed to organizational management and $4,000 attributed to the contingency/renewal fund. Assessed Businesses Lodging Type # Of Active Listings # Of Rooms Hotel/Motel Vacation Rentals Bed & Breakfasts 0 0 RV Parks TOTAL This inventory is current through August 7, 2018 a complete list of names of assessed businesses is on file with the City of Paso Robles Finance Department. ACTIVITIES Key Highlights of Activities - Paso Robles Destination began operating on July 1, 2017 Paso Robles Destination/Travel Paso Annual Report August Agenda Item No. 14 Page 183 CC Agenda

11 - All appropriate organization paperwork was submitted and approved by the IRS, CA Secretary of State and Board of Equalization. - City of Paso Robles Business License was filed. - The recruitment of an Executive Director began in August 2017 and was completed in late September 2017 the ED began work December A Marketing and Communications Specialist was recruited and hired in June A Strategic Planning process began in March 2018 and was completed in June 2018 when the Travel Paso Board approved and adopted a three-year Strategic Plan. - Over $55,000 in funding was awarded to diverse community organizations and event producers as support for tourism-related events and activities. - Two travel media familiarization trips were conducted in May and June, respectively, bringing a combined total of 13 travel journalists into Paso Robles to experience our wine country assets including wine tasting, craft breweries, ciders, distillers and dining. As a result of those tours, Travel Paso began to see story placements on social media channels in July, in Forbes Magazine and Sunset Magazine in August. - In addition to media fams, Travel Paso hosted two Visit California tours through the Central Coast one in partnership with Korean Airlines and one in partnership with the Outbound Collective. - Travel Paso attended U.S. Travel Association s IPW international trade show and conducted 30+ appointments with international tour operators, product buyers and media from the UK, Germany, Brazil, Japan, Korea, China and the U.S. - Partnered with Visit SLO CAL to showcase an evening in Paso Robles as part of their media fam in May. - Transient Occupancy Tax continued to increase in FY to $5,737,972, a 6% increase from FY Key Highlights for the Program of Work - Marketing Strategy being finalized and will be approved at the September 2018 Travel Paso Board meeting. - Brand development to be completed and launched in April Website redesign to be completed and launched in April Three media fams being organized for spring/early summer Community partnerships program to be refined and launched in October # # # Paso Robles Destination/Travel Paso Annual Report August Agenda Item No. 14 Page 184 CC Agenda

12 8/30/ Secrets About Paso Robles, A Vibrant Wine Region Of California 2,358 views Aug 13, 2018, 10:33am 6 Secrets About Paso Robles, A Vibrant Wine Region Of California Liza B. Zimmerman Contributor Food & Drink i Cass Winery in the Paso Robles region. TRAVEL PASO One of Central California s most charming towns is an easy drive from both San Francisco and Los Angeles. Paso Robles is a half an hour from the Pacific Ocean and is home to great local wineries and fun bars and restaurants. Local girl Danna Stroud, the executive director of Travel Paso, has shared some of the things that stand out about her home town. She adds that her love for the region began in her childhood by riding with her grandma over the rolling hills to take lunch to her grandpa during the grain harvest. Agenda Item No. 14 Page 185 CC Agenda /4

13 8/30/ Secrets About Paso Robles, A Vibrant Wine Region Of California She eventually ended up in the tourism industry by working in hotel sales in Southern California. After that, she relocated back to the area almost two decades ago to run what was then called the Paso Robles Conference and Visitors Bureau. At that time, the region was home to only 57 wineries. However, the wine industry has grown and is now home to more than 200 producers. Vines and the History of Paso Robles In the early years, Paso Robles farmers and ranchers were major producers of almonds, Danna Stroud heads up Travel Paso. TRAVEL PASO grain, cattle and Zinfandel, she notes. The Paso Robles Farmer s Alliance was founded in 1891 and served as a co-op to better serve the needs of the local farmers and ranchers. MORE FROM FORBES She adds that, from a wine perspective, the region s multiple micro-climates and diverse soils have led to a vibrant wine industry. Paso Robles is now home to 11 different wine sub-appellations. As a wine-growing region, what sets Paso Robles apart from other regions is its elevation, 10-mile proximity to the Pacific and the fact that it has a coastal climate which means that consistently hot dry sunny days are followed by cool nights with thick sea fog, which blankets the region nightly. Some of the best wines are produced from grapes traditionally grown in the Rhône region of France, such as Grenache, Mourvèdre, Syrah, Grenache Blanc, Picpoul Blanc, Roussanne and Marsanne and even Zinfandel. In last few years, Cabernet Sauvignon has really taken off. While the region has been producing Agenda Item No. 14 Page 186 CC Agenda /4

14 8/30/ Secrets About Paso Robles, A Vibrant Wine Region Of California wine for more than 100 years, in the last 30 years it has really cemented itself as a world-class region. Paso Robles was incorporated in 1889 and early city leaders were relatives of Jesse James. Rumor has it, according to Stroud, that he passed through a few times. Also in the early 1900s, the Chicago White Sox used a local baseball field for spring training purposes. Hollywood screen legend James Dean met an untimely death just outside of Paso Robles in And over 80 years ago, residents began the tradition of Pioneer Day, shares Stroud, which is an opportunity for city residents to invite farmers and ranchers to break bread with family, friends and neighbors. Views, Dining and Hotel Options While Stroud says that she is partial to the view she had from the hill she was raised on along Buena Vista Drive, there are many others to enjoy. You can t beat the vistas found at the Alta Colina, Adelaida and Daou wineries and vineyards, she says. There are a few stops along some of the country roads, such as Kiler Canyon and Peachy Canyon, that offer commanding views of the rolling hills on the west side of the town. The moment you see the Pacific Ocean as you head west from Paso Robles is also impressive. Paso s downtown square is home to The Hatch, La Cosecha, Jeffry s Wine Country BBQ and Los Robles Café. There are just over 20 tasting rooms downtown to visit for a glass of wine, including Diablo Paso and Paso Underground. A visit to Pappy McGregor s will afford you a pint of beer from one of the local craft breweries. And, adds Stroud, one has to pop into the General Store Paso Robles to work made by a selection of local artisans. Studios on the Park is another unique spot to discover an art studios and a gallery that offers wine tasting. Tin City, a collection of bars and restaurants just outside of town, is also not be missed, along with Etto, which makes its own pasta. Agenda Item No. 14 Page 187 CC Agenda /4

15 8/30/ Secrets About Paso Robles, A Vibrant Wine Region Of California A country fair in Paso. Travel Paso TRAVEL PASO In terms of downtown hotels, the Historic Paso Robles Inn offers a step back in time with early 1900s design while Hotel Cheval is a small luxury hotel that is slated to expand. I have been writing, educating and consulting about wine, cocktails and food for more than two decades. I also do innovative wine events for corporate team building and educational projects for wine producers and regions. I have worked almost every angle of the wine and food... MORE Agenda Item No. 14 Page 188 CC Agenda /4

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