2012-2013 Annual Meeting. 2012-2013 Board of Directors C. Terry Brown Chairman President, Atlas...

• C. Terry Brown  Chairman President, Atlas Hotels

• Richard Bartell Vice Chairman President, Bartell Hotels

• William L. Evans Treasurer VP / Managing Director, Evans Hotels

• Luis Barrios Secretary GM, Best Western Hacienda Hotel

• Patrick Duffy GM, The Hilton La Jolla Torrey Pines

• Mohsen Khaleghi GM, Hyatt Regency La Jolla Aventine

• Robert A. Rauch, CHA GM/Partner, Hilton Garden Inn Del Mar

• Keri A. Robinson Area Managing Director,

Starwood Hotels & Resorts San Diego

• John Schafer VP / Managing Director Manchester Grand Hyatt San Diego

• SDTMD FY2012 Annual Report• Five-Year Recap of Initial District Results

• Overview of District Renewal

• Information Sessions:• Lodging Businesses: Changes to Reporting

Requirements• Applicants for Funding: FY 2014 Funding Guidelines

and Application Introduction

• $29 million deployed• Supported production of 3,747,771 room nights• $528 million in room night revenue• Approximately 18:1 ROI

What We’ve Done:Competitive Application

3rd Party Performance Audits

• Created accountability through standards, measurement, audits and transparency

• ROI measured in TMD Hotel Room Nights• Relieved pressure on City General Fund ($10.4

million in FY2009)• Stabilized TOT against economic downturn • Held our own or out-pacing other cities to attract

tourist spending

August 2008 to August 2009

• Room occupancy: down 7%• Average daily room rate: down 10%• Revenue per available room: down 13%

• Source: STR Global, Oct. 2009

FY2009 RESULTS

• $26.7 million deployed• Supported production of 2,650,856 room nights• $433.7 million in room night revenue• Approximately 16:1 ROI

City Change ’09 vs. ‘08

Los Angeles -0.56%Anaheim 0.01%Phoenix 0.07%Seattle 0.07%San Diego 0.17%San Francisco 0.25%

Source: Smith Travel Resources

FY2010 RESULTS

• $21.5 million deployed• Supported production of 3,545,500 room nights• $481.5 million in room night revenue• In excess of 18:1 ROI• SDTMD Hotel Occupancy 2.6% Higher than County• SDTMD OTA Trend Continued in Nights/ Revenue

New York $176.10

Oahu $110.54

Miami $97.82

San Francisco $97.75

Washington $92.90

Boston $90.77

San Diego TMD $88.56Los Angeles $75.34

New Orleans $70.09

Anaheim $70.05

Seattle $69.39

Philadelphia $68.70

Chicago $65.02

Phoenix $55.45

Denver $55.44

Orlando $55.19

Minneapolis $52.87Nashville $49.93

Tampa $49.83

Houston $48.41

Atlanta $45.09

St Louis $44.96

Dallas $44.39

Norfolk $43.12

Detroit $37.95

• $22 million deployed• Supported production of 3,267,501 room nights• $458 million in room night revenue• Approximately 20:1 ROI• US NEWS Travel Ranked San Diego as #3 Best Vacation

Destination • Collaboration and Economy of Scale

• SD Hotel Industry Oversight and Direction in Partnership with the City of San Diego

• TMD & City Double Filter of Checks and Balances• Funding = Aggressive Application, Vetting and Audits• ROI (est.) :

• 2008 - 2012: Over $112 million TMD funds deployed• Directly supported production of over 15 million SD room nights• Generating approximately $2.18 Billion in SD room night revenue• Overall estimated ROI of 19:1

• There are now 74 TMDs in California.

President & CEO and SDTMD General Counsel

• 74 TMDs currently in California• Including “comp sets” San Francisco, LA and

Anaheim

• California, Montana, Oregon, and Washington have established TMDs

• Texas, Florida, South Carolina, Oklahoma, and Colorado in process of starting TMDs

• SDTMD Initial Term Ended on 12.31.2012• 40-Year Procedural Ordinance Passed by

City• CA Prop 26 Passed November 2010

• Mandates enhanced restrictions on funding

• Revised Management Plan and Contract Approved by Industry and City 11.26.12

• Taxes require 2/3 voter approval • Not a tax if “A charge imposed for a

specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged”

• And “which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege”

•Not a tax if “A charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged” •And “which does not exceed the reasonable costs to the local government of providing the service or product”

• Reconstructed to Accommodate PROP 26• Refined District Created for Assessed Hotels• SDTMD Contractor Funding Not Guaranteed• Annual Distribution:

• 90% Sales & Marketing Programs• 5% Contingency• 5% Admin including fully loaded City Fees

• Two Major Benefit Categories Created– Benefit Category A:

• TMD Meeting & Group Sales / Consumer Direct Sales & Marketing• Payor Universe = Lodging businesses in City of SD with thirty (30) rooms or more• Assessment @ 1.45%*

– Benefit Category B: • Destination Marketing with Specific Call to Action for TMD Lodging Businesses• Payor Universe = All Lodging Businesses in City of SD• Assessment @ 0.55%*

* All TMD lodging businesses of 30 or more rooms pay Categories A + B for total assessment of 2%

• A1- Meeting and Group Sales & Marketing Programs and TMD Consumer Direct Sales & Marketing Programs

• A2 – Sub-Regional Targeting

• A3 – Competitive Targeting

• Payor Universe = Lodging businesses in City of SD

with thirty (30) rooms or more assessed at 1.45%

• Benefit Category B advertising campaigns and earned media to drive sales demand for San Diego TMD lodging businesses.

• Payor Universe = All Lodging Businesses in City of SD assessed at 0.55%.• Includes revenue from businesses with 1-29 rooms*; and• Includes revenue from businesses with 30 rooms* or more.

* % estimates to be provided by City

• All campaigns must have proportional other-source funding reflective of benefits.

• B&F recommended adoption of revised Ordinance: July 20, 2011• City Council approval of revised Ordinance: October 6, 2011• B&F approval of in concept the management plan: July 25, 2012• City Council approval of ROI & management plan: September 25, 2012• Ballots sent out: October 10, 2012• Public Hearing: October 23, 2012• Ballot count & City Council approval of renewed district: November 26, 2012• Effective date of new district: January 1, 2013• Approve / publish FY 2014 applications: January 2013

• SDTMD Annual Meeting & City Workshop: January 23, 2013• FY2014 Application Deadline: February 8, 2013• Public Application Presentations: February - March 2013

John LambethNew District Formation

Transient Occupancy Tax Accounting Supervisor, Accounting Program, Treasury Operations Division

Office of the City Treasurer

Changes to the Reporting Process• TOT/TMD Return• Online Payment Option• Mandatory Online Payment Requirement

New TOT/TMD Return

On January 31, 2013:

• Updates to Office of the City Treasurer’s Website

• TMD is now split into two categories

Online Payment Option - Changes• First step – select reporting period• Actively confirm TOT Certificate number• Auto calculation of TMD amounts

Mandatory Online Payments• Online will be mandatory July 1, 2013• Lobby Payment Option• Exemption• Benefits

Tricia MendenhallChanges to Reporting Requirements

INTRODUCTION:FY 2014 APPLICATION & GUIDELINES

• Incremental Room Nights and Leads for TMD Assessed Lodging Businesses

• Cannot Benefit Non TMD Paying Lodging Businesses• Example – Coronado / Carlsbad / Casinos, etc.

• Off-Peak Events and Promotions• Geographical - Programs in Sub-Regions• Possibility of Creating Long-Term / Legacy Events• Quantifiable Results through Third Party Audits• Economy of Scale

• Example - Collaboration with Other TMD Contractors

• A1.1 - Hotel Meeting Sales

• A1.2 - Event Management and Group Sales Dev. • A1.3 - Tourism Development including Travel & Trade

• A1.4 - Group Meeting Direct Marketing • A1.5 - Consumer Direct Sales & Marketing Programs

* Payor Universe = Lodging businesses in City of SD with thirty (30) rooms or more assessed at 1.45%

A1.5 Consumer Direct Sales & Marketing Programs • Placement of consumer direct sales and marketing campaigns

including, but not limited to, Pay-Per-Click Online Banner Advertising and dedicated Online Travel Agency (OTAs such as Expedia, Orbitz, Travelocity) campaigns that are specifically designed to place booking opportunities for assessed businesses in the grasp of consumers who have or may have expressed an interest in traveling to San Diego.

• Typical expenses include outside services such as advertising agency fees ; related events and promotions; production and advertising costs, District-related personnel salary, commissions, benefits, training, travel, printed material , promotional items, information technology, market intelligence, research, and performance audits.

• Typical indirect expenses include related contractor executive management, information technology support, and general & administrative overhead.

• By Category A1.1 through A1.5, specifically detail the scope of work of your proposed sales, marketing / promotional program and/or event using TMD funding.

• Your proposed scope of work narrative should explain your line-by-line Exhibit B – Budget.

January 2013:• FY 2014 Applications available by download / request

February 2013:• FY 2014 Application Deadline: February 8, 2013• Formal public board review of qualified applications

March 2013:• Funding recommendations of programs by board• Notification of funding intention to City• FY 2014 final budgets from approved organizations due on or about March 15, 2013• SDTMD submits FY 2014 Budgets with ROI projections and Scope of Work

assumptions to City on or about March 21, 2013

May-June 2013:• FY 2014 Budget presentation to City Budget Finance Committee / City Council• FY 2014 Contracts Issued

July 1, 2013: FY 2014 Begins

*Dates and funding cycle are approximate and may change without notice.

Lorin StewartFY 2014 Application & Guidelines