January 2017

Tourism Marketing ProgramBusiness Plan Presentation

Gary W. LoganAdministrator

NOGALES INFORMATION CENTEROFFICE TELEPHONE: 631-312-0476CELL PHONE 520-841-2674

REVITALIZING NOGALES TOURISM LIKE IT WAS!

EXECUTIVE SUMMARY

The Nogales, Sonora, Mexico Tourism Marketing Program is designed to rejuvenate the tourism industry, and as a byproduct, rejuvenate the Nogales Retail Economy.

Tourism in Nogales was decimated by drug cartel violence in 2008 and the relentless media coverage of the horrific carnage. In 2010, the drug cartel violence subsided drastically, but the media didn’t cover that story.

There is not much in the way of tourist records for Nogales, Sonora. The best recorded indicator of the change in tourist traffic is the U.S. Customs Service statistics on Northbound pedestrian traffic. 2008 records 7.7 million people and 2015 shows only 3.1 million pedestrians. That is a dramatic drop of 4.6 million people or 60% drop in people crossing the border.

01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,0009,000,000

Border Pedestrian Crossers

Year

Num

ber o

f Ped

estr

ians

It should be noted that the Northbound traffic includes people crossing to work in Arizona, school kids, their parents, people crossing to buy groceries, shop, work in Sonora or to work in Arizona. There should not be any or little change in those people’s habits. Logic says the biggest change is going to be in the discretionary traveler, mainly the tourist.

The Nogales tourism interests basically ignored the problem, hoping that tourism would somehow recover. From 2008 through 2016, the city government made many great improvements to their infrastructure, added security and designed events for tourists to enjoy.

Although the city readied itself for the recovery of tourism, they forgot to tell the Americans and Canadians about the completed improvements. When they had events, they forgot to invite the people from the North.

This Tourism Marketing Program is designed to inform and educate the people about the safety of the tourist places, services and products in Nogales. Inform them about the Medical/Dental tourism that is designed for them. Tell them about all the tourist businesses that are available in

P a g e 2 | 9

Nogales. Let them know that there are many economical products and services that are ready for them to buy or use.

For the purpose of the Tourism Marketing Program:

A tourist is defined as any person crossing the Northern border for the purpose of spending money for Nogales products and/or services.

Focus 1.) Get tourists to cross the border and spend money. Provide events that attract various segments of the population. Tell and show that Nogales, Sonora is safe and secure for Arizonians.

Focus 2.) Get tourists to cross the border and spend more money. Provide specific products and services as a destination for the tourist. Tell and show that Nogales, Sonora is safe and secure for Arizonians AND Medical Tourism economically beneficial for them to make the trip.

Focus 3.) Get more tourists to cross the border, stay longer and spend even more money. Provide events and access to more specific products and services. Tell and show that Nogales, Sonora is safe and secure for Arizonians AND it is economically beneficial for them to make the trip AND it can be fun to bring their family and friends for a cheap diversion for shopping, restaurants and bars.

The investment for the program is $1.92 million. The investment will be allocated at $150,000 per month for Marketing and Advertising in Phoenix, Tucson and Sierra Vista. 5.5 million people will be targeted as potential tourists. $10,000 will be allocated monthly to provide an information center in Nogales to interface with the Marketing/Advertising agency, the tourists and the businesses in Nogales.

Advertising/Marketing/Publicity

Information Center

Total Investment

$- $500,000

$1,000,000 $1,500,000

$2,000,000

$1,800,000

$120,000

$1,920,000

Amount of Investment

The projected return on the investment is a 24.5% increase in tourists (714,000.) The projection for the number of medical tourists is 15.4% or 111,300 people. The average medical tourism revenue is $583.82 or $64,978,923 total additional revenue. Unfortunately, no data is available

P a g e 3 | 9

on the average expenditure by the other 602,700 tourists, but $10 each would yield $6 million; $20 would yield $12 million; and $50 would yield $30 million!

N u m b e r o f N e w M e d i c a l S e r v i c e T o u r i s t s

N u m b e r o f N e w O t h e r T o u r i s t s

T o t a l A d d i ti o n a l T o u r i s t s

0 200,000 400,000 600,000 800,000

111,300

603,700

714,000

Number of Tourist & Visitors

P a g e 4 | 9

Revenue From New Other Tourists @$50 Each (16%)

Revenue From New Other Tourists @$20 Each (16%)

Revenue From New Other Tourists @$10 Each (16%)

$0 $5,000,000 $10,000,000 $15,000,000

$6,500,000 $4,800,000

$6,500,000 $1,920,000

$6,500,000 $960,000

11300000

8420000

7460000

Estimated Tax on Revenue

Return on Investment DataInvestments:  

Advertising/Marketing/Publicity $1,800,000   Information Center $120,000  

Total Investments $1,920,000 Return on Investment People  

Number of New Medical Service Tourists 111,300   Number of New Other Tourists 603,700  

Total Additional Tourists 714,000 Return on Investment Dollars:  

Revenue from New Med. Svc. Tourists $584 Each $65,000,000   Revenue from New Other Tourists @$10 Each $6,000,000  

Total Additional Tourist Revenues A. $71,000,000 Revenue from New Med. Svc. Tourists $584 Each $65,000,000   Revenue from New Other Tourists @$20 Each $12,000,000  

Total Additional Tourist Revenues B. $77,000,000 Revenue from New Med. Svc. Tourists $584 Each $65,000,000   Revenue from New Other Tourists @$50 Each $30,000,000  

Total Additional Tourist Revenues C. $95,000,000      

The economic benefit of the program should be an influx of $71 to $95 million dollars. The tax benefit should yield between $1 and $4.8 million in Value Added Taxes, plus another $6 million in incomes taxes. Estimated direct return on the $1.9 million investment is $7 and $11.8 million.

P a g e 5 | 9

Nogales Marketing Program

P a g e 6 | 9

Tucson Advertising/Marketing/Publicity AgencyUtilizing their resources and expertise the agency will contact virtually

5.5 Million Potential Tourists and Visitors each Month.

P a g e 7 | 9

Nogales Information CenterThe Center will provide the interface between the tourists/visitors and the

Nogales businesses with bilingual personnel via the telephone, internet and face-to-face contact. The Center will also interface between the businesses and

the Advertising Agency and the City Government to insure fair and responsible media coverage of events in Nogales, Sonora.

P a g e 8 | 9

The investment and the commitment has to be done over 12 months. During the years 2008 to the present date in 2016, nothing has been done to counter the bad media coverage. It cannot be fixed month to month, it has to be done incrementally by building the trust of the people north of the border.

Los Algodones did not have the drug cartel violence stigma that Nogales has, but it draws from a population of 5.5 million potential tourists within a 3-hour drive. Although not a perfect correlation, with a bigger, more diversified city, Nogales should be able to put the problems of the past behind them and generate an additional $64.9 million in tourism revenues the first year.

The Nogales, Sonora, Mexico Tourism Marketing Program will help put Nogales’ violent past reputation behind it move forward with a great vitality. The program will inform, educate and generate interest in the tourism in Nogales. The invitational events will provide exposure to the safe and fun environment of the city that the tourists will take home with them. And finally, the returning tourists will have a positive attitude to relay to their families, friends, neighbors and fellow workers!

An added benefit to this plan is that the positive message will carry over to the State of Sonora and the whole country of Mexico! Through the internet It will spread to the rest of the United States, Canada and in fact, to the whole world!

_____________________________________________________________________________________

P a g e 9 | 9

NOGALES TOURISM PROGRAMACCEPTANCE AND SUPPORT FORM

1. I Accept and Support the Nogales Tourism Program as a viable program to revitalize the tourist, visitor businesses, along with the economy of Nogales, Sonora.

2. I agree that the program is reasonable in cost to benefit and that it needs to be funded for immediate implementation.

Name: ____________________________ Title: ____________________________________

Business Name: ______________________________________________________________

Email Address: _________________________________ Telephone: ____________________

_______________________________________________________ _____/_____/_______Signature Date