CITY COUNCIL STAFF REPORT
March 18, 2025 {{section.number}}c
FISCAL YEAR (FY) 2025-26 CORONADO TOURISM IMPROVEMENT DISTRICT (CTID)
ADVISORY BOARD ANNUAL REPORT/MANAGEMENT PLAN AND RESOLUTION OF
INTENT TO CONTINUE TO LEVY ASSESSMENTS ON FOUR HOTEL BUSINESSES RECOMMENDATION:
Approve the FY 2025-26 Annual Report and Management Plan from the CTID Advisory Board; adopt “A Resolution of The City Council of the City of Coronado, California, Declaring its Intention to Continue to Levy Two One-Half Percent (0.5%) Assessments During Fiscal Year 2025-26 on Certain Hotel Businesses Within the Coronado Tourism Improvement District I and Coronado Tourism Improvement District II;” and set a public hearing date of Tuesday, April 15, 2025, for consideration of the continued levy assessment.
BACKGROUND:
On June 15, 2010, the City Council adopted Ordinance No. 2013 establishing the first Coronado Tourism Improvement District (CTID I). CTID I was formed under the Parking and Business Improvement Area Law of 1989 and incorporated into the City's Municipal Code under Chapter 16.14. On June 16, 2015, the City Council adopted Ordinance No. 2050 amending Municipal Code Chapter 16.14 to establish the second Coronado Tourism Improvement District (CTID II).
In 2018, CTID began operating as Discover Coronado. Tourism Improvement Districts are a variation of a Business Improvement Districts (BIDs), whose formation and function are authorized in California’s Street and Highways Code. The working assumption behind BIDs is businesses know best how to market, promote, and benefit their business. With all BIDs, a local agency uses its authorized powers to collect an assessment on selected businesses, and then the selected businesses use the assessments according to a work plan approved by the legislative body for the benefit of the assessees. Funds cannot be used for any purpose other than the benefit of the assessees, or the program is considered a tax. The formation of the first CTID in 2010 was in reaction to the downturn in Coronado’s tax revenues after the Great Recession of 2008.
Pursuant to Coronado Municipal Code Section 16.14.080 and Sections 36530 and 36533 of the 1989 Law, the CTID Advisory Board must submit an Annual Report and Management Plan outlining the board's efforts over the current year and the proposed activities for use of the assessment funds for each CTID in the upcoming fiscal year. Section 36534 of the 1989 Law further requires that, after approval of the Annual Report and Management Plan, the City Council shall consider adopting a resolution of intent to reauthorize both CTID I and II to continue to levy the current annual assessment and authorize the programs proposed for the next fiscal year. If the resolution of intent is adopted, a time and place for a public hearing shall be called. The public hearing shall be held no less than ten days after the Resolution of Intent is adopted. The purpose of the public hearing shall be to receive any written or oral protests from the assessed hotel properties against the reauthorization of either or both CTID I and II and/or the one-half percent (0.5%) assessment for each CTID.
Discover Coronado is a self-sufficient organization. It does not receive funding from the City of Coronado, federal, state or industry sources. Instead, it is funded by an assessment paid by overnight guests to member hotels.
Notice of the public hearing will be published and letters noting the renewal and protest hearing date, along with the resolution of intent, will be sent to all assessed parties (in this case, the four major hotels) within seven days of the adoption of the Resolution of Intent.
ANALYSIS:
The Discover Coronado Annual Report and Management Plan summarizes the activities and accomplishments for the current year and goals for the upcoming year. Despite challenges such as inflation, increased competition from regional hotel growth, reduced room inventory, and water quality concerns, Discover Coronado continues to lead the travel and hotel sector and serve as a reliable economic recovery mechanism.
Coronado’s resorts saw a strong post-pandemic recovery in 2023. However, 2024 brought new challenges, including hotel room supply constraints, a decline in leisure demand, and beach closures, all of which impacted growth. In 2024, group travel generated $84.3 million in direct visitor spending, resulting in a total economic impact of $122.2 million in the City of Coronado.
Member hotels sold 344,100 room nights in 2024, of which 119,700 were from the group travel segment. Due to ongoing renovations at several hotel properties, the projected transient occupancy tax revenue for calendar year 2024 is expected to decline by 6.1% to $21.4 million.
Discover Coronado remains committed to marketing and sales initiatives that position the City of Coronado as a premier destination and attract luxury meetings to its resorts. These efforts contributed to Coronado being ranked the 39th Top Meeting Destination in America in 2024 by Cvent.
Beyond destination marketing, Discover Coronado actively supports local community initiatives.
Over the past year, the organization cosponsored the Coronado Holiday Tree Lighting, funded the Orange Avenue Banner Program, provided the wrap for the Free Summer Shuttle, and sponsored a photo booth for a City event. Additionally, Discover Coronado served as the title sponsor of the Art & Wine Festival and partnered with Sevilla Productions to underwrite a threeepisode documentary on the restoration of the Hotel del Coronado.
A full list of FY 2024-25 achievements is outlined in the attached Discover Coronado Annual Report. Looking ahead to FY 2025-26, Discover Coronado has outlined key goals for both District One and District Two:
District One Management Plan Goals:
1. Increase overnight leisure guest outreach in key regions.
2. Support services that enhance destination and Discover Coronado participation.
3. Elevate awareness and appreciation for Discover Coronado scope of work.
4. Remain vigilant to labor concerns that threaten destination.
District Two Management Plan Goals:
1. Widen group sales effort and conversion tracking with San Diego Tourism Authority.
2. Continue to fund research that measures and quantifies return on investment.
3. Advocacy to address water quality funding and impacts.
4. Distinguish destination with improved imagery, assets, and content.
As FY 2025-26 approaches, Discover Coronado will conclude its current strategic plan, which has guided the organization through the pandemic and the five-year renovation of the Hotel del Coronado. Many of the strategic goals have been achieved, and new challenges have prompted the Advisory Board to identify key priorities for FY 2026-28, including expanding group sales outreach, reinforcing the need for overnight leisure guests, enhancing awareness of Coronado as a premier destination, strengthening data collection and research capabilities, and improving community relations, advocacy, and education.
FISCAL IMPACT:
The City receives $5,000 from both CTID I and CTID II to cover the cost of an annual financial review, accounting costs, and other in-kind services. The CTID Annual Report projects FY 2025 assessments will generate $1,087,500 in revenues each for CTID I and CTID II, for a total of $2,175,000.
ALTERNATIVE:
1) Make modifications to the Annual Report and Management Plan and approve it, as modified; and/or 2) Not approve the Annual Report and Management Plan or exclude either CTID I or CTID II from the Resolution of Intent and direct staff to bring back a Resolution of Intention to disestablish one or both Districts.
CALIFORNIA ENVIRONMENTAL QUALITY ACT:
Not Applicable.
PUBLIC NOTICE:
No notice required.
ATTACHMENTS:
1. Resolution No. 2025-08
2. Discover Coronado Annual Report
Submitted By: City Manager's Office / Kelli Maples