Administrative
Report
N.1., File # 22-5003 Meeting Date: 10/18/2022
To: MAYOR AND CITY COUNCIL
From: GREG KAPOVICH, WATERFRONT & ECONOMIC DEVELOPMENT DIRECTOR TITLE
DISCUSSION AND POSSIBLE ACTION REGARDING THE ANNUAL REPORT FROM THE REDONDO BEACH TRAVEL & TOURISM BOARD FOR FISCAL YEAR 2022-23 ADOPT BY TITLE ONLY RESOLUTION NO. CC-2210-084, A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF REDONDO BEACH, CALIFORNIA, APPROVING THE REPORT OF THE REDONDO BEACH TRAVEL & TOURISM BOARD FOR FISCAL YEAR 2022-23 IN
CONNECTION WITH THE REDONDO BEACH TOURISM MARKETING DISTRICT
EXECUTIVE SUMMARY
In December 2017, the City Council approved a contract with Civitas Advisors, Inc. (Civitas) to assist the City with the formation of the Redondo Beach Tourism Marketing District (RBTMD). The RBTMD provides a dedicated revenue source to market Redondo Beach as a tourist, meeting and event destination. Civitas worked with a steering committee comprised of local hoteliers and City representatives to create a Management District Plan (Plan), which established the framework for the RBTMD including proposed boundaries, a service plan, self-assessed fees, an annual budget and a proposed structure for governance.
On August 21, 2018, the City Council approved Resolution No. CC-1808-053 which formally established the RBTMD. Management of the RBTMD is the responsibility of a non-profit entity, Redondo Beach Travel & Tourism (RBTT) which was implemented as part of the District formation process. RBTT serves as the Redondo Beach Tourism & Marketing District Owner’s Association, manages the funds and implements RBTMD programs
In accordance with the Management District Plan and the contract with the City, the RBTT is required to deliver an Annual Report within ninety (90) days following September 1 of each year of the RBTMD’s five-year term. This year’s report outlines how the RBTT Board and Paolucci, Salling and Martin (PSM), their communications group, have addressed the ongoing challenges faced by the tourism industry that is still recovering from the impacts of COVID-19. Efforts made by the RBTT are supplemental to individual marketing budgets of the assessed businesses.
BACKGROUND
In California, Tourism Management Districts (TMD) are formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of a special benefit assessment district to raise funds within a specific geographic area for activities, such as the promotion of tourism, that benefit the proposed district. The formation of the RBTMD allowed lodging and tourismrelated businesses within the City to organize their efforts to increase tourism. Lodging businesses
N.1., File # 22-5003 Meeting Date: 10/18/2022
related businesses within the City to organize their efforts to increase tourism. Lodging businesses within the RBTMD assess themselves and those revenues fund the services and marketing that support the businesses within the District. General benefits of a TMD include; • Customization of programmatic activities to fit the needs of each destination • Provision of a wide range of services such as: Marketing of the Destination Tourism Promotion Activities and Sales Lead Generation
• The design, creation and governance by those who will pay the assessment • Generation of a stable funding source for tourism promotion • Funds cannot be diverted for other government programs Management District Plan: A steering committee comprised of local hoteliers and City representatives crafted a Management District Plan (MDP) which established the framework for the RBTMD. It included the district boundaries, the budget, and the means of governance for the District.
More specifically, the Plan outlined the method of assessment for the businesses within the District.
At the time of formation in 2018, the RBTMD estimated annual revenues of approximately $785,000, which is derived from a one percent (1%) assessment on gross room revenue for each assessed lodging business. The one-percent assessment represents the minimum assessment for the District.
The assessment rate may be increased by the RBTT Board to a maximum of two percent (2%) of gross room rental revenue - however, the maximum increase or decrease of the assessment in any year is limited to one-half of one percent (0.5%). Any proposed assessment increases or decreases approved by the RBTT Board must be included in the annual report and are not effective until they are also approved by the Redondo Beach City Council. For FY 2022-23, the RBTT Board is leaving the current assessment in place with no proposed changes. The actual FY 2021-22 assessment was $638,594. The assessment for FY 2022-23 is estimated at $700,000. With an anticipated carryover of $332,845 and delayed remittances of $191,453, the total budget for the RBTMD for FY 2022-23 is approximately $1,224,298.
The City collects the assessment on a monthly basis from each licensed lodging businesses within the RBTMD boundaries that are comprised of twenty (20) rooms or more. The TMD assessments are remitted to the City at the same time as the TOT remittances.
The initial contract term of the RBTMD is five (5) years, which will expire December 31, 2023. Once per year, beginning on the anniversary of the RBTMD formation, there is a thirty (30) day period in which any assessed lodging business owner that pays fifty percent (50%) or more of the total assessment pool may protest and begin proceedings to terminate the RBTMD. Staff is unaware of any protest that would lead to a termination of the assessment district. 2022-23 Annual Report: Attached to this report is the FY 2022-23 RBTMD Annual Report.
Pursuant to the Management District Plan, the City Council must review and consider for approval the Annual Report for the RBTMD that outlines accomplishments from the previous fiscal year, the proposed budget and operational plan for the coming fiscal year.
During the past fiscal year, the RBTT continued to maneuver the ongoing strategic demands in response to the impact of COVID-19 on the tourism industry. Activities, goals and achievements for the period of September 1, 2021 - August 31, 2022 include:
• Launching seasonal and tactical campaigns tied to every travel trend; winter holiday travel, Page 2 of 4 N.1., File # 22-5003 Meeting Date: 10/18/2022
• Launching seasonal and tactical campaigns tied to every travel trend; winter holiday travel, summer kick-off travel and “stay two nights get your third night free” incentive • Concepting and releasing a new creative ad campaign highlighting Redondo Beach’s unique attributes for drive-close audiences through a new STAYCATION campaign creative direction
• Supporting Beachlife festivals through a significant paid sponsorship program that garnered over 750,000 digital impressions through email, social postings and web page views tied to RBTT offerings
• Using “aRes” platform, an electronic reservation platform to drive direct bookings including a special “stay two nights get your third night free” promotion • Maintaining, evolving and directing new tourism leads to the website:
www.RedondoBeachTourism.com, 221,000 Sessions
• Investing $66,000 in three Expedia ad campaigns that returned directly attributed bookings valued at over $1,900,000
• Making use of social influencers with four familiarization tours that supported outreach into new market segments for actively engaged travelers across three key demographics:
regional family travel, empty nester escapes and millennial active travel • Optimizing regional paid search and social efforts resulting in 13.8 million total RBTT impressions served across Google, Facebook related platforms, BING search and Youtube.com
The sales and marketing program for the period of September 1, 2022 - August 31, 2023 will have the goal of increasing overnight visitation and room night sales by promoting assessed businesses as tourist, meeting and event destinations. Activities may include the following:
• Internet marketing efforts to increase awareness 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 • Familiarization tours of assessed businesses
• Lead generation activities designed to attract tourists and group events to assessed businesses
• Promotion of special events designed to drive overnight visitation and room sales to assessed businesses
• Development and implementation of a public relations and communications strategy, inclusive of social media outlets and press release distribution designed to increase overnight visitation at assessed businesses
• Development and maintenance of a website designed to promote assessed businesses • Development of a marketing plan to ensure RBTMD funds are strategically spent to market Redondo Beach assessed lodging businesses
• Development of Return on Investment (ROI) analysis on effectiveness of district funds to improvement effectiveness and increase overnight visitation at assessed businesses There are no proposed changes to the RBTMD boundaries or to the method and basis of levying assessments for FY 2022-23. However, Pacific Coast Inn will be removed as one of the RBTMD participants since it is no longer operating as a hotel. Per Civitas, a notation about Pacific Coast Inn has been included in the FY 2022-23 Annual Report but no further administrative action is required.
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As noted above, the estimated assessment for FY 2022-23 is $700,000.
COORDINATION
The Waterfront and Economic Development Department represents the City as a non-voting advisory member of the RBTMD and assists with the coordination of the City Council’s review and consideration of the RBTT Annual Report. The City Attorney’s Office has approved the Resolution as to form.
The Financial Services Department manages the processing of the assessments and disbursements to the RBTT.
FISCAL IMPACT
Funds from the RBTMD are collected from the assessed hotels by the City via the regular Transient Occupancy Tax billing on a monthly basis. Revenues are then submitted to the RBTT. The collected RBTMD assessments do not have a fiscal impact on the City’s budget, as the City’s General Fund does not contribute to the RBTT in any way, but it is expected that RBTMD marketing efforts increase visitation to the City, resulting in an increase in overall Transient Occupancy Tax and sales tax collections. RBTMD assessments are restricted exclusively by the RBTMD and must be reported to the City Council annually.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Reso - Approve Redondo Beach Tourism Marketing District Fiscal Year 2023 Report · FY 2022-23 Annual Report - Redondo Beach Tourism Marketing District · FY 2022-23 Financial Report - Redondo Beach Travel & Tourism · Redondo Beach Travel & Tourism PowerPoint Presentation, September 2021-August 2022 · FY 2021-22 Annual Report - Redondo Beach Tourism Marketing District · FY 2021-22 Financial Report - Redondo Beach Tourism Marketing District · Agmt - Management District Plan - Redondo Beach Travel & Tourism and Redondo Beach Tourism Marketing District
· Bylaws - Redondo Beach Travel & Tourism