Administrative
Report
N.2., File # 23-6988 Meeting Date: 10/17/2023
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 2023-24 ADOPT BY TITLE ONLY RESOLUTION NO. CC-2310-108, 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 2023-24 IN
CONNECTION WITH THE REDONDO BEACH TOURISM MARKETING DISTRICT
EXECUTIVE SUMMARY
On July 18, 2023, the City Council renewed the Redondo Beach Tourism Management District (RBTMD) for a ten-year term. The RBTMD provides a dedicated revenue source to market Redondo Beach as a tourist, meeting, and event destination. Management of the RBTMD is the responsibility of a non-profit entity, titled Redondo Beach Travel & Tourism (RBTT). The RBTT manages the funds and implements RBTMD programs.
In accordance with the RBTMD and the renewed contract with the City, the RBTT is required to deliver an annual report. The report describes RBTT’s recent activities, goals and achievements.
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 tourism-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
N.2., File # 23-6988 Meeting Date: 10/17/2023
· Funds cannot be diverted for other government programs The City Council approved a contract with Civitas Advisors, Inc. (Civitas) to assist the City with the formation of the RBTMD. 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. The initial contract term of the RBTMD was five (5) years and was set to expire in 2023, however on July 18, 2023, the City Council renewed the RBTMD for an additional ten years. Management of the RBTMD is the responsibility of RBTT and, in accordance with the recently renewed RBTMD, the RBTT is required to deliver an Annual Report within ninety (90) days following September 1 of each year of the RBTMD’s ten-year term.
At the time of formation in 2018, the RBTMD estimated annual revenues of approximately $785,000, which are 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 City collects the assessment on a monthly basis from each licensed lodging businesses within the RBTMD boundaries that are comprised of 20 rooms or more. The TMD assessments are remitted to the City at the same time as the transient occupancy tax (TOT) remittances.
The assessment rate may be increased by the RBTT Board to a maximum of 2% of gross room rental revenue - however, the maximum increase or decrease of the assessment in any year is limited to 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 2023-24, the RBTT Board is leaving the current assessment and boundaries in place with no proposed changes. However, there is one change to the number of assessed businesses. The Starlight/Pacific Coast Inn is no longer a participating hotelier. The RBTMD will continue to include all other lodging businesses with 20 rooms or more available for public occupancy within the boundaries of the City of Redondo Beach. 2023-24 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 (FY 2022-23) and the proposed budget and operational plan for the coming fiscal year (FY 2023-24).
During FY 2022-23, 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 include:
· Fully integrated a comprehensive marketing strategy
· Slowed and re-evaluated all approaches to travel-based marketing due to the surge of COVID19 cases and restrictions placed on LA County · Restarted with a reduced, and highly targeted, marketing budget geared to local travelers following the increase in vaccination rates and ever-growing demand in the drive market · Launched 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 · Continued support for the BeachLife Festivals through a significant paid sponsorship program that garnered over 750,000 digital impressions through email, social postings, and web page
N.2., File # 23-6988 Meeting Date: 10/17/2023
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, which saw 221,000 sessions · Investing $66,000 in three Expedia ad campaigns that returned directly attributed bookings valued at over $1,900,000
· Made use of social media 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 The sales and marketing program is designed to increase 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 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 trade shows to promote assessed businesses · Sales blitzes for assessed businesses
· Familiarization tours of assessed businesses
· Preparation and production of collateral promotional materials such as brochures, flyers, and maps featuring assessed businesses
· Attendance of professional industry conferences and affiliation events to promote 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 assessed lodging businesses
· Development of Return on Investment (ROI) analysis on effectiveness of district funds to improve effectiveness and increase overnight visitation at assessed businesses Budget FY 2022-23
The total budget for FY 2022-23 saw $597,706 in collections, $332,845 in carry over from the previous year, and $191,810 in delayed remittance of FY 2021-22 RBTMD assessment funds. The total budget for FY 2022-23 was $1,122,361.
FY 2023-24 Projections
The anticipated total budget for FY 2023-24 is $700,000 in collections, $487,036 in estimated carry
N.2., File # 23-6988 Meeting Date: 10/17/2023
The anticipated total budget for FY 2023-24 is $700,000 in collections, $487,036 in estimated carry over from the previous year, and $128,030 in estimated delayed remittance of FY 2022-23 RBTMD assessment funds. The projected total budget for FY 2023-24 is $1,315,066. The categorical breakdown is included in the table below. All categorical budget allocations are within the authorized 15% adjustment of the total budget from the prior year.
Category % Collections Carryover Delayed
Remittance
Total
Sales & Marketing 87% $609,000 $278,307 $111,387 $998,694 Administration &
Operations
10% $70,000 $139,140 $12,803 $221,943
Contingency / Reserve 3% $21,000 $69,589 $3,840 $94,429 Totals 100% $700,000 $487,036 $128,030 $1,315,066
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. RBTMD assessment collections do not have a fiscal impact on the City’s budget, as the City’s General Fund does not contribute to the RBTT. However, it is expected that RBTMD marketing efforts increase visitation to the City, resulting in an increase in overall TOT and sales tax collections. RBTMD assessments are restricted for exclusive use by the RBTMD and must be reported to the City Council annually.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Reso - No. CC-2310-108, Approving the Report of the RBTT for FY 2023-24 · RBTMD Annual Report, October 3, 2023
· RBTT Annual Report Financials, August 31, 2023