TO: COMMUNITY AND ECONOMIC FROM: Nanci Klein
DEVELOPMENT COMMITTEE
SUBJECT: Team San José Semi-Annual DATE: September 10, 2024 Update
Approved Date
9/14/24
RECOMMENDATION
Accept a report on Team San José’s unaudited performance for Fiscal Year 2023-2024 and its annual sales, marketing strategies, and activities for Fiscal Year 2024-2025.
BACKGROUND
Team San José (TSJ) is a nonprofit organization combining the San José Convention and Visitors Bureau, hotels, arts, labor, and venues to deliver a high-quality visitor experience. TSJ manages the San José McEnery Convention Center, Parkside Hall, South Hall, and theater venues, including the California Theatre, Center for the Performing Arts, Montgomery Theater, and the San José Civic Auditorium. Per the San José Municipal Code, the City provides 4.5% of the collected 10% Transient Occupancy Tax to TSJ to operate the convention and cultural facilities venues and manage the San José Convention and Visitors Bureau. The Transient Occupancy Tax is collected from visitors to San José hotels. On June 18, 2024, City Council approved amendments to the two agreements with Team San José to manage the City-owned convention center facilities and four theaters and operate as the San José Convention and Visitors Bureau.1 Both agreements are in final five-year terms that expire on June 30, 2029. As part of City Council action on June 18, 2024, direction was given to the City Manager to create a 2026 working group that includes TSJ, Office of Economic Development and Cultural Affairs, and other arts, business, community, and labor stakeholders, as well as the Mayor’s Office, District 3 Council Office, and District 6 Council Office.
Pursuant to the master agreement between the City and TSJ, semi-annual updates on TSJ’s performance on Council-approved target performance measures are presented to the Community and Economic Development Committee. To support greater 1 https://sanjoseca.primegov.com/Portal/Meeting?meetingTemplateId=31099 COMMITTEE AGENDA: 9/23/24
ITEM: d(3)
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
September 10, 2024
Subject: Team San José Semi-Annual Update
understanding of TSJ’s strategies and activities, TSJ also presents sales and marketing activities highlights. Also included are metrics that, while not part of TSJ’s specific performance measures, provide insight into industry trends and the local environment.
This memorandum will focus on TSJ’s performance in FY 2023-2024, and major goals, sales, and marketing strategies for FY 2024-2025. It will also cover June 18, 2024, amendments to the contract, including the marketing collaborative, business outreach, and disaggregated data.
ANALYSIS
FY 2023-2024 Unaudited Performance and FY 2024-2025 Performance Targets While unaudited, TSJ reports meeting all six performance targets in FY 2023-2024. TSJ reports that the San José McEnery Convention Center saw significant performance increases in FY 2023-2024 compared to the prior fiscal year, and the theaters saw attendance eclipse pre-pandemic and FY 2022-2023 levels. TSJ also saw future room sales associated with 2026 mega events begin to contract during FY 2023-2024. The City Auditor will present the annual audit of TSJ’s performance to the Community and Economic Development Committee and, subsequently, the City Council by the end of the calendar year.
As outlined in the Attachment, TSJ and the City collaborated to develop performance targets for FY 2024-2025, informed by national industry trends and local indicators, which also inform TSJ’s sales and marketing strategies. TSJ will seek to continue the diversification of new business for the San José McEnery Convention Center while maintaining high standards of service to retain current repeat clients. The theaters are expected to see continued growth, although year-over-year gains are not as large as in the previous two fiscal years.
FY 2024-2025 Sales and Marketing Activities
In addition to performance measures, TSJ will present year-to-date sales and marketing strategies and activity highlights to the Community and Economic Development Committee, including industry trends and the hotel economy, as outlined in the Attachment. TSJ, operating as “Visit San José,” seeks to diversify market segmentation for sales and executes a robust customer engagement plan via industry tradeshows and events. Based on San José travel data, the marketing team at Visit San José continues to build awareness of San José as a unique Bay Area destination.
Furthermore, as added to the Visit San José contractual scope of work, it is now leading a collaborative marketing group focusing on marketing San José to regional audiences.
TSJ is also enhancing its outreach to the business community to ensure better cohesion in the visitor experience and maximize economic impact from overnight guests and local/ regional visitors to TSJ managed facilities downtown.
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
September 10, 2024
Subject: Team San José Semi-Annual Update
Road to 2026
In 2026, Super Bowl LX and FIFA World Cup 26 are destination sporting events being held in the region. A working group has been established a weekly meeting for several months and is identifying key components for the City’s “Road to 2026” work plan. The work plan includes seven strategic initiatives: policy work, cultural programming and event calendar, resources, marketing and communications, emergency operations, status reports/updates, and public space improvements. TSJ will be a critical partner in destination and regional marketing and activation of City-owned facilities. Staff will report on this work plan at the October 28, 2024, Community and Economic Development Committee meeting as part of the “2026 Major Events Status Report” item.
TSJ will discuss the highlights of the attached presentation at the Community and Economic Development Committee meeting.
COORDINATION
The memorandum was coordinated with the City Attorney’s Office. /s/
NANCI KLEIN
Director of Economic Development and
Cultural Affairs
For questions, contact Kerry Adams Hapner, Director of Cultural Affairs, at kerry.adams[email protected].
ATTACHMENT
Community and Economic Development Committee TSJ September FY 2024-2025 Semi-Annual Report