City Council
Report
City Council Meeting: July 14, 2026
Agenda Item: 4.C
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To: Mayor and City Council
From: Oliver Chi, City Manager, Office of Economic Development Subject: Approval of the Santa Monica Tourism Marketing District Fiscal Year 2026-27 Budget and Work Plan
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061 (b)(3) of the California Environmental Quality Act (CEQA) Guidelines; and
2. Receive and approve the Santa Monica Tourism Marketing District Fiscal Year 2026-27 Budget and Work Plan.
Summary
In 2012, in partnership with local hotels, Santa Monica Travel and Tourism (SMTT) established the Santa Monica Tourism and Marketing District (SMTMD) to fund targeted marketing and promotions to increase overnight room sales. Funding for the marketing programs and activities is derived from assessments and revenues collected from the hotels operating within the boundaries of the SMTMD. The attached SMTMD Annual Report (Annual Report) summarizes the proposed programs and activities for the upcoming Fiscal Year 2026-27, including the SMTMD budget, hotel report, and marketing plan. Staff recommends that Council review, receive, and approve the Annual Report in accordance with the State laws governing tourism marketing districts.
Discussion
Under Streets and Highway Code (Section 36650), the Santa Monica Tourism and Marketing District (SMTMD) is required to prepare Annual Reports providing the 2 of 6
following information:
• Any proposed changes to the boundaries of the tourism marketing district or to any benefit zones or classification within the district, • The improvements, maintenance, and activities for that fiscal year, • An estimate of the cost of providing improvements, maintenance, and activities for that fiscal year,
• The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year,
• The estimated amount of any surplus or deficit in revenues to be carried over from a previous fiscal year,
• The estimated amount of contributions to be made from sources otherthan assessments levied pursuant to this part.
In accordance with Section 36650, the SMTMD has submitted its 2026-2027 Annual Report (Attachment A), including the work plan and budget for Council approval. The following overview summarizes the proposed expenditures to be funded with SMTMD assessments in the upcoming fiscal year.
SMTMD Reporting Year FY 2026-27
Revenues
Estimated SMTMD Assessments 6,866,255
Bank Interest 2,747
Total Revenues* $6,869,002
Expenditures
Cost of Programs
Travel Industry Sales 1,148,002
Marketing 1,421,901
Meetings, Incentives, Conferences,
and Exhibitions
330,000
Public Relations 340,000
General and Administrative Services 647,000
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Salaries & Benefits 2,638,785
Contingency Fund 343,313
Total Expenses $6,869,001
Estimated Carry-over from Previous Fiscal Year $0
Estimated In-Kind Contributions** $365,000
* This does not include $2,994,004 in City funding included in the FY 2026-27 Proposed Budget for a services agreement with SMTT that the City provides SMTT annually to continue SMTT’s tourism and marketing programs, operate Visitors Centers, produce collateral materials, create brand awareness, and promote Santa Monica through print and social media.
* *In-Kind Contributions are provided by tourism partners and represent such items as complimentary hotel rooms; discounted or donated meeting space; attraction tickets; hosted meals, transportation or other partnerprovided services that support SMTT programs and events.
The SMTMD expenditures and services for FY 2026-27 are budgeted at $6,869,002 to fund programs and services that focus on five strategic areas:
1. Drive Balanced Demand for the Destination
2. Enhance the Brand and Steward the Destination Experience
3. Champion the Value of Tourism
4. Strengthen Strategic Partnerships and Relationships
5. Ensure Operational Excellence
Per SMTT’s submitted reports, the 2026–2027 Operating Plan reflects a strategic pivot from recovery to resilience, driven in large part by federal policy impacts that are affecting international travel, which historically have accounted for approximately 50% of Santa Monica’s visitation. These headwinds will require long-term strategic planning and continuous engagement in key global markets, even as the organization prioritizes short-term gains through domestic and drive-market travel. Compared to prior years, there is an increased focus on high-value segments such as luxury travelers and Meetings, Incentives, Conferences, and Exhibitions (MICE), alongside a stronger emphasis on driving measurable economic impact through increased length of stay, Average Daily Rate (ADR), and Transient Occupancy Tax (TOT), dining and retail tax.
The SMTT plan also advances more conversion-focused digital and content strategies, 4 of 6
deeper community integration, and enhancements to the on-the-ground visitor experience. At the same time, it positions Santa Monica’s strong brand to capitalize on upcoming global mega-events such as the 2026 FIFA World Cup, the Route 66 Centennial, the 2027 Super Bowl and 2028 Summer Olympic and Paralympic Games, thus recognizing that converting visibility into visitation will require sustained investment, strategic partnerships, and a more data-driven, performance-oriented approach.
The 2026–2027 SMTT Budget reflects a similarly disciplined and focused approach as SMTT responds to shifting market conditions. With Tourism Marketing District (TMD) collections slightly down and City funding remaining flat, SMTT is prioritizing the protection of core Travel Industry Sales (TIS), MICE, public relations, and marketing programs that drive measurable results. At the same time, SMTT is aligning resources toward areas of strongest near-term demand, particularly domestic travel, while maintaining continued investment and presence in international markets for long-term recovery. Departmental budgets across marketing, MICE, visitor services, and client services remain largely consistent, reflecting a deliberate decision to operate more efficiently and focus on execution over expansion. Ultimately, this budget is designed to maximize return on investment (ROI), in-kind, and Fair Share support while maintaining the flexibility to scale as conditions improve and as we approach major global events.
The proposed FY 2026-27 budget was approved by the Tourism Marketing District Committee and the Santa Monica Travel and Tourism (SMTT) Board of Directors at a joint meeting on March 18, 2026. Council may approve the annual report or may modify any section contained in the annual report and approve it as modified. As the assessment formulas in the SMTMD remain as approved in 2017, staff recommend Council approve the attached Annual Report.
Environmental Review
The SMTMD’s FY 2026-27 workplan is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines, which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may 5 of 6
have a significant effect on the environment.” The annual report provides a summary update of the activities and funding of the SMTMD. Therefore, it can be seen with certainty that actions would not result in adverse physical impacts on the environment, and as such, is exempt from CEQA.
Past Council Actions
Meeting Date Description
Attachment B - 7/8/2025 Council approved the Annual Report for FY 2025-26 (Calendar Year 2025) representing the eighth report
for the SMTMD renewal term.
Attachment C - 11/1/2016 Council adopted Resolution 11005 (CCS) extending the SMTMD by nine and one-half years beginning on
January 1, 2018 through June 30, 2027.
Attachment D - 12/11/2012 Council adopted Resolution No. 10722 (CCS) establishing the Santa Monica Tourism Marketing
District (SMTMD).
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the recommended action.
Prepared By: Erika Cavicante, Senior Development Analyst Approved Forwarded to Council
Attachments:
A. 2026-27 TMD Annual Report
B. 7/8/2025 Staff Report
C. 11/1/2016 Staff Report (Web Link)
D. 12/11/2012 Staff Report (Web Link)
E. Levine 2026
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F. Oaks 2026