Major Employer – John Mallard Citizens At Large & Neighborhoods – Thomas M. Niemann

Major Employer – John Mallard

Citizens At Large & Neighborhoods – Thomas M. Niemann

Lodging Limited Service – Mary K. Simpson

Lodging Limited Service – Jim Wagner

Foodservice – JoAnne Worthington

CEO - Reyn Bowman

Features/Entertainment – E'Vonne Coleman-Cook, Chair

Lodging Full Service – Brian McGhee, Vice Chair

Retail Shopping – James E. Heyward, Secretary/Treasurer

City Council – Cora Cole-McFadden

County Commissioners – Becky Heron

Lodging Full Service – Ron Hunter

Tourism Development Authority

Part 1: Role of DCVB

James HeywardRepresenting: Retail Shopping

Role of DCVB

• DCVB is a public authority chartered state and local government

• As a provision to granting Durham authority to levy a special “Room Occupancy & Tourism Development Tax” on Visitors

• To Spearhead the Promotion of Durham as a Visitor Destination

How Visitors Benefit Durham

How DCVB Relates to City-County Outcomes

How DCVB Relates to City-County Outcomes

• Fuel the Durham business climate with visitor spending

• To Generate tax revenues from visitor spending to fund local government

• Help Sustain Place Based Assets (cultural, natural, heritage)

• Inform development decisions to retain Durham’s unique cultural identity

Economic Impact of Visitors to Durham

Percent Change in Local Sales and Occupancy Taxes Generated by Visitors

16 Years (1990 – 2005)

Part 2: How Visitor Promotion Generates Revenues to Fund

Local Government

Tom NiemannRepresenting: Citizens At-Large or Neighborhood

Associations

Legislated Role of DCVB With Current Funding – “Only to Promote Travel, Tourism and

Conventions to Durham”

• “Promote travel and tourism means to”:

• “advertise or market an area”

Legislated Role of DCVB With Current Funding – “Only to Promote Travel, Tourism and

Conventions to Durham”

• “Promote travel and tourism means to”:

• “advertise or market an area”

• “publish and distribute pamphlets and other materials”

Legislated Role of DCVB With Current Funding – “Only to Promote Travel, Tourism and

Conventions to Durham”

• “Promote travel and tourism means to”:

• “advertise or market an area”

• “publish and distribute pamphlets and other materials”

• “conduct market research”

Legislated Role of DCVB With Current Funding – “Only to Promote Travel, Tourism and

Conventions to Durham”

• “Promote travel and tourism means to”:

• “advertise or market an area”

• “publish and distribute pamphlets and other materials”

• “conduct market research”

• “engage in similar promotional activities to attract tourists or business travelers to the area”

Legislated Role of DCVB With Current Funding – “Only to Promote Travel, Tourism and

Conventions to Durham”

• “Promote travel and tourism means to”:

• “advertise or market an area”

• “publish and distribute pamphlets and other materials”

• “conduct market research”

• “engage in similar promotional activities to attract tourists or business travelers to the area”

• “include administrative expenses incurred in these activities”

Legislated Role of DCVB With Current Funding – “Only to Promote Travel, Tourism and

Conventions to Durham”

• Funding After 32 years Permits DCVB to:

• “promote travel and tourism” and/or

• “tourism related expenditures including capital projects”

Marketing Activities Promote Durham’s Brand Image and Leverage Economic Value

• Getting Durham on the List for future consideration

How Marketing Activities Work

• Getting Durham on the List for future consideration

• Creating Awareness and Distinctiveness

• Distinguishing Attributes and Points of Difference

• Shaping Attitudes, Creating Attachments and Associations

How Marketing Activities Work

• Market Research and Diagnostics to Make Other Activities More Effective

• Shopping and Placing News Story Ideas

• Mining and fulfilling inquiries via the Web and Traditional Advertising

• Brand Scrubbing To Eliminate or Correct Inaccuracies

• Printing and Distributing Maps, Brochures, Fliers, Walking and Driving Tours

How Marketing Activities Work

• Prospecting and Booking Groups like Conventions, Sports Groups, Films

• Stimulating Visitors to See, Do and Spend As Much As Possible

• Leveraging Alliances and Strategic Partnerships

• Creating Synergy among visitor related organizations, e.g. lodging, dining, shopping, entertainment

Part 4: How Can More Revenue Be Generated from Visitors to

Fund Local Government

John MallardRepresenting: Major Employer, University or Meeting

Planner

Durham is leaving up to $18 million annually on the table.

• Full Share from Visitors.

Durham is leaving up to $18 million annually on the table.

• Full Share from Visitors.

• Comparing Durham visitation to national averages, Durham would need to attract another 6.7 million visitors annually to reach its fair market share of visitors. In particular, it needs to grow its leisure and personal visitors while converting visiting friends and relatives to overnight visitors. That would effectively double the amount of visitor spending currently achieved.

Durham is leaving up to $18 million annually on the table.

• Full Share from Visitors.

• Proportion of Occupancy Tax reinvested in Visitor Promotion.

Durham is leaving up to $18 million annually on the table.

• Proportion of Occupancy Tax reinvested in Visitor Promotion.

• Durham is investing 33% of the occupancy tax into promotion compared to 67% in the best practice State House guideline, the national average of 55% and the average of 53% among State peers, Buncombe, Forsyth, Greensboro, Winston-Salem and Raleigh. Putting 3% vs. 2% of the 6% occupancy tax into DCVB promotion would bring Durham to just shy of the state and national average.

Durham is leaving up to $18 million annually on the table.

• Full Share from Visitors.

• Proportion of Occupancy Tax reinvested in Visitor Promotion.

• Capacity of Facilities and Events.

Durham is leaving up to $18 million annually on the table.

• Capacity of Facilities and Events.

• Even though 50-70% of attendance is from visitors, Durham facilities and events are currently operating at half capacity. Increasing the amount of the occupancy tax used to draw additional visitors from 2% to 3% of the 6% occupancy tax will help close this gap and make these facilities and events more sustainable.

100% LODGING 50% ENTERTAINMENT

33% RESTAURANTS 33% RETAIL

Without Visitors, Durham Would Lose

Durham is leaving up to $18 million annually on the table.

• Full Share from Visitors.

• Proportion of Occupancy Tax reinvested in Visitor Promotion.

• Capacity of Facilities and Events.

• Promotion Per Guest Room.

Durham is leaving up to $18 million annually on the table.

• Promotion Per Guest Room.

• At $382.90, Durham reinvests 22% less in destination promotion per guest room than the average of $489.33 by its State peer group. An additional $800,000 from the occupancy tax for promotion brings Durham to the average, and $2.3 million brings it even with the best practice destination.

Durham is leaving up to $18 million annually on the table.

Durham VisitorPromotion Per

Guest Room

Peer GroupAverage

Best PracticePeer Group

Average

$382.90

$489.33

$696.95

Durham is leaving up to $18 million annually on the table.

• Full Share from Visitors.

• Proportion of Occupancy Tax reinvested in Visitor Promotion.

• Capacity of Facilities and Events.

• Promotion Per Guest Room.

• Local Sales Tax Revenue Generated Per 1,000 Residents.

Durham is leaving up to $18 million annually on the table.

• Local Sales Tax Revenue Generated Per 1,000 Residents.

• By investing just 33% of the occupancy tax in promotion, Durham is generating 46% less than a destination committing 100% to destination promotion. Reinvesting an additional $1 million from the occupancy tax into destination marketing will help close this gap. The good news is that Durham is still reaping 26% more tax revenue than a nearby destination placing its faith in “build it and they will come.”

A Tale of Three DestinationsAn Illustration of the Power of Marketing

Three Approaches to Visitor Development & Results in terms of 2005 Visitor Generated Local Sales Tax Revenue Per 1000 Residents

*Less Visitor Generated Related Local Tax Revenue Per 1000 Residents

Source: TEIM, Benchmark Studies

Durham is leaving up to $18 million annually on the table.

• Full Share from Visitors.

• Proportion of Occupancy Tax reinvested in Visitor Promotion.

• Capacity of Facilities and Events.

• Promotion Per Guest Room.

• Local Sales Tax Revenue Generated Per 1,000 Residents.

• Visitor Spending Potential.

Durham is leaving up to $18 million annually on the table.

• Visitor Spending Potential.

• There is a 42 point gap between Durham lodging revenue per guest room and overall visitor spending per guest room compared to peers. Durham is reaping 17% more revenue per guest room but 25% less overall visitor spending per guest room.

How Can Even More Revenue Be Generated from Visitors to Fund Local Government

Current Deployment

Potential Deployment

Part 4: How DCVB is Perceived by Residents and Peers

Brian McGheeRepresenting: Lodging Full Service

The occupancy tax on hotel rooms was established as a means of self-funding visitor promotion. The state guidelines recommend using two-thirds of occupancy taxes for that purpose. Durham currently uses one-third. How strongly do you agree or disagree that Durham should increase the percentage of occupancy taxes used to fund visitor promotion and draw visitors and visitor spending to Durham?

DCVB Accolades

• Rated in the top 5% of similar organizations (“8.7” on a scale of 1 to 10) in yearlong, in-depth performance diagnostic by Performance Management, Inc.

• Twice rated #1 website out of the 1,034 destination websites in North America.

• 20 Destination Marketing Achievement awards 15 Best Practice Innovation awards in “blind” statewide judging.

• Webby Awards Worthy Selection as a website that demonstrates a standard of excellence.

• Three Gold MarCom Creative Awards and an Honorable Mention in an international competition for marketing.

DCVB Accolades

• Four time Featured panelists for best practices at the national level.

• One of the only three CVBs in the country selected as a case study for the book Guide to Best Practices in Tourism and Destination Management.

• Rated “8 on a scale of 1 to 10” or significantly exceeds expectations on an anonymous Community Stakeholder Survey of 500 civic & business leaders.

• Awarded Readers’ Choice Awards in 2005 and 2006 by convention and meeting planner readers of ConventionSouth magazine.

Part 5: Explore Solutions

Possible Options to Reap the Additional $18 Million Annually?

• Pass on the $18 million in additional local tax revenue for now.

• Defer until additional revenues become available for marketing 2015-2035.

• Accelerate now the Redeploy of more of the occupancy tax to visitor promotion.