Home Around Town CVB hike to generate $.5+ million a year
CVB hike to generate $.5+ million a year

CVB hike to generate $.5+ million a year

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By Scott Sullivan

Editor

Saugatuck-Douglas Area Convention & Visitors Bureau lodging members have approved hiking room assessments from 2 to 5 percent, a move the CVB board says will generate $500,000-plus a year in new revenue.

The CVB received official confirmation from Travel Michigan May 30 the increased passed 652 yes votes to 139 opposed. Property managers representing 60 eligible voting entities participated in the referendum.

The measure passed in the City of Saugatuck 170-101, Douglas 229-28, Saugatuck Township 178-10, Laketown Township 35-0, Ganges Township 31-0 and Clyde Township 9-0.

“We are extremely excited to share this news with our members and the entire community,” CVB Executive Director Josh Albrecht said.

“As we discussed during the voting process, the increased assessment revenues will help us enhance our marketing message about how wonderful our community is to potential visitors,” he continued.

“Tourism is our community’s top economic development tool and making sure we do everything we can to nurture and help tourism grow is vital to the well-being of our entire region.”

The assessment hike here will take effect July 1. Before then the local CVB was one of only three bureaus in Michigan which had not increased its surcharge from 2 to 5 percent.

“Five percent is the industry standard,” said Albrecht. “The increase will make us more competitive with other state tourism bureaus. It will allow us to implement aggressive, fully-integrated year-round marketing initiatives and messaging.”

CVB members can learn more about the increase and the bureau’s current and future marketing plans at the CVB’s annual meeting Tuesday, June 19, at 6 p.m.

“An assessment increase is not a tax increase,” Albrecht told The Commercial Record. “It won’t be subtracted from what members collect from customers; it would be added, here as elsewhere, to what lodgers pay already.”

The CVB board in February shared with members a strategic marketing plan outlining what it would do with increase, should lodging establishments approve.

The bureau in 2017 collected $348,158 based on the 2-percent fee, said the plan. Should occupancy remain flat, the 5-percent fee, which will start July 1, it projects collecting $531,151 in 2018 and, with a full year’s increase, $870,392 in 2019.

The CVB also derives ad revenue from its yearly visitors guide. It expects to bring in $80,000 in 2018 and $85,000 that way the next year.

The bureau board projects a $512,468 budget for 2018, $800,000 in 2019 and $950,000 in 2020.

The CVB expects to spend 40 percent of its 2018 budget on marketing-specific projects, another 40 percent towards administration (which includes staff marketing time) and 20 percent going towards operations/building.

The board’s goal, says its marketing plan, “is to progressively move towards a 50/50 split with an eye on increasing the budget to 60-percent marketing-specific activities and 40 percent on operations/administration.

“In addition, a portion of the increased assessment will be put into reserves over the next three years in order to add $200,000 into reserve funds,” the plan continues.

“The SDACVB Welcome Center (acquired in January 2013 for $295,000) will be systematically paid off by allocating additional funds each year to paying off the building loan. A reserve fund for building maintenance and upkeep will be established.”

“The use of our new website, social media, updated photography and strategic partnerships with Pure Michigan and Michigan Beachtowns, special events and traditional advertising streams, will set the course for success,” Albrecht said.

Last week’s announcement caps 18 tumultuous months for the local bureau. The assessment hike had been long considered but not realized.

The bureau in October 2015 rolled out a 5-year strategic tourism marketing plan broaching the possibility of an increase, expecting at that time it would generate $429,000 in added advertising funds.

An advisory board, appointed to follow through, asked its founding and 27-year executive director, Felicia Fairchild, to address policy and transparency concerns to build support among members for the increase. She declined to renew her contract one year later.

In February 2017 the bureau contracted with Michigan Society of Association Executives President Cheryl Ronk for a reported $20,000 to conduct an executive search for its new director.

The CVB hired 12-year Sonoma County (Calif.) Tourism President/CEO June 21 with high expectations, but after a 90-day review terminated his contract.

“Ken came from a big bureau with an $8.3-million annual budget and 26 full-time employees to our small one (only two staff members),” board chair Andrew Milauckas told The Commercial Record. “He is great in a role as a leader, spokesman and representative who delegates tasks to others.

“We need someone who can also execute tactical, day-to-day things,” Milauckas said. “Here, he just wasn’t a good fit.”

The bureau settled with Fairchild in March for $50,000 — $15,000 from its own fund at $35,000 from its insurer — on the former director’s arbitration claims for copyright infringement, merit pay, unreimbursed expenses, office furniture, slander, intentional infliction of emotional distress and to recover attorney fees.

Albrecht, most recently marketing and public affairs director for the Rockford, Ill., Area CVB, was hired in November acknowledging an increase would be pivotal towards future planning.

“Tourism is competitive,” Albrecht said. “We have fallen behind the industry standard. We don’t have the resources that our neighbors do to maintain a diverse and sustained year-round marketing plan.

“The SDACVB Welcome Center (acquired in January 2013 for $295,000) will be systematically paid off by allocating additional funds each year to paying off the building loan. A reserve fund for building maintenance and upkeep will be established.”

For more information about the bureau and its endeavors, visit saugatuck.com.