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CVB shares how it would spend new funds

CVB shares how it would spend new funds

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By Scott Sullivan

Editor

The Saugatuck-Douglas Area Convention & Visitors Bureau board shared with members April 5 how it would use funds generated by increasing its room assessment from 2 to 5 percent, should they approve so doing.

The local bureau, one of just three in Michigan not (or yet) to approve hiking its assessment to now-industry-standard 5 percent, projects spending $500,000-plus a year in new revenue this would generate to implement “aggressive, fully-integrated year-round marketing initiatives and messaging,” executive director Josh Albrecht told attendees.

“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.

The board apprised dues-paying members Feb. 28 of its plan to seek the long-discussed increase this spring. At last Thursday’s meeting, it shared a 2018-2019 marketing/P.R. plan detailing how the added funding, should members approve it, would be used.

The board plans to present this plan and needed documents to Travel Michigan. The state agency will then mail an explanation of the proposal and ballots to each local lodging member.

“We expect those to go out near the end of April, said Albrecht. “Members, upon receiving them, will have a hard, two-week deadline to send them back to the state, which will do the tally.

“The increase, if passed, would start 30 days after the vote is confirmed, likely in early June,” he said.

Such a hike has been long considered. 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 then-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.

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.

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

The bureau in 2017 collected $348,158 based on the 2-percent fee. Should occupancy remain flat and a 5-percent fee start this June, 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 next year.

It projects a $512,468 budget for 2018, $800,000 (should the increase be approved) in 2019 and $950,000 in 2020.

The bureau 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 the 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.”

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