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TDC Minutes 10/21/2002 ROctober 21, 2002 TRANSCRIPT OF THE MEETING OF THE COLLIER COUNTY TOURIST DEVELOPMENT COUNCIL Naples, Florida, October 21, 2002 LET IT BE REMEMBERED, that the Collier County Tourist Development Council in and for the County of Collier, having conducted business herein, met on this date at 9:00 AM in REGULAR SESSION in Building "F of the Government Complex, East Naples, Florida, with the following members present: CHAIRMAN: Commissioner Jim Coletta Councilman E. Glen Tucker Vice Mayor Gary Galleberg Gene Vaccaro Kevin Durkin Jerry Thirion Susan Becker Joe Dinunzio (Absent) Rhona Saunders (Excused) ALSO PRESENT: Bleu Wallace-Director -CDES Operations Dept. Ron Hovell-Proj ect Manager -Public Utilities Div. Jacqueline Hubbard Robinson -Co. Attorneys Office Ms. Elaine McLaughlin -Tourism Mgt. Consultant Ms. JoNell Mody -Kelley Swofford Roy, Inc. Ms. Susan Kelley - Kelley Swofford Roy, Inc. Dr. Walter Klages - Evans-Klages Page 1 October 21, 2002 II. III. IV. Meeting was Called to Order at 9:08 AM. Pledge of Alliance was recited Roll Call was taken - a Quorum was established. Changes & Approval of Agenda Bleu Wallace read an E-mail letter from Kevin Ramsboch, City Manager, and City of Naples. The E-mail read as follows: Dated October 17, 2002 - As our previous conversation please consider this official confirmation to request that the Tourist Development Council Grant for the Naples Reserve be tentatively rescheduled to your next regular meeting pending City Council Action. Should the Council not approve moving forward on the Grant, I will notify you. Very truly yours, City Manager, Kevin Ramsboch Mr. Galleberg requests the item be withdrawn. This did not have City Council approval. Mr. Galleberg moved to withdraw the item. Seconded Mr. Durkin. Carried unanimously 7-0. Approval of Minutes: September 9, 2002 Mr., Galleberg moved to approve the minutes of September 9, 2002 with the correction of misspelling his name throughout the minutes. Seconded Mr. Thirion. Carried Unanimously 7-0. Presentations 1. Dr. Walter Kiages - Evans Klages, Inc. Mr. Wallace introduced Ms. Elaine McLaughlin- Consultant She will interject from time to time in the presentations. Dr. Klages presented graphs showing drops in occupancy. A recession was in place and September 11th made it worse. The peak season of January, February and March and part of April they are still below the zero line which means there is still a definite deficiency. The reason: 1) De£1cit is not just the result of Sept. 11, but the result of the recession. 2) Very heavily attributed to the disappearance of the foreign European market. The domestic market kept the industry afloat. We can not lose our share of the domestic market. He discussed the Resort Tax Collection being a negative except for the month of August. Elaine mentioned July was down and August slightly increased. They feel it is because some of the resorts paid a little late and rolled over to August. So August wasn't good either, but held their own for the month. It was a bad summer. The figures do not look good at all. Weather is also an Page 2 October 21, 2002 effect on tourism. Many factors enter into the figures. He covered the percentage figures of the loss of visitors, spending patterns of retail, employees, (now not employed), the gas tax, sales tax, spending patterns and all related taxes. When 50,000 people stay home it makes a large impact. It is a ripple effect. Dr. Klages covered the economic impact which figures to $658M. The County is not highly diversified meaning it does not have a broad distribution of industry and depends heavily on its number one industry which is Tourism and related industry such as restaurants and transportation. Estimated impact figures were gone over in his presentation on the visualizer. The wage effect is $586 M in payroll. An independent study was done on the myth of low paying tourism jobs - the lowest in Florida pays over $42,000/yr which is well above the State average of employment. It is just not real. Dr. Klages stated no one can predict what the impact of a possible war would be, but indications are there will be a normal pattern of activity by the end of 2003 and end of the first quarter. Recession lingers on and shows up later, but is truly recovering. It requires maintaining our market share. Mr. Galleberg inquired about the figures given on the tax numbers. Dr. Klages used a technical formula and explanation of how they come up with the numbers. The private segment of the market as opposed to the hotels is significant. The condominium numbers play a big part also. A handout of an article from USA Today was given to the Committee. The article talks about the fact that we do not have a National Tourist Office and mayors from major US cities are trying to convince the White House that it is needed. We need to build the International Trade which is very important. Collier County has seasonality and experiment more than we should. It has deeper troughs and shouldn't be. Not seeing foreign markets and we need to fill that gap. Many other areas are doing better due to marketing. Ms. Susan Kelley - Kelley Swofford Roy - She reported it was last June she gave an update of activities. They were launching a summer newspaper campaign at that time. They will cover their Public Relations activity, but due to computer problems will be heard later in the meeting. SPEAKERS: Mr. Darren Robertshan - Collier Hotel Lodging Assoc. - He stated he is in support of Elaine's decision on the staffing levels of which she will be Page 3 October 21, 2002 recommending and hope that the Committee will accept them and look forward to it happening soon. 3. Elaine McLaughlin - Status of Collier County's Tourism Effort -Due to a computer problem Elaine decided to give her presentation at this time. She is trying to assist in becoming more competitive in the market place. Through 2001 until now we continue to bleed. We need to stop bleeding or mitigating the loss to a greater extent than they have been able to do so far. The hotel group hired her to work with them in the spring, along with the DTC and Commission. They established several points, of which one is holding monthly meetings. Another reinforcement that came from the meetings is reinforcing the County's position to bring a Tourism operation in house. By doing that we can hire a Director and compete with other counties in a more effective way. Efforts have been made to hire a Director with no success but moving towards that goal. A Tourism Director will be on board early in 2003. Elaine asked for a round of applause for Mr. Bleu Wallace who has held this together and a great assistance to the industry and recognizes this. Another person that has done a tremendous job working with the staff and the media is JoNell Modes who also deserves a round of applause. She had done a great job on publicity of which she will explain her efforts later in the meeting. Elaine stated she has worked with the Industry and County leaders agreed they need to sell Collier County as sales for the industry. Many other Counties have a tourism staff on board as a department of County Government. The unemployment rate is very high because of lying off seasonal persons. We need to recover from this because we have 23,600 people that need jobs in the tourism industry. They are not living on dividend incomes. The tourist tax collections are down SIM and another $2M in sales tax has been lost. That is not including the gas tax. Tourism is contributing to gas tax, but but because we are not successful, at a lesser rate than if we had 40-50,000 visitors. Commissioner Coletta asked if this is happening in other Counties. Elaine answered, it is but not to the degree as in Collier County. Commissioner Coletta also asked why we haven't we been able to turn the tide, we don't have a 1% increase in place and not for at least 2 more years. He doesn't want to blame it on something that may happen in the future, he wants to know what they are doing wrong and what can they do to turn the situation around and right now. He is wondering why something hasn't been done 6 months ago. Elaine responded that they need an organized program in Tourism Development and a staff. Page 4 October 21, 2002 Commissioner Coletta supported her statement and will be in favor of increased staffing and increase spending money for tourism but to stay directed. Elaine again talked abut the tax impact and Commissioner Coletta wants to know how to correct the problems that exist now and where do we go with staffing and increased advertising and keeping our people employed. He would like to stay focused on those subjects. Elaine responds with "what should we do?": -Need to organize - have done advertising but no direct sales effort. The Hotels sell their specific hotel of which is their job. Those involved in the tourism industry want more investment in direct sales. Bring business into this area that is going to other places. -Strengthen Partnerships - The World Travel Market is being held in London, England in November. The British market is an excellent summer market and we will not be there. This is a place where you will see the world stage in competition - multiple buildings of tourism product - beach, golf, and sunshine. All that we offer to the customer is being sold over and over in that Market. We are not there because we don't have a sales staff, so they cannot even choose us because we are not in attendance. This has been brought up to the Commission and will need to consider for the immediate future. -New Markets - We need persons visiting during the slower seasons of the year, such as people kayaking. Targeting a direct type of advertising which will be looked at while developing a marketing plan. - Staff an Office - Elaine covered what other counties figures are for a staffed office and the investment they are recouping. She covered other counties with figures of their marketing investments and income. The real return numbers happen in the visitor spending numbers - visitors spending dollars. Walton County - small county in the panhandle, coastal, beach community has 98 hotel rooms and collects $4.6M in resort tax and spends $3.6M in marketing. We are reinvesting very little with no harvest. Need to promote the shoulder and summer season - not during the winter months when winter seasonal residents live here. They will be here every year and go home after Easter no matter what is done in tourism. We need to fill hotel rooms so restaurants can stay open, retail spending continue during those shoulder months when no one is complaining about traffic. -What are we recommending? Create 3 staffpositions. 1) Director- $58,000-$95,926 2) Sales Manager - (Been created/need reclassification) 3) Sales Manager - $39,348-$64,925 4) Administrative Fiscal Support - $35,726-$58,947 Page 5 October 21, 2002 Those are the 3 salary positions recommending. A chart was handed to the Committee which showed the in-house staff positions and the out source positions. Volunteers and paid interns will be needed. She covered the handout in explaining to the Committee the relationships that need to be developed in order to gain 5.6% instead of losing. Need to work with International and Domestic tour operators. Many examples were given on the Domestic aspect. Everything proposed will be paid for out of the current share of the budget that is dedicated to advertising and promotions. Will go to the reserve fund for establishing the capitol items for furnishing an office. Any funds left over in carry over should be done on a more aggressive marketing rather than letting it sit. Will be looking at 2004-first quarter before recovery is seen. Director can be hired by the first of the year (2003) and that person would hire the two additional persons. Mr. Wallace said an agenda item will have to be established for requests to hire two full time employees. Commissioner Coletta asked for the soonest it can be brought to the commission. Mr. Wallace stated he can have something ready in two weeks. Mr. Durkin moved to approve and support staffs recommendation and request this be an agenda item before the Board of County Commissioners meeting in two weeks. Seconded Susan Becker. Mr. Galleberg disagrees this is a government issue and Collier County is using its TDC funds in the sense of eating its own seed com. The reason there is a Tourist Development Council in Collier County is it was sold to the residents primarily as a beach renourishment program. He is wondering where other groups such as The Chamber of Commerce, the Economic Development Council, the Trade Associations. He doesn't feel it has to be a government problem. Elaine feels government is the key stack holder in making the situation work and reason being because of the benefits derived on the tax side. Not just hotel taxes but other taxes as well. She is concerned because if trends are followed, the State Government will be crisis with a $1.5 Billion deficit because sales tax revenues is not coming in as usual. She feels we need government to be involved. The private sector is not going to sell destination they need to diversify the economy - the Chamber of Commerce serves "its members". The countywide body should look to sustaining the 23,600 jobs and Elaine suggests that is Collier County Government. Mr. Galleberg said it is assumed it is a government problem and he disagrees. Page 6 October 21, 2002 Mr. Vacarro disagrees because if we are not measuring up - where are we left to turn. Commissioner Coletta sated there will always be disagreement in how things should go but no disagreement that we can do more from the funds from Tourism and the County Government to make things better. But he feels they owe it to the industry to move forward. Mr. Galleberg doesn't necessarily disagree, just doesn't want beach renourishment to be shoved off on some non-tourist thing. He questioned what is a Govemment issue and a private sector issue. Mr. Vacarro commented it is not always a dollar issue, and if other counties are more effective than ours, we need to question the content and not always the bottom line. We need someone to look over the shoulder and see how effective our advertising is, not just throwing or collecting more money, but the content of what we are doing, is it hitting home, is it working, is it burning the imagine of Naples into the conscience of potential travels nation wide. Elaine stated the role of the Director will be to manage and have oversight responsibilities of advertising - but we are not competing with our advertising budget with other counties she is aware of. Commissioner Coletta feels this Board takes the responsibility of being an oversight Board also. He appreciates everyone's comments. Motion Carried - 7-0. Break- 10:10 Meeting was reconvened - 10:22 Ms. Susan Kelley - Kelley Swofford Roy - Susan introduced JoNell Modeys-Account Director Naples Office & oversees the Public Relations. JoNell gave a presentation on the overhead. Some of the Highlights she covered were: Publicity Strategies - Individual and Group FAM tours and building relationships. Meeting and having many favorable impressions from journalists. Free publicity from people traveling through the area publishing their articles and pictures. Advertising - several diversified magazines - one she mentioned was for Bird watchers. Need to target particular groups of people. -Meeting Planner Events - Radio talk shows. Staff level work - wanted to do their own Collier County Press FAM tour in September but was not able to get organized due to two important Page 7 October 21, 2002 meeting planner events scheduled. Since no tourism director on staffthe agency took over the role of day to day contact to get the events accomplished. In June-Classic Florida Golf & Meetings Marketplace and August-hosting location for the successful Meetings Marketplace. Collier County has terrific infrastructure for group meeting business and has very low impact on the area since they almost always use group transportation. She said they came up with a scheme to be represented at the Word Travel Market to be recognized by contracting with the Visit Florida United Kingdom Public Relations staff take press kits and hand out. International Press is well attended and will meet with journalists and discuss different areas of tourism. Elaine gave a brief overview of the advertising efforts. With emergency funds provided they entered into an arrangement with FLAUSA Visit Florida. Bought into media - television paying for the result. Not just paying to be on the air, they bought the result and that is to prompt request for more information. Online advertising becomes very important and growing at a large rate. The average person booking online is 44 years of age and comes from a more affluent household. They will be shifting more towards that area. They will do their best to track the statistics and results. She discussed the Travelocity Website. She talked about the many other different opportunity buys; television, publications, and radio. Mr. Vacarro wanted to know how effective this has all been and how favorably does it compete with other Counties efforts. I hear that our efforts have not been well received. I hear nothing about the response of the advertising efforts. If there are no responses, the dollars spent is too much. Elaine responded that a special study would have to be done to show is "what didn't we lose"? The reality is we are down but would we have been down more if no advertising had been done? She feels it would. She stated they have mitigated some of the loss through an advertising program while doing nothing else. Broward County is spending $10 to every dollar we spend. The return is measured in capturing the e-mail responses and the 800 calls from visitors. They will be looking at those results at the next meeting. Effective advertising was discussed. More research is being done, and when there is a professional level of managing a tourism program there will be a conversion analysis. How much did the ads convert into real business. The effectiveness the committee wants to see in the long term is Page 8 October 21, 2002 - occupancy continue to climb in the seasonal and winter months, room rates continue to climb, and taxes continue to climb. V. Items Requiring Action by the Tourist Development Council 1. Acceptance of Collier County Film Commission Annual Report Mr. Vacarro felt Maggie McCarty is doing a great job. Mr. Galleberg moved to accept the Collier County Film Commission Annual Report. Seconded Mr. Durkin. Carded Unanimously 7-0. 2. Category "C" Museum Grant Application (Naples Preserve Econ- Education Center ) - City of Naples, Applicant - Withdrawn Category "A" - Beach Renourishment Items - Ron Hovell - Public Utilities Engineering Dept. a. Recommend Board approval of Budget Amendment for Wiggins Pass Emergency Maintenance Dredging - $10,000. This is dredged every other year just offshore. He showed an aerial photograph on the overhead. The BCC approved engineering services not to exceed $10,000 to get the initial work started. Will come back to the Committee with construction estimate and budget amendment and will go through the Coastal Advisory Committee and BCC. Mr. Galleberg moved to approve the expenditure of $10,000 for the Wiggins Pass Emergency Maintenance Dredging. Seconded Mr. Thirion. Carried unanimously - 7-0. Recommend Board approval of staff and CAC recommendations to "disapprove" TDC Category "A" Grant Application for Sand Web System - $1,000,000 A report on the system was handed out. An e-mail was handed to committee members by Mr. Wallace. This is to put a new sand web system on one mile of Naples Beach. The total value of the Grant Application is $1,000,000 with the intention of getting a cost reimbursement from the Florida Dept. of Environmental Protection under the experimental program. Estimated at $625,000 - difference is net cost to tourist taxes if approved. Appropriate permits would be required. The area was shown on the map. An experiment is continuing south of the pier continue until November 2004. An interim valuation has been done. The test plan did not seem the accumulation met the Page 9 October 21, 2002 criteria for a successful project. Naples Beach Hotel & Golf Club does object to this project being done. The Coastal Advisory is not in favor of the recommendation. SPEAKERS: Mr. Colin Kelly - He stated the committee is the stewards' taxpayer dollars. His company is cost effective and provides sand at $10.75 a cubic yard - the taxpayer gets a break. It is esthetic and does not stop persons from strolling along the Beach. Naples Golf& Beach Club objects because they don't need it in front of their Club. He displayed at map on the overhead. He showed the new system. He talked about the sea turtles, manatees, and trucking in the sand. He felt the report taken was incorrect. He displayed a graph. He feels the committee is given facts that do not show the total picture. He doesn't feel it should be overlooked. Mr. Galleberg pointed out the following: Experiment #1 is not finished, shouldn't start Experiment #2 Misinformation on cost of sand- $850 for the first - $1050 for the second Volume - (he noted he is not against the first experiment) accumulated approx. 4,000 cubic yards per month. The sand does not just appear. Commissioner Coletta stated this is not a time for rebuttal with the speaker, Mr. Kelly. Mr. Gaileberg endorsed the Coastal Advisory Committees decision and staffs Recommendation for disapproval. Seconded Commissioner Coletta. Mr. Vacan'o wanted everyone to know that anyone can bring ideas to the committee anytime and not feel intimidated. Susan Becker reiterated Mr. Vacarro's comments. She feels the studies are incomplete on the first experiment and been given figures that conflict. The reports are difficult to understand and want to abstain from voting. Jacqueline Robinson - Assistant County Attorney stated that a person on a Public Advisory body can't abstain if the subject is not understandable. The staff is in attendance and would answer any questions Ms. Becker may have. Ms. Becker felt the first experiment was positive and the report they are referring to isn't finished. She feels she cannot form an opinion on the motion. If not able to forma positive opinion, would have to vote against the motion. An abstention is usually based on a conflict of interest. Motion was carried unanimously 7-0. Page 10 October 21, 2002 Ce Recommend Board approval of Budget Amendment to cancel the Marco Island Breakwater Modifications Project and return funds to TDC Reserves - $699,500. Ron Hovell showed an aerial map of the location at the South end of Marco Island of the three existing breakwaters. Taylor Engineering reviewed the data and provided 2 alternatives. Do they want to increase the beach width or looking to maintain what is there currently? Depending upon which one you prefer depends on modifying the breakwaters or not. The Coastal Advisory Committee and staffs recommendation is to approve the cancellation of the project and return $699,500 to the TDC Reserves. Mr. Thirion moved to accept the proposal of staff to cancel the project and have the $699,500 returned to TDC Reserves. Seconded Susan Becker. Carried Unanimously 7-0. V. Council Discussion Fourth Penny (Tourist Development Tax) - Chairman Coletta Commissioner Coletta stated he doesn't see this as a conflict but as an extension of his job as a Commissioner. He was pointed a point person to come up with initiatives to come up with various forms of funding. None of them is going to meet the needs of everyone, they all have opposition. The 1% Tourist Tax - he is sympathetic and recognizes the fact that everyone has to share the burden. The 1% being proposed is not a tax that will come off the top of the hotels, off the top of condominium rentals, but something that is paid as a user fee by the person renting. Naples is a rich market and 1% by itself will not make that much difference. It is not in place at this time. They should see recovery by 2003-2004. If it is passed, it wouldn't be until 2004. They would then be the recovery period. They are searching for alternatives and came up with the half cent sales tax, but was rejected. They will build roads. They have raised impact fees, dipped into the ad volurem tax, bonded our gas tax, and are doing everything possible to provide the roads that haven' been provided for the County in the past. They are trying to come up with a balance. They do not want to add a new tax, but to include language in the fourth penny to allow it to be used for roads. It would generate about $3M a year. It benefits our roads and takes State Legislative action. Commissioner Coletta is keeping the industry appraised of all the moves and information given. Mr. Vacarro asked and summarized Commissioner Colettas comments as: a proposal of an additional penny to go for roads that will be collected through the Tourist tax and he would be very supportive. Page 11 October 21, 2002 Ms. Becker asked about statistics showing the cost of the roads and what percent is now being born by the impact fees along with other sources. Commissioner Coletta said it is a large report or document and can supply a copy to anyone. The monies could possibly be available in 2003 or 2004. Mr. Galleberg commented that he appreciates the situation the Commissioners are in but doesn't think that Tourist tax is a proper source of these funds. The voters said "no" to the additional half cent sales tax, accept it, and water under the bridge. But people with no voice or constituency in the County is not the right way to go. Mr. Tucker shared Mr. Gallebergs opinion. SPEAKERS: Mr. Darren Robertshan - President of the Hotel Lodging Assn. Collier County - He commented they do not support it. Tourist can't vote, that is not the way to get them here. Mr. Ron Albeit - Registry Resort - He agrees with Mr. Galleberg. $3M is not going to make an impact on building roads in the community and would have an adverse effect in the economy. Another point is the legality of the tax. What prevents us having other deficiencies and change the law again, to use the penny for something else. The impact on the roads is misleading. It is the residents that come down between January and April that impact our roads. William Doyle - Edgewater Beach Hotel - He favored the organizational structure in tourism. If the plan moves forward goals will be achieved, the sales and gas tax dollars will increase. The additional penny will not help the hotel industry. They want to do their part but the industry is in a critical state. o Selection Date/Time for next TDC Meeting. - The joint BCC/Tourist Development Council Workshop is December l0th at 9:00 AM. They decided to hold their next meeting on December l0th, 2002 - at 8:00AM. The Marketing Plan will be brought before the committee in December. If the plan is in the packet the presentations can be kept at a minimum. Being no further business the meeting adjourned at 11:50 AM. Page 12