In this Newsletter
Developing New CVB Funding: An Action Plan to Produce Success

The #1 issue I hear today from DMOS is: the need for long range funding-- assuring that manpower and financial resources are available to effectively compete in the marketplace against all competitors. Here’s a recommended action plan to get you there.

In case you weren't in attendance at DMAI's annual July conference in Las Vegas, here are highlights of my presentation, which will also be archived on my website for future industry reference at:  WWW.MMTourismMarketing.com.

Getting started with an action plan

As you would suspect, the one constant that's implicit in this issue, regardless of the size of the CVB, is the need for additional funding. And in most cases, it takes a new Action Plan to make that happen.

Some of the most effective CVB funding action plans have garnered truly great success, producing funding increases in the 40% to 400% annual range. And while we all recognize that CVBs and destination challenges are never the same, I've outlined below some of the most important issues and resulting tactics that brought about this success.

In this brief article, we have focused on the transient occupancy tax (TOT) as the principal funding source, but these six key program requirements may also be applied to other funding requirements, including voluntary assessments, BID programs, etc.

1. First, Protect Your Existing Funding

Before we get started on the Action Plan, let's address the ongoing threat to the traditional number one resource for CVBs, the dedicated transient occupancy tax that fuels nearly 90% of today's bureaus. And make no mistake; it's the CVBs role to proactively protect it. That's because today, only about 55% of the local transient occupancy tax on average is being earmarked for CVBs.

Unfortunately, a lot of this money goes to non-tourist related local uses, which is challenging as well as dangerously counter-productive, according to a national study from the Hotel & Lodging Educational Foundation. This study concludes that increases in the hotel tax, for non-CVB marketing, (city general fund, arts council operating expenses, heritage preservation, beach and waterfront development, sports facilities, arenas, etc.) can actually cause reductions in local tourism business through the reduced room sales and associated visitor spending that then negatively impacts every sector of the local economy—a 2% increase in national taxes on visitors would reduce an estimated 300,000 jobs and billions of dollars in unrealized visitor spending.

Our recommendation is to become familiar with this study and then disseminate it as required to protect the integrity of this important marketing resource for your CVB and the community you serve. You can get a copy of the study from the American Hotel and Lodging Foundation. 

2. Support your New Funding Need through research

Your first Action Plan step is developing a persuasive argument for new funding through research:

Also, don't shy away from communicating marketing challenges and weaknesses in your ongoing communications to stakeholders and business partners; because if you consistently display an "Everything is Rosie" posture of false optimism for the community and CVB, few constituents will then believe in the credibility of your new concerns about additional funding needs.  

3. Make sure you have strong community support

Before you launch your Funding Action Plan, make sure you have the strong support of community stakeholders as well as the local votes by the governing body.

We've worked with a variety of communities who had limited confidence in the governing board of the CVB. Others, such as the hotel, arts and sports communities, felt they weren't appropriately represented at the board and executive committee level. The same has been found true by government officials who felt distanced by the CVB and not linked with the DMO through representation of their city manager or Mayor's office. In each case, positive steps were required to address these issues, assure good governance representation and deliver positive support and communications. 

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Sometimes we've found that while the community supports the CVB, they may lack confidence in its abilities to actually produce incremental business. You must determine the level of confidence of the CVB to do that. Assessment techniques may include:

4. Plan and Introduce a new marketing program with this funding--where you will increase visitation and achieve resulting economic impacts

The most effective funding program involves introducing a new marketing program or a new spin on past efforts—not just merely expanding the existing program tactics. Focus on new techniques that will generate an estimated dollar return on investment: from ad conversion, the high dollar value of media publicity, new visitors through internet programming, new sales program resulting from co-op partnership efforts, etc. 

5. Answer the questions that stand in your way

As alluded to earlier, you will have a lot of publics to cover and favorably influence, including the general public, the media, government and others. A planned effort requires that you initially determine the principal interests of each of them, and then produce frequently asked questions to answer and assuage any concerns.

For examples:

The general public may be interested in knowing how this program is useful for them? (By providing new visitor taxes that can help support the community and minimize resident taxes, produce new amenities and lifestyle attributes for their enjoyment, etc.) 

Government may question: When do we reach the point of diminished ROI of this program? Actually, the opposite should occur--and the ROI in visitor receipts and benefits over time should be proportionally higher. This is because a byproduct of success should be additional infrastructure of new visitor facilities such as such as accommodations, retail, restaurants, etc. Also, the branding effort from this enhance program in future years will build marketing communications equity and assist in delivering even greater returns from marketing, as new business partners also work to leverage additional marketing efforts under community's "umbrella effort".

6. Build a Strong Team Effort for Launching

You will be the best judge of how to most effectively launch this effort. There's usually a special task force, with representation from key constituents, to manage or plan the process with oversight from the board and CEO. That may sometimes be supported by special guidance and counsel from a lobbyist that's close to the government officials required for support, a public relations firm, or others as the needs require. Above all, it should be an inclusionary process.

For examples:

New York--When we successfully launched the new funding plan for the New York CVB budget, it was entitled: A Vital Investment for Economic Growth in New York City". And it was supported by a whole host of leaders including: The New York hotel Association, the Restaurant Association, Association for a Better New York, New York Society of Association Executives and nearly a dozen others.

Door County, Wisconsin--the Board of the CVB mounted a similar successful campaign for the TOT tax that focused on each individual village. It has produced new annual funding that has grown from a total of $500,000 annually to about $2 million dollars today—and its efforts are all targeted on strong ROI for the destination.

South Carolina—In Myrtle Beach and Hilton Head, new marketing programs were produced with the ongoing voluntary support of the hotel communities that increased their budgets from between several hundred thousand dollars to several millions in new programming. Then that funding was then matched fifty cents on the dollar from the State Tourism Office.      

In Summary

Your destination's future success is based on your performance-based programs and the funding that delivers them. These Action Plan recommendations should help provide a road map to get you there.  

You can now access previous newsletters on a variety of marketing topics by visiting:
WWW.MMTOURISMMARKETING.COM