Loading...
HomeMy WebLinkAboutLTC 116-2002 CITY OF MIAMI BEACH Office of the City Manager Letter to Commission No. l/b,2~/)~ ~ From: Mayor David Dermer and Date: May 3, 2002 Members of the City Commission Jorge M. Gonzalez t ~ City Manager () r-O GMCVB: Report in accordance with Finance Committee Direction of April 8, 2002 To: Subject: This Letter to the Commission provides the results of the Administration's efforts in accomplishing the direction received from the Finance Committee on April 8, 2002 with regard to the Greater Miami Convention and Visitors Bureau contract. As you know, the Administration was directed to: . Review the elements of the Agreement between the City of Miami Beach and the Greater Miami Convention and Visitors Bureau (GMCVB) to determine if they have been complied with; . Negotiate with the GMCVB to identify additional elements desired as part of the renewal; . Recommend appropriate renewal term; . Develop Scope of Services for a Request for Qualifications (RFQ) to conduct a broader study of the structure and model most appropriate for Miami Beach going forward, and . Report back to the Commission. Backaround In 1984, the City of Miami Beach (CMB), Miami Dade County, the City of Miami and the Village of Bal Harbour, entered into an Interlocal Agreement with the Greater Miami Convention and Visitor's Bureau to perform tourism and convention sales and promotion functions. In 1998, the CMB advised the GMCVB of its intention notto renew the Interlocal Agreement and the CMB negotiated a one (1) year Agreement with the GMCVB ending on September 30, 1999. Concurrent with its approval of the Agreement, the City Commission directed the Administration to establish a Blue Ribbon Committee on Conventions and Tourism (Committee) that would evaluate the Bureau and determine whether the City should continue with a new agreement with the Bureau after September 30, 1999, or issue a Request for Proposals (RFP). May 3, 2002 GMCVB - Contract Renewa/- LTC Page 2 0'5 After several Blue Ribbon Committee meetings, on June 24, 1999 a workshop was conducted with the Mayor and City Commission. Based upon the findings and recommendations of the Blue Ribbon Committee, as amended in part by the Administration, on July 7,1999 the Mayor and City Commission adopted Resolution No. 99-23237 approving an agreement with the GMCVB for an initial term commencing on October 1, 1999 and ending on September 30, 2002 with one, two (2) year renewal option, at the City's discretion. With the upcoming expiration of the initial term of the contract, on March 20, 2002, a referral was made to the Finance and Citywide Projects Committee to discuss the City's renewal option. On April 8, 2002, the Finance and Citywide Projects Committee, including Mayor Dermer and Commissioner Garcia and Commissioner Gross, met and discussed the renewal option at length and the Committee instructed the Administration to meet with the GMCVB staff to evaluate the Bureau's performance on the specific elements stipulated in' their agreement and report on the findings at the May 8, 2002 Commission Meeting with a recommendation on how to proceed with the two-year extension to the GMCVB agreement, including specific goals to be accomplished, as well as, develop a RFQ for consultant services to review the current structure, model and scope of services of the Bureau as compared to other similar organizations and alternatives. Analvsis: The Administration's analysis included a review of the GMCVB achievements and performance; outreach to local partners; research on comparable destinations and organizations; and identification of areas of future focused and enhanced services. The latter is highlighted in the conclusion and summary section of this memorandum. GMCVB Performance Attached hereto and pursuant to my request, the GMCVB has prepared a comprehensive Performance Analysis for the contract period of October 1, 1999 through September 30, 2002 (to date) with regard to the key elements included in the contract. The GMCVB Analysis highlights key accomplishments during each contract year (Le. 1999/2000, 2000/2001 and 2001/2002) in the Convention Sales and Marketing and Promotion areas. The analysis also indicates that the GMCVB has expanded Miami Beach's representation on the GMCVB Boards and Committees. By way of example, the Convention Sales Department reflected 425 bookings during FY 2001 compared with 480 bookings during FY 2000. However, the estimated economic impact was in excess of $186 million when compared to in excess of $177 million for the same period with a resultant return on investment of $85 vs. $75, for FY 2001 compared to FY 2000, respectively. Another interesting fact was the overnight visitor analysis that reflects consistent growth in Miami Beach visitors during the term of the Agreement. This growth was also clearly evidenced during the shoulder season, or the summer months. May 3, 2002 GMCVB - Contract Renewal- LTC Page 3 of 5 Local Partner Outreach As part of my review of the GMCVB's performance, in addition to the evaluation of their performance, the Administration solicited input from a variety of sources. This input was not limited to distributing a questionnaire to the following organizations: Stu Blumberg, Chair, Greater Miami and Beaches Hotel Association Grace Calvani, Latin Chamber of Commerce Elsie Howard, Chair, Visitors and Convention Authority David Kelsey, South Beach Hotel & Restaurant Association Lilliam Lopez, South Beach Hispanic Chamber Michael Milberg/Bruce Singer, Miami Beach Chamber of Commerce Steve Polisar, Chair, Nightlife Industry Task Force Doug Tober, General Manager, SMG, Miami Beach Convention Center Pauline Winick, Chair, Cultural Arts Council The questionnaire sought input as to the GMCVB's performance, strengths, weaknesses, areas of opportunities and greatest accomplishments and key future initiatives or enhancements deemed important. Consistent themes in the survey included the GMCVB's ability to quickly respond to situations, leverage resources and partnerships and its increased representation of Miami Beach businesses. Items to focus on now include, niche marketing, promoting small and boutique hotels, summer tourism campaigns and continuing to improve convention center bookings. There was also expressed the desire for better outreach by the GMCVB the need to establish and track performance measures and the return on Miami Beach's investment. Finally, in communicating with representatives of Miami-Dade County, the CMB was advised that the Board of County Commissioners has directed the County Manager to conduct an audit of the GMCVB's performance. A broader performance audit by all of the interlocal partners is presently being contemplated. Comoarative Destination Analvsis As part of the City's research, the Administration spoke with representatives from the Hawaii Tourism Authority, City of Boston and the Mayor's Office in the City of Los Angeles. These three (3) destinations were identified because they, too, are currently evaluating their respective CVB operations to determine future funding and governance arrangements. The key factor identified by each entity was the need to establish key performance measures to ensure accountability. Furthermore, each organization conveyed a desire to establish benchmarks to assess future performance. To this end, any renewal of the GMCVB contract should be conditioned on the procurement of an independent market assessment and development of a new strategic tourism plan. Complimentary to this effort, the CMB has discussed the issuance of an RFQ soliciting qualifications and proposals to review and assess the current GMCVB governance, structure, processes and overall operations and make recommendations as to May 3, 2002 GMCVB - Contract Renewal- LTC Page 4 0'5 what model/structure should provide the services to achieve the optimal public relations, sales and marketing efforts to enhance our tourism and convention industries. Summary and Conclusion After much research, review and consideration, my conclusion is that the GMCVB has performed well in accomplishing the identified tasks included in the contract. While every organization has areas for growth and improvement, the GMCVB has, over the contract period, made a sincere, concerted and generally successful effort to address the issues required of them. The GMCVB's attention and efforts to address the issues of Miami Beach representation in their governance structure and their attention and efforts to develop summer and shoulder season initiatives are particularly noteworthy and commendable. For example, they were instrumental in securing the Microsoft Worldwide Conference in July of 2001 generating 62,000 room nights and an estimated economic impact of more than $17 million. They have also worked closely with the City and the Miami Beach Visitors and Convention Authority (VCA) to consistently increase resources for the ''Tropicool Summer Festival Season" program. The GMCVB best demonstrated its ability to react to challenges or changes in the market in the period immediately following the tragic events of September 11, 2001. The GMCVB reacted immediately and aggressively in responding to these events developing a new message and marketing campaign and securing significant funds and resources to market Miami Beach and the destination. At the same time they took the necessary steps to ensure that the organization operated within its resources. The GMCVB was helpful in assisting the City during negotiations with Miami-Dade County regarding the amended Interlocal Agreement on the Convention Development Tax. Finally, the GMCVB demonstrated its leadership in funding and securing a Convention Center Needs Assessment study. This study analyzed the potential expansion of convention facilities in the Miami-Dade. In summary, as it relates to Miami Beach, the study recommended that 50,000 sf. multipurpose general assembly banquet hall would increase the marketability of the Miami Beach Convention Center, focusing on large exhibit space users and not for stand-alone events. There are a few tasks, however, where the GMCVB did not, in my view, fully achieve compliance. For example, the contract called for the development of a Strategic Tourism Plan (Item K). While the GMCVB has used the Visitor Industry Plan (VIP) to guide the development of its annual program of work, the VIP was developed several years prior to the contract period and a newer Strategic Plan should have been generated. While the GMCVB complied with Section 1.05 that set forth City participation on the GMCVB Board, Executive Committee and Sub-Committees, in light of the questions raised and statements made during this debate, I can only conclude that the GMCVB could have been more successful in achieving Item "L" of the contract: to involve policy makers of Miami Beach in the Bureau activities to the maximum extent possible. Additionally, said discussions indicate a need to create an increased emphasis on Miami Beach as a May 3, 2002 GMCVB - Contract Renewal- LTC Page 5 of 5 "Destination Resort" by way of campaigns of information, advertising, publicity, marketing and/or sales (Item N). Notwithstanding, the GMCVB has been successful in achieving the identified requirements. While there are few measures that represent a direct, causal relationship between outcome and the activities of the GMCVB, the Bureau's general stewardship of the destination and the visitor industry has been instrumental in the overall growth and success of the area. Impressive growth in most performance indicators (allowing for adverse impact of September 11th) demonstrates the effectiveness of the GMCVB. Perhaps the most accurate measure of the success of the overall industry is the Resort Tax Collections -- the unprecedented growth experienced in the Resort Tax collections over the past three years is adequate evidence that overall the City and the industry has prospered under the current relationship. In addition to the elements in the current agreement and based upon the analysis presented herein, the Administration has identified additional areas for enhanced focus and dedication of resources by the GMCVB. While these terms are outlined in detail in Exhibit "1", in summary, they include: . Issuance of an RFQ for marketing services . Funding for sub-market initiatives . Implementation of Mayor's Blue Ribbon Tourism Task Force Report initiatives . Enhanced representation of GMCVB Committees . Funding for Educational Scholarships . Increased funding for Cultural Tourism initiatives . Completion of a Strategic Tourism Plan . Procurement of an Independent Market Assessment In light of the aforementioned, it is my recommendation that the City should exercise its option to renew the contract with the GMCVB for a period of two years, subject to the provisions included in attachment, Exhibit "1 ". This recommendation is conditioned upon a stipulation that the City proceed in conducting a broader study of the structure and model best suited to meet Miami Beach's needs, pursuant to the scope of services set forth in Exhibit "2". JMG\CMC\rar F:\CMGR\$ALLIRAR\LTClGMCVB COntract Renewal.doc EXHIBIT "1 " 2002 ADDITIONAL RENEWAL TERMS Additional Provisions negotiated as part of the renewal term of the Contract between the City of Miami Beach and the Greater Miami Convention and Visitors Bureau (GMCVB): . GMCVB will commit to issue an RFQ for Advertising Agency Services prior to renewal of their contract. The Selection Committee to evaluate proposals in response to said RFQ will be established in conformance with Section 1.05 of the Contract which sets forth the City Participation on the Bureau Board of Directors. . GMCVB agrees that no less than $600,000 will be targeted to support and implement sub-market initiatives, including, but not limited to, initiatives identified in the Mayor's Blue Ribbon Tourism Task Force (MBRTTF) Report. . In addition, the GMCVB will commit to implement the initiatives identified in the MBRTTF Report in the areas of (specific initiatives detailed in Attachment A): -Cultural/Special Events -Sales/Marketing -Film/Fashion -Service/Attitude -Small/Boutique Hotels -Airport Initiatives -Gay & Lesbian -Administration -Residential . . Additionally, GMCVB agrees that: o The Marketing Committee will be restructured to better reflect and be more representative of the sub-market initiatives. o The City Manager, or his designee, will sit as a voting member of the GMCVB Finance Committee, and o The Miami Beach Convention Center General Manager will be invited to the Convention Sales Committee. . GMCVB will contribute $20,000, annually, towards the establishment of a scholarship fund for needy Miami Beach residents pursuing a career in the Tourism Industry and/or Hospitality Management. . GMCVB will continue to contribute $300k to the Miami Beach Cultural Arts Council (CAC) annually. Additionally, GMCVB will contribute $30,000 annually, either based upon a one-to-one matching grant with the CAC or the Miami Beach Visitors and Convention Authority 0/CA), or individually, towards cultural tourism generating events co-sponsored or generated by the Cultural and Special Events Task Force. . Renewal term is recommended for a period of two years. If however, upon completion and based upon the recommendations of the consultant study as referenced in Exhibit "2", the parties mutually agree to a new longer term relationship within 24 months, that agreement will supercede this renewal. . The Contract sets forth a requirement to develop a Strategic Tourism Plan. While the GMCVB has been utilizing the Visitor Industry Plan 0/IP) prepared in 1996 to establish its annual workplan, during the renewal term, the GMCVB will develop a new strategic tourism plan. The strategic plan should include the results of an independent market assessment based on the attached scope of services. (see Attachment "B") As part of this Plan, the Market Assessment will include and clearly identify the demographics, travel patterns and characteristics of the Miami Beach marketplace; comparing the Miami Beach traveler vs. the Miami-Dade County/South Florida Region traveler. F:\CMGRlSALLICHRISTIN\JMGIGMCVB Renewal TOlTTlS.doc Attachment "A" Detailed Initiatives to be implemented as part of the Mayor's Blue Ribbon Task Force on Tourism Report: Cultural/Special Events: . Cultural Tourism Committee established and ongoing . Achieve synergy and focus on Cultural Events (coordination with City partners), e.g. 2nd Thurdays . Support and develop incentives for Festival Season Sales/Marketing: . Expand public relations efforts . Hire a "wrangler" to focus on "star power" and edginess that identifies Miami Beach as a Happening Place. Film/Fashion: . Film/Fashion/Entertainment Committee established and ongoing . Commit $27,000 to advertise Industry and promote the Production Industry Access Program in Select Magazine Small/Boutique Hotels: . Support and develop a marketing/collateral piece and web program to ensure targeted marketing for the small and boutique hotels Airport Initiatives: . Continue ongoing partnership with Miami International Airport to enhance visitor experience Gay & lesbian: . Conduct Research . Expand co-op advertising program . Continue collateral Publications . Continue, support and collaboration with GoGayMiamLcom website and Miami-Dade Gay and Lesbian Chamber of Commerce . Establish and continue working committee to oversee the marketing initiatives Service/Attitude: . Work with the Visitors' and Convention Authority to develop a service and attitude plan . Assist in the development of a training video hospitality employees . Support a Citywide Customer Service/Attitude Campaign featuring initiatives such as the secret shopper. Administration: . Assist in attaining and maximizing use of "MiamiBeach.com" website Residential: . Assist and implement a resident-focused public awareness campaign emphasizing tourism's benefits to the community. Attachment "B" 1. Market Assessment: . How many visitors does my destination attract? (What is my share of the market?) . How many potential guests are not staying in the CMB? . How much do they spend? What other economic benefits are realized? . Who are my competitors? (Which travelers are we competing for?) . Identify Top Origin Markets to Miami Beach. . Analyze and forecasting of trends in tourism, conventions and business meeting . Conduct industry-wide impact studies, project feasibility studies, and consumer demographic and research analyses 2. Targeting . What are travelers' demographics and travel patters? (Competitor profiles) . Who values my product but does not use it? (Identify Opportunities) . How will ''target travelers" perceive a new vacation concept? (Concept Testing) . Where are the "non-converted" travelers? (Gap Analysis) 3. Positioning . What do travelers think of my product? Why do they visit? (Image) . What do travelers seek and what do they avoid? (Product Positioning) . How should product development dollars be spent? (Obtaining Financing) . Which markets offer the best probability of successful development? (I nvestors/Developers) 4. Communicating . Where will my advertising dollars have the greatest impact? (Leverage Media Budgets) . What are media preferences of target travelers? (Lifestyle Segmentation) 5. Conduct Annual Comparative Analyses . Determine the Market Size of key segments of both leisure and Business domestic travel to relative to the national average . Better understand the dynamics (e.g., demographics and travel patterns) of the Miami Beach travel marketplace including Business vs. leisure, Resident vs. Non-Resident, and South Florida vs. City of Miami Beach travel comparisons . Identify key demographic and travel behavior characteristics of Miami Beaches' diverse travel parties . Identify primary demographic and travel behavior characteristics of overnight paid accommodation travelers visiting Miami Beach relative to the national average . Assess the Direct Economic Impact of Miami Beaches' Total, Business, and Leisure travel segments . Identify Miami Beach's top feeder markets for both Business and Leisure . Annually assess how Miami Beach travel compares to the previous year . Compile financial operating data from comparable convention and visitor bureaus gathered on revenues, operating expenses and fixed charges 6. Evaluate Independent or Complimentary Public Relations Strategies EXHIBIT "2" Scope of Services for Consultant RFQ: The City of Miami Beach ("CMB") is soliciting qualifications and proposals from Contractors in written format to provide: 1. A review and assessment of the current Greater Miami Convention and Visitors Bureau ("GMCVB") govemance, structure, processes and overall operations, including an assessment of the following areas: . Assess and measure GMCVB performance against stated goals and work plan; . Benchmark the current GMCVB operation against other comparable convention and tourism sales organizations; . Evaluate and understand the GMCVB's strengths, weaknesses, opportunities and challenges based on current and future market conditions and competition; . Identify areas that must be improved and developed and how the organization can increase its productivity; . Assess the quality level of key processes in sales, marketing and customer service and administration/management and support services; and . Evaluate research conducted by the GMCVB. Assess the methodology employed and the impact on prioritization of initiatives and concentration of resources. 2. Make recommendations as to what type of modeVstructure should exist provide the services necessary to achieve the optimal public relations, sales and marketing efforts to enhance the CMB's tourism and convention industries. The consultant will make recommendations as if no such structure currently existed throughout the region by evaluating: . Organizational structures and governance . Partnership arrangements . Range and types of functions performed . Funding arrangements . Performance Indicators . Advertising, marketing and public relations methods and approaches . Cost effectiveness of strategies . Visitor services provided . Impact and use of computerized databases . Uses and formats of multimedia information . Information Technology systems in operation . Information Technology development strategies . Research Methodologies . 3. Consultant will compare and provide a comprehensive report on the GMCVB operations relative to industry standards based on: . Organizational structures and governance . Partnership arrangements . Funding sources . Available facilities . Tax rates . Budgets . Staff structure . Expense categories 4. The Consultant will evaluate and recommend strategic approaches for the CMB to meet objectives identified in the Market Assessment, including: . Targeting: assessing the current and future target market, . Positioning: differentiating destination from its competition so that it's most meaningful to your visitors, and . Communicating: marketing/relationships, public relations, advertising, promotion, community relations, government affairs. F:ICMGRISAlLICHRISTIN\JMGIGMCVB Renewal- SCOpe 01 Ser.ices.doc