Agenda - 05-19-2009 - 7b - Laserfiche WebLink

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i I From: Brad Broadwell Sent: Monday, May 11, 2009 8:40 AM To: Laura Blackmon Subject: RE: Visitors Bureau BOCC Follow Up Item THE CVB INDUSTRY Travel and Tourism is one of the largest industries in the United States, employing over 7 million people and generating over $100 billion in local and state taxes. Over the past 25 years, community leaders have seen the opportunity to increase the economic base of their region by marketing their destination to business and leisure travelers. In most communities, the responsibility of marketing the region falls to a Destination Marketing Organization, often referred to as a `Convention and Visitors Bureau' CVB or in cities without a large convention center, `Visitors Bureaus" or VBs. In the vast majority of communities, CVB budgets are powered by government funding, often in the form of Room Tax revenues that are derived from the guests of area hotels. According to recent industry figures, 88% of CVBs report receiving Room Tax revenues with which to run their sales and marketing programs. In addition, Public Sector Funding makes up 84% of the average CVB budget. The rest comes from private sector fundraising such as membership programs, service fees, and merchandise and advertising sales in publications. As competition for the visitor dollar increased, many CVBs transformed themselves into independent, 501(c)(5) not-for-profit agencies. Organizational Structures: ° w The majority of CVBs are independent not �for�profits: 5�°%o are 50'I(c)(6) and 4% are 501(c)(3). 18% are government agencies (city, county, statelprovince, authority) and 5% are a chamber or a division of a chamber of commerce. . Increased productivity, the opportunity to insure that all revenues invested by government are spent on tourism promotion and the ability motivate sales staff with adequate compensation were cited as the primary advantages for an independent CVB structure. • Be it formerly governmental or a Chamber division, most independent CVB respondents pointed to layers of bureaucracy and diversion -of room tax revenues to non-tourism initiatives as no longer hampering their efforts. ® Unfettered access to the Mayors, County Commissioners and key Department heads and the ability to avoid having to lobby for budget appropriations each year were cited as the key benefits of governmental status* RATIONALE FOR CONVERSION TO INDEPENDENT STATUS ' Less than a third of the CVBs remain as a division of government, which begs the question "why?" The primary rationales for an independent CVB structure appear to center on the CVB's ability to be more efficient and productive; the opportunity to insure that all g overnmentally directed revenues were expended on tourism related programs; and the ability to do things that government often cannot such as develop compensation and incentive plans that motivate increased sales bookings. Independent status has allowed CVBs more time to focus on the 42-5