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

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i History: The CVB was founded in 1986 as a division of the Greater Raleigh Chamber of Commerce. In 1991, the State enacted legislation that allowed Counties to create and fund Destination Marketing Organizations. While Durham created a "Tourism Development Authority," Raleigh opted for the creation of a quasi-public entity that the IRS defines as an "instrumentality of government." This provides the options for the Bureau to avail itself of County benefits such as health and retirement benefits...but does not place the CVB as a County Department. Benefits of this structure: According to the CVB, their unusual set up is not unlike being a 501(c)(3) foundation. It can take advantage of many of the benefits of government without the bureaucracy that often restricts governmental CVBs. The revenue stream is mandated by state statutes, so there is not a fear of being impacted by across the board budget cuts that can befall governmental Bureaus in tight economic times. And, this unique structure allows the Bureau to focus on ghat it does best without the diversions that being a division of County could create. Governance & Accountability: The Bureau is governed by a Board of Directors numbering 12; six appointments from the City and six from the County. Four of the appointments must be from the hotel industry and two others from related tourism businesses. The Chamber of Commerce appoints one ex-officio member to the Board. while there is no reporting mechanism required, the Raleigh CVB provides detailed reports to the City and the County on a monthly basis. Advantages of Privatization +� Nearly 70% of CVBs are now private, stand-alone entities • The shift to privatization has mirrored that of governmental desires for more outsourcing, in addition to market needs demanding the CVB be a much more nimble and flexible organization. • As a private entity you can increase your speed-to-market enhanciing your competitive position. Translate* greater success and more public revenues. • Incentive bonus to motivate greater sales bookings. • As a government dept., bureaus must still seek approval of county commissioners and staff department directors on budget, slowing down purchasing and deadline -oriented projects. N A governing board comprised of those in the hospitality and tourism industry is better poised to provide the necessary oversight that has become crucial. Visitors Bureaus have IT needs not typically supported by county government, including shared calendar of events software, booking engines, blogs, merchandise sales and the acceptance of payments for goods and services. ■ In difficult economic tunes, it is typical for a visitors bureau to spend more on marketing. • Visitors Bureaus receive requests from the hotels for quick marketing decisions. (For example, if the weddings market is performing well, then hotels want dollars moved towards wedding marketing. The Bureau makes tine item transfers and quick decisions that often are outside of sound county fiscal policies.) 42-8