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HomeMy WebLinkAboutC-4961 - Agreement for Tourism Promotion, Branding and Marketing ServicesAMENDMENT NO. TWO TO AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND VISIT NEWPORT BEACH, INC. FOR \ TOURISM PROMOTION, BRANDING AND MARKETING SERVICES THIS AMENDMENT NO. TWO TO TOURISM PROMOTION, BRANDING AND MARKETING SERVICES AGREEMENT ("Amendment No. Two") is made and entered s' into as of this 5 day of August, 2015 ("Effective Date"), by and between the City of 1 Newport Beach, a California municipal corporation and charter city ("City"), and Visit C) Newport Beach, Inc., a California nonprofit corporation and an IRC 501(c)(6) destination marketing organization ("VNB"), whose address is 1600 Newport Center Drive, Suite 120, Newport Beach, CA 92660, and is made with reference to the following: RECITALS A. On September 27, 2011, City and VNB entered into a Tourism Promotion, Branding and Marketing Services Agreement ("Agreement") for destination marketing services. On January 28, 2014, the parties entered into Amendment No. One to extend the term of the Agreement to December 31, 2024, to switch from an annual to biennial budget process, to update contact information, and to add public benefit funding. C. On August 12, 2014, the City Council authorized the City Manager to enter into a second amendment to the Agreement to change the reporting timeline for the Performance Standards, Marketing Goals, and the Marketing Plan from annual to biennial to correspond with the biennial budget reporting timeline. D. The parties desire to enter into this Amendment No. Two to implement the City Council's direction from August 12, 2014. E. City and VNB mutually desire to amend the Agreement, as provided below. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. PERFORMANCE STANDARDS REPORT Section 6(a) of the Agreement is amended in its entirety and replaced with the following: "(a) Performance Standards Report. In time for presentation to the City Council by the City Council's second meeting in July of each even numbered year of the term, VNB shall set and update performance standards ("Performance Standards") that correspond with VNB's approved goals, as set by the VNB Board of Directors ("Board") for the two (2) twelve (12) month fiscal years that begin each July 1. The City Council shall review this report." Visit Newport Beach, Inc. Page 1 2. BIENNIAL MARKETING PLAN Section 6(b) of the Agreement is amended in its entirety and replaced with the following: "(b) Biennial Marketing Plan. In time for presentation to the City Council by the City Council's second meeting in July of each even numbered year of the term, VNB shall prepare and its Board shall adopt a Biennial Marketing Plan, describing VNB's marketing and branding efforts, for the two (2) twelve (12) month fiscal years that begin each July 1. The City Council shall review this report." 3. REPORTS TO THE CITY Section 6(c) of the Agreement is amended in its entirety and replaced with the following: "(c) Budget. In time for presentation to the City Council by the City Council's second meeting in July of each even numbered year of the term, VNB shall prepare and its Board shall adopt a biennial budget for the two (2) twelve (12) month fiscal years that begin each July 1. The budget shall describe the revenues and expenditures required to meet the Performance Standards and Biennial Marketing Plan obligations. The City Council shall review the budget and approve and/or modify and approve the budget. Once the biennial budget is approved by the City Council, the City Council shall review and approve or deny any proposed budget amendments that increase VNB's "fixed operating costs" by One -Hundred Thousand Dollars and 00/100 ($100,000.00) or more in any twelve (12) month period. "Fixed operating costs" is defined as any expenditure, other than a one (1) time expenditure, that commits VNB to an on -going fiscal obligation." 4. INTEGRATED CONTRACT Except as expressly modified herein, all other provisions, terms, and covenants set forth in the Agreement shall remain unchanged and shall be in full force and effect. [SIGNATURES ON NEXT PAGE] Visit Newport Beach, Inc. Page 2 IN WITNESS WHEREOF, the parties have caused this Amendment No. Two to be executed on the dates written below. APPROVED AS TO FORM: CITY OF NEWPORT BEACH, CITY ATTORNEY'S OFFICE a California municipal corporation Date: ' Ir / ' Date: °14-1 r By: Aaron C. City Attorney ATTEST: �} 15 Date: _t By: Leilani I. Brown City Clerk Cr l By: CA( A Dave Kilt City Manager VNB: Visit Newport Beach, Inc., a California nonprofit corporation and an IRC 501(c)(6) destination marketing organization Date. 6 11 1 J Pre ident Date. By: • Chair of the Board [END OF SIGNATURES] Visit Newport Beach, Inc. Page 3 AMENDMENT NO. ONE TO AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND VISIT NEWPORT BEACH, INC. FOR TOURISM PROMOTION, BRANDING AND MARKETING SERVICES THIS AMENDMENT NO. ONE TO TOURISM PROMOTION, BRANDING AND MARKETING SERVICES AGREEMENT ("Amendment No. One") is made and entered into as of this 28th day of January, 2014 ("Effective Date"), by and between the City of Newport Beach, a California municipal corporation and charter city ("City"), and Visit Newport Beach, Inc., a California nonprofit corporation and an IRC 501(c)(6) destination marketing organization ("VNB"), whose address is 1600 Newport Center Drive, Suite 120, Newport Beach, CA 92660, and is made with reference to the following: RECITALS A. On September 27, 2011, City and VNB entered into a Tourism Promotion, Branding and Marketing Services Agreement ("Agreement") for destination marketing services, B. The parties desire to enter into this Amendment No. One to extend the term of the Agreement to December 31, 2024, to switch from an annual to biennial budget process, to update contact information, and to add public benefit funding. C. City and VNB mutually desire to amend the Agreement, as provided below. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. TERM Section 3 of the Agreement is amended in its entirety and replaced with the following: "The term of this Agreement shall commence on September 27, 2011, and shall terminate on December 31, 2024, unless terminated earlier as set forth herein." 2. REPORTS TO THE CITY Section 6(c) of the Agreement is amended in its entirety and replaced with the following: "(c) Budget. In time for presentation to the City Council by the City Council's second meeting in July of each even numbered year of the term, VNB shall prepare and its Board shall adopt a biennial budget for the two (2) twelve (12) month fiscal years that begin each July 1. The budget shall describe the revenues and expenditures required to meet the Performance Standards and Annual Marketing Plan obligations. The City Council shall review the budget and approve and/or modify and approve the budget. Once the biennial budget is approved by the City Council, the City Council shall review and approve or deny any proposed budget amendments that increase VNB's "fixed operating costs" by One -Hundred Thousand Dollars and 00/100 ($100,000.00) or more in any twelve (12) month period. "Fixed operating costs" is defined as any expenditure, other than a one (1) time expenditure, that commits VNB to an on -going fiscal obligation." Visit Newport Beach, Inc. Page NOTICES Section 17 of the Agreement is amended in its entirety and replaced with the following: "Any notice, demand, request, consent, approval, or communication that either Party desires or is required to give to the other Party or to any other person shall be in writing and either served personally or sent by pre -paid, first-class mail. Any notice, demand, request, consent, approval, or communication that either Party desires or is required to give to the other Party shall be addressed as follows: If to VNB: If to City: With a copy to: Visit Newport Beach Inc. Attn: President & CEO 1600 Newport Center Drive, Suite 120 Newport Beach, CA 92660-6210 City of Newport Beach Attn: City Manager 100 Civic Center Drive P.O. Box 1768 Newport Beach, CA 92660 City of Newport Beach Attn: Finance Director 100 Civic Center Drive P.O. Box 1768 Newport Beach, CA 92660 Either Party may change its address by notifying the other Party of the change of address. Notice shall be deemed given within three (3) days after the date of mailing, if mailed as provided in this Section." 4. PUBLIC BENEFIT FUNDING Section 23 shall be added into the Agreement and read as follows: "VNB shall contribute One Hundred Fifty Thousand Dollars and 00/100 ($150,000.00) per year, commencing annually June 1, 2014, to the City of Newport Beach for expenditure on programs or activities (e.g., public art, cultural and promotional activities, beautification projects, etc.) that benefit the public, as determined by the City Council. The contribution shall be made annually to the City in two (2) equal installments of Seventy - Five Thousand Dollars and 00/100 ($75,000.00) payable on June 1 and December 1." 5. INTEGRATED CONTRACT Except as expressly modified herein, all other provisions, terms, and covenants set forth in the Agreement shall remain unchanged and shall be in full force and effect. [SIGNATURES ON NEXT PAGE] Visit Newport Beach, Inc. Page 2 IN WITNESS WHEREOF, the parties have caused this Amendment No. One to be executed on the dates written below. APPROVED AS TO FORM: CITY ATTORNE 'S OFFICE Date: Z 10 By: Aaron C. Haf City Attorney ATTEST: 9. 8. 1 � Date:• By: D0424171 Leilani I 'Brown City Clerk CITY OF NEWPORT BEACH, a California municipal corporation Date: 2, i . I `f By: Rush N. Hill, II N' Mayor VNB: Visit Newport Beach, Inc., a California nonprofit corporation and an IRC 501(c)(6) destination marketing organization Date: Br. DebbiB "Snavely Chair of the Board [END OF SIGNATURES] Visit Newport Beach, Inc. Page 3 Unique Visitors Web Visits Total Pageviews Avg. Time on Site Pages Per Visit Facebook Followers Twitter Followers YouTube Video Views Total Ad Impressions Online Ad Clicks/Visits to Site Travelocity Bookings from website /Wp ort ECAC & COMPANI! Marketing Goals 2013-2014 Fiscal Year 485,552 510,558 598,251 600,713 1,708,525 1,965,526 2:19 min 2:55 min 3 4.3 38,208 0,863 37,800 46,333 38,250 94,069,765 102,900,000 127,314 204,750 131 116 536,000 630,700 2,058,000 2:40 42,000 12,000 47,000 108,045,000 215,000 N/A — book direct Visitors Guide CD Visitors Guide USBs Media Pitches out Partner Leads Ad Equivalency Print Circulation Unique Visitors 2,500 2,500 396 116 $4,617,452 47,594,353 288,613,026 Impressions 3,578,181,680 Total Media Assists 199 Domestic Media Destination Visits 66 International Media Destination Visits 58 100,000 2,500 2,500 10,000 Wholesaler Companies 15 26 57% 100,000 2,500 10,000 N/A N/A N/A N/A 44% 69% 5% 35% 36% 33% 5% 32% 3% 15 0% AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND VISIT NEWPORT BEACH INC. FOR TOURISM PROMOTION, BRANDING, AND MARKETING SERVICES THIS TOURISM PROMOTION, BRANDING, AND MARKETING AGREEMENT ("Agreement"), is made and entered into on this 27th day September, 2011 ("Effective Date"), by and between the City of Newport Beach, a California municipal corporation and charter city ("City") and Visit Newport Beach Inc., a California nonprofit corporation and an IRC 501(c)(6) destination marketing organization ("VNB"). City and VNB are at times individually referred to herein as "Party" and collectively as "Parties." RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the City's Charter. B. VNB is a 501(c)(6) marketing organization whose mission is to partner with the City and the tourism and hospitality industry by protecting and promoting the City's brand and to deliver additional spending by leisure and conference visitors, leading to enhanced community economic vitality and quality of life. C. VNB serves as the owners' association to the City's Tourism Business Improvement District's pursuant to an agreement between the City and the VNB dated July 1, 2009. D. City and VNB operate under a May 12, 2004 agreement ("Original Agreement") whereby the VNB receives a portion of the City's transient occupancy tax ("TOT") to fund marketing efforts and the promotion of tourism within the City. E. City and VNB amended the Original Agreement on March 10, 2009 to extend its term and revise Recital "B" to clarify the taxes that comprise TOT under the Original Agreement. F. City and VNB desire to terminate the Original Agreement, as amended, in its entirety and replace it with this Agreement. NOW, THEREFORE, it is mutually agreed by and between the Parties as follows: AGREEMENT 1. INCORPORATION OF RECITALS The Recitals provided above are true and correct and incorporated into the operative part of this Agreement. 2. TERMINATION OF ORIGINAL AGREEMENT Notwithstanding the termination language provided in Section 10 of the Original Agreement, the Original Agreement and any amendments thereto shall be terminated and of no further effect upon the execution of this Agreement by the Parties. 3. TERM This Agreement shall be effective on the date first written above, the Effective Date, and shall terminate on June 30, 2016, unless terminated earlier as provided herein. 4. SCOPE OF SERVICES At a minimum and in a manner consistent with standard practices in the tourism and hospitality industry ("Standard Practices") VNB shall develop, plan, carry out, and supervise a program to market and promote the Newport Beach brand and to promote tourism in, and serve the needs of, visitors to Newport Beach as well as increase the amount of TOT collected through their promotional activities ("Services"). Subject to the foregoing sentence, the Services shall, at a minimum, include the following: a) The maintenance of suitable office space and the employment of competent personnel to properly carry out promotional, branding, and marketing duties; b) The preparation of brochures, publications, guides, on-line promotions, social networking efforts, and other marketing materials and information that inform prospective tourists and visitors of the recreational activities, cultural assets, shopping and dining opportunities, night-time stay opportunities, and natural beauty of Newport Beach. c) The dissemination of information described in this section by way of the media, direct mail, handouts, social networking, websites, smart phone applications, or other means of distribution; and d) The development and implementation of specific marketing programs designed to increase awareness of the Newport Beach brand and to increase business and visitor trade in Newport Beach; and 2 e) Any additional Services when proposed by the City which are consistent with the promotion of tourism and the Newport Beach brand which are mutually agreeable and acceptable to the Parties. 5. TIME OF PERFORMANCE Time is of the essence in the performance of this Agreement by both Parties, and VNB shall perform all Services to completion in a diligent and timely manner. 6. REPORTS TO THE CITY In accordance with the Standard Practices, the following reports shall be submitted by VNB to the City within the time frame set forth below. The reports shall be subject to review and approval or modification by the City where noted below: a) Performance Standards Report. In time for presentation to the City Council by the City Council's second meeting in July of each year, VNB shall annually set and update performance standards ("Performance Standards") that correspond with VNB's approved goals, as set by the VNB's Board of Directors ("Board"). The City Council shall review this report. b) Annual Marketing Plan. In time for presentation to the City Council by the City Council's second meeting in July of each year, VNB shall annually prepare and its Board shall adopt an Annual Marketing Plan describing its marketing and branding effort for the upcoming fiscal year. The City Council shall review this report. c) Budget. In time for presentation to the City Council by the City Council's second meeting in July of each year, VNB shall annually prepare and its Board shall adopt an annual budget for the twelve (12) month fiscal year that begins each July 1. The budget shall describe the revenues and expenditures required to meet the Performance Standards and Annual Marketing Plan obligations. The City Council shall review the budget and approve and/or modify and approve the budget. Once the annual budget is approved by the City Council, the City Council shall review and approve or deny any proposed budget amendments that increase VNB's "fixed operating costs" by One -Hundred Thousand Dollars ($100,000) or more in any one (1) year. "Fixed operating costs" is defined as any expenditure, other than a one- time expenditure, that commits VNB to an on -going fiscal obligation. d) Audited Financial Statements. By September 30th of each year, VNB shall submit to the City audited financial statements for its most recently ended fiscal year, including any management letter associated with the audited financial statements. The City Council shall review the audited financial statements and management letter. 3 e) Expenditure Report. By September 30th of each year, VNB shall submit an expenditure report which shall be certified by VNB and a Certified Public Accountant to the effect that the funds received pursuant to this Agreement were expended in accordance with this Agreement in the previous fiscal year for purposes authorized by this Agreement. This report shall include reasonable detail in support of the certification, including expenditures for or contributions to special events and not -for -profit organizations in Newport Beach. 7. INTERNAL PROCESSES AND CONTROLS In accordance with Standard Practices, the Board shall adopt and enforce internal policies and controls, including but not limited to: a) Requests for Proposals for outside consultant services, including marketing and independent auditing firms; b) Travel and entertainment expense authorization and reimbursement, including international travel; c) Conflict of interest procedures that are applicable to VNB staff as well as Board members in accordance with Internal Revenue Service practices; and d) Use of external consultants for determination of compensation of executive staff, as well as the establishment and evaluation of performance standards for determining payment of incentive compensation, and other non -salary compensation. 8. COMPENSATION a) City shall pay VNB eighteen percent (18%) of the annual total TOT collected by City ("Payment", "funds" or "City funds provided under this Agreement"). For the purposes of this Agreement, TOT shall only include the tax collected under City Municipal Code Chapters 3.16 and 3.28 and shall not include any other tax, fee, or assessment including, but not limited to, any fee paid to the City for the right to develop timeshares. The Payment shall be electronically distributed to VNB on a monthly basis on the twentieth (201h) day of each month during the term of this Agreement. b) Subject to the limitations set forth in this Section 8(b), City shall have the right, in its sole discretion, to adjust the Payment (increase or decrease the percentage of TOT paid to VNB) for any reason after notice to VNB and an opportunity for VNB to formally comment on the adjustment. If the City adjusts the Payment, it shall do so as a part of the City's once -annual budget adoption process. 4 9. RIGHT TO AUDIT City reserves the right to designate its own employee representative(s) or its contracted representatives with a Certified Public Accounting firm who shall have the right to audit VNB's accounting procedures and internal controls of VNB's financial systems and to examine any cost, revenue, payment, claim, other records or supporting documentation resulting from any items set forth in this Agreement. Any such audit(s) shall be undertaken by City or its representative(s) at mutually agreed upon reasonable times, not more than once per year. City will make every attempt to finish audit timely and VNB agrees to submit all records requested by City or its representative(s) in a timely manner. VNB agrees to fully cooperate with any such audit(s). This right to audit shall extend during the length of this Agreement and for a period of three (3) years or longer, if required by law, following the date of any Payment tendered under this Agreement. VNB agrees to retain all necessary records/documentation for the entire length of this audit period, and to provide, upon prior notice to VNB, access to VNB's auditors for this purpose. The City will notify VNB in writing of any exception taken as a result of an audit. If VNB disagrees with any such exceptions, VNB will notify City in writing within twenty (20) days after the notification of exceptions to VNB. VNB and the City Manager or his/her designee will then meet and attempt to resolve any discrepancies. VNB will be provided an opportunity to include its written responses to audit exception items in the final report of the audit. Any expenditure of funds for a purpose not authorized by this Agreement shall be paid to City by VNB within thirty (30) days from presentation of City's findings to VNB. If VNB fails to make such payment, VNB agrees to pay interest, accruing monthly, at a rate of ten percent (10%) per annum. Interest will be computed from the date of written notification of exception(s) to the date VNB reimburses City for any exception(s). 10. VNB GOVERNANCE The City Council shall appoint, at its sole discretion, one (1) person with experience in matters of board governance, preferably either directly or indirectly in the tourism or hospitality industry, to serve as a full voting member of the VNB's Executive Committee. The City Council shall consult in advance with VNB on candidates for this appointment. The City Manager or his/her designee shall serve as an ex-officio non- voting member of the VNB's Board of Directors. VNB agrees that, except for any portion of the meeting relating to confidential personnel matters, the City Manager or his or her designee may attend but not vote at Executive Committee meetings. VNB shall notify the City Manager and the City's board appointee of any and all meetings of the Board of Directors and Executive Committee not less than 72 hours before each meeting. 5 11. ASSIGNABILITY VNB shall not assign or otherwise transfer any of its rights or obligations whatsoever in this Agreement without the prior written consent of City acting by and through the City Manager. 12. COPYRIGHTS If this Agreement results in any publication, in any form, which may be copyrighted, the author is free to copyright the work, but City reserves a royalty -free nonexclusive and irrevocable license to reproduce, publish or otherwise use and may authorize others to use such materials for use in connection with official City programs or activities; provided, however, that the City shall be bound by and responsible for the payment of any contracts VNB may have entered into, at City's direction, regarding copyrighted material. 13. OFFICE SPACE VNB shall maintain office space within the City's corporate boundaries. 14. INDEMNIFICATION To the fullest extent permitted by law, VNB shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, agents, volunteers and employees (collectively, the "Indemnified Parties") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys' fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims"), which may arise from or in any manner relate (directly or indirectly) to the negligence, recklessness, or misconduct of the VNB or its principals, officers, agents, employees, vendors, suppliers, subconsultants, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable or any or all of them. Notwithstanding the foregoing, nothing herein shall be construed to require VNB to indemnify the Indemnified Parties from any Claim arising from the sole negligence, active negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorney's fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by VNB. 6 15. NO WAIVER OF RIGHTS A waiver by either Party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 16. INSURANCE Without limiting VNB's indemnification of City, and prior to commencement of Services, VNB shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts in a form satisfactory to City. 17. NOTICES Any notice, demand, request, consent, approval, or communication that either Party desires or is required to give to the other Party or to any other person shall be in writing and either served personally or sent by pre -paid, first-class mail. Any notice, demand, request, consent, approval, or communication that either Party desires or is required to give to the other Party shall be addressed as follows: If to VNB: If to City: With a cc to: Visit Newport Beach Inc. Attn: President & CEO 1200 Newport Center Drive, Suite 120 Newport Beach, CA 92660-6904 After November 14, 2011: Visit Newport Beach Inc. Attn: President & CEO 1600 Newport Center Drive, Suite 120 Newport Beach, California 92660-6210 City of Newport Beach Attn: City Manager 3300 Newport Blvd. P.O. Box 1768 Newport Beach, CA 92658-8915 City of Newport Beach Attn: Finance Director 3300 Newport Blvd. P.O. Box 1768 Newport Beach, CA 92658-8915 7 Either Party may change its address by notifying the other Party of the change of address. Notice shall be deemed given within three (3) days after the date of mailing, if mailed as provided in this Section. 18. CONFLICTS OF INTEREST VNB or its employees may or may not be subject to the provisions of the California Political Reform Act of 1974 ("Act") which (among other provisions): (1) requires public officials to disclose any financial interest that may foreseeably be materially affected by the Services performed under this Agreement; and (2) prohibits public officials from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the Act, VNB shall conform to applicable requirements of the Act. Failure to do so constitutes a material breach and is grounds for immediate termination of this Agreement by City. VNB shall indemnify and hold harmless City for any and all claims for damages resulting from VNB's violation of this Section. Upon request of the City, VNB shall provide all approved conflict of interest forms to the City that are required under the Act. 19. CLAIMS VNB and City expressly agree that in addition to any claims filing requirements set forth in this Agreement, VNB shall be required to file any claim VNB may have against the City in strict conformance with the Tort Claims Act (Government Code Sections 900 et seq.). 20. TERMINATION In the event that either Party fails or refuses to perform any of the provisions of this Agreement at the time and in the manner required, that Party shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of fourteen (14) calendar days, or if more than fourteen (14) calendar days are reasonably required to cure the default and the defaulting Party fails to give adequate assurance of due performance within fourteen (14) calendar days after receipt of written notice of default, specifying the nature of such default and the steps necessary to cure such default, and thereafter diligently take steps to cure the default, the non -defaulting Party may terminate the Agreement forthwith by giving to the defaulting Party written notice thereof. Notwithstanding the above provisions, City shall have the right, at its sole discretion and without cause, of terminating this Agreement at any time by giving one year's (365 calendar days) prior written notice to VNB. The written notice of termination without cause must be authorized by the City Council at a regular or special meeting. 21. INDEPENDENT CONTRACTOR It is understood that City retains VNB on an independent contractor basis and VNB is not an agent or employee of City. The manner and means of conducting the Services are under the control of VNB, except to the extent they are limited by statute, rule or regulation and the expressed terms of this Agreement. Nothing in this Agreement shall be deemed to constitute approval for VNB or any of VNB's employees or agents, to be the agents or employees of City. VNB shall have the responsibility for and control over the means of performing the Services, provided that VNB is in compliance with the terms of this Agreement. Anything in this Agreement that may appear to give City the right to direct VNB as to the details of the performance or to exercise a measure of control over VNB shall mean only that VNB shall follow the desires of City with respect to the results of the Services. 22. STANDARD PROVISIONS a) Compliance With all Laws VNB shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. In addition, all Services performed by VNB shall conform to applicable City, county, state and federal laws, rules, regulations and permit requirements. b) Integrated Agreement This Agreement represents the full and complete understanding of every kind or nature whatsoever between the Parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. c) Conflicts or Inconsistencies In the event there are any conflicts or inconsistencies between this Agreement and any attachments attached hereto, the terms of this Agreement shall govern. d) Interpretation The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either Party by reason of the authorship of the Agreement or any other rule of construction which might otherwise apply. e) Amendments This Agreement may be modified or amended only by a written document executed by both VNB and City and approved as to form by the City Attorney. 9 f) Severability If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. g) Controlling Law and Venue The laws of the State of California shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. h) Equal Opportunity Employment VNB represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex, sexual orientation or age. i) No Attorney's Fees In the event of any dispute or legal action arising under this Agreement, the prevailing Party shall not be entitled to attorneys' fees. j) Counterparts This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute one (1) and the same instrument. k) Good Faith, Due Diligence, and Fair Dealing VNB and the City of Newport Beach shall exercise good faith, due diligence, and fair dealing toward one another in carrying out the terms of this Agreement. Rev 082511 [SIGNATURES ON FOLLOWING PAGE] 10 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed on the dates hereinafter respectively set forth. CITY OF N WPORT B ACH, a Californi. m nicipal fa.rporation Date: ATTE lo Date: tbJ'Tht APPROVED AS TO FORM: CITY ATTORNFX ,OFFICE By Aaron Rarp City Attorney Date 9/2t//l ael F. Hen Mayor Leilani Brown City Clerk VISIT NEWPORT BEACH INC., a Califo •:._. nonprofit corporation and rganization an B \:: c Printe•' am Title ' Ji '�' C i?0 1(c)(6) By NO/M---C--- Printed Name Aka. o6v2 % 7 Title %�i���•�-t^-- [END OF SIGNATURES] 11 VISIT f ort EACHiNC. June 27, 2011 Leilani Brown City Clerk 3300 Newport Blvd. Newport Beach, CA 92658 Dear Leilani: Please find the attached copy of 2011-2012 Marketing and Business Plan that has been approved by the Visit Newport Beach Inc. Board of Directors on June 23, 2011. If you have any questions, please do not hesitate to contact me. ally, ry C She n President/CEO 1200 Newport Center Drive Suite 120 Newport Beach, CA 9266o Tel: 80o-94-COAST Fax: 949-719-6101 visitnewportheach.com Marketing & Business Plan 2011-2012 TABLE OF CONTENTS 2 Introduction • Letter from the President &CEO e. Governance c. Brand Promise, Vision, Mission Statement d. Organizational Structure II. Research • U.S. Travel Industry California Orange County/Newport Beach • Newport Beach Infrastructure III. Trends a. Travel & Media Trends Forecast for 2011-2012 IV. Marketing • Marketing & Advertising International Markets Community Relations V. Finance & Administration • Policies ▪ Budget VI. Appendix • INTRODUCTION There was a time not too long ago, where you could draft a five year strategic plan and with a few adjustments here and there, you could expect a reasonable and somewhat predictable outcome if you followed the plan accordingly. Today, you can create a six-month plan; you may scrape the entire effort two months later due to changing market conditions. It is no secret that we live in a volatile economic world, with rapidly changing conditions both politically and financially. However, like a voyage over rough seas, you still need direction and focus, even if you may change the route along the way. That is the philosophy behind this 2011-2012 Visit Newport Beach Inc. Marketing and Business Plan. While it sets a firm course, it is flexible enough to be adjusted throughout the year to capitalize on necessary or unexpected opportunities. This plan is designed to craft the programs necessary to maximize and grow the city's $1 billion annual visitor industry, which is responsible for employing more than 10,000 individuals. This plan, like the others before it, is based on reviewing a significant amount of visitor and tourism industry related research that can help us better define the target audiences we are trying to reach through our messaging. This research is gathered through numerous sources that is highlighted in this plan and is the foundation for the plan's assumptions. Through this research, plans and programs that are compatible with the target Newport Beach visitor are developed to both enhance the brand equity in the destination and grow incremental business in the group and leisure sector. This plan is also developed in consultation with industry partners throughout the community who have shared critical information and insights that have allowed us to better target our visitors. It is a plan that is designed to reinforce and further communicate the outstanding brand awareness that is the Newport Beach visitor experience. 0 3 116 0 0 0 INTRODUCTION (continued) This city is blessed with an exceptionally strong visitor product that is constantly being refreshed. Whether it is new developments at Fashion Island, exciting innovative restaurants operated by world -class chefs, or stunning hotel upgrades, the product that we are charged with promoting has never been better. This commitment to never ending improvement has allowed Newport Beach to weather some challenging conditions in the economy in better form than most. As the worldwide marketing arm of this community, Visit Newport Beach takes its role seriously in generating more visitor -related business. We have often said that Newport Beach is much like the jewelry store Tiffany's. When you get that famous blue box as a gift, it never fails to awe the receiver. It is classic, always tasteful and never fails to impress. Newport Beach, like its jewelry counterpart, is truly a brand of incredible value. 4 Gary Sherwin President & CEO Visit Newport Beach Inc. • GOVERNANCE BOARD OF DIRECTORS Chairperson: Paul Devitt Brion Amendt Kandee Anderson Seymour Beek Linda M. Beimfohr Candace Bisconte Homer Bludau Wendy Boyd Laura Davis Richard R. Evanich Tom Johnson Dave Kiff Giuseppe Lama Hyatt Regency Newport Beach Newport Channel Inn (2011-2012) Newport Beach Marriott Bayview Balboa Island Ferry, Inc. Hornblower Cruises & Events ACCESS Destination Services Irrelevant Week American Express Fashion Island Island Hotel Johnson PR & Marketing City of Newport Beach Pelican Hill • • Robert Leck Radisson Hotel Newport Beach Richard Luehrs Paul Ohm Cynthia Pirtle -Cowell Steve Plummer Terri Reid John Robinson Gregg Schwenk Debbie Snavely Charles Taft Holiday Inn Express Newport Beach Andy Theodorou NB Chamber of Commerce Fairmont Newport Beach Newport Beach Public Library Tustin Ranch Golf Club The Balboa Bay Club & Resort Amelia's Balboa Island Newport Beach Film Festival Newport Beach Marriott Hotel & Spa Newport Dunes Waterfront Resort & Marina Anna Ulloa-Cantos Disneyland Resort • EXECUTIVE COMMITTEE 2010-2011 2011-2012 Chairperson Paul Devitt Hyatt Regency Newport Beach Vice Chairperson Paul Ohm Fairmont Newport Beach Secretary Linda M. Beimfohr Hornblower Cruises & Events Treasurer Laura Davis Fashion Island Members at Large Candace Bisconte Andy Theodorou Past Chairperson Debbie Snavely lo 7 ACCESS Destination Services Newport Dunes Waterfront Resort & Marina GM Newport Beach Marriott Chairperson Paul Devitt Hyatt Regency Newport Beach Vice Chairperson Tom Johnson Johnson PR & Marketing Secretary Linda M. Beimfohr Hornblower Cruises & Events Treasurer Laura Davis Members at Large Paul Ohm Andy Theodorou Past Chairperson Debbie Snavely Fashion Island Fairmont Newport Beach Newport Dunes Waterfront Resort & Marina GM Newport Beach Marriott Hotel & Spa Hotel & Spa • • o • o MARKETING COMMITTEE Chairperson: Kevin Lorton Hornblower Cruises & Events Wendy Boyd American Express Michelle Divine Balboa Bay Club & Resort Shery Drewry Wilma' s Patio Peggy Fort Newport Beach Restaurant Association Rachel Gibson OC/John Wayne Airport Gina Kerley OC California' s Golf Coast Mark Philips The Resort at Pelican Hill Ralph Prieto Bayshores Peninsula Hotel Jason Ushijima Fashion Island Jenny Wedge OC/John Wayne Airport • • • • • TOURISM BUSINESS IMPROVEMENT DISTRICT TBID Board of Directors Chairperson: Paul Devitt Kandee Anderson Robert Leck Terri Reid Paul Ohm Debbie Snavely • Hyatt Regency Newport Beach Newport Beach Marriott Bayview Radisson Hotel Newport Beach Balboa Bay Club Fairmont Newport Beach Newport Beach Marriott Hotel TBID Marketing Committee Lauren Carr Michael DiFrancesco Tim Mattos Terri Reid Lindsey Strutzenberg Donna Walp • Fairmont Hotel Newport Beach Newport Beach Marriott Hyatt Regency Newport Beach Balboa Bay Club & Resort Newport Beach Marriott Hotel Radisson Hotel Newport Beach • BRAND PROMISE & OBTECTIVE BRAND PROMISE: Newport Beach is an Orange County coastal fantasyland that represents a "taste of the perfect life," a place where visitors can experience a friendly, sophisticated, aspirational lifestyle that permits them to escape from daily reality. Comprised of a collection of unique islands and neighborhoods that form their own distinct character, the destination offers a combination of affluence, quaintness, casual glamour and attention to detail. Coupled with the manmade and natural beauty of the destination, this is the place that allows the visitor to relax and recreate the dream of what can be by protecting and nurturing the destination brand and to deliver additional spending by leisure and conference visitors leading to enhanced community economic vitality and quality of life. OBJECTIVE: To define what makes the Newport Beach travel destination distinctive and unique among other beach and comparable destinations. The idea is to capture the distinctive essence of Newport Beach for the visitor and use this Promise as the guiding star and focal point for all community decision -making and tourism marketing. • • VISION As a brand -driven and entrepreneurial destination leadership organization, Visit Newport Beach Inc. is innovative and professional in securing new visitor business to the city. It does for its stakeholders what they cannot do for themselves in telling the compelling Newport Beach story. 11' 110 • • • MISSION STATEMENT As the City of Newport Beach's official destination marketing organization, the mission of Visit Newport Beach Inc. is to partner with the tourism and hospitality industry by protecting and nurturing the destination brand and to deliver additional spending by leisure and conference visitors leading to enhanced community economic vitality and quality of life. 1 1 ORGANIZATIONAL PRIORITIES Organizational Marketing Priorities Increase Conference Sales Client Engagement: Increase interest and contact with key clients through the launch of the "Live the Dream" promotion, which is a direct sales promotion designed to incentivize clients to book Newport Beach hotel properties. Develop and implement a day visitor strategy: Through a comprehensive research program, determine a methodology to reach and influence Southern California residents and convert them into overnight visitors. Expand International marketing efforts into Australia: Leveraging the existing $50 million California Travel and Tourism Commission marketing program, expand Newport Beach presence into the Australian market; a market that is expected to have the largest and fastest growth into the state over the next six years. Develop new Newport Beach advertising and messaging to reinforce the luxury destination selling proposition: Create new advertising creative and messaging to strengthen the Newport Beach upscale luxury product offerings and aspirational lifestyle while selectively communicating the value orientation. Community Hospitality Training: Working with the Newport Beach Police Department and other community organizations, create a Newport Beach guest experience -training program to insure quality "Newport Beach style" service orientation. 13 • • ORGANIZATIONAL VALUES Visit Newport Beach Inc. believes the corporate values should be lived, not just written down. The values below help make Visit Newport Beach Inc. a great organization to work for and will help bring value to our community: 1. INNOVATION — relevance and trending ahead 2. CUSTOMER AND STAKEHOLDER CENTRIC — fundamental shared message 3. LEARNING AND KNOWLEDGE — destination expertise, stay on the cutting edge 4. FLEXIBILITY —strategic but adaptable to opportunities 5. RESPECT— treat others with respect 6. ENJOYMENT — positive attitude and passion for the destination 7. WELLNESS — take responsibility for smart choices and foster life balance 8. RESOURCEFULNESS — do more with less, be efficient, share best practices 9. INTEGRITY — be ethical and provide transparent communication 10. COMMITMENT— Visit Newport Beach Inc. provides the marketing efforts for Newport Beach domestically and internationally...this responsibility requires complete commitment o i• • • • • o ORGANIZATIONAL CHART BOARD OF DIRECTORS EXECUTIVE COMMITTEE TOM BENNETT SENIOR VP SALES Amanda Kliem National Sales Manager Bette Haddock National Sales Manager Hillary Burton National Sales Manager Lori Hoy National Sales Manager 15� 1 GARY SHERWIN PRESIDENT & CEO Erin Stapely Sales & Research Coordinator Michelle Donahue Sales Consultant LESLEY SWAIN CHIEF FINANCIAL OFFICER Jeanette Pulliam Executive Assistant to CEO & CFO • � 1 VICKI HIGGINS SENIOR VP MKTG J Brianna Saucedo Marketing Coordinator Lauren Gega Visitor Concierge Tania Leichliter Online Ad C'nnciiltant Caroline Bruderer Dir of PR & Communications Ruby Gualberto Dir of Brand Mktg & Community Relations Online/IT To Be Filled Michelle Austin Pedin International Marketing Consultant RESEARCH: U.S. TRAVEL INDUSTRY U.S. TRAVEL ECONOMIC IMPACT 17 d-- U.S. TRAV E L 900 800 700 600 500 400 300 200 100 0 ASSOCIATION Economic Impacts of Travel and Tourism UPDATED 4/25/2011 U.S. DOMESTIC AND INTERNATIONAL TRAVELER EXPENDITURES 2000-201OP (US$ BILLIONS) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010p ■ International Passenger Fares** International Travel Spending ■ Domestic Travel Spending • • • U.S. TRAVEL ECONOMIC IMPACT • 18 ,d-- U.S. T RAV E L ASSOCIATION Economic Impacts of Travel and Tourism UPDATED 4/25/2011 TRAVEL EXPENDITURES IN THE U.S. (US$ BILLIONS) Year Domestic International Travel Travel Spending Spending Total International Passonger Fares** Grand Total 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010p 503 4 483.8 478 3 495 8 532.4 572 0 610 0 641 3 662.4 610.2 655 6 82 4 71.9 66 6 64 3 745 81.7 85.7 96.7 110.1 93.9 1031 585 8 555 7 544.9 560 1 606 9 653 7 695 7 738 0 772 5 704 1 758.7 20.7 17.9 170 15.9 18.9 21.0 22.0 25.6 31.4 26.4 31.3 606 5 573 6 561 9 576 0 625 8 674 7 717.8 7636 803.9 730.5 7900 Sources: U.S. Travel Association, Bureau of Economic Analysis, U.S. Department of Commerce: Office of Travel & Tourism Industry p = preliminary data, * Includes spending by domestic and international travelers in the U.S. on travel related expenses (i.e. transportation, lodging, meals, entertainment & recreation, and incidental items), " Spending by international visitors traveling to the U.S. on U.S. flag carriers that are made outside the U.S. • • • • U.S. TRAVEL FORECASTS • 4- ASSOCIATION U.S. Travel Forecasts Updatod 05/20/11 U.S. Travel Forecasts _ 2007 2008 2009 2010 2011 2012 2013 2014 Real GDP 13,228.9 13.228.9 12,880.6 13,248.2 13.606.3 14,039.0 14,546.3 15,051.2 Unemployment Rate (%) 4.6 5.8 9.3 9.6 8.8 8.2 7.1 6.2 Consumer Price Index (CPI)' 207.3 215.3 214.5 218.1 224.3 228.5 235.3 239.9 Travel Price Index (TPI)` 244.0 257.7 241.5 250.8 265.9 272.3 281.2 284.9 Total Travel Expenditure In the U.S. ($ Billions) 738.0 772.5 704.4 758.7 817.0 851.1 892.5 933.4 U.S. Residenls 641.3 662.4 610.2 655.6 703.6 727.8 761.7 796.5 International Visitors" 96.9 110.0 93.9 103.1 113.4 123.3 130.8 136,8 Total International Visitors to the U.S. (Millions) 56.0 57.9 55.0 59.7 61.8 64.9 67.9 70.7 Overseas Arrivals to the U.S. (Millions) 23.9 25.3 23.8 26.4 27.7 29.2 30.7 32.0 Total Domestic Person -Trips*** (Millions) 2,004.5 1,964.9 1,897.8 1.964.6 2,005.9 2,043.1 2,089.2 2,137.1 Business 494.3 461.1 431.9 447.8 453.2 459.3 466.5 474.5 Leisure 1,510.2 1,503.8 1,465.9 1.516.8 1,552,e 1,583.8 1,622.7 1,662.7 U.S. Travel Forecasts (Growth) _ 2007 2008 2009 2010 2011 2012 2013 2014 Real GDP 1.9% 0.0% -2,6% 2.9% 2.7% 3.2% 3.6% 3.5% Consumer Price Index (CPI)' 2.9% 3.8% -0.3% 1.6% 2.9% 1.8% 3.0% 2.0% Travel Price Index (TPI)• 4.5% 5.6% -6.3% 3.8% 6.0% 2.4% 3.3% 1.3% Total Travel Expenditure In the U.S. ($ Billions) 6.1% 4.7% -8.8% 7.7% 7.7% 4.2% 4.9% 4.6% U.S. Residents 5.1% 3.3% -7.9% 7.4% 7.3% 3.4% 4.6% 4.6% International Visitors" 12.9% 13.5% -14.6% 9.8% 10.0% 8.7% 6.1% 4.6% Total International Visitors to the U.S. (Millions) 9.8% 3.5% -5.1% 8.7% 3.5% 4.9% 4.7% 4.1% Overseas Arrivals to the U.S. (Millions) 10.3% 6.1% -6.3% 11.0% 5.0% 5.4% 5.4% 4.1% Total Domestic Person -Trips**` (Millions) 0.2% -2.0% -3.4% 3.5% 2.1% 1.9% 2.3% 2.3% Business -2.8% -6.7% -6.3% 3.7% 1.2% 1.3% 1.8% 1.7% Leisure 1.2% -0.4% •2.5% 3.5% 2.49E 2.0% 2.5% 2.5% ' 1982-84 • 100 "Excludes mlernatonel visitors' spondmg on traveling to the U Son U S Bag gainers. and other mac bansportabon. "'One person Imp or 50 mules or more, one wey. away from home or 'nclud!ng one or more nights away from home. Sources U S Travel Assouahon'a Trawl Forecast Model. BLS, Deportment of Labor. OTTI, BEA, Department of Commerce. • • U.S. TRAVELER SENTIMENT INDEX After languishing since February 2009, the YPartnership/US Travel Association Traveler Sentiment IndexTM (TSI) has soared to its highest level since April 2007, driven by the dramatic improvement of four out of the six measurements from which the index is derived. TSI now stands at 95.2, up 9.2% from October 2010. The travel and tourism industry can expect a rebound in leisure demand during the year ahead. Traveler Sentiment IndexTM March 2007 — February 2011 105 95 85 Mar Apr Jun Aug Oct Dec Feb Apr Jul Oct Feb Apr Jul Oct Feb Apr Jul Oct Feb 07 07 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 TS! 100 96.2 89.4 91.1 91.1 90.0 93.0 82.4 78.3 78.2 90.2 89.1 92.1 90.5 91.0 90.4 86.7 87.: 95.2 * Source: YPartnership 2010 Portrait of American Travelers*" 20 • U.S. TRAVEL CAUTIOUSLY OPTIMISTIC The U.S. travel industry hopes to reflect the weather's sunny forecast as summer quickly approaches. Although we have seen encouraging signs of economic recovery, the industry remains cautious about solid travel performance in the months to come. Rising inflation and gas prices have consumers feeling less confident that the recession has truly ended and doubtful that recent economic and employment growth is sustainable. Despite this uncertainty, surveys show that consumer spending habits and buying attitudes remain restrained but up slightly from last year. Data also reveals strength in 2011 travel thus far, indicating the potential for a modestly improved summer travel season, especially within the leisure travel segment. Employment and Consumer Confidence 75 70 65 60 55 50 45 40 35 Consumer Canitlenca • L T;,tal Empta : ment. mcnthiy:•; change I P. • - 0,4 Mar 10 Jun 10 Sep 10 Dec 10 Mar 1 03 02 01 00 •0.1 •0 2 03 Source Bureau of Labor Statistics, Conference Board `Source: U.S. Travel Outlook, Research and Trends, April 2011 • TE Leading Travel Indicator 10 s 6 4 2 0 -2 Lta,. r.,� T r�.r11i iit�ator Travel Demand indicator Emma ,�; %y change Feb 10 Aug 10 Feb11 •-.u;11 Source Tounem Economca • • • U.S. TAX REDUCTION HELPS TRAVEL Washington helps consumers and the travel industry: President Obama' s recent tax proposal extends the current tax rates, but also introduces a payroll tax reduction of 2.0% of wages, effective January 1, 2011. According to Moody' s Analytics, this provision alone could boost consumer spending by upwards of $120 billion. The payroll tax reduction proposal would give the vast majority of working Americans a 2.0% pay raise. This additional income would be a boom to consumer spending which in turn would increase overall domestic production, thus stimulating the need for additional employees. Moody' s estimates that the increase in GDP of 4.0% (up from a pre -proposal forecast of 2.8%) will result in the creation of 2.8 million jobs in 2011. The improved economic outlook would lead to a 5.2% increase in demand, 200 points greater than the current PKF-HR forecast. These additional travelers would allow hoteliers to become even more aggressive with their pricing strategies. The average daily room rate forecast increase of 3.9% improves to 4.6%. These higher occupancy and average daily rate levels would yield a 280 bps improvement over the already attractive 6.2% increase in revenue per available room (RevPAR), in the expected case scenario. The expected 11.1% lift in Net Operating Income for the typical U.S. hotel would expand to 16.0%. 110 22 • • • INTERNATIONAL TRAVEL TO U.S. U.S. Department of Commerce on International Travel to the United States: The U.S. Department of Commerce (DOC) projects international travel to the United States will continue to experience strong growth through 2016. Visitor Volume is expected to increase 7% in 2011 and reach 64 million visitors who stay one or more nights in the United States. This growth would build on the 9% increase in arrivals in 2010, which resulted in a record 59.7 million visitors. All world regions are forecast to grow from 2011-2016 ranging from a low for the Middle East (+29%) to a high for South Africa (+83%) and Asia (+82%). Six countries are expected to account for three -fourths of the projected growth including Canada (38%), Mexico (12%), South Korea (8%), China (6%), Brazil (6%), and the United Kingdom (5%). In fact, the expected growth from Canada would be larger than the total visitor volume for any other country except Mexico by 2016. The Travel Promotion Act of 2009 established the new Corporation for Travel Promotion (CTP). The CTP' s goal is to promote the United States as a premier travel destination for international travelers. Impacts are expected to progressively increase from 2011 through 2016. 23 • GROWTH FOR LODGING INDUSTRY Impending Recovery from the Lodging Recession: PKF Hospitality Research' s (PKF-HR) Hotel Horizons® report predicts hotels in the U.S. will suffer a 1.1 percent decline in Revenue Per Available Room (RevPAR) for 2010. However, quarterly movements of these indicators throughout 2010 reveal that U.S. lodging industry demand, occupancy, average daily rate (ADR), and RevPAR will all start to show year -over -year quarterly gains sometime during the year of 2011. Based on the December 2010 edition of Hotel Horizons®, Colliers PKF Hospitality Research (PKF-HR) is forecasting occupancy for the overall U.S. lodging industry to grow 2.2% in 2011, along with a 3.9% gain in average daily rate (ADR). The net result is a 6.2% increase in RevPAR that should yield an 11.1% lift in the net operating income' (NOI) of the average U.S. hotel. • RESEARCH: CALIFORNIA CALIFORNIA TOURISM SUMMARY Following steep declines in 2009, state and national travel industries began to recover during 2010. • Travel Activity. According to Smith Travel Research, room demand in California increased by 7.4% from 2009 to 2010. Overseas arrivals at California ports of entry increased by 15.6%. Visitor air arrivals on domestic flights increased by 1.9%. • Tax Revenues. Corresponding to the growth in travel spending, local and state tax receipts generated by travel spending increased by 8.2% from 2009 to 2010. Transient lodging tax receipts increased by 7.5% and state sales tax revenue attributable to travel increased by 10.9%. • Spending. Total direct spending in California was $95.1 billion in 2010. Travel spending in California increased by 7.4% in 2009 to 2010. The primary price increases were in transportation, especially motor fuel. Room rates were essentially unchanged from 2009 after a 10.9% decrease in the 2008-09 period. • Employment. Travel -generated employment decreased by 0.9% in California from 2009 to 2010. Indications are that leisure and hospitality businesses began to add jobs in the last quarter of 2010. *Source: Dean Runyan Associates, California Travel Impacts by County, April 2011 1 i 26 • • • CALIFORNIA TOURISM SUMMARY • Total Overseas Market. There were approximately 23.8 million overseas visitors to the U.S. in 2009, down 6.3% from 25.3 million in 2008. Approximately 4.8 million overseas visitors (18.9%) indicated California was a destination on their U.S. trip, down 12.8% from 5.5 million overseas visitors to California in 2008. • Main Destination. Three-quarters (75%) of overseas visitors to California indicated that California was their main destination, similar to that reported in previous years. • California MSAs Visited. Similar to last year's data, the most common Metropolitan Statistical Areas (MSAs) visited by overseas visitors to California included Los Angeles - Long Beach (56%) and San Francisco (49%), followed by San Diego (14%), Anaheim -Santa Ana (7%), and San Jose (6%). • Main Purpose of Trip. The main purpose of trip among overseas travelers to California was vacation (47%), followed by business (22%), and visiting friends and relatives (21%). • Purpose of Trip. Overseas travelers to California listed multiple reasons for their trip in addition to the main purpose. These included: vacation (65%), visiting friends/relatives (37%), and business (26%). Compared to other overseas travelers, visitors from Australia, France, and the U.K. reported the highest proportion of travelers on vacation/holiday (81%, 81%, and 79%, respectively), while visitors from India reported the highest proportion of those visiting friends and relatives (49%). Once again, visitors from China and India (49% and 46%, respectively) reported the highest proportion of business travelers. • Leisure/Recreation Activities. Shopping (87%), dining (86%), and sightseeing (56%) were the most common leisure and recreation activities of overseas visitors to California in 2009. More than nine in ten visitors from China and Australia reported shopping as a recreation activity, while more than nine in ten visitors from the U.K. and Australia reported dining in restaurants. *Source: Dean Runyan Associates, California Travel Impacts by County, April 2011 • 27 • • • CALIFORNIA TOURISM SUMMARY 28 California Tourism Summary (Annual %change) Total Visits -1 6% -5 8% 4.0% 3.1 % 3.0% 2 7% 2 3% Domestic total Visits Leisure Visits -1 6% -1 0% -5.6% 3-8°,6 -6.0% 3.2% 2.8% 3.0% 2.9% 2.5% 22% 2.6% 2.2% International Total °, change -1.6% -7.9% 6.2% 5.9% 5.3% 4.2% 3 4% O.erseas 6.1% -13.7% 9.8% 5.5% 5.1% 4 5% 4 I% Mexico -8 7% -3.4% 3.7% 6 5% 5.8% 4.1% 3 0% Canada 9 5% -6 6% 5.1% 3.8% 3.5% 3. 2% 2 9% Leisure change 0.3% -7 5% 5.7% 6.6% 4.6% 4.1 % 4.3% O‘erseaS 14.0% -13.7% 8.5% 5.9% 5.4% 5.2% 4.8% Mexico -8.7% -3.4% 4.1 % 7.8% 4.4% 3. 6% 4.3% Canada 9.5% -6.6% 5.0% 2.9% 3.3% 2.9% 2 8% Total Expenditures ($ 97.5 87.7 94 2 99.5 105.6 112 0 117 6 billions) % change 2 5% -10.1% 7.4% 3.6% 6.2% 6.1% 5.0% Domestic 79.2 72.1 77.0 80.7 85.0 89.8 94.3 % change 1.0% -9.0% 6.8% 4.8% 5.3% 5.7% 5.0% International 18.3 15.6 17.2 18.8 20.6 22.2 23.3 % change 9.6% -14.8% 10.5% 9.0% 9.9% 7.7% 4.8% Source: Tourism ESononlcs HstorICal sources: TNS Global (domest)c): GC Fsearc,,. OT11(nternaticnal). Dean Runyan (expenditures) • DOMESTIC TRIPS TO CALIFORNIA 29 Annual Domestic Leisure Trips to California (Annual %change) Total California Primary Markets Arizona Nevada Oregon Washington Utah Colorado Opportunity Markets Texas New York Illinois Rest of US -1.0°'o 0.0% 2.6% 4.2% 2.3% 4.0°0 7.5% 1.2°0 1.9% -1.5°0 -2.7% 3.9% -4.9% -12.1°0 -6.0°0 -4.2% -6_7% - 'I0.0°,0 -7.0% 0.8°0 -9.9% -2.3°io -12.3% - 10.2% - 10.5% -"I7.G% - 18.0°0 010 3.7°0 - 0.2°0 '1.7% - 4. '190 'I.0°%o -0.4% 4.6°0 4.5°0 5.2% 5.8% I.6% 2.6% 2011 3.0% 2.8°0 4.2% 4.4°'0 4.7% 4.0°,0 3.8% 4.4°0 3.4°0 3.5% 3.7% 2.4°/0 4.7% 3.5% 2012 20_ 2.9% 2.6% 2.2°o 2.8% 2.4°0 2.0°0 3.2% 3.4°0 2.8% 3.290 2.9% 2.6°0 3.5°0 4.2% 3.0°0 2.0% 2.4% '1.2% 3.6% 4.2°0 4.0% 3.2% 2.8% 2.6°0 4.1 % 3.8% 3.5% 3.4% 3.5°0 2.7% 4.2°0 3.990 2.9% 2.4°0 3 . 0 % 3.1 °%o 3.2% 3.3°,0 1.8% 3.5% 2.6% 2.8% Source: Tourism Economics. Historical sources: TNS Global • • • CALIFORNIA TOURISM DEMAND Air travel on domestic flights increased by 1.9% from 2009 to 2010. Domestic Air Passenger Visitor Arrivals at Calitornia Airports QI Q22 Q3 Q4 *Source: Dean Runyan Associates, Cal. Travel Impacts by County, April 2011 30 Room demand increased by 6% from 2009 to 2010. 30 E 25 z i5 20 c2 Calitornia Room Demand 0 2008 ❑ 2009 II 2010 Q1 • Q2 Q3 INTERNATIONAL TRIPS TO CALIFORNIA 31 Annual International Leisure Trips to California (Annual %change) Total China India Japan South Korea Australia United Kingdom Germany France Scandanavia South America Canada Mexico Rest of World 0.3% -7.5% 5.7% 6.6% 4.6% 4.1 °io 4.3% 58.9% -0.6% 42.9°0 22.7% 14.5% 13.9% 12.0% 3.5% -12.6% 15.'I% 8.2% 12.1% 12.8%o 6.5% 2.7% -27.4% 13.9% 7.8% 4.6% 6.3% 5.1% -11.5% -10.9% 17.9% 7.3% 7.3% 6.5% 5.5% 7.7% 9.7% 17.4% 7.2°io 8.3% 6.3°10 5.7% 10.7% -13.9%-1.610 4.5% 3.5% 3.7% 3.6% 69.2% -7.6% 0.6% 2.5% 3.7% 4.1% 3.7% 20.5% -8.5% 3.4% 1.9% 3.1% 2.4% 1.4% 5.4% -15.0% 6 8% 2.3% 3.7% 3.3°o 2.G°6 0.0'10 0.2°io 22.5°0 11.8% 9.3% 8.0% 9.0% 9.5% -6.6% 5.0°0 2.9% 3.3% 2.9% 2.8% -8.7% -3.4% 4. I% 7.8% 4.4% 3.6% 4.3% 15.7% -21.7% 5.5% 3.8% 3.5% 3.1% 3.4% Source Tourism Economics Historical sources CIC Research, OTTI • INTERNATIONAL TRAVEL TO CALIFORNIA International travel to California increased in 2010, representing a spend of $17 billion — a 5.9% increase from 2009. Overseas arrivals at Los Angeles and San Francisco totaled $3.96 million in 2010, a 9.1% increase from 2009. International Visitor Spending in California, 2000-2010p Overseas Arrivals at California Ports of Entry, 2000-2010 :i°o 20° 0 5 15°0 2 10°0 000 Share Spending 00 01 02 03 04 05 06 Year 'Source: Dean Runyan Associates, Cal. Travel Impacts by County, April 2011 32 0- 08 09 10p J a• 19 $18 c 5.0 $1- 4.5 $16 4.0 $15 {35 $14 g $13 3.0 $12 2.5 00 01 02 03 04 05 06 07 08 09 IO ea' CALIFORNIA HOTEL PERFORMANCE Industry data from the first half of the year shows strong growth in visits to California. Hotel performance in California for 2010 (through August) was robust with the number of rooms sold growing 7.6% faster than the national average. Hotel Performance % change year ago, Jan -Aug 2010 Rooms sold Occupancy Source : STR Global ADR ■California III Pacific US aus 1 1 RevPAR • • CALIFORNIA ACCOMMODATION SPENDING Spending by Accommodation Type: $88.4 Billion ■ Day Travel $22B ■ Vacation Horne $4B ■ Private Home $11.1B `Source: Dean Runyan Associates, Cal. Travel Impacts by County, April 2011 34 o ■ Campground $3.4B • ■ Hotel/Motel $47.9B • • CALIFORNIA TRAVEL IMPACT Travel Spending by Category: $95.1 Billion Air Transportation Other $2.4B $6.7B • Retail Sales $15B • Arts, Entertainment & Recreation $14B *Source: Dean Runyan Associates, Cal. Travel Impacts by County, April 2011 go 35 • Ground Tran. & Motor Fuel $15.7B • Accommodations $15B IN Food Stores $2.9B 0 • Food & Beverage Services $23B o $ BILLIONS o CALIFORNIA TOT BY CITY 160000 140000 120000 100000 80000 60000 40000 20000 0 �y 25 •�a �a LC` a r o to ���`� SP�� ° Pear c, to 1b7° o \e c. ° � �'� a O a ac *Source: Dean Runyan Associates, Cal. Travel Impacts by County, April 2011 36 • • • in 2010 ■ 2009 • RESEARCH: ORANGE COUNTY & NEWPORT BEACH � nuaNr.F COUNT Orange County includes 34 cities and had a January 2010 population estimate of 3.2 million...third only to Los Angeles and San Diego in population for California counties. Orange County continues to attract a large number of visitors to the area. In 2010, the number of visitors totaled 42.7 million, flat from 2009 and down from 43.1 million in 2008. Visitors to Orange County spent $7.4 billion, an increase of 4.3% from 2009; although 2009 reflected an 11.3% decrease from 2008. Both visitors and spending are projected to increase in 2011. Of the visitors coming to Orange County, more than 60% came from the Western United States, while 7% were international travelers. *source: PKF Consulting 38 • R I.•MOO • gr." l lamas' Palk t *Hall.. MM..• . ia.*..: ^ Copt tK{ 9.rf IN `,• utlrM. WV•alm.lMtt coos Aga, Soil Wadi t nil.. Vthey (vat*lier.a -. IYnowIL. Hwa. [l fa• L apash w....n 0•1041 I tea.. VWmb` loiAs Y•e a•4.. rim.. (alum dot Ms t �~ .. wlw..t GIV.+wwl Wool tot dos craw • %ow Soo* . Ywrrf Lr� . Sop .Apin WM tam" o+. s.a.M:w • ORANGE COU liks Based on the sample set of hotels, the overall Orange County lodging market is estimated to increase 0.2% in annual rooms supply in 2011. The sample set of hotels include the sum of aggregated sub markets, which is approximately 70% of the total existing lodging supple in Orange County. Overall market occupancy for Orange County finished at 69.0% in 2010, a 7.9% increase over 2009. The average daily rate decreased 1.1% of $115.87. For 2011, room occupancy is expected to increase 3.3%, translating to market occupancy of 71.1%. The average daily rate is estimated to show growth of 5.2%, after two years of consecutive decline. Overall, revenue per available room is estimated to continue to increase, with growth at 8.5% to $86.68. John Wayne Airport has become one of the country's busiest regional airports. The Improvement program will increase the terminal size and accommodate six additional gates. Annual passenger traffic has increased at a compound annual rate of 1%. Total passenger counts in 2010 were approximately 8.7 million total passengers. *Source: PKF Consulting 39 ORANGE COUNTY .V Historical Coastal Orange Market Performance County of the Competitive Study ili Year Annual Supply Occupied Rooms Market Avg Daily Rate RevPAR Occupancy 2007 1,716,595 0.0% 1,214,802 1 6% 70.8% $258.85 8.4% $183.19 10.1% 2008 1,729,005 0.7 1,180,274 -2.8 68.3 252.15 -2.6 172.13 -6.0 2009 1,874,275 8.4 1,086,443 -7.9 58.0 220.18 -12.7 127.63 -25.9 2010 1,896,905 1.2 1,222,115 12.5 64.4 218.25 -0.9 140.61 10.2 2011 E 1,896,905 0.0 1,295,442 6.0 68.3 231.34 6.0 157.99 12.4 Compd Avg Annual Growth 2.0% 1.6% -0.6% -1.0% *Source: PKF Consulting 40 • • NEWPORT BEACH TOP MARKETS e.. - California Marke California 57.1'A Inland Empire 33.2% Western Europe/UK 33.0'S6 Arizona 4.2% Los Angeles 21.8% Western Canada 17.0% Utah 3.6% LA Valley Areas 16.6% Australia/New Zealand 9.6% Texas 3.2% San Diego 9 0% Eastern Canada 9 6% Washington 3.0% CA Central Coast 5.2% Middle East 8.5% 'Source: Horizon Consumer Science. 41 • NEWPgkRTmBEACH VISITOR PROFILE • 6.9 million people visited Newport Beach in 2010. • 84.3% of Newport Beach visitors are U.S. residents and 15.7% reside in other countries. • 62% of visitors have visited Newport Beach in the past three years and 38% were first time visitors. • 61.3% of visitors named Newport Beach as their primary destination; 23.3% named other areas within Orange County as their primary destination. • 69% of visitors named "Vacation" as their primary purpose to visit Newport Beach. • Average Age: 42 • Average Annual Household Income: $93,800 • 57% of visitors were female. • Household composition - 64% married, 28% single, 2.2% LGBT • 54.2% were traveling with at least one other person (34.5% with children), 45.8% were alone. • 57.7% of visitors arrived in a personal vehicle, 36.3% via airline, 4.3% in a rental car. • 58.5% used a personal vehicle to get around Newport Beach, 51.8% walked, 20.2% rented a vehicle, 4.5% used a bicycle. 'Source: Horizon Consumer Science, 2010-2011 Economic Impact Study (fall, winter, spring only) 42 • • • • NEWPORT BEACH VISITOR PROFILE • 70% of Visitors stayed in a hotel/motel, 26.8% with friends/family in a private residence. • 67.7% used Google to research trip planning but the next site was Trip Advisor at 9.3%. • 92.7% of visitors were "extremely" or "very satisfied" with Newport Beach as a visitor destination. -The main reasons for satisfaction included: good beaches, great weather, great environment, many things to see and do, and great location. Top activities visitors enjoyed in Newport Beach: Restaurants Sightseeing/exploring Shopping Beach Visit friends & family Business Boating/sailing/water sports Museums/galleries Live music or performance Bay or boat cruise Top categories of visitor spend: Hotel/lodging Shopping/gifts/souvenirs Amenities like spa/beauty/health clubs Attractions/museums/admissions Meals out/snacks Activity fees Personal items Local transportation (car rental, gas, bus, etc.) Drinks/beverages *Source: Horizon Consumer Science, 2010-2011 Economic Impact Study (fall, winter, spring only) 43'j • • • NEWPORT BEACH = SATISFACTION According to City Manager, Dave Kiff, as we come out of a very tough fiscal year, "Newport Beach is among the most fiscally conservative cities in the nation," and its AAA bond rating in 2010 proves it. Newport Beach has become a city that its residents can rely on for a promising future in developing, rebuilding, and improving its infrastructure and appeal year after year. Residents: A 2010 Citizen Satisfaction Survey was implemented, and in comparison with the last survey done in 2007, taking into account the current state of the economy today versus for years ago, "satisfaction with the city programs and services increased," with improvements in over 60% of major city services, while the U.S. average declined by 5 points. Another major finding was that 92% of residents, "who had an opinion," are "very satisfied" or "satisfied" with the overall quality of life in Newport Beach. Visitors: Similarly, 92.6% of visitors to Newport Beach also marked "very satisfied" or "satisfied" with the overall destination experience. Newport Beach appeals to the masses as an inspiring place to live and an exceptional destination to visit. *Source: 2010 Citizen Satisfaction Survey; Horizon Consumer Science 44 NEWPORT BEACH � ACCOMMODATION SPENDING Spending by Accommodation Type: $8.2B • Day Travel $2,223M • Vacation Home $143M • Private Horne $901M • Campground $118M 'Source: Dean Runyan Associates, Cal. Travel Impacts by County, April 2011 451 • IN Hotel -Motel $4,824M • $ MILLIONS, 2010 NEW'!' TEACH TRAVEL IMPACT Travel Spending by Category: $8.2B • Retail Sales $1,291M IN Arts, Entertainment & Recreation $1,680M • Ground Trani Motor Fuel $1,335M *Source: Dean Runyan Associates, Cal. Travel Impacts by County, April 2011 46 • Air Transportation $194M • • Accommodations $1,421M ■ Food Stores $212M Food & Beverage Services $2,074M $ MILLIONS, 2010 • NEWPORT BEACH INFRASTRUCTURE EWPORT BEACH INFRASTRUCTURE Fashion Island Fashion Island completed its $100 million reinvestment that has transformed the outdoor spaces, architecture and common area amenities. The extensive renovations underscore The Irvine Company's ongoing commitment to reinvestment and to keep its retail centers alive and vibrant. Phase II of the Fashion Island renovation is in progress, including a major redevelopment of its seven -screen Island Cinemas. Hyatt Regency Newport Beach Hyatt Regency Newport Beach debuts the $2 million renovation early in 2011. The renovation brings a fresh look and calm casual elegance to the property's main lobby entrance, registration, bar and lounge areas and includes a new library enclave. Newport Beach Civic Center & Park Project The new Civic Center & Park Project includes a city hall building, one of the city's largest parks, a 450 space parking structure, and an expansion of the Newport Beach Central Library. The project is scheduled to be completed by the end of 2012 and the current cost estimate for all project components is $128 million. The Peninsula — New Look & Stores The shopping center on the corner of 32nd and Newport Blvd on the Peninsula is undergoing a major change. The Catellus group is in the renovation process of the 45,363 square foot area and will add 6,515 square feet of new retail and restaurant space. New tenants include: Pavilions, CrowBurger, Gina's Pizza, Newport Nails and Chase Bank and possibly Chipoltle. Sources: The Irvine Company, Fashion Island, Hyatt, The Newport Beach Independent, and City of Newport Beach websites • • 0 0 • • NEWPORT BEACH INFRISTRUCTURE Orange County/John Wayne Airport The Airport Improvement Program will create additional terminal area capacity in the form of new aircraft gates, hold rooms, concessions, passenger/baggage screening capabilities, and more parking. It will also help redistribute traffic between Terminals A, B and C, thus achieving a balanced operation throughout the terminal complex. A key objective of the Airport Improvement Program is to ensure that the new facilities are designed and developed in a way that creates a single, seamless environment for passengers. The components of the Airport Improvement Program are segregated into four geographic areas: (i) Terminal (between the curbfront and aircraft); (ii) Landside (parking structures and roadways); (iii) Airside (airfield, Remain -Over -Night (RON) aircraft parking, fueling, taxiways); and (iv) Ancillary (miscellaneous projects). Disneyland Disney California Adventure Park is one year away from completion of a $1.5B + expansion — summer 2012. The Little Mermaid, Ariel's Undersea Adventures opens in June, Star Tours in 3D opens in June and the Summer Parade at Disneyland: Mickey's Soundsational Parade Knott's Berry Farm WindSeeker is a new ride that will take 64 passengers 300 feet into the air opening summer of 2011. WindSeeker will feature 32, 2-person gondolas that will ascend to a height of 301 feet. Once it has reached the top of the tower, WindSeeker will spread it's metal arms swinging riders for a 60 second flight at a 45 degree angle at a speed of 8 rotations per minute. Sources: OC/John Wayne Airport, Disneyland, Knott's Berry Farm websites • 49 • • • TRENDS T'. USA Today' s Top Travel Trends of 2010: Rise of the real-time Web: With nearly half of U.S. adults using social networking sites, expect more time -sensitive "flash sales" offered via Facebook or Twitter, more real-time postings of travel experiences, and faster response from companies and institutions fearful that negative opinions will go viral. Appetite for apps : Thanks to a global rollout of high-speed data networks and robust sales of GPS-enabled smartphones, look for an explosion of travel -related apps for everything from airport security (On the Spot System's new iPhone app lets users rate TSA screening checkpoints) to ordering hotel room service before you check in (just -released apps for Hilton, Embassy Suites and Doubletree)."Traditional travel services will meet geo-location and social networking to make travelers' lives easier," predicts Alan Warms of review site Appolicious.com. Wi-Fi breaks free: McDonald's offer of gratis wireless in more than 11,000 of its U.S. restaurants, the latest example of making Internet access "part of the plumbing of our lives," says tech columnist Larry Magid. Expect more upscale hotels to join their economy and mid - priced brethren in letting guests surf for free. Amtrak will also launch free Wi-Fi on Acela Express trains. A la carte airlines: Look for more charges for "perks" like aisle and window seats, and greater traction for the "plane as retail store" which sells everything from travel pillows, food and headphones to show tickets on board. Healthy outlook for medical tourism: As Washington lawmakers continue to grapple with health-care reform, more Americans — will combine foreign vacations with short -stay, outpatient procedures that cost 30%-70% Tess than procedures in the U.S. — an estimated 1.6 million Americans will travel for medical tourism by 2012, according to Deloitte Center for Health Solutions. On a wing and a prayer: With more than 300 million people traveling each year for religious and pilgrimage reasons and with annual revenues that exceed $18 billion, faith tourism has become a significant global industry that extends from cruises to volunteer vacations. 51 • • • IILTRAVELAVREllICTIONS FOR 201171 USA Today' s Top Travel Predictions for 2011: Checking Into Higher Hotel Rates: Leverage shifts back from consumers to operators. Travelers should expect average daily room rates to increase by nearly 5% - and they'll have to be "much more flexible to get a good deal." Pop-up bargains: As part of what Trendwatching.com calls "pricing pandemonium," more upscale hotels and resorts will offer short- term, steeply discounted rooms via "flash sales," on members -only sites like Jetsetter, Vacationist and SniqueAway and through social media channels. Driven by the popularity of Groupon and LivingSocial, the "collective buying craze will begin to re -shape demand, particularly for travel service providers who are long on inventory on selected dates and disinclined to spend scarce marketing dollars to drum up demand the old fashioned way," predicts Peter Yesawich of the travel marketing firm Ypartnership. Cloudy forecast for airfare transparency: Though consumer advocates are cheering websites to "prominently disclose" all baggage - fee increases it "will make airfare shopping harder." Another question mark for 2011: Whether Google will succeed in its proposed acquisition of ITA Software, a company that powers fare searches for Orbitz, Kayak, Bing Travel and other popular travel sites. Online travel gets more social...: We'll see social travel search/social travel planning emerge as a major trend, thanks to sites that integrate with Facebook. The most notable: TripAdvisor, which just enhanced users' ability to see their Facebook friends' reviews and recommendations first. ...and mobile: It may be premature to dub 2011 the "year of the tablet computer" for travelers, but even before the buzz about Apple's plans to add a camera to its iPad, it was earning raves as an indispensable travel gadget. That said, "the real focus is still on smart phones" and the immediacy of recommendations available through location -sharing services such as Foursquare. Digital detox vacations: "I'll be taking an "unplugged" journey later this month - no TV or in -room phone, let alone iPhone and iPad - and look forward to exploring a place without being short-circuited by technology." 52 111- TRENDS: LAST MINUTE TRIPS Time is of the essence...a popular expression today for sure, yet one rarely heard in discussions about vacation planning. Yet it now appears to be a mantra embraced by the growing percentage of American leisure travelers who take "last minute" trips. As revealed in the chart, one out of four leisure travelers took a vacation in their local area as an alternative to vacationing in a destination that would have required more extensive travel (aka a "staycation") during the past year. This type of vacation appears to be yet another manifestation of the trend toward more impulsive vacation behavior. * Source: YPartnership 2010 Portrait of American Travelersw 53 i • 0 Took Last -Minute Trips Last Year 2010 olo Yes No 27 73 Average number of days in advance planned last-minute trips taken last year. 6 Purchased a Travel Service as a Result of Flash Sale" Yes No 14 86 Types of Services Booked as a Result of Flash Sale'• Airfare Hotel or other lodging Vacation package Cruise Car rental Other 47 47 38 21 20 Took an overnight leisure trip/vacation in your local area (within a 26 50-mile drive radius of your home) as an alternative to vacationing in a destination that would have required you to travel a much greater distance at least once during the past 12 months • Among those who took a last-minute trip last year. •• Among those who purchased a travel service as a result of flash sale. flash sale is defined as the blasting of time -sensitive offers or discounts to targeted prospects via e-mail. • 0 • NDS: : MILY TRAVEM "Family travel" is defined as any form of leisure travel that includes children. • 44% of leisure travelers took at least one "family vacation" last year • They are equally likely to take both weekend trips (73%) of 4 nights or less including a Saturday, and extended trips (71%) of 5 consecutive nights or more • Beach/lake destinations rule, selected by fully one third (33%) of all family travelers last year; fully one out of four (26%) took a theme park vacation, and one out of ten (9%) visited an all-inclusive resort • Seven out of ten (69%) took a vacation to celebrate a life event last year (a "Celebration Vacation"), with milestone birthdays and anniversaries topping the list • One out of five (20%) is a grandparent, and two-thirds (67%) of those who have reached this life stage took at least one vacation with their grandchildren last year • Family travelers are also more likely to have taken a vacation in their local area (less than 50 miles from home) as an alternative to vacationing in a destination that would have required traveling a greater distance (aka a "Staycation") • Three out of ten (31%) took a "last minute" trip last year, departing an average of just 6 days after deciding to take the trip • All (99%) have access to the Internet at home, and practically all have gone online to get information about travel suppliers (89%) and make reservations (87%) • Fully nine out of ten (90%) have a page posted on facebook, and one out of four (23%) has visited a blog to seek or preview information about a vacation destination or travel service supplier • Fully one out of four (24%) has stayed in a vacation home or condominium rental as an alternative to conventional hotel/resort lodging on a vacation last year • Children play an active role in planning vacations in half (48%) of all family travel household Source: YPartnership 2010 Portrait of American rravelerssM • TRENDS:TRJ Consumers have become more insular with a closely -knit here of influence, this is affecting how they arrive at and make purchase decisions. Family and friends are ess. tially TIED with traditional media as the places they find ideas and inspiration for making travel decisions. Key sources of information for each phase of the travel de ;ion making "funnel" include: Ideas & Inspiration - family & family are an equal influent to traditional media such as television and a variety of printed media in iding guide books, brochures and magazines. Advice & Insight— personal recommendations of family a friends is most important and the Internet grows in influence. Pricing & Comparing — internet tops the list for research ( %), online travel agencies are used for price comparisons and gather ; information, search engines then destination websites. Purchasing — when purchasing the best deal, the funnel n rows to online travel agencies (41%) or purchasing directly from the supr ?r's site (38%). Few travelers use travel agents, branded sites or destinati. sites. `Source: YPartnership 2010 Portrait of American Travelerss^" 55 Purchase • • TRENDS: AicRIDIBIIl&TILYINTINUU46/11 Credibility continuum...stretches from personal testimonials of friends & family (most credible) to content found on social media websites (least credible). Word of mouth endorsements remain the most believable endorsements for consumers especially if delivered by a trusted family member or friend. Given the fact that it has become increasingly more difficult to influence consumers through marketing messages, these insights provide extremely valuable clues as to the mix of media sources that should be incorporated into marketing communication programs to yield maximum impact. a/o Agree: I have a great deal of confidence in the Information I get from... Travel guidebooks (57) Company/ destination site (46) Family/friend recommendations (81) Online travel agent (54) Travel agent (46) Brochures (39) Slogs (33) Online advisory site (53) Media coverage (43) '" Source: YPartnership 2010 Portrait of American TravelerssM IW r 56 ' • • • Facebook(wltter (19) YouTube (14) Travel advertising (27) • TRENDS: sONLINE TRAVEL BOOKING Where travelers think they get the best prices on travel services: Incidence Generally Get Best Prices on Travel Sery ces From: 48% Online Travel Agency Websites 35% Online Travel Supplier Websites 11% Over the Phone from a Travel Supplier 6% Over the Phone from a Travel Agent The ability to comparison shop online is the primary reason consumers typically use online travel sites such as Expedia, Travelocity, Orbitz, Travelzoo and Priceline when shopping for travel: Incidence 62% Typically Use When Booking Travel: - — Online Travel Agency 46% Branded Supplier Site 14% Meta Search Site 9% Traditional Travel Agent 5% Collective Buying Site 5% Private Sale Site * Source: YPartnership 2010 Portrait of American TravelerssM • 57 iho • TRENDS: SMART PHONE APPS 2010 Have Downloaded a Travel -related Application (app) 19 to Your Smartphone* Activities Engaged in with a Smartphone' Navigate a destination using your phone's GPS functionality 47 Search for the latest information on flight schedules and delays 46 Comparison shop airfares and hotel rates 29 Share information and photos about your travel experiences 28 Book air travel or lodging 18 View virtual visitor guides that provide information on things to 15 do and see in a destination Download and use mobile coupons from your phone 11 Download an audio walking tour of a destination to your phone 6 • Among those who access the Internet from a cell phone that is a smartphone such as an iPhone, Blackberry, Palm, etc. • Source: YPartnership 2010 Portrait of American Travelerss"' II 58 ti' Fewer than 10% of active travelers use the internet from a tablet or iPad. Among those who do, the activities they engage in are similar to that of a mobile phone...with the exception that tablet/iPad users are more likely to use their device to comparison shop airfares and hotel rates. Access Internet from Tablet or iPad 2011 % Yes 7 Activities Engaged in On Tablet or iPad* Find restaurants or shops nearby based on criteria input 46 Comparison shop airfares and hotel rates 42 Search for last minute info on flight schedules 39 Book air travel or lodging 37 Look for ratings, reviews of hotels, dining, destination 35 Navigate a destination using GPS 27 View virtual visitor guides 26 Share information & photos about travel experience 24 Use "check in" feature (foursquare/places) 18 Participate in customer loyalty by using "like" function 17 Download and use mobile coupons 13 Download Audio Walking Tour of Destination 13 Augmented Reality App for Destination 11 * Source: YPartnership 2010 Portrait of American TravelerssM sample size is extremely small 59 .2j • TRENDS: USE OF VIDEO Video streams are a growing trend. 60 2.50 2.00 1.50 1.00 0.50 0.00 Average Minutes Watched Per Stream by Source Twitter Yahoo! Facebook Google Bing 110 • The theoretical "reach" of social media does, in fact, boggle the mind: facebook alone now boasts in excess of 500,000,000 members globally. The incidence of adults who report posting on the other popular sites pales by comparison. But to what extent do active travelers visit these sites, consult the content of these sites when evaluating travel service options and, perhaps most importantly, report that the content of what they find on these sites influences their actual behavior? The answers, as revealed in our 2010 Portrait of American TravelersTm, may surprise you. Among all active travelers in the U.S. (those who took at least one trip that required overnight accommodations during the previous 12 months), just under half (an estimated 46%) have a page posted on a social site. Facebook has achieved the highest rate of market penetration, followed by Linked In and MySpace: Social Site % of Active Travelers with Page Posted Facebook 91% Linked In 24% MySpace 23% But, theoretical reach doesn't necessarily translate into influence, particularly when it comes to commercial communications. And in three separate national surveys conducted by Ypartnership, fewer than one in ten active travelers has reported that the content to which they have been exposed on social sites has had any significant influence on their final choice of a destination or travel service supplier, as revealed below: Active Travelers % Agree Have made a destination or travel supplier selection based primarily on information from a social networking site 6% * Source: YPartnership 2010 Portrait of American TravelerssM • • TRENDS:GAS PRICES A few educated predictions: The Global Business Travel Association predicts that business travel will remain steady even if oil prices pass $125 per barrel. The availability of hotel discounts once travelers arrive at their destination is thought to play a role in continued business travel despite the increased cost of airfare. Leisure travel, however, may see a shift. Instead of buying an airplane ticket, consumers who have foregone travel during the recession may opt to take their vacations within driving distance. Although rising gas prices will impact the cost of a road trip, a destination within driving distance is still likely to be Tess expensive to reach than one that requires a cross- country plane ride. The good news for hotels and other companies in the hospitality industry is that people want to travel now that their incomes are recovering, they just might not be willing to travel as far as they would before oil and gas prices started climbing. Potential Implications that could mean good news for Newport Beach: Most visitors to Newport Beach are from Southern California.* 57.7% of visitors to Orange County/Newport Beach arrive by personal vehicle. *Sources: 2011 Horizon Consumer Science, Wave 1 & 2; Travel Industry Uptake. • RENDS: GAS PRIG What other experts are saying: AAA: "Staying closer to home is exactly what some travelers did during the summer of 2008 when fuel prices reached record highs, said AAA national spokesman Troy Green. Still, Americans have a strong desire to travel, and those who book months in advance are likely to go, possibly cutting back on spending for lodging, dining or incidentals." CNN: "If they normally would take a long trip, they go closer in." MSNBC: "Airlines are facing fuel challenges again which brings industry -wide increases in airline ticket prices. Those planning spring or summer vacations abroad should be ready for sticker shock." USA Today: "In 2008, nearly half reduced their gas consumption by consolidated shopping trips, 29% cancelled or modified vacations, 25% found alternatives to driving. Perhaps because consumers have traveled this road before, some analysts say this time around the impact may not be as pronounced across middle-class and higher -income consumers as it was in 2008." The Nielsen Company: "We should expect consumer reactions to mirror historic trends including; increased trip compression, less eating out, more value -conscious shopping alternatives and increased use of coupons. Value messaging will be important, but also think about the emotional connection with messaging that reflects the fun and enjoyment to be had with family members and friends. *Sources: CNN.com, MSNBC.com, USAToday.com, AAA.com, Nielsen Company 2011 • 63'; CNKNJ S4.-49 NBC nie As we close the books on 2010, many in the travel industry are likely to add the following refrain to their last chorus of Auld Lang Syne: "Are We There Yet?" If so, the simple answer is "well, almost." Planning and purchasing behavior reflects a "New Frugal" attitude that is likely to prevail throughout the entire year, if not well into 2012. The horizon line for demand from leisure travelers looks encouraging as 55% of all U.S. adults were planning at least one overnight trip primarily for leisure purposes during the first two calendar quarters of 2011, up slightly from the 53% in 2009. The most affluent households in the U.S. (those with an annual income greater than $125,000, or roughly 10% of all U.S. households), the net positive difference between those planning "more" or "fewer" trips for leisure purposes in the year ahead is over 10%, thereby signaling that the leading edge of incremental demand for leisure travel services will be populated primarily by more upscale clientele. So here are the headlines for the year ahead: • The New Frugal will continue to direct the majority of travelers' planning and shopping behavior and the implication is clear: most travel suppliers (except airlines that do not replenish their already reduced seat capacity) will meet resistance when trying to achieve greater pricing power. This is likely to translate into a higher incidence of comparison shopping and further challenge the fragility of brand loyalty • More travelers will discover the appeal of comparison shopping sites (meta search engines) as they pursue what they consider to be rightfully theirs in the current economic environment: a good deal. This is inevitable given the fact that only one out of every five travelers has ever visited a meta search engine • The "collective buying" craze (thanks to GroupOn) will begin to re -shape demand for travel services, particularly for those travel service suppliers who are long on inventory on selected dates and disinclined to spend scarce marketing dollars to drum up demand the old fashioned way *Source: YPartnership 2010 Portrait of American Travelerss" 64 • • • • • Although travel with one's spouse or another adult will continue to represent the highest incidence of leisure travel (eight out of ten leisure travelers will take at least one such trip in the year ahead), family travel (adults who travel with children) will continue to grow because of the burgeoning popularity of multi -generational leisure travel: one third of all leisure travelers are now grandparents, and three out of ten took at least one vacation with their grandchildren last year. This incidence will continue to grow as the population continues to age • Air fares will continue to escalate as demand improves from the return of business travelers and carriers adjust their capacity to maximize yield • Hotel rates will rise modestly in the majority of U.S. markets, and aggressively in a few such as New York and Miami, driven by the combined impact of growing demand from business travelers and the hiatus observed in new hotel construction during the past two years • Cruises will continue to gain popularity (almost six out of ten leisure travelers are now interested in taking a cruise during the next two years, more than the proportion who express interest in visiting even the most popular states in the U.S.!), because of the inherent appeal of the experience (great value, grander ships, fabulous entertainment, attentive service, etc.) and very alluring pricing due to the lingering oversupply of new cruise product (and the thousands of new cabins that must be filled before the bon voyage party gets underway) • Interest in vacation ownership (timesharing, fractional resort real estate ownership, residence clubs, etc.) will grow gradually throughout the year as leisure travelers feel more confident about discretionary expenditures on vacation time and conclude that some type of fractional ownership interest in resort real estate makes more sense than whole ownership because the latter is unlikely to appreciate in value for many years to come • Interest in condominium and vacation home rentals will demonstrate robust growth (almost half of all leisure travelers are now interested in a vacation home rental as an alternative to conventional lodging when on vacation), particularly among family travelers seeking more space and better value * Source: YPartnership 2010 Portrait of American Travelerss'v 65 • • • ORE • • Mobile applications that facilitate the planning and purchasing of travel services will continue to proliferate as more consumers migrate to smart phones (an estimated four out of ten now have one, and roughly 20% of those who do have downloaded a travel app). And their usage of these devices will extend well beyond GPS functionality to include searching for schedule delays, comparison shopping fares and rates, and downloading mobile coupons • Interest in and usage of social media will continue to display explosive growth in terms of theoretical reach (the ability to connect and engage sheer numbers of active travelers): almost half of all travelers now have a page posted on a social site, 91% of which are posted on facebook. The extent to which the content of information on social sites truly influences the selection of travel service suppliers remains elusive, however. Watch for greater clarity on this conundrum from us in the year ahead • Flash sales (the use of unsolicited emails to liquidate what would otherwise be distressed inventory) will assume their rightful place in the arsenal of tactics embraced by travel service marketers because of their demonstrated effectiveness (and modest cost to implement) • American's sustained sense of wanderlust will translate into an increase in U.S. citizen departures to international destinations, with the Caribbean and Western Europe [Italy] topping the list of "dream destinations" • California and Florida will, once again, top the list of domestic "dream destinations" • The Disney parks (Orlando being the favorite) will continue to dominate the list of "dream destinations" for family travelers (including multi -generational family travelers) • And, finally, the bed bug problem will continue to pose challenges for hoteliers in selected urban destinations as it is now clearly on the minds of all travelers: a remarkable 31% of U.S. travelers are "very/extremely" concerned about an encounter with bed bugs on a future hotel stay; another 29% are "somewhat" concerned. And with that, here's wishing everyone a more prosperous 2011. Remember, we're almost there. And don't let the bed bugs bite! * Source- YPartnership 2010 Portrait of American Travelers5M 66,, • • • Quoted from YPartnership • MARKETING MARKETING OVERVIEW The Marketing Team is charged with reaching both domestic and international leisure visitors year- round. The team creates this Marketing Plan by applying hard data and industry insights to craft a strategic foundation to market Newport Beach for leisure visitors. The Marketing Plan is crafted to incorporate all basic marketing functions to maximize manpower and financial resources. • 68 • Advertising • Brand Management • Collateral & Visitor Information • Website & Mobile Applications • Social Media • E-Communications • Public Relations International Efforts * • MARKETING OBJECTIVES Develop and implement a day visitor strategy: Through a comprehensive research program, determine a methodology to reach and influence Southern California residents and convert them into overnight visitors. Expand International marketing efforts into Australia: Leveraging the existing $50 million California Travel and Tourism Commission marketing program, expand Newport Beach presence into the Australian market; a market that is expected to have the largest and fastest growth into the state over the next six years. Develop new Newport Beach advertising and messaging to reinforce the luxury destination selling proposition: Create new advertising creative and messaging to strengthen the Newport Beach upscale luxury product offerings and aspirational lifestyle while selectively communicating the value orientation. Community Hospitality Training: Working with the Newport Beach Police Department and other community organizations, create a Newport Beach guest experience -training program to insure quality "Newport Beach style" service orientation. • • • ADVERTISING In an effort to generate demand and grow tourism in the business and leisure segments, the Marketing Department of Visit Newport Beach Inc. will develop new creative to activate its branding strategies and campaigns in various markets, including direct -to -consumer, trade and corporate audiences domestically and internationally. • Seasonal ad campaigns - summer, fall, winter, and spring • Newport Beach events - tie room nights to key events throughout the year • Themed advertising — develop programs to tie room nights tied to activities that visitors show an interest in from the research such as dining and shopping Advertising Mix: • Online Advertising — most visitors research and purchase travel online so online advertising is important • Print Advertising — traditional advertising plays an important role in the decision making "funnel" during the "Ideas & Inspiration" phase so more focus on traditional advertising will be developed this year • Radio — online and on -air advertising with radio networks • Out of Home — advertising at John Wayne Airport • Video — new video clips of Newport Beach events will help advertise and promote the destination • 70 La • o lo ADVERTISING MARKETS Target Markets One of the main responsibilities of Visit Newport Beach Inc. is to reach both domestic and international visitors throughout the year. Per the research conducted by Horizon Consumer Science, the majority or 84% of all Newport Beach Fall visitors were US residents while 16% came from international locations. Most of the domestic efforts will focus on the California market since 57% of all visitors to Newport Beach are from California. Top 5 Domestic Markets to Newport Beach • California Arizona Utah Texas • Washington ■57% 71 • No Top California Markets to Newport Beach 9% 16.60% 5.20% I • 33.20% 14 ■ 21.80% • Inland Empire • Los Angeles LA Valley San Diego CA Central Coast * o BRAND MANAGEMENT In order to maintain a perfect Newport Beach brand identity, the Marketing Team must proof all material to maintain the integrity of the brand image. The advertising is: Elegant yet approachable. Fun yet sophisticated. We think it perfectly captures the essence of Newport Beach and the opportunity every visitor has to live the dream life in Newport Beach. The signature colors: Blue for the sea. Grey for the misty mornings. Black for the elegant nights. PMS 548 PMS 5483 PMS 634 PMS Cool Gray 11 Typography is an important component of the brand identity. Two fonts have been selected for use in brand and marketing materials: RABBIT EARS and MINION. MINION REGULAR ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz 1234567890 Templates have been created for business cards, letterhead, envelopes and more. The electronic Identity Manual & Style Guidelines manual provides partners with a comprehensive look at our logo parameters, color pallet, typography, advertising requirements, usage and examples. 72 • o o COLLATERAL Collateral Visit Newport Beach Inc. publishes collateral materials that highlight Newport Beach while maximizing the opportunity for partner businesses to gain exposure to visitors and capture guest revenue. They are strategically distributed and provided to guests prior to their arrival. Official Visitors Guide: A magazine -style guide published annually in June and details all the activities that Newport Beach has to offer visitors. It consists of information on community events, accommodations, attractions, itineraries, neighborhoods, shopping, beauty & wellness, arts & culture, outdoor activities, dining, visitor' s services, maps and other editorial. This year's map also has a promotional link so we can begin tracking success. • 100,000 printed versions • 2,500 USB drives • 2,500 CDs Distribution: Attractions in Orange County, Disneyland Hotel, California Welcome Centers, Fashion Island, Car Rental Companies, Local Hotels, John Wayne Airport • 73 • THE ULTIMATE rnASTAt GETAWAY Eve rytl rtg You Need for a Perfect Visit INCLUDES m APS • OEACNES ACCOMMODATIONS DINING dHOPPING ATTOAC.IOHS • :-. • COLLATERAL Map of Newport Beach: Visit Newport Beach redesigned and reprinted 100,000 Newport Beach maps, which outline the beaches, major attractions, transportation, shopping, dining and highlight many of the local neighborhoods. The maps are distributed free of cost to local hotel concierge desks, visitor centers, conferences, John Wayne Airport, car rental companies, and other locations throughout Orange County. Boutique Hotel Guide: This publication features all of the boutique hotels and inns located in Newport Beach. It provides photos, maps, and descriptions on each of the properties. Since it has not been updated for several years, Visit Newport Beach will redesign and produce this Guide in the Fiscal Year 2011/2012. Group Dining Guide: Visit Newport Beach is currently developing a Group Dining Guide to highlight over 300 dining establishments and focus on specific restaurants that offer opportunities for group dining. 74 IIIIMPIMIlli I. * * o ir * VISITOR INFORMATION Visitor Kiosk Directories: There are three current visitor kiosks that detail Newport Beach shopping, dining, water activities and accommodations. The directories are located in three traffic areas including McFadden Square, the Balboa Pier and Balboa Island. Visit Newport Beach is looking into making these kiosks more interactive and user friendly. Fashion Island Visitor Concierge: Visit Newport Beach Inc. plans on opening a Visitor Concierge Center at Fashion Island due to its prime location and heavy foot traffic. Visit Newport Beach Inc. will staff the center and provide information to visitors. This is a convenient location for visitors to find and a very welcoming atmosphere to gain information on Newport Beach. o Ip • • o o WEBSITE Website Although the Visit Newport Beach website was redesigned last year, the Marketing Team will continue to make enhancements to it to make the user experience enjoyable and easy to use. The objectives for this Fiscal Year are to: • Increase time spent on the site by providing relevant and timely content (i.e. itinerary section, what' s hot) • Grow the number of visitors/impressions through using our database, e-newsletters links, social media fans/followers, etc. • Continue to enhance the site to be more visually appealing and user friendly...such as the addition of Google Mapping within each listing • Revamp the special offers section to include offers from our partners • Build out "categories" such as Food & Wine, Shopping, Outdoor Active, etc. • Explore other tech tools such as "apps", mobile tagging, etc. • Maximize traffic to the website through increased SEO and PR placements and partner links • Continue to use Google Analytics to track and analyze all initiatives that affect the website • Maintain a timely and fresh "Insider Information" blog for Newport Beach • Identify revenue generating areas on the website (i.e. online ads, rotating banners) 76 • • MOBILE APPLICATIONS 77 ets t 114. aa Mobile Applications As technology is constantly changing, it is integral that Visit Newport Beach Inc. keep up with the times and invest in more mobile applications and tools. In addition to the Newport Beach iPhone Application by Mary Ann Hemphill, Visit Newport Beach will explore opportunities with: • iPhone and iPad applications • Other Smart Phone applications • Mobile Tagging • Travel technology tools for visitors E-MARKETING E-Blast Advertising Visit Newport Beach Inc. will send email blasts as a marketing tool to communicate with certain audiences in an effort to find new visitors, build loyalty with current visitors or test marketing strategies. The following types of eblasts will be executed: E-Promotions In order to be aligned with the luxury destination of Newport Beach, our promotions will be targeted specifically to engage the affluent traveler seeking a good value for an exceptional experience. The "collective buying" craze is a growing trend so LivingSocial, Groupon, escapes, Jet Setter are on the radar to offer exclusive Newport Beach packages. E-Newsletters Our e-newsletters will get a fresh new look, which will be more visually stimulating and will also increase the number of visitors to visitnewportbeach.com. Instead of sending the e-newsletters on a quarterly basis, they will be sent on a monthly basis to the below target markets. Our focus will be to increase our open rate, as well as grow the number of opt in subscribers. • Consumers • Community Partners • Media • Meeting Planners 78 o • • SOCIAL MEDIA Social Media Our social media plan for Fiscal Year 2011/2012 is based on creating buzz, highlighting our partners, user generated content acquisition, and creating a connection with our fans and followers. A social media calendar will ensure that all partners and Newport Beach events are promoted throughout the year. Key initiatives include: • Continue to grow the Facebook fan count by leveraging the platform's continuously improving consumer engagement tools • Increase exposure on YouTube by posting a video library, podcasts and partner videos • Continue to use Twitter as a communication tool for Newport Beach Destination enthusiasts and followers as well as media bloggers • Engage and increase fans/followers through ongoing contests/sweepstakes • Explore other new media opportunities • "Like" partner sites to increase fans and promote partners 79 o o o • SOCIAL MEDIA • ly Waa /rdde Pas :n,0 P.,. o • -fuel O co. cages r'rt. Alael tlyt trr.,,s.t nerr Dv rate, vaneerrl • Socw,l llcd y lot/tarn sylpan,m Mtw,e Roy Club A Rrwrt Corona del liar fy; cltaml.er 01 ■SPIN CrrOatr. rlr,.nort ereN Nont.trum --ti r.t4.4.••, Iala•.t Newport Beach - Southern California tde wort Status S t}ae.tmn ri Photo 411 Ink Qf IMre litRrnpost near+ Saul here Caldron,. , Chest Pe Agr s eat dtoe ebeer*r• r bethe offer rods, .y t.r �y _..r .!Y,s )1•wr. rail. ...•, • v-t. , r• wS..d-w the eat uady Ue lt/ In thaemo County eaddkboa rd. I ro,npre, or I u e,•ry R.,.,I Rrat al • t.v,nlia tnl Rtwport acarh c,,:thrm [.Mama Camel. M],n', the fiat hk..ap•t Pt, t• Prradr^, `4.0 Ger. S,e,•r r Id ttts • -• bsro.rcc Swam ero C1t coits toe tl tedOys Doty Piet. vn.t henport beach president, c to to recewe akmn a ward • Way Phi/ [} for, yid :I : i•� Mt tln. Fort Pair Adorns (4) fj+::,r FA, ay; n0'•M 'F1r.h :•wlC,p•� u13'10 ;;r) ,ter. •Ioyraeo,I 24 1/4 -•crrtt eRh rl Ael me 1Y0•O ia,•• 7lyr�„ You and Re. port (lead, - Southem California ChIGINErritl ,h; ; I- en.01144. e„ Quick TIPP :let w•r Deckle A Ih,• rsu P.ff •,• ✓ at este+ ads to,,r Get Hone Connectrows t sample Ad: Me,rpo.1. beach _ •t'.0 ee.t Or (OW 00 . II •JO,KrP ▪ -re ..or - rot 11,•a• Sponsored Ita!t an AJ 6.,rrfrw.l Pf..,lnpraphy by Tin. Penal. •011 S'LWO YSSI)14 f.yt A•I $. o - 4c ap.:alrok Olaww- Y. ,Inaal.•.!Wan orrl • • PUBLIC RELATIONS Public Relations Visit Newport Beach continued to place a robust emphasis Public Relations in 2010/2011 and will continue to build on that momentum in the coming year. The PR and Communications role will keep the integrity of the overarching marketing strategies. PR and communications efforts will continue to create a spotlight on the destination locally, regionally, nationally and internationally, and also increase awareness through traditional media, online media, social engagement and mobile channels. New initiatives include: • Integrate all media channels to leverage the full power of the campaigns • Develop video library and podcast series that mirror the various campaigns initiated throughout the year • Leverage entertainment industry contacts to promote Newport Beach • Push original content and partner content for editorial opportunities using Vocus media database • Continue to pitch unique and brand -centric story ideas to journalists, editors, on -air talent, and bloggers who deliver news to targeted audience • Communicate to press through a quarterly media e-newsletter or TIP SHEETS designed to give highlights of Newport Beach "Happenings" on a timely basis • Refine Social Media and create a more robust, comprehensive program to fully utilize the strategic benefits of the platform r_ 81 INTERNATIONAL MARKETING II MIIA(I 8; 11111111 i,1,111III11111I11111'' nI'111111NI1 INTERNATIONAL MARKETS U.S TRAVEL A SS 1) C I A I I ON InternalonnlThltar alon yaee 2009 U.S. International Visitor Arrivals - Top 25 Countries of Origin 1. CANADA 2. MEXICO 3. UNITED KINGDOM 4. JAPAN 5. GERMANY 6. FRANCE 7. BRAZIL 8. ITALY 9. SOUTH KOREA 10. AUSTRALIA 11. SPAIN 12. INDIA 13. NETHERLANDS 14. CHINA 15. VENEZUEIA 16. COLOMBIA 17. IRELAND 18. ARGENTINA 19. SWITZERLAND 20. SWEDEN 21. ISRAEL 22. BELGIUM 23. DENMARK 24. TAIWAN 25. DOMINICAN REPUBLIC 1100 New York Avenue. NW. Suite. 450 Washington. DC 20005-3934 ustravcl.org • • • U.S. TRAVEL ASSOCIATION INTERNATIONAL MARKETS International Markets 15.7% of the International visitors arrived from markets shown below. International visitors also stay longer and have a higher visitor spend average. As we look at opportunities to grow tourism for Newport Beach, the 2011-2012 Fiscal Year will begin to focus on further growth in the UK market and possible expansion into Western Canada and Australia. 84 9.6% International Travel to Newport Beach 8.5% F 17.0% ■ 33.0% ® Western Europe/UK Li Western Canada Australia Eastern Canada Middle East INTERNATIONAL MARKETS 85 ASSOCIATIONiii#.... U.S. TRAVEL International Visitor Info) mntlon System UNITED KINGDOM MARKET SUMMARY • Arrivals from the U.K. totaled 3,899,167 in 2009, a decline of nearly 15% from 2008 arrivals. • Arrivals for November 2010 were 271,717, down about 1% from arrivals for November 2009. Year-to-date arrivals through November 2010 are down 0.5% compared to the same period in 2009. • Total U.K. arrivals in 2010 are forecasted to increase by 2 to 3,820,000. • The U.K.'s economic recovery is forecasted to be gradual, with a 2.0% increase In GDP and 0.5% in real private consumption expected for 2011. • In 2009, the U.S. received a total of $11.4 billion from U.K. visitors, a decrease of 31.6% compared to 2008. $8.8 billion was spent on travel while in the U.S., and $2.7 billion was spent on international airfare. • Total spending, Including spending on international airfare, per U.K. arrival to the U.S. averaged $2,931 in 2009, a decrease of 20.0% compared to 2008. • Britain's new coalition government has indicated it will replace the controversial Air Passenger Duty with a per plane tax. • "Staycations" are expected to remain a popular travel option over the long-term. • INTERNATIONAL MARKETS 450 400 350 300 250 200 150 100 50 0 4-.- U.S. T RAVE L ASSOCIATION lnlern4tlol4.1Visltcr Iororms4on874tem 1 UNITED KINGDOM Monthly Arrivals to the U.S. (thousands) CO I;iiiii]iiii.ii to m m of00 0o a o00 0o^ LLao z Ian Change Nov 10/Nov 09 % Change YTD Nov 10/ YTD Nov 09 -0.5% % Change Total 09/Total 08 -14.6% rob Mar Apr May lun Jul Au6 Sep Oct Nov Dec YTO Total Yeartnd Total 2008 246.272 321,044 401.629 437.342 380.364 366,440 432.075 442.710 415.898 435.349 317,551 356,221 4,208.674 4,564,895 2009 199,739 244,691 2711,371 379.050 340,070 339,272 367,749 384,783 371,979 402.713 273,642 316,863 3,582.304 3.899.167 2010 189.333 235.046 302.711 314.235 342.759 332.213 370.643 388.612 391.766 423961 271.717 3.564.996 Source: U.S. Department of Commerce, Office of Travel & Tourism Industries n00 New 9016 Aviv. P. N'N. :al • 30 V/ ISI11r,. n ;LOOS 1 ,34 :;Irl - 01.0 • 86 • �— U.S.TRAVEL ASSOCIATION • • INTERNATIONAL MARKETING - UK International Marketing: UK Visit Newport Beach uses third -party consultants in the United Kingdom for wholesale sales and public relations efforts. They are an extension of the team and are expected to increase tourism to Newport Beach through building awareness in the United Kingdom. Visit Newport Beach will continue the wholesale sales efforts in the United Kingdom through Marketing Representative, Michelle Austin Peden her efforts include: 87 California Vacations Veteran independent specialist tour operator California Vacations hosts a 'California Evening' for 50 retail travel agencies in Manchester, England. Product Development Meetings The UK team attends World Travel Market in London, and the world's largest travel trade show ITB in Germany, to continue their efforts to increase room night sales though meetings with operators not currently selling Newport Beach. Destination Visits The UK Team assists several wholesalers with the planning and coordinating of educational trips to Newport Beach including North America Travel Service, Virgin Holidays, British Airways, Trailfinders, Thomas Cook, and Wexas. Training — Online Travel Academy To gain additional visitor bookings, an online continued education & training program will be developed in FY 2011- 2012. This will allow for retail agents and wholesale staff to learn about the destination and will lead to a certification as a "Newport Beach Specialist." d • • INTERNATIONAL MARKETING - UK International Public Relations - UK London -based Magellan Public Relations continues to be the Agency of Record for Visit Newport Beach Inc. to promote the destination in the UK. They work seamlessly with the in-house team to create ongoing interest in the destination and dynamic itineraries for visiting media: London Taxi Cab Campaign Overview Visit Newport Beach Inc. plans to continue the successful Taxi Cab campaign in London. The iconic taxi cabs in Newport Beach -branded designs, generating brand awareness and promote the destination during the key summer holiday booking period for the UK. UK -based Virgin Holidays and the Hyatt partnered with Visit Newport Beach Inc. to offer a limited -time travel package. This offer was featured on 50 tip up seats in the interior of the London taxi cab, 25,000 passenger take -away receipts, prominent position on Virgin's website, and a customized website landing page created for the UK market. Harrods of London Visit Newport Beach embarked on a month -long marketing and promotional campaign in London with the powerhouse retail brand Harrods of London. This is a strong partnership that will have opportunities for future growth in 2011-2012. The elements include: • The "Secret Garden" window display of Newport Beach • Videos on multiple plasma screens showing Newport Beach footage • Harrods Magazine, 55,000 circulation • In-store cooking demonstration and media event with Fairmont Newport Beach Executive Chef Chad Blunston • Presence at the exclusive Harrods California Wine event where • Inclusion within the Harrods Wine Supplement published in conjunction with California Wines • 88 1r • o INTERNATIONAL MARKETS Newport Beach, California ...where oceanside beauty meets high-st le luxury livi VACATION Boaha°r,,.•m.'Rr°rh• Call/grata holiday today: PACKAGE • 5"Ithrr'aaamrnodauonmihr 1 hew h'o.rnibrr.. < n.}lw yranr Wart Rr1rnry Novo', Bra.h R • Schrdalr.l fliyhir with �}J /' V i4 9 . Virgin Mantle . Cat hire from law Anyrkr. Vitit r lrpinholhlayr.roaddri rvpurlbrarh or tan 0844 S57 9271 Iwer Perron .oraaran. errs atIrr. �rp� r them h.• anur,k q.Aa...q.mnu.ngr.:<h f a ..n yr.wry n r.raa� �*.. r h INTERNATIONAL EXPANSION International Expansion The research indicates that a large number of international visitors are from Australia and this market is expected to grow exponentially over the next six years. Visit Newport Beach Inc. will use third -party consultants for both wholesale sales and public relations efforts. The main objective of the consultants will be to build awareness about Newport Beach as a destination and to convert awareness into actual visitors. A fully -integrated sales and marketing plan are in development to reach these goals with limited resources and budget. Key Programs for Australia: • Play a key role in training travel agents on Newport Beach as a destination • Activate new consumer promotions with wholesalers, hotels, airlines and other key tourism companies • Partner with CTTC on their Los Angeles/Orange County Training Blitz efforts in the UK and Australia • Execution of advertising in international cities to reach top wholesalers, travel agents and other tourism stakeholders • Create promotional efforts with online travel agents • Develop organized destination visits to Newport Beach for wholesale buyers and journalists so that they experience the destination first-hand • Maximize exposure on wholesaler website and placement in wholesaler collateral • Maximize integration of trade and PR activities to promote consumer marketing activities and generate consumer awareness • 90 • • • INTERNATIONAL EXPANSION U.S.TRAVEL ASSOCIATION Internationst Visitor Information System UPDATED 2/17/2011 Au S T R A L I A MARKET SUMMARY A total of 723,576 residents of Australia visited the U.S. in 2009, a 4.S increase from 2008, I Total Australia arrivals in 2010 are forecasted to increase by 18%% to 854,000. I Monthly arrivals for November 2010 totaled 80,809, an increase of 15.1% compared to November 2009, Through the first eleven months of 2010, arrivals from Australia were up 24.8% compared to the first eleven months of 2009, I I The Australian economy is expected to remain healthy through 2011 with an increase of 3.8% in private consumption compared to 2010 and GDP growth of 3.3%. In 2009, the U.S. received a total of $3.4 billion from Australian visitors, a decrease of 8.3% compared to 2008. $2.9 billion was spent on travel while in the U.S., and $490 million was spent on international airfare. L Total spending, including spending on international airfare, per Australian arrival to the U.S. averaged $4,731 in 2009, a decrease of 12.6% compared to 2008. The U.S. is the second most popular long -haul destination for Australians. Approximately 8.2% of all Australian residents traveling beyond Oceania visited the U.S. in 2009. • INTERNATIONAL EXPANSION 120 100 • so 20 - 0 U.S. TRAVEL A s s o C I A r I O N UPDATED 2117/2011 AUSTRALIA Monthly Arrivals to the U.S. (thousands) bil!!!!!Itli!!!1[11.1! %Change Nov 10/Nov 09 15.1% %Change YTD Nov 10/ YTD Nov 09 24.8% Change Total 09/total 08 4.9% Jan 54.172 Feb 39.727 Mar 47.121 0/. 55.018 87.592 ru 101 Aug SeP 0cr Nov 66.089 57.305 62.939 78.543 52.304 Or r10To,a, r.arae Total 64.964 624.943 6R9.927 46.192 39,914 56,568 87.384 84,776 66.824 84.698 85.129 69,319 56,126 71,888 651.888 723.515 58.300 43.104 56,782 69.805 79.951 89.729 60.809 83.108 108.835 82.311 04.815 813.348 Source: U.S. Department of Commerce. Offlreyf T y�l , TOurlsm Indv'1th '. 0 No- r Ntek ANor -. r4W.' rap n50 ', rdury . n' Ir .53nt4 u11 r, tr9 Copyright ©2010 by the U.S. Travel Association. All Rights Reserved. U.S.TRAVEL ASSOCIATION • COMMUNITY RELATIONS COMMUNITY RELATIONS INITIATIVES Visit Newport Beach Inc. works closely with the hospitality, merchandise, restaurant and non-profit industries and is vital for the city of Newport Beach. Due to our relationships with the community, we act as the liaison between the hospitality industry, visitors and City Hall. In addition to sitting on many boards and committees, we are committed to growing tourism for Newport Beach through investing time, money and marketing efforts. I. New Community Relations Initiatives: • Visit Newport Beach Inc. Community Visits: In an attempt to promote our partners and sell their products/services better, the staff of Visit Newport Beach Inc. will schedule outings at partner businesses. By doing this, the staff will be able to interact with partners and learn more about unique selling points to help promote them to clients. • Website: Visit Newport Beach is looking into the possibility of giving partners access to their information on visitnewportbeach.com. Partners will be able to update their listings and add events to the website through the Simpleview extranet. • Newport Beach Hospitality Training Program: Since front line staff, police & fire officers, and key stakeholders in the community have first hand interaction with visitors to Newport Beach, it is important to provide them with tools and knowledge to successfully make visitors feel welcome. Visit Newport Beach Inc. will develop a Hospitality Training Program so that these key stakeholders become experts on Newport Beach, It will provide them with the opportunity to learn about Newport Beach, as well as discover insider facts and tips to better serve visitors and enhance their overall experience in Newport Beach. 94 • COMMUNITY RELATIONS ACTIVITIES II. Community Relations Activities: • Annual Dinner: This annual event is organized each June as a recap of the year. It is the perfect opportunity for partners, city officials and other stakeholders to gather in one place to celebrate the tourism industry and see the accomplishments of Visit Newport Beach Inc.' s efforts. Educational Seminars: Visit Newport Beach is revamping this program to make it more beneficial for partners. It will be more interactive and the first topic of the 2011-2012 Fiscal Year will be a social media panel of experts. Member Mixers: In an effort to provide partners with the opportunity to network and discuss opportunities to work together, Visit Newport Beach Inc. organizes quarterly social gatherings. They are held at partner venues to showcase the space and help generate potential business. Fashion Island Visitor Concierge: This position was placed on the back burner last year due to the reduced budget. However, Visit Newport Beach Inc. plans to welcome visitors to Fashion Island in the summer of 2011. Research and Economic Impact Study: Horizon Consumer Science conducted four on -site interviews with visitors to Newport Beach. The goal of this study is to determine trends, economic forecasts and the tourism economic impact for Newport Beach. This study will be compiled and show a comparison to the 2007 study conducted by the same organization. Visit Newport Beach will also collect city hotel tax revenue reports, PKF, and other tourism indicators such as Y Partnership and American Express' Business Insights for additional research to determine economic impact and opportunities for growth in the coming year. go 95 • • • M 0 COMMUNITY RELATIONS BENEFITS III. Partner Engagement: Partners of Visit Newport Beach Inc. receive several benefits that provide additional exposure and are promoted through the following channels: • Marketing Collateral & Publications - the Official Visitors Guide, Meeting Planner Guide, Boutique Hotel Guide, Official Map and Visitor Kiosk Directories • Website - categorical listings, photos, editorial copy and special offers • Social Media and Public Relations — additional exposure for partners • Co-op Advertising - opportunity for partners to leverage the total media spend of co-op advertising programs • Photo Gallery and Video/B-roll Footage Access — opportunity for partners to use images and footage to promote their business • Monthly Partner E-Newsletters - provides key information about Visit Newport Beach, industry news, research, community events and opportunities o 96 hi • • o • COMMUNITY RELATIONS EVENT SUPPORT IV. Community Event Partnerships Visit Newport Beach Inc. supports and strategically partners with businesses, organizations and events that assist in promoting Newport Beach as a travel destination with the purpose of increasing overall visitation. Sponsorship is activated primarily through cooperative advertising, public relations assistance, research, photography, social media support, and exposure on VisitNewportBeach.com. These events may include but are not limited to: • Hyatt Regency Newport Beach Jazz Festival • Infiniti Summer Concert Series • Irrelevant Week • Newport Beach Chamber of Commerce Annual Christmas Boat Parade • Newport Beach Chamber of Commerce Annual Taste of Newport • Newport Beach Film Festival • Newport Beach Restaurant Week • Newport Dunes 4th of July Celebration • Newport to Ensenada International Yacht Race and Inaugural Launch Fiesta 97 o • o o COMMUNITY RELATIONSHIPS V. Relationships with Orange County & City Organizations: Orange County Destination Marketing Organizations: Visit Newport Beach partners with the other DMO's in Orange County such as: Anaheim, Buena Park, Costa Mesa, Huntington Beach, Irvine, Laguna Beach, etc. in an effort to promote the entire Orange County region. California Travel Association (CalTravel): Visit Newport Beach' s President & CEO was Chairman of the Board in 2010/2011 of CalTravel (formerly CaITIA), a travel organization tasked with the mission of ensuring the future health of tourism through advocacy, collaboration and education. Involvement provides Newport Beach with tremendous exposure to other state organizations and includes Newport Beach with a "voice" on important tourism issues. City of Newport Beach Special Events Advisory Committee (SEAC): Visit Newport Beach' s Vice President of Marketing sits on the SEAC committee designed to evaluate future event requests seeking funding from the city. The participation keeps Visit Newport Beach involved in all city events, involves Visit Newport Beach in the City Council, and includes Visit Newport Beach in creating the City' s Master Calendar of Special Events. Orange County Tourism Council (OCTC): Visit Newport Beach will continue to participate in both the Marketing Committee and Board of Directors for the OCTC, an organization made up of Orange County CVB' s and key attractions collectively promoting visitation to Orange County as a whole. Key Programs in 2011/2012 will include: 255,000 rack brochures in California Welcome Center Locations and high tourist traffic promoting "Forever Savings" discount program; Special website; Sweepstakes promotions. 98 • MARKETING GOALS 99 Marketing 2009-2010 Goals 2010-2011 est 2011-2012 GOAL Website Total Visits Pages Views Pages per Visit Time on Site 233,000 828,000 3.1 2.34 350,000 1,000,000 3 5 3 30 400,000 1,200,000 3.8 3.50 Social Media Facebook 12,071 19,000 25,000 Twitter 3,786 5,000 7,500 YouTube Upload Views 18,250 27,000 3.8 # of New Videos 3 14 20 Public Relations Media Assists 200 211 250 Press Visits to NB 21 35 Circulation 14M 50M 60M Ad Equivalency $1 4M $.5M $1.5M Overnight Packages LivingSocial/Groupon/Jetsetter 235 500 Code on Visitors Guide N/A 100 Travelocity Packages 90 125 International Markets Over 1000 total pkgs: UK 600 vacation pkgs 700 room nights in pkgs UK Wholesales Agents 17 22 25 Australia N/A 150 room nights in pkgs • • FINANCE & ADMINISTRATION FINANCE & ADMINISTRATION Visit Newport Beach Inc. is committed to run a smart, entrepreneurial business that embraces best practices. In Fiscal Year 2011-12, the following new initiatives will be undertaken in the Finance and Administrative Department: Renewal of International Accreditation: Visit Newport Beach Inc. accreditation with the Destination Marketing Association International expires in 2012. This process mandates compliance with over 50 specific items including governance, finance, reporting and policies. Visit Newport Beach will undertake the process necessary to receive successful reaccreditation. Travel and Entertainment Policy: Visit Newport Beach Inc. will update its current Travel and Entertainment Policy to reflect travel purchase patterns and update guidelines for staff when travel or entertaining clients on business. Request for Proposal Policy: Visit Newport Beach Inc. will develop a formal policy to guide decision -making on the use of Request for Proposals and their appropriate use in the company. Compensation Study: Visit Newport Beach Inc. has formed a Compensation Committee to review its executive compensation for its senior officers and will contract with an experienced firm to conduct a competitive analysis. Office Relocation: Visit Newport Beach Inc. is currently in discussion with the Irvine Company to relocate its corporate offices to a comparable location within Newport Center at a significant cost savings. This move, if terms are agreed upon and approved by the board, would take place by November 15, 2011. • 1r • • FINANCE & ADMINISTRATION CRISIS COMMUNICATIONS Crisis Communications Overview This crisis plan and guidelines provide policies and procedures for the coordination of communications within Visit Newport Beach Inc., and between Visit Newport Beach Inc. and any applicable outside agencies (e.g. - city government, media, Visit Newport Beach partners and the public) in the event of an emergency or controversial issue, including: — natural disasters (earthquakes, mud slides, excessive rain, high tides, etc.) — fires — bomb threats — major crimes — police investigations — protests or other situations that demand a public response The plan addresses media relations and communications issues, plus procedures for the rapid assessment of potentially harmful situations and the methods for responding to these situations quickly and effectively. The plan is designed to be used in conjunction with the normal decision -making hierarchy of the organization and does not supplant that decision - making process. The information in this plan is based upon current best practices and must be reviewed and updated yearly to remain relevant. Annual reviews must be set so changes/updates can be made to accurately reflect changes in city government structure and in order for the plan to be effective against ever -changing conditions in the world today. This plan and its accompanying guidelines are not meant to be considered definitive but are provided as guideposts to assist in effectively addressing a crisis or emergency situation. Visit Newport Beach Inc.'s Marketing & Communications team has been charged by the President & CEO of Visit Newport Beach Inc. with managing all information during a crisis. The Director of Communications has been designated as the official spokesperson for Visit Newport Beach. 102 FINANCE & ADMINISTRATION 103 FISCAL YEAR 2011-2012 TOT BUDGET REVENUE 400 HOTEL TRANSIENT OCCUPANCY TAX: 402 PARTNERSHIP FEES 404 CO-OP ADVERTISING 410 EVENT HOSTING 410.01 LUNCH & LEARNS 410.02 ANNUAL DINNER INCOME 410 EVENT HOSTING SUBTOTAL Subtotal Total 260 6,500 2,811,075 20,000 1,500 6,760 TOTAL REVENUE $ 2,839,335 EXPENSES ADMINISTRATION / FINANCE 933,878 MARKETING 1,905,457 TOTAL EXPENSES $ 2,839,335 i EV • • • FINANCE & ADMINISTRATION Itemized Marketing Budget 601 • Salaries $ 364,893 605 • Temporary Personnel 2,500 606 • Payroll Taxes 28,582 608 • Health Insurance 43,070 609 • Personnel Benefit 1,800 610 • Life Insurance 2,520 611 • 401 K 24,047 614 • Worker's Compensation 1,320 618 • Office Supplies & Expense 3,000 620 • Telephone & Cable Expenses 7,200 621 • E-Marketing 75,000 622 • Postage / Direct Mail /Delivery 30,000 640 • Equipment 6,500 654 • Prof'l Fees & Services 45,000 662 • Travel 25,000 663 • Business Meals & Entertainment 7,500 664 • Trade Shows 6,625 665 • Team Functions/Meetings 1,000 668 • Printing Fees 30,000 669 • Website Maintenance 26,800 671 • Advertising Consumer 500,000 104 672 • Advertising Production 69,550 673 • Int'I Tourism 673.1 • Personnel $ 78,000 673.2 • Travel 13,500 673.3 • Business Meals & Entertainment 14,500 673.4 • Trade Shows 9,500 673 • Intl Tourism - Advertising & Other 41,350 673 • Intl Tourism Subtotal 156,850 684 • PR / Media / Photography 80,000 685 • Community Events 170,000 686 • Community Relations 20,000 687 • Local Meeting Events 687.1 • Annual Dinner $105,000 687,2 • Lunch & Learn 6,000 687 • Local Meeting Events - Other 12,500 687 • Local Meeting Events Subtotal 123,500 688 • Professional Membership / Sub 700 690 • Research 50,000 691 • Education 2,500 TOTAL MARKETING $ 1,905,457 • • • Appendix Sources 2011 Horizon Consumer Science, Wave 1 and 2 Travel Newport Beach City Newsletter from City Manager Industry Uptake Online Travel Market 2010 2011 Virtuoso Luxe Report Online Travel Market, April 2011 AAA.com PKF Hospitality Research Industry Reports 2010 & 2011 City of Newport Beach Community Survey: Final Social Media Examiner, 2001 Report —conducted by ETC Institute Social Media Examiner, 2010 CNN.com Smith Travel Research CTTC Summer -Fall 2010 Horizon Consumer Science Dean Runyan Associates, Cal. Travel Impacts by Country, The Futures Company/Lightspeed Research-Travelport April 2011 Consumer Segmentation Survey 2010 eMarketer.com Tourism Economics, Historic Sources: CIC Research, OTTI Fashion Island Tourism Economics, Historic Sources: TNS Global Horizon Consumer Science USAToday.com Hotel Horizons° USA Today's Top Travel Trends of 2010 Irvine Company USA Today's Top Travel Predictions for 2011 John Wayne Airport U.S. Travel Outlook, Research and Trends, April 2011 MSNBCcom Visit Newport Beach New Media Trend Watch YPartnership Nielsen Company 2011 City of Newport Beach Newport Beach Community Special Events Calendar July 2011- June 2012 July 2011 Fourth of July Celebration- Spend a memorable Fourth of July along the water and under the stars at The Newport Dunes Waterfront Resort and Marina, host of Orange County's most spectacular seaside fireworks display for over 50 years. Festivities start early in the afternoon with a barbecue, carnival games, crafts, face painting, music and more, followed by an evening in awe as the "patriotic extravaganza" fills the air and lights up the sky with bursts of fireworks streaming over the ocean. It is a sight that truly should not be missed. Newport Beach Breakers Tournament- The finest tennis pros of all time meet on the court for seven weeks of exciting matches in this World Team Tennis Tour Event. The tournament benefits Hoag Hospital and other notable Orange County charities. Old Glory Boat Parade- See Newport Harbor strewn with the "American Spirit" as the "Old Glory Boat Parade" hosted by the American Legion Yacht Club, features boats adorned with red white and blue decorations to celebrate the birth of the United States of America. The Festival of Arts- Featuring the original artwork by 140 award -winning artists from Orange County, California's longest -running outdoor fine art exhibition pleases all types of connoisseurs with its open-air gallery setting. And in true festival form, special art -related attractions include special events such as jazz concerts, wine and chocolate pairings, and guided art tours. July 2011 Cont. Shakespeare by the Sea- A flat grassy area is the perfect spot to lay your blanket down at Newport Beach's Bonita Canyon Sports Park to experience the lively theatre portrayal of Shakespeare's renowned plays. Each year, the Newport Beach City Arts Commission presents two different productions performed by professional actors Concerts in the Parks- Diverse musical acts fill the air by joining in one of the many summer events offered in Newport Beach. Free and open to the public, the Newport Beach City Arts Commission hosts two evenings of family arts entertainment at local parks. From showcase singers to street bands, simply bring your lawn chairs and blankets, and picnic outdoors with family and friends. 76th Annual Flight of the Lasers Boat Race- Known as the starting point for many blue -water sailors, more than 100 small, single -masted catboats fill the Newport Bay to compete in what has become a local tradition. Beginning at the Balboa Pavilion and circumventing the entire bay, sailors may test their skills come race day, free of charge. The Pageant of the Masters- Where art comes to life, and vice versa. Be intrigued by re -creations of classic and contemporary works with real people posing to look exactly like their counterparts in the original pieces. The Festival of Arts brings you 90 minutes of "living pictures" accompanied by a professional orchestra, original score, and live narration in an outdoor amphitheater designed to impress August 2011 Concerts in the Parks- Diverse musical acts fill the air by joining in one of the many summer events offered in Newport Beach. Free and open to the public, the Newport Beach City Arts Commission hosts two evenings of family arts entertainment at local parks. From showcase singers to street bands, simply bring your lawn chairs and blankets, and picnic outdoors with family and friends. September 2011 Corona Del Mar Coastline Car Classic- Thousands of people gather in the seaside venue of Corona Del Mar to view a unique blend of European and American Classics, Exotic Sports Cars, Hot Rods, Customs and specialized dealer select vehicles. With festivities including live entertainment, food and beverages, unique vendor exhibits, and VIP hospitality, the Pacific Ocean backdrop purely serves at the icing on the cake at this extraordinary beachfront car show September 2011 Cont. 23rd Annual Taste of Newport- Home to more than 300 diverse restaurants ranging from elegant eateries to quaint cafes, Newport Beach is a food-and-drink-lover's paradise that becomes even more epicurean each September during the annual Taste of Newport. Over 30 restaurants give you a taste of their premier food, flavorful drinks, and rich tasting brews served with a side of spectacular live entertainment, along with live cooking demonstrations. The event pleases all of the senses, and is one that should not be missed. Lido Yacht Expo- "The best place to sell big boats and yachts in the West!" With more than 250 big vessels on display, along with gear that makes owning one more enjoyable, this boat show's continued growth has created the word of mouth that drives buyers to the ideal location of Newport Beach —a popular destination for active and affluent boaters. October 2011 Harbor Heritage Run- Newport Harbor High School PTA celebrates 25 years of community with the 25th Harbor Heritage Run. Join in a 5K Feature Race, 2K Fun Run/Walk, and a Kids' Klassic Race and free Fitness Fair. 50th Annual Sandcastle Contest- Corona Del Mar supplies the sand, while the Commodores Club of the Newport Beach Chamber of Commerce brings together thousands of spectators in an event that features a variety of skill levels in the artistry of Sandcastle sculpting. From children to professional architects, talented groups compete for the winning title or to simply have a great time while supporting the community. October 2011 Cont. International Festival- The Newport Beach Sister City Association International Festival will celebrate the City of Newport Beach and its Sister Cities in France, Japan and Mexico. The free event will include games, prizes, and entertainment "under the big top," with a variety of live performances. The Blackie's Long board Association Annual Halloween Contest- A Newport Beach surfing institution and local watering hole since 1953, Blackie's by the Sea will judge costumed surfers who compete off Newport Pier. It is truly a sight to see extreme surfing techniques paired with outrageous Halloween outfits. December 2011 33rd Annual Corona Del Mar Christmas Walk- As one of the oldest events the Chamber of Commerce is proud to present, the holiday festivities for family, friends, and associates should not be missed. Fun -loving people gather at the Village of Corona Del Mar for entertainment, food, prizes, and games in true holiday spirit. What better way is there to visit with Santa, meet the community, and participate in the joy of the holiday season? 103rd Annual Newport Beach Christmas Boat Parade- Since 1908, boat owners in Newport Beach have "decked the hulls" of their seagoing vessels from beautiful multi -million dollar yachts to small boats and canoes with dazzling holiday lights and music to fill the air. The splendor of Christmas, and the holiday spirit shines vividly across the waters of the harbor as the Christmas Boat Parade —a magical holiday tradition for all ages —continues to be a premier event for the holiday season in Southern California. The New York Times even hailed it as "one of the top ten holiday happenings in the nation." January 2012 6th Annual Restaurant Week- Start off the New Year by quenching your pallet at one or more of almost 100 of the finest establishments featured in the Newport Beach Restaurant Week. During this time, some of the best chefs create 3-course gourmet meals to satisfy a lunch outing with friends, or a special dinner for two. Discounted prices combined with beautiful scenery, make for an unbelievable dining experience that will not break your wallet, but keep you coming back for more. Whale Watching (January through March)- The annual Grey Whale migration takes whale watching in Southern California to a new level. Hundreds of Grey Whales swim along the Laguna Beach coastline, only minutes away from Newport Harbor. These majestic mammals migrate from the Bering Sea to Baja California and back — they are truly a sight to see for all ages. Charter companies like Newport Beach's Davey's Locker, Newport Landing, and Balboa Pavilion offer the best viewing opportunities with daily whale watching excursions starting as low as $10 per person . February 2012 Marriott Newport Beach Jazz Party- Enjoy the multi -faceted style of jazz while eating brunch, lounging poolside under the afternoon sun, or dressed to the nines sipping on cocktails in the Grand Ballroom. Performances include all-star musicians, and true geniuses of the trade that is jazz music. March 2012 Spirit Run- Celebrate health and education with a community event designed for the entire family to enjoy. A variety of races are implemented to appeal to all, from: 4-12 year olds, mothers and fathers with strollers, competitive or leisure runners, as well as whole family "walks". With all proceeds benefitting the Newport -Mesa schools, the "spirit" behind the run is truly mentally, as much as it is physically rewarding. Toshiba Classic- Held on the green at the Newport Beach Country Club, the Toshiba Classic is a world-renowned event that takes place annually. The event combines an atmosphere filled with the prestige of golf legends and greats like Hale Irwin and Fred Couples, with the distinguishing maturity of the 50-year-old golf course located along Pacific Coast Highway for a scenic view of Newport Beach. April 2012 Newport Beach Film Festival- Movie Maker Magazine named the Newport Beach Film Festival one of the "25 Film Festivals: Worth the Entry Fee." The festival spotlights hundreds of films every year, and offers filmgoers a rare opportunity to meet the filmmakers. It is an experience filled with several premieres and galas, followed by awards ceremonies, and a chance to hear from directors, screenwriters, and cinematographers about the behind -the -scenes magic involved with making a film. Newport Boat Show- With more than 300 boats on display in -water —including three legendary lines —at the Lido Marine Village, and a host of exhibitors on hand to showcase innovative products and services that make owning and operating a big boat more enjoyable, this is the one show serious buyers will not want to miss. April 2012 cont. t Newport to Ensenada Yacht Race- AHOY! The world's largest boat race accompanied by a variety of festivities kicks off every year with the traditional "Launch Party" through to the annual "Send -Off Fiesta" where you can mingle with the skippers and crew. This unusually fun event, and the views of the boat -laden harbor, is something that you have to experience to believe. March for Babies- Walking in the annual March for Babies not only makes you a part of the largest fundraising event of the year for Orange County March of Dimes, but it also allows you to give hope to the more than half a million babies born premature every year. The money you raise will support programs in your community that help moms have healthy, full -term pregnancies. Ma 2012 Hyatt Regency Newport Beach Jazz Festival- Three days filled with world -class performances by 25 top jazz artists brings smooth sounds of jazz to the Hyatt Regency Newport Beach. Featured as Southern California's most famous Smooth Jazz Festival, combined with popular tunes and great classics —along with a selection of food and wine —makes for an unforgettable setting May 2012 cont. OC Marathon- Join thousands of other community -minded runners and walkers who will view scenery equal to the best of Orange County, beginning at Newport Center before crossing into Upper Newport Bay towards the finish line. Pledges will benefit over 15 local charities, and prizes will be given out to a number of first, second, and third place winner National Tourism Week- Showcasing in Newport Beach, National Travel and Tourism Week is a collective effort to promote the power of travel through customized events in Newport. The goal is to enhance the country's economy, security and perception, and recognize the cultural and social benefits created by travel and tourism. Both residents and visitors alike can take advantage of the great values such as special offers, events, and conferences. Balboa Island Art Walk- South Bayfront Promenade (from Marina Avenue to Pearl Avenue) on Balboa Island features over a mile of art. Ninety plus artists will exhibit original oil paintings, acrylics, watercolors, glass, ceramic, sculpture, jewelry and photography —many of which are talented local artists. May 2012 cont. Movies on the Beach- Join us on Fridays and Saturdays from May through August for free movies shown on a giant screen at the Newport Dunes Waterfront Resort & Marina. Beginning at dusk, bring the kids, lounge chairs, and treats for a summer night the whole family will enjoy. Food & Wine Festival- Enjoy wines from Italy, epicurean delights and spirits on the idyllic waterfront setting of The Balboa Bay Club & Resort. Where acclaimed winemakers, celebrated chefs, master sommeliers, and noted experts will serve as guides captivating festival goers with educational seminars, enticing tastings, as well as extraordinary dining experiences. June 2012 e1lYl X+Yl f.'Afi764 !lit. Corona Del Mar Scenic 5k- For over 25 years, the Corona Del Mar Chamber of Commerce and the City of Newport Beach presents the Scenic 5k Race, 2 Mile Fun Walk, and 1 Mile Kids Dolphin Dash —three signature special events you will not want to miss. Come join thousands of people for a race/walk that ends along the bluffs of Big Corona State Beach where restaurant row, merchant booths, and live entertainment await your arrival. June 2012 cont. Summer Concert Series at Hyatt Regency Newport Beach — With a stellar line-up of musicians bringing a range of genres to the stage including jazz, smooth jazz, contemporary, acoustic and vocals. As the longest running music series in California, and recognized as bringing revered musicians to southern California every year. Balboa Island Parade- Show your Patriotism and join one of California's most charming seaside towns in their annual parade which draws more than 5,000 residents, merchants, and community neighbors down Marine Avenue. This Balboa Island tradition is filled with children on bikes, island dogs, decorated Golf Carts and Floats, Vintage Cars, and various local groups, marching bands, and dignitaries. Help the island welcome summer with family, friends, and good old American fun. 32nd Annual Baroque Music Festival- Founded in 1981, the festival presents historically stylistic interpretations of the great masterpieces of the Baroque period —as well as a few neo-Baroque works. The singers and instrumentalists are informed and sensitive to the specific style of music, with antique and modern reproductions. As a result, you will hear music by Baroque composers much as it would have been heard during the time period. 90 June 2012 cont. 37th Annual Irrelevant Week- Former USC football standout and fan of the Underdog, Paul Salata, started the: Irrelevant madness in 1976. Needless to say, Orange County does not like to forget about the Underdog, also known as the final pick of the NFL draft. Instead, we celebrate him with an open to the public golf tournament and regatta sports banquet where many sports celebrities roast the "Lowsman Trophy" winner, in fun . Barrett -Jackson Collector Car Auction- A car lover's dream encompasses all of the attributes that Barrett -Jackson has been able to deliver, giving them the reputation for the World's Greatest Collector Car Auctions. From mint -condition Classics, to Muscle Cars, Hot Rods, Resto-Mods, Exotics, and Contemporary Collectibles, Barrett -Jackson boasts the same amount of class as the vehicles which cross its showroom floors. ,a/t/Wact_o-ie_ 0 r 120