2024-030 Transition City's Convention and Visitor's Bureau August 2,2024 Report No. 2024-030
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Transition of the City's Convention and Visitors Bureau.
EXECUTIVE SUMMARY:
Representatives from the City, Chamber of Commerce, and local hotel management have
collaboratively developed a plan to transition Discover Denton, the City of Denton's Convention
and Visitors Bureau (CVB), from the Chamber of Commerce to an independent Destination
Marketing Organization (DMO)by January 2026.
BACKGROUND:
Discover Denton was established in 1976 and is currently a line of business under the Chamber of
Commerce. The Chamber is a 501 (c) (6) organization funded through a mix of memberships,
programs and events, City funding, and Hotel Occupancy Tax (HOT) funds. The City as a whole
has experienced significant growth, which has increased tourism activities and the subsequent
collection of HOT coupled with the recent creation of an additional revenue stream through the
Denton Tourism Public Improvement District.
In 2024,Denton Hotel representation requested the City evaluate the three primary organizational
structures used for Convention and Visitor Bureaus in Texas and nationwide. Based on these
factors a team was created in March 2024 comprised of representatives from the City, Chamber,
and local hotels to examine three potential structures to best position the City's tourism efforts to
accommodate anticipated future growth.
Hotel Representatives
Sara Hensley,City Manager Erin Carter,Chamber President Emily Wright,General Manager of the Homewood
Suites&TPID Board Chair
Christine Taylor, Assistant City April Stokes,Chamber Board Chair Jay Darsie, General Manager of the Hilton Garden
Manager Inn&Board Chair of the CVB Advisory Board
Jesse Kent,Assistant to the City Seth Morgan, Chamber Board Chair- Jeff Pritts,General Manager of the Embassy Suites,
Manager Elect and Convention Center
A Council Work Session on July 16 presented the options of housing Discover Denton under the
City, establishing it as a stand-alone DMO, or maintaining its current structure. Following the
session,the City Council directed the City Manager to recommend a future structure by August
6,before the FY 24-25 Budget Workshop on August 10.
The City Manager, in consultation with the Chamber Board, Chamber President, CVB Advisory
Board, and hotel representatives, recommended transitioning Discover Denton to an independent
DMO, beginning with a temporary move under City management.
August 2,2024 Report No. 2024-030
GENERAL DIRECTION:
A steering committee will oversee this transition, targeting completion by January 2026.
TRANSITION TIMELINE:
• Short-term: Transition Discover Denton under City management (0-6 months: August
2024 - January 2025)
• Long-term: Establish Discover Denton as an independent DMO (6-12 months: January
2025 - January 2026)
STEERING COMMITTEE COMPOSITION:
• City Staff Representatives (2)
• Chamber Board Representatives (2)
• CVB Advisory Board Representatives (2)
PRIORITY NEXT STEPS:
• City will lead the hiring of an Interim CVB Director (60-90 days)
o Form a hiring committee (comprising the steering committee members and
additional CVB Board Representation)
o Contract with a recruitment firm
TRANSITION PLAN MAJOR CATEGORIES TO BE MEMORIALIZED:
• Schedule
• Staffing Plan/Human Resources
• Consultant to facilitate the transition
• Governance
• Funding
• Communication/Collaboration/Relationships
• Strategic Plan
• Branding
• Welcome Center on the Square
CONCLUSION:
The transition of Discover Denton from the Chamber of Commerce to an independent DMO
represents a strategic move to accommodate the anticipated growth in Denton's tourism sector.
By leveraging the combined expertise of the City, the Chamber of Commerce, and local hotel
management, this transition aims to enhance the efficiency and effectiveness of the City's
tourism efforts.
The dedicated steering committee and the outlined priority steps will guide this process, focusing
on key aspects such as staffing, funding, governance, and strategic planning. Additionally,the
City plans to provide periodic updates to the Council, Chamber Board, and CVB Advisory Board
August 2,2024 Report No. 2024-030
on the status of the transition to keep all stakeholders informed and engaged. This transformation
is expected to position Discover Denton to better capitalize on future opportunities, drive tourism
growth, and contribute to the overall economic development of the City.
ATTACHMENTS:
1. City Council Work Session Presentation, July 16, 2024, ID 24-1317
STAFF CONTACT:
Sara Hensley
City Manager
Christine Taylor
Assistant City Manager
STAFF TIME TO COMPLETE REPORT:
16 Hours
Convention and Visitors Bureau
Organizational Structures
DIS � o�ER
DEN ON !-X
Objective: This presentation will discuss the three primary organizational structure
options for the City of Denton's growing Convention and Visitors Bureau (Discover
Denton).
Background: In 2024, Hotel representation requested the City evaluate the three primary
organizational structures used for Convention and Visitor Bureaus. Increased hotel stays
along with creation of the Tourism Public Improvement District will significantly increase
the CVB's budget and the City, Chamber, and the Hotel representatives want to best
position the City Is tourism efforts to accommodate anticipated future growth.
Project Team:
A team was created composed of representatives from the City, Chamber, and Hotels.
� - Hotel Representatives
Christine Taylor, Assistant City Erin Carter, Chamber President Emily Wright, General Manager of the
Manager Homewood Suites &TPID Board Chair
Jesse Kent, Assistant to the City April Stokes, Chamber Board Chair Jay Darsie, General Manager of the Hilton
Manager Garden Inn & Board Chair of the CVB Advisory
Board
Seth Morgan, Chamber Board Chair Elect Jeff Pritts, General Manager of the Embassy
Suites and Convention Center
The team met bi-weekly April through July.
Project Key Considerations
Staffing, organizational efficiency, governance, funding, flexibility, stakeholder
engagement, mission and vision alignment, community impact, performance metrics,
data, and trends.
By considering these factors, the overall goal is to have a structure in place to support
sustainable growth and maximizes the positive impact of tourism on the community.
ID 24-1317 July 16, 2024
CVB Background
Prior to the 1970s and 1980s, tourism promotion and development generally was the responsibility of a
municipality's chamber. The vast majority of CVBs as a division of the chamber or economic development were
often in small communities that had limited financial resources. As travel increased, communities grew, and room
taxes were levied, CVBs began to have significantly higher budgets and no longer needed the additional financial
support. the mid-1990s, growing CVBs with financial resources began split from the parent organizations.
Presently, there are three primary structures of a CVB, also more recently known as a Destination
Marketing/Management Organization (DMO), including:
• Independent Organization
• City Division
• Chamber of Commerce Division
CVB Structures
.................................................................................................
In 2023, the Texas Association of Convention &
Visitor Bureaus completed a survey of its
members to determine the breakdown of CVB
CVB Structures in Texas structures within the state. The following
is a breakdown of these member structures,
which represents approximately 90 Texas
Independent
_ destinations. The majority are currently
structured under the city.
:...............................................................................................:
City
Chamber 58.0%
22.0%
ID 24-1317 July 16, 2024
CVB Structures
.................................................................................................
In 2023, Destinations International completed a
survey of its members to determine the
breakdown of CVB structures around the U.S.
Nationwide, a much higher percentage of CVBs
CVB Structures in the United States are set up as independent organizations
Other c , compared to Texas.
it
4.0% 13.0%
Chamber
3.0%
.................................................................................................
Independent
80.0%
ID 24-1317 July 16, 2024
Current Structure
Total of ' .5 Full TIme Equivalents (FTEs) Board of Directors
Chamber President
Pk
Discover Denton
ID 24-1317 July 16, 2024
8
Existing Structure
Discover Denton is currently a line of business under the Chamber of Commerce.
The Chamber is a 501 (c) (6) organization funded through a mix of memberships,
programs and events, City funding, and Hotel Occupancy Tax funds.
The mission of the Chamber is to advocate, educate, and collaborate for the
economic prosperity of the City of Denton.
The purpose statement of Discover Denton is to market and promote Denton in
order to generate demand for the destination creating a positive economic impact
for the community.
ID 24-1317 July 16, 2024
Current Budget
...............................................................................................
Economic Development Partnership $300,000
Discover Denton $1,600,000
Chamber $800,000
Estimated Annual Revenue Total $2,700,000
:...............................................................................................
Economic Devleopm...
10.9%
Chamber
29 0`;:
Discover Denton
60.1
ID 24-1317 July 16, 2024
10
Key Considerations: City Structure
Staffing: Texas Municipal Retirement System with a City Match, Health Benefits, Paid Time Off (Holidays, Vacation and
Sick Leave)
Efficiencies: Engagement and additional support from other City departments, economies of scale specifically with
purchasing.
Governance: CVB Board (Advisory), City Council (Executive), funding included in the annual audit, Strategy Office focused
on data and performance metrics
Funding: Increased control of public funds, potential increase to personnel budget
Flexibility: Less flexible, procurement is often more structured
Mission and Vision: Not a singular mission, Council priority for Economic Development and Tourism
Data/Trends: Most common in mid-size Texas cities, with a population of more than 150,000 and less than or equal to
300,000
Considerations: The City's Ethics Policy, Inability to offer incentive-based compensation i.e. commissions
Key Considerations: Chamber Structure
Staffing: 401 K with a Chamber Match, Health Benefits, Paid Time Off (Holidays, Vacation and Sick Leave), flexible
schedules including seasonal half days
Efficiencies: Engagement and additional support (administrative) from Chamber, Collaboration with the Business
Community
Governance: CVB Board (Advisory), Chamber Board (Executive)
Funding: No impact, existing model
Flexibility: More Flexible
Mission and Vision: Not a singular mission, Chamber mission focused on economic prosperity with a local business
focus (permanent)
Data/Trends: Most common in smaller to midsize Texas cities, populations equal to or less than 150,000
Considerations: Ability to offer incentive based compensation i.e. commissions
Key Considerations: Independent DMO Structure
Staffing: Unknown at this time, but assume similar benefits to Chamber including: 401 K with match, paid time off
(holiday, vacation, sick), flexible schedules
Efficiencies: Able to adapt and shift quickly to changes in industry needs, faster decision making (singular board)
Governance: CVB Board (Executive)
Funding: Increase to administrative expenses since there would not be shared administrative resources
Flexibility: More Flexible
Mission and Vision: Singular mission, focused on tourism for people who visit but leave (non-residents)
Data/Trends: Most common in large Texas cities, population equal to or greater than 300,000
Considerations: Ability to offer incentive based compensation i.e. commissions
Recommendations from the Project Team
Review the Makeup & Roles for Chamber and CVB Board
• Increased Hotel Representation, such as, but not limited to: Entertainment,
Transportation, etc.
• Explore Creative Compensation - ensure ability to connect compensation with
actualized sales
• Develop a CVB Strategic Plan
• Research what additional Key Performance Indicators could be introduced and
tracked to compliment a strategic plan
• Strengthen Communication and Collaboration
• Explore set percentage or allocation to the CVB from HOT Funds
FY 24-25 HOT Funds Budget & Contract Timeline
Community Partnership HOT Funds Contract
Committee
Recommendation Execution
July 2024 October 2024
August 2024 January 2025
wA
Budget HOT Funds Distribution
WorkshopCouncil
(Calendar Year)
ID 24-1317 July • 2024
Questions & Discussion
Members of the Project Team available for questions
• - Hotel Representatives
Christine Taylor, Assistant City Erin Carter, Chamber President Emily Wright, General Manager of the
Manager Homewood Suites &TPID Board Chair
Jesse Kent, Assistant to the City April Stokes, Chamber Board Chair Jay Darsie, General Manager of the Hilton
Manager Garden Inn & Board Chair of the CVB Advisory
Board
Seth Morgan, Chamber Board Chair Elect Jeff Pritts, General Manager of the Embassy
Suites and Convention Center
Direction
• Keep Existing Structure
• Explore Moving the CVB under the City or to an Independent DMO - Budget Process
• Pause - Bring back at a future date for consideration