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Home My WebLink About2024-030 Transition City's Convention and Visitor's BureauAugust 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. City Chamber 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 Manager April Stokes, Chamber Board Chair Jay Darsie, General Manager of the Hilton Garden Inn & Board Chair of the CVB Advisory Board Jesse Kent, Assistant to the City Manager Seth Morgan, Chamber Board Chair- Elect Jeff Pritts, General Manager of the Embassy Suites, 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 July 16, 2024 Christine Taylor, Assistant City Manager 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 Visito r Bureaus. Increased hotel stays along with creation of the Tourism Public Improve ment District will significantly increase the CVB’s budget and the City, Chamber, and the Hotel representatives want to best position the City's tourism efforts to accommodate anticipated future growth. ID 24-1317 July 16, 2024 2 Project Team: A team was created composed of representatives from the City, Chamber, and Hotels . City Chamber Hotel Representatives Christine Taylor, Assistant City Manager Erin Carter, Chamber President Emily Wright, General Manager of the Homewood Suites & TPID Board Chair Jesse Kent, Assistant to the City Manager April Stokes, Chamber Board Chair Jay Darsie, General Manager of the Hilton 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. ID 24-1317 July 16, 2024 3 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 4 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 Background ID 24-1317 July 16, 2024 5 In 2023, the Texas Association of Convention & Visitor Bureaus completed a survey of its members to determine the breakdown of CVB structures within the state. The following is a breakdown of these member structures, which represents approximately 90 Texas destinations. The majority are currently structured under the city. CVB Structures ID 24-1317 July 16, 2024 6 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 are set up as independent organizations compared to Texas. 7 Current Structure ID 24-1317 July 16, 2024 Total of 14.5 Full TIme Equivalents (FTEs) 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 9 ID 24-1317 July 16, 2024 Current Budget Economic Development Partnership $300,000 Discover Denton $1,600,000 Chamber $800,000 Total $2,700,000 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 11ID 24-1317 July 16, 2024 Key Considerations: Chamber Structure Staffing: 401K 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 12ID 24-1317 July 16, 2024 Key Considerations: Independent DMO Structure Staffing: Unknown at this time, but assume similar benefits to Chamber including: 401K 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 13ID 24-1317 July 16, 2024 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 ID 24-1317 July 16, 2024 14 ID 24-1317 July 16, 2024 January 2025 HOT Funds Distribution (Calendar Year) October 2024 HOT Funds Contract Execution August 2024 FY 24-25 Budget Council Workshop July 2024 Community Partnership Committee Recommendation FY 24-25 HOT Funds Budget & Contract Timeline 15 Questions & Discussion City Chamber Hotel Representatives Christine Taylor, Assistant City Manager Erin Carter, Chamber President Emily Wright, General Manager of the Homewood Suites & TPID Board Chair Jesse Kent, Assistant to the City Manager April Stokes, Chamber Board Chair Jay Darsie, General Manager of the Hilton 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 Members of the Project Team available for questions ID 24-1317 July 16, 2024 Direction ●Keep Existing Structure ●Pause - Bring back at a future date for consideration ●Explore Moving the CVB under the City or to an Independent DMO - Budget Process 16