(1) Receive an update on the City’s regional destination marketing contract and provide direction to staff.

(2) Approve a resolution authorizing an amendment to increase the professional services agreement with Burghardt-Dore Advertising Inc. for marketing services by $10,000 for a total amount not to exceed $70,000.

The City’s primary revenue sources include property taxes, sales and use taxes and transient occupancy taxes, with the latter two sources representing about $11.4 million, or 52% of the Fiscal Year 2017-2018 budgeted revenue. As tourism contributes to the City’s economic vitality, the City seeks to encourage visitors at certain times of the year while also balancing the residential and community characteristics of the Village. Marketing is one avenue to promote tourism and the City has utilized the services of a marketing professional, Jeff Burghardt, since 2006 to assist in this effort. Since this time, Mr. Burghardt (and his business colleagues) have created and maintained the City supported travel website; designed seasonal and thematic marketing campaigns; and coordinated print, television and electronic advertising efforts. The City’s current agreement with Burghardt-Dore Advertising Inc. expires on December 31, 2017.

While the City has been very satisfied with the services rendered by the consultant, both the City’s Municipal Code requirements pertaining to purchasing and governmental best practices, warrant that a competitive process be undertaken to ensure that the City is receiving the best offer for consulting services. Before staff embark on the development of a competitive process to solicit marketing services, staff seeks direction from Council regarding its marketing objectives.

Marketing Objectives:
The City’s 2006 agreement with Anda/Burghardt was based on a strategy to create an integrated destination marketing plan (public relations and advertising) that builds the Carmel-by-the-Sea brand by delivering a consistent, strategic message surrounding an engaging theme that resonates with the target market and entices them to visit Carmel-by-the-Sea. The target audience was identified as mid-to-high income consumers, nationally and regionally (primarily in the California feeder markets) driving them to visit Carmel-by-the-Sea year-round, and, more specifically, to increase hotel room nights and retail sales between November and April.

Since entering into the 2006 marketing agreement, the City has continued to fund marketing efforts. Part of this effort includes contracting with Burghardt-Dore Advertising Inc. for regional destination marketing and working collaboratively with partner agencies, such as the Monterey County Convention and Visitors Bureau, the Carmel Chamber of Commerce and Visit Carmel. As presented to Council during marketing workshops in July 2016 and May 2017 respectively, these organizations have similar objectives.

The Monterey County Convention and Visitors Bureau has a stated mission to drive business growth through compelling marketing and targeted sales initiatives that maximize the benefits of tourism to its guests, members and community. Part of its marketing focus is on increasing overnight visitors and it uses the metric of room nights booked to gauge the success of its marketing strategies. The mission of the Carmel Chamber of Commerce is to promote business, marketing, and networking opportunities to benefit its members professionally and economically. As part of this effort, the Chamber produces a comprehensive visitors’ guide to Carmel and operates the Visitor Center, which allows the Chamber to provide information to visitors regarding lodging, dining, shopping, and events and activities within the City.

Visit Carmel is a nonprofit entity that was formed to serve as the Owners’ Association for the Carmel Hospitality Improvement District (CHID), in accordance with State laws pertaining to the formation of such assessment districts. It is tasked with managing funds and implementing marketing programs as contained within the Management District Plan. As stated within the CHID Management Plan, the marketing theme is to promote Carmel as a desirable place for overnight visits, with the goal of increasing overnight visitation and room night sales at assessed businesses, particularly in shoulder season and mid-week periods.

As presented during the July 2016 workshop, the City’s funding is leveraged with Visit Carmel funds for a regional destination marketing efforts spearheaded by Burghardt-Dore. These objectives include:
• Increase mid-week and off-season room nights
• Promote a world-class destination image
• Build opt-in email lists and social audiences
• Integrate marketing, advertising and public relations

In addition to promoting tourism, many governments also utilize marketing strategies to promote economic development (business development/relocation in particular) and/or attract new residents. Often these different foci may be intertwined. For example, attracting new businesses is also likely to result in additional new residents brought to the area as part of job creation. Or, an individual visiting a town on vacation may have a positive experience and consider relocating to that jurisdiction permanently. Another aspect of marketing is “branding”, which is the development and communication of an image to a targeted audience, which may include the citizenry itself. This approach often involves the creation of a City logo and/or motto and messaging of the image to external and internal audiences.

The first part of this agenda item therefore is for Council to determine its marketing objectives. While the overarching goal thus far has been broad in terms of increasing visitors to Carmel-by-the-Sea during ‘off-season,’ it has often included the specific objective to also increase overnight stays within the Village. A logical premise of this marketing effort is to increase lodging stays and the associated transient occupancy tax as well as attempting to enhance sales and use taxes as overnight visitors are likely to purchase goods and services as part of their stay. Staff seeks Council direction on:
(1) Increasing overnight stays and enhancing spending within the City’s boundaries remains the City’s marketing objectives and/or:
(2) Provide direction to staff regarding other marketing objectives to incorporate into future marketing efforts.

Service Delivery Approaches:
In addition to receiving direction pertaining to objectives, staff seeks Council input into the process for soliciting marketing services.  Option #1: The City uses a marketing professional or consultant to continue promoting the City as a world-class destination and actively engage in marketing and advertising efforts to promote tourism, should Council determine this to be its marketing objectives. Implementation of Option #1 involves staff developing a competitive process to select a marketing consultant including: the development of a Request for Proposals document; public noticing and outreach to potential firms, creating evaluation criteria and an evaluation process to review proposals and interview potential firms, including the use of a panel of community/subject matter experts; and a recommendation and awarding of a contract by City Council. An RFP would assess a consultant’s understanding of Council’s marketing objectives; relevant experience and approach to developing campaigns and creating and disseminating marketing collateral to achieve Council’s marketing objective(s).

By using this approach, the City would be able to compare services among consultants that are interested in providing services to the City and evaluate these services in terms of the “best offer as judged against proposal evaluation criteria” (Carmel Municipal Code §3.12.160). This method also allows the City to retain control of its marketing dollars and ensure that its marketing dollars are utilized more holistically and to promote citywide businesses in the areas of lodging, food/dining and retail. However, City staff are not marketing experts and the scope of potential services being rendered to the City would be largely driven by the consultant proposals.

Option #2: The City utilizes an entity to serve as the administrator of the marketing funds. This approach was used by the City in the past. A possible benefit is that an agency with subject matter expertise determines the specific marketing tactics and best use of the funds as long as the marketing messaging achieves the Council’s objectives. Leveraging of funds and increased coordination of marketing strategies are also possible benefits associated with this approach. A process to select an entity will need to be developed if Council is interested in pursuing this option.

At this time, staff is seeking Council direction on the options regarding the existing marketing contract. Such direction includes determining which approach to utilize as well as providing feedback regarding the criteria and process to select either a marketing consultant or marketing administrator. Staff recommends Council direction to seek a marketing administrator, in coordination with the City Attorney, to best amplify the Council marketing objectives.

As part of the current marketing effort, Council has awarded a short-term contract to Burghardt-Dore Advertising Inc. for marketing and advertising. The production of a Carmel brochure that includes a City map has been a popular marketing tool. Burghardt-Dore has facilitated the reproduction of additional brochures that are provided to the City (available at City Hall), hotels/inns and other interested organizations. When the cost of these brochures are factored into the payments to the vendor, an augmentation of the City contract with Burghardt-Dore is necessary to increase the amount of the contract to avoid exceeding the total contract amount.

ENVIRONMENTAL REVIEW:

There are no potential environmental impacts associated with providing direction on the City’s marketing efforts.