ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 1 Fort Monroe Tourism Feasibility, Marketing and Development Analysis May 28, 2008

ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 2 I. Tourism Market Overview II. Marketing Strategy III. Development Plan Options IV. Questions and Discussion Agenda

ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 3 Tourism Market Overview  There were 35 million visitors to Virginia in 2007  Virginia tourism has been in a no-growth pattern since 2003  Average party size is 1-2 persons, indicating childless couples  78% are overnight visitors  57% utilized hotel/motel accommodations  40% visitation was leisure-oriented  Tourists to Hampton today are regional 25% visitors are from Virginia 12% visitors are from North Carolina 7% visitors are from Maryland

ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 4 Cultural Attractions Overview  11 historic sites and battlefields and 3 wildlife/wilderness National Parks within 200 miles of Fort Monroe  2007 attendance was 7.8 million persons  Colonial National Historic Park is the most heavily visited  Historic sites and battlefields have the highest total visitation throughout the year

ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 5 Recreational Tourism Market Overview  There are 3,151 hotel rooms in The City of Hampton  Average annual occupancy is 58.1% Annual occupancy declined from 66% in 2002 to 58% in 2007  Average daily rate is $73.89; VA average is $93. Summer room revenue is nearly 4 times winter room revenue  More than 1/3 annual stays were between June and August  There are 27 marinas within 30-minutes of Fort Monroe  50% maintain a wait-list  Demand exists for new facilities or 40 ft. + slips  Amenities and services are important attributes  Average Hampton Slip Rental Rates: Nightly: $ per foot. Long-term: $6.25 to $8.00 per foot per month Semi-annual: $8.50 to $10 per foot per month.  There are 14 RV spots at Fort Monroe today  Average nightly rate: $24.50  Most RV Parks offer swimming amenity, some charge premium for views  Facilities must be larger and offer more amenities to demand premium rates; expansion potential exists

ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 6  Fort Monroe has strong tourism potential  Historic significance attracts several submarkets Military Historians African American visitors Preservationists  The site’s natural beauty, beach, recreation facilities, marina, and campgrounds draw resort and recreation visitors  Projected Market  Estimated visitation (conservative, stabilized year) 100, ,000 annual cultural attractions visitors 115, ,000 beach visitors 225, ,000 total visitors  If a brand is obtainable, room resort can be supported  Seasonality will mirror beach destinations High season will be three summer months A two month shoulder season will bring additional visitors  Initially, regional visitors will be price sensitive Tourism Market Potential

ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 7 I. Tourism Market Overview II. Marketing Strategy III. Development Plan Options IV. Questions and Discussion Agenda

ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 8  A cultural museum cluster anchored by a Civil War Museum told from three perspectives will draw visitors and highlight historic significance  A link to “America’s historic triangle” will elevate Fort Monroe’s visibility on a regional and national level  The Fort Monroe hotel, if designed to evoke the historic Hygeia Hotel and nationally branded will enhance the area’s national exposure, draw recreational travelers and link to the area’s history  Recreational areas like the beach, marina and RV park can be marketed and functioning in short order support and promote Fort Monroe through its development Marketing Strategy Components

ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 9 Marketing Strategy Timeline  The Museum/Cultural/Historical cluster will likely take 7-10 years to develop and facilities should not be marketed until the year prior to opening  Incremental/existing cultural attractions (i.e. a retained Casemate museum, fort and historic driving tour) can be marketed much earlier  Recreational amenities can be marketed as soon as improved facilities are completed  Public beach, marina and RV park can be marketed when available  Incremental improvements and enhanced access and parking will be necessary to attract visitors to recreational components

ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 10 Cultural Attraction Cooperative Agreement  Expand “History Triangle” to “America’s History Quadrangle” to include Fort Monroe  A regional/national/international joint marketing agreement with Williamsburg, Yorktown and Jamestown will require funding and strategy compliance among four partners  An agreement may take several years to craft  Fort Monroe’s interpretive direction will heavily influence the scope and benefit of this agreement  Will broaden the appeal to cultural visitors coming to the Hampton Roads Area  Can extend the stay and spending of existing visitors with enhanced attractions options and marketing

ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 11 Marketing Funding Sources and Plan  Each component should be included in a comprehensive marketing program to promote Fort Monroe as an addition to attractions in the Hampton Roads region  The VTC, foundations, special interest groups and other donors could financially support programs and facilities  Educational programming and school trips costs  Tourism marketing could be sourced through VTC  Donors may sponsor special exhibits and events  Exhibits and programming sponsorships  Connections with area Universities can be beneficial  Promote educational materials and research without extensive funding required by FMFADA  3-5% of overall operating budget should be dedicated to marketing programs/costs

ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 12 I. Tourism Market Overview II. Marketing Strategy III. Development Plan Options IV. Questions and Discussion Agenda

ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 13 Development Plan  Both a private (FMFADA) and public 501(c)(3) non-profit will be needed to maximize revenue/contributions  Both organizations could manage non-profit and for- profit/commercial activities  Costs and revenue allocations to be determined by future phasing, capital investment requirements and partner capacities  Several management and development options exist for both entities:  Concessions contract  Direct Management  National Park Service  Ground Lease  Sale

ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 14 Development Options Pros/Cons  Concessions Management  Pros: Highly experienced, efficient, well-funded, easily obtain necessary financing, steady franchise fee income stream  Cons: Institutional, high overhead, will limit control, may be hesitant to take on non-revenue producing components  Direct Management  Pros: Maintain complete control, cohesive plan, strong revenue potential  Cons: Require high capital investment from FMFADA, may be difficult to obtain financing/funding, lack experience in management of hospitality operations, take on complete project risk  Ground Lease  Pros: Steady rental income stream, Maintain ownership of sites, no capital investment requirement, long-term value enhancement  Cons: Limited development control, can be difficult to finance, may lack cohesion with introduction of sub-leasing and various management agreements for separate components  Direct Sale  Pros: Large immediate capital income to fund non-profit initiatives  Cons: Complete release of control, lack of cohesion, no long term income potential; will not address long term guarantees for quality and protection  National Park Service  Pros: Will ease linkage to “America’s Historic Triangle”; guarantees some government funding, maintains site cohesion, guarantees site’s protection in perpetuity; NPS is a ‘brand”  Cons: Bureaucratic, under-funded, restricted income potential, tax exemption limits fiscal and economic benefits for surrounding community; lease terms limit use of historic tax credits

ERA No: – Fort Monroe Tourism, Marketing and Development AnalysisSlide 15 Questions and Discussion