1. FY2018 San Diego Tourism Marketing District Report of Activities
Economic Development Department
FY2018 San Diego Tourism Marketing District Report of Activities
Economic Development & Intergovernmental Relations Committee
Meeting of April 20, 2017 – Item ____

2. TMD Overview Renewed effective January 1, 2013 (Part I)
Economic Development
TMD Overview
Renewed effective January 1, 2013 (Part I)
Modified effective September 1, 2016 (Part II)
Elimination of lodging businesses/assessment <70 rooms
No separate categories of benefit or assessment
Updated Activities and Funding Guidelines
New Operating Agreement effective November 1, 2016

3. Tourism Outlook Moderate growth is projected in FY2018:
Economic Development
Tourism Outlook
Moderate growth is projected in FY2018:
Occupancy levels forecasting 0.8% growth in calendar year (CY) 2017 and 0.4% growth in CY 2018.
Average daily room rate growth in +3.3% in CY 2017 and +3.6% in CY 2018.
Influential economic indicators:
Suggest reason for greater optimism
Uncertainty in both domestic and international markets
Slowing Chinese economic growth
Undefined policies of the new Trump administration.
Continued strength of the US dollar
Unresolved drive-market constraints (I-5 corridor congestion and San Diego’s inability to match competitor’s growth in attractions)
Source: Tourism Economics San Diego Travel Forecast, December 2016

4. FY18 Available Funds Source $ Projected Assessments $ 36,855,968
Economic Development
FY18 Available Funds
Source $
Projected Assessments $ 36,855,968
Projected Interest & Penalties $ 160,000
Projected FY17-Part II cfwd – non Litigation $ 3,058,608
Total $ 40,074,576
Projected FY17-Part I Cfwd – Litigation Reserve $ 29,700,000
Required FY17-Part I required carryforward $ 29,000,000
Activity occurring June through May 2018 with payments remitted July through June

5. FY18 – Recommended Allocations
Economic Development
FY18 – Recommended Allocations
Non-TMD
Entity / Purpose Allocation Funds
SD Tourism Authority Base $ 31,987,
SDTA/SD Sports Alliance Sponsorships $ 739,
Total SDTA $ 32,727,485 $ 4,452,483
California Police Athletic Federation $ 50,000 $ 141,500
California State Games $ 150,000 $ 500,000
California State Games – USA Masters Games $ 150,000 $ 1,014,500
Century Club - Farmers Insurance Open $ 100,000 $ 808,625
Extreme Sailing $ 400,000 $ 600,000
San Diego Bayfair - Thunderboats $ 95,000 $ 301,000
San Diego Bowl Game Association $ 300,000 $ 1,000,000
San Diego Brewers Guild – Beer Week $ 74,900 $ 40,100
San Diego Crew Classic $ 200,000 $ 1,050,000
TOTAL $ 34,247,385 $ 9,908,208

6. FY18 – Recommended Allocations cont.
Economic Development
FY18 – Recommended Allocations cont.
Purpose Allocation
Destination Marketing Master Plan $ 37,500
Opportunity/Catastrophe $ 2,692,262
City & SDTMD Administration $ 2,097,429
Litigation Reserve $ 1,000,000
Total $ 40,075,576

7. FY18 – SDTA Program Highlights*
Economic Development
FY18 – SDTA Program Highlights*
Target ROI overall 21.5 to 1
Increase hotel occupancy:
77.1% in 2017 to 77.4% in 2018
Increase average daily room rate (ADR):
in 2017 to $ in 2018
Increase revenue per available hotel room (RevPAR):
$ in 2017 to $ in 2018
*Subject to updating and SDTA Board approval

8. FY18 – SDTA Program Highlights* (Cont.)
Economic Development
FY18 – SDTA Program Highlights*
(Cont.)
Increase Market Share
16.2% in 2017 to 16.3% in 2018
Of Six Western Region Competitive Set Cities (source: Smith Travel Research (STR))
Increase NEW single-property group room nights:
410,000 in FY16 to 420,000 in FY18
Book 860,000 Convention Center related room nights in FY18 for future years
*Subject to updating and SDTA Board approval

9. FY18 – Program Highlights cont.
Economic Development
FY18 – Program Highlights cont.
California Police Athletic Federation - $50,000
Room Nights: 11,118
Target ROI overall: 35.5 to 1
Event: United States Police & Fire Championships
California State Games - $150,000
Room Nights: 17,500
Target ROI overall: 16.9 to 1
Event: Youth Summer and Winter sports competitions
California State Games – USA Masters Games - $150,000
Room Nights: 10,000
Target ROI overall: 9.7 to 1
Event: Adult competition in 20+ sports

10. FY18 – Program Highlights cont.
Economic Development
FY18 – Program Highlights cont.
Century Club of San Diego - $100,000
Room Nights: 42,571
Target ROI overall: 68.2 to 1
Event: Farmers Insurance Open professional golf tournament
Extreme Sailing - $400,000
Room Nights: 10,000
Target ROI overall: 4.0 to 1
Event: International high-speed sailing competition on San Diego Bay
San Diego Bayfair/Thunderboats Unlimited - $95,000
Room Nights: 16,511
Target ROI overall: 27.8 to 1
Event: Performance boat racing on Mission Bay

11. FY18 – Program Highlights cont.
Economic Development
FY18 – Program Highlights cont.
San Diego Bowl Game Association - $300,000
Room Nights: 24,572
Target ROI overall: 13.1 to 1
Event: Holiday Bowl featuring teams from Pac-12 and Big Ten
San Diego Brewers Guild - $74,900
Room Nights: 8,000
Target ROI overall: 17.1 to 1
Event: San Diego Beer Week festival showcasing San Diego beers
San Diego Crew Classic - $200,000
Room Nights: 11,500
Target ROI overall: 9.2 to 1
Event: Collegiate, high school, open/alumni, masters rowing events in spring; kicking off US rowing season.

12. FY18 Supplemental Request
Economic Development
FY18 Supplemental Request
Source $
FY17- Part I Litigation Reserve $ 3,000,000
Entity / Purpose Allocation
SD Tourism Authority $ 3,000,000
China Market Development $ 1,000,000
Los Angeles Leisure Market stimulus $ 1,000,000
Balboa Park Co-op Marketing Program $ 1,000,000
*Requires amendment to Operating Agreement (Litigation Reserve and Withholding Schedule)
Activity occurring June through August 2016 with payments remitted July through September

13. Highlights of Supplemental Request
Economic Development
Highlights of Supplemental Request
China Market Development $ 1,000,000
Growth potential & Chinese visitors stay longer and spend more
No direct flights to San Diego
Lack of awareness of San Diego
SDTA marketing plan to increase San Diego share of market.
Los Angeles Leisure Market stimulus $ 1,000,000
Decline in LA visits due to reduced co-op advertising
Reverse trend through targeted TV media spend next Spring in L.A.
Past experience suggests a 48:1 ROI ==> + $5 million in TOT collections
Balboa Park Co-op Program $ 1,000,000
First year of 3-year / $3 million marketing program
advertising, public relations, social media, web and content management.
Collaborative effort led by SDTA with City of San Diego, Balboa Park Cultural Partnership, Balboa Park Conservancy, Friends of Balboa Park, and individual park institutions, including the Zoo and Comic-Con Museum of Popular Culture.
Leveraging funds from Legler Benbough Foundation.

14. Summary of Requested Actions
Economic Development
Summary of Requested Actions
Approve FY2018 Report of Activities and associated expenditures
Approve FY2018 Supplemental Funding Request and associated expenditures and First Amendment to Operating Agreement
Authorize processing of any outstanding FY2017 reimbursements in FY2018 and associated expenditures

15. Questions