1. Successful Performance Measures How Can We Achieve Them?

3. Smith Travel Research * Hotel Industry Performance Tracking - STAR - Occupancy - Average Rate - Revenue Per Available Room - Market Share * Competitive Benchmarking

6. STR Segmentation 177 U.S. Markets - MSA//County 573 U.S. Tracts - Zip Code/County

7. Successful Performance Measures Rich Carollo, Director Research, CCTB

8. IACVB Foundation Research Committee 4 Established in 1999 4 1999 Information Needs Assessment Survey 4 1999 Software Survey 4 1999 Visitor Profile Project 4 2000 Compensation Survey 4 2001 CVB Organization and Financial Profile 4 Convention Income Survey Methodology 4 2001 Research Activities Survey

9. Needs Assessment Survey Visitor Counts Economic Impact Conversion Rate Accountability STANDARDIZATION

10. Standardization Challenges 4 Visitor/Delegate Counts 750, 100 mile or other definition? 7City, County, DMA or other? 4 Impact/Expenditures 7Model type? 7Avg. Spending 7Method oAttendance x exp. oPeak x avg. stay x exp. oAttendance(day and night) x exp. Exhibitors x exp. 4 Performance Measures (Sales Divisions ROI)

11. Successful Performance Measures Kerri Kapich VP Marketing San Diego CVB IACVB Annual Convention July 17, 2001

12. San Diego Convention & Visitors Bureau Founded in 1954 Mission –To ensure success of San Diego’s convention and visitor industry for the benefit of the greater San Diego community and its visitors Total operating budget = $16.2 million –89% funded by Local Government –11% funded by Members and Other

13. Tourism Infrastructure 460 Hotel/Motels - 108 convention/conference Over 6,500 Restaurants San Diego Convention Center Corporation 4 Major Attractions - Sea World, San Diego Zoo, Wild Animal Park, LEGOLAND 92 Golf courses Rich arts and culture scene - 90 museums/historic sites and monuments, 125 performing arts organizations, over 300 festivals and events

14. San Diego Tourism $5.2 billion economic impact 26.5 million visitors annually –15.1 million overnight Primarily Leisure Destination –85% Leisure –8% Meetings/Conventions –5% Commercial/Business

15. Performance Measures The Challenges Multitude of Stakeholders = Multitude of Measurements –What’s in it for me? –Local government differs from members’ needs Lack of Industry Standards –terminology –methodology Not selling widgets

16. Where We Are Invest in Research –6% of budget allocated to department and contracts –foundation for strategic planning –essential to measure success Audit of all reporting systems Building a better tomorrow

17. Key Performance Measures Visitor Industry Statistics –Health of industry Program Analysis –Measure effectiveness of specific campaigns –Market Share Marketing Return on Investment

18. Industry Performance Overnight Visitors Visitor Spending Hotel Room Nights Hotel Occupancy Rate Hotel ADR Airport Arrivals Attraction Attendance Convention/Meeting Attendance

19. Program Effectiveness Sales Measurements –Leads –Room Nights Advertising Measurements –Pre- and post-awareness studies –Image perception studies –Conversion studies - inquiries Market Reports –Market share and competitive set

20. Return on Investment Partnered with the State of California Hired D.K.Shifflet –year-long study assessing total marketing impact on the leisure travel market –measured those who inquired and those who don’t –determined awareness, attitudes, interest and intent shifts caused by marketing programs

21. ROI Study - Key Findings Budget issues –Low share of voice - messages are received favorably but difficult to stay top of mind We move the meter in some markets better than others Branding is working –Consumer perceptions are changing –Travel experience is delivering on promise

22. Key Findings cont. Better origin market analysis data –Valuation tools beyond volume Avg. Los Angeles Trip Expenditure = $309 Avg. Denver Trip Expenditure = $1,471 Insights into consumer motivation and behavior

23. The Bottom Line For every $1 we spend on marketing San Diego, we generate $54 in return In spot markets, we increase our ROI to $77

24. We’re Not There Yet There is still a gap –Industry performance and marketing ROI don’t address other stakeholders’ needs Reporting audit conclusions –Drowning in data –Fragmented –Requires coordination of financial, research, IT, marketing, sales, membership

25. The Future Vision Centralized database Centralized reporting through Research Department Customized reports and analysis for members, local government and employees Visitor Relationship Management - maximize ROI

26. From Beans to Bucks to Clout : Jogging the Winding Path toward Accountability Ed McWilliams, Ph.D. VP Destinations D.K. Shifflet & Associates Ltd “ Setting the Standard”

27. Beans Versus Budgets Principle 1: More Beans = More Budget ? D.K. Shifflet & Associates Ltd “Setting the Standard”

28. Counting the Beans How many sales Leads/calls? How many convention delegates? How many delegate room nights? What are Occupancy Rates? How many articles written? How many Column Inches of PR generated? How many consumer impressions? How many people converted? D.K. Shifflet & Associates Ltd “ Setting the Standard”

29. Counting the Bucks Visitor Spending Delegate Spending Room Night Sales Economic Impact D.K. Shifflet & Associates Ltd ‘Setting the Standard”

30. Accountability = Connecting the Dots Cause versus Effect Programs versus Impacts Return versus Investment D.K. Shifflet & Associates Ltd “Setting the Standard”

31. Performance Based Budgeting Goals Objectives = Budget $, FTEs Strategies D.K. Shifflet & Associates Ltd “Setting the Standard” Linking Activities, Beans and Bucks

32. Program Measures: A few Definitions D.K. Shifflet & Associates Ltd “Setting the Standard” Input-> Output Outcome Impact Efficiency

33. Program Measures: A few Definitions Input Measures: Budget and Staff Output Measures : Program/staff Activity. For example: # of sales calls, # of consumer impressions generated, # of inquiries fulfilled. D.K. Shifflet & Associates Ltd “Setting the Standard”

34. Program Measures: A few Definitions Outcome Measures: Measures the results from programs. For example: Room Nights generated by convention delegates, travelers generated in response to advertising, etc. D.K. Shifflet & Associates Ltd “Setting the Standard”

35. Program Measures: A few Definitions Impact Measures: Translation of program results (outcomes) into Bucks, or other tangible measures. e.g. Total Spending by Visitors Influenced by Advertising, $ value of Convention Room Nights sold, Total Spending of Convention Delegates D.K. Shifflet & Associates Ltd “Setting the Standard”

36. Program Measures: A few Definitions D.K. Shifflet & Associates Ltd “Setting the Standard” Input $ -> BEANS = “Activity Stuff” Impacts $ BEANS= “Outcome Stuff”

37. Program Measures: A few Definitions Efficiency Measures: Estimate cost per unit generated by a program. For Example. Cost per consumer inquiry, cost per consumer converted, cost per convention delegate, D.K. Shifflet & Associates Ltd “Setting the Standard”

38. Program Measures: A few Definitions Ultimate Efficiency Measure: Return on Investment ROI: dollars returned per dollar invested Ideal to measure each program (allows like comparisons across programs). D.K. Shifflet & Associates Ltd “Setting the Standard”

39. Common Accountability Research: Conversion Study Strengths: Ideal for consumer Marketing budgets under $1 million. Measure differences across target markets. Aides marketing/media decisions. Good overall consumer marketing accountability Limitations: Miss those who saw or heard Ads and traveled, but never inquired Usually a small percentage of actual visitors Often not measured for specific markets D.K. Shifflet & Associates Ltd “Setting the Standard”

40. Audience Penetration Audience – 100% Aware - 24% Confirmed Aware 13% Traveled – 3% Influenced – 2% Inquired - 1% D.K. Shifflet & Associates Ltd “Setting the Standard”

41. Traveler Penetration Travelers – 100% Aware – 62% Confirmed Aware 50% Influenced – 34% Inquired – 11% D.K. Shifflet & Associates Ltd “Setting the Standard”

42. Using Efficiency Measures for Mgmt Decisions: Conversion Rate 42% Cost Per Conversion= #of travelers/ Budget$ For Example: $12 Market A: CPC= $10 Market B: CPC= S 8 Market C: CPC= $15 D.K. Shifflet & Associates Ltd “Setting the Standard”

43. Using Efficiency Measures for Mgmt Decisions: Advertising Example 1: Market A: CPC= $10 ROI = $ 25 Market B: CPC= $ 8 ROI = $ 10. Market C: CPC= $15 ROI = $ 35. D.K. Shifflet & Associates Ltd “Setting the Standard”

44. Using Efficiency Measures for Mgmt Decisions: Program Output Outcome Impacts ROI Budget Convention Sales Sales Leads # Room Nights $ Value of Delegates Impact/Budget D.K. Shifflet & Associates Ltd “Setting the Standard”

45. Cost per Visitor by Market D.K. Shifflet & Associates Ltd “Setting the Standard”

46. Marketing Return on Investment by Market D.K. Shifflet & Associates Ltd “Setting the Standard”

47. DKS&A “Advertising Impact Monitor”Answers Your Fundamental Advertising Questions 1. How is consumer awareness, interest, intent, and travel behavior changing in response to advertising? 2. What is the ROI of TV advertising in spot markets? 3. Is television worth the premium over print? 4.How much does it cost to draw a customer from Market A versus Market B? 5.What is the Return on Investment for Market A versus Market B? D.K. Shifflet & Associates Ltd “Setting the Standard”

48. Measurement Strategies and Costs Golden Rules: 1) Leverage accountability costs into Investments for strategic information. 2) Always invest research $ in proportion to your spending. Big programs deserve more research. 3) Be brutally honest. Remember all goals are not quantifiable. 4) Be prepared to change. D.K. Shifflet & Associates Ltd “Setting the Standard”

49. Measurement Strategies Next Steps: 1) IACVB – Set agenda to Establish Industry Definitions 2) IACVB – Develop standard accountability prinicpals 3) IACVB: Publish, promote, educate & advocate for use of standards. D.K. Shifflet & Associates Ltd “Setting the Standard”

50. From Beans to Bucks to Clout : Jogging the Winding Path toward Accountability D.K. Shifflet & Associates Ltd “Setting the Standard”

51. Successful Performance Measures How Can We Achieve Them?