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HomeMy WebLinkAboutCity Council Committees - Lodging Tax Advisory Committee - 02/10/2022 (2) The Lodging Tax Advisory Committee typically meets in April and September to review grant requests. Unless otherwise noted, meetings are held in the Centennial Center North & South Conference Rooms, 400 West Gowe Street, Kent. For more information, contact Rhonda Bylin at 253-856-5457 or RBylin@KentWA.gov. For disability accommodation, please contact the City Clerk’s Office at 253-856-5725 in advance. For TDD relay service call Washington Telecommunications Relay Service at 7-1-1. Lodging Tax Advisory Committee Agenda Committee Members: Bill Boyce, Chair John Casey - Tim Higgins - David Kwok – Gaila Haas City Staff: Bill Ellis – Michelle Wilmot - Rhonda Bylin February 10, 2022, 4 p.m. Centennial Center N&S Conference Rooms or you can listen to the meeting by calling 1-888-475-4499 or 1-877-853-5257 and enter Meeting ID: 892 8824 8100 Item Description Action Speaker Time 1. Call to order Chair Boyce 1 min 2. Roll call Chair Boyce 1 min 3. Approval of the Agenda Yes 1 min i. Approval of the Minutes – October 14, 2021 Yes 1 min 4. INFO ONLY: Lodging Tax Revenue Update NO Shane Sorenson 10 min 5. Business Items A. Reappointment of Andrew Hutchison Yes Michelle Wilmot 5 min B. Jay Ray Proposal for 2022 Yes Jay Ray Team 30 min C. 2022 Grants Yes All 15 min 6. Adjournment Chair Boyce Page 1 of 4 Pending Approval Lodging Tax Advisory Committee Lodging Tax Advisory Committee-Regular Meeting Minutes October 14, 2021 Date: October 14, 2021 Time: 4:03 p.m. Place: Chambers Attending: Bill Boyce, Chair John Casey, Gaila Haas, Tim Higgins, Andrew Hutchison, David Kwok, Agenda: 1.Call to Order 4:03 p.m. 2.Roll Call Attendee Name Title Status Arrived Bill Boyce Chair Remote John Casey Remote Gaila Haas Present Tim Higgins Present Andrew Hutchison Present David Kwok Present Zenovia Harris Absent 3.Agenda Approval 4.Approval of the Minutes - 3/11/21 John Casey mover Tim Higgins second A. Approval of Minutes dated March 11, 2021 MOTION: Move to approve the Minutes dated March 11, 2021 RESULT: APPROVED [UNANIMOUS] MOVER: John Casey SECONDER: Tim Higgins AYES: Boyce, Casey, Haas, Higgins, Hutchison, Kwok 5.Information Items A. Report on Lodging Tax Revenue Lodging Tax Advisory Committee Lodging Tax Advisory Committee-Regular Meeting Minutes October 14, 2021 Kent, Washington Page 2 of 4 Shane Sorenson from Finance will report on Lodging Tax revenues returned to the City through August of 2021, and how that compares to projections made at the start of the COVID-19 pandemic regarding financial impacts to travel/tourism and other hospitality related businesses. Since the arrival of vaccines, travel and tourism have made significant adaptations and taken steps toward recovery. However, the impact was significant and continues to this day with hotels in particular struggling with new or increased expenses, operating at reduced capacity and struggling to maintain appropriate staffing levels. For these reasons, the LTAC revenue outlook is trending very close to the high impact scenario predicted back in March of 2020. Councilmember Boyce asks what is the 2021 spending for - that is confirmed by Michelle Wilmot and Shane Sorenson. The Ltac funds expended were primarily JayRay but there was a payment made to the T-birds to support their short and late season. Would federal funding be available to make up for revenue losses of this type to the city. That is a possibility but how it all works out remains to be seen. B. Recovery Outlook and Committee Priorities Michelle Wilmot asks our hotelier committee members to let us know what they are currently experiencing, and what they are hearing from industry peers and affiliated hotels in other markets. Feeling seems to be that while leisure travel will fully recover and is well on its way, that business travel will never get back to the levels it was at, because the pandemic brought permanent changes to the ways that business is done, and new found comfort with remote meeting tools, will make overnight travel for most meetings increasingly rare. Michelle raises the question about how hotels will deal with staff shortages and the many industries that are offering higher wages than hospitality. David shares he has lost employees to Amazon. He has two housekeepers for 72 rooms when he needs 5 or 6, especially with the extra cleaning required due to COVID-19 protocols. John Casey asks about month over month numbers. Is there a steady recovery appearing? David shares that July was strong, as was first half of August, but second half of August was dead and September was a roller coaster, with a busy weeks followed by very low occupancy the next. Bill Boyce wants to know what concerts are upcoming at ShoWare, and if any of them might bring in overnight guests. Tim Higgins mentions some Lodging Tax Advisory Committee Lodging Tax Advisory Committee-Regular Meeting Minutes October 14, 2021 Kent, Washington Page 3 of 4 upcoming concerts and acts, but the hotelieirs offer that this is a hard thing to predict. Michelle Wilmot brings up the concept of GeoTracking, a reality which is in its infancy, but will eventually provide a lot more metrics about the visitors to Kent. It miay seem a little intrusive but is expected to provide tremendous value down the road in terms of being able to precisely direct marketing campaigns. Though agreeing that fiscal prudence was the best coarse in these times, there is some regret about not having money to support events which are happening now and which have proven to be winners in bringing business to Kent Hotels. With a strong recovery in lodging tax revenue still not forecast until mid 2022, the outlook for the City’s tourism promotion grant program budget is not robust. With a lot of uncertainty related to matters of public health, a shortage of available workers and concerns for the overall economy, the committee will have to consider very carefully the types of initiatives it wishes to support with the funding available Bill proposes that we reconvene in January. C. Recent Changes for Boards & Commissions and Impacts on Committee Membership At the recommendation of Council, the City’s legal team recently completed an overhaul of the City’s Ordinance No. 4406 governing the operations of appointive boards, commissions, and committees. To enhance transparency and consistency, a standard set of general provisions, modelled after the Parks and Recreation Commission’s governance was created and adopted to govern the operations of all committees, except where state statute would supersede rules established by the City ordinance. These changes primarily impact recruitment of members, length of their term, and the number of terms they will be allowed to serve. While the lodging tax advisory committee is one of those commissions whose member make up is dictated by state statute, its current membership will still be significantly impacted by these changes. While there are eight seats on the committee, there are only five active committee members serving at present (this does achieve the minimum for a quorum). Of these only one will be eligible to continue as a member at the end of their current appointment. The other 4 will be ineligible to serve, UNLESS a proactive recruitment process fails to discover willing and qualified new committee members to serve and advise council on committee Lodging Tax Advisory Committee Lodging Tax Advisory Committee-Regular Meeting Minutes October 14, 2021 Kent, Washington Page 4 of 4 recommendations, and they still wish to serve. Today’s discussion will summarize and answer questions about these ordinance changes and membership impacts. 6.Adjournment 4:59 p.m. Committee Secretary 2018 2019 2020 2021 2021 2021 2021 2021Actual Actual Actual Adj Budget YTD Low Impact Med Impact High ImpactBeginning Fund Balance457,556 336,486 185,546 73,398 73,398 73,398 73,398 73,398 RevenuesLodging Tax 312,813 306,055 155,591 185,000 192,037 229,200 220,500 201,900 Interest Income 7,682 8,533 2,793 2,310 637 690 690 690 Total Revenues320,495 314,588 158,384 187,310 192,674 229,890 221,190 202,590 ExpendituresProjects & Events** 423,868 455,202 205,148 150,000 117,088 150,000 150,000 150,000 Allocations 17,698 10,325 65,384 29,190 27,612 29,190 29,190 29,190 Total Expenditures441,566 465,527 270,532 179,190 144,700 179,190 179,190 179,190 Change in Fund Balance (121,071) (150,940) (112,148) 8,120 47,973 50,700 42,000 23,400 Ending Fund Balance 336,486 185,546 73,398 81,518 121,372 124,098 115,398 96,798 * Impact Assumptions as follows:Finance Policy: $50,000 minimum fund balance Low Impact: 47.3% increase in 2021 per STR and Tourism Economics Group August 2021 Forecast Medium Impact: 41.7% increase in 2021 per CBRE Hotels Research September 2021 Forecast High Impact: 29.8% increase in 2021 based on Q2 & Q3 2021 Activity**Projects and Events YTDTbirds Marketing 45,000Kent Chamber Grant 6,500JayRay Ads 65,588Total Projects and Events 117,088*Impact of Covid-19 on RevenuesNovember 30, 2021Lodging Tax Operating Fund Report First Quarter2020 2021 2020 2021 2020 2021 2020 2021RevenuesLodging Tax19,555 11,155 (8,400) -43.0%11,429 11,141 (289) -2.5%5,688 13,698 8,010 140.8% 36,673 35,994 (679) -1.9%Interest Income402 197 (205) -50.9% 238 65 (173) -72.6% 234 39 (195) -83.4% 874 301 (573) -65.5%Total Revenues19,957 11,352 (8,605) -43.1% 11,667 11,206 (461) -4.0% 5,922 13,737 7,815 132.0% 37,547 36,295 (1,252) -3.3%Total Expenditures448 6,599 6,151 50,717 29,103 (21,613) 35,592 6,601 (28,991) 86,757 42,304 (44,453)#DIV/0!Net Revenues19,509 4,753 (14,756) -75.6% (39,049) (17,898) 21,152 -54.2% (29,669) 7,136 36,805 -124.1% (49,210) (6,008) 43,202 -87.8%Second Quarter2020 2021 2020 2021 2020 2021 2020 2021RevenuesLodging Tax12,244 16,336 4,092 33.4%16,925 17,850 925 5.5%14,750 22,015 7,266 49.3% 43,919 56,201 12,283 28.0%Interest Income346 29 (317) -91.6% 97 28 (70) -71.6% 129 16 (113) -87.9% 573 73 (500) -87.3%Total Revenues12,590 16,365 3,775 30.0% 17,022 17,877 855 5.0% 14,879 22,031 7,152 48.1% 44,491 56,274 11,783 26.5%Total Expenditures55,808 8,099 (47,709) -85.5% 14,340 32,040 17,700 123.4% 3,064 6,130 3,066 100.1% 73,213 46,269 (26,943) -36.8%Net Revenues(43,218) 8,266 51,484 -119.1% 2,682 (14,163)(16,845)-628.1% 11,815 15,901 4,086 34.6%(28,721)10,004 38,726 -134.8%Third Quarter2020 2021 2020 2021 2020 2021 2020 2021RevenuesLodging Tax13,638 26,950 13,311 97.6%14,843 28,082 13,240 89.2%13,211 24,644 11,433 86.5% 41,692 79,676 37,984 91.1%Interest Income111 23 (89) -79.6% 183 47 (136) -74.3% 194 64 (130) -66.8% 488 134 (354) -72.5%Total Revenues13,750 26,972 13,223 96.2% 15,025 28,129 13,104 87.2% 13,405 24,708 11,303 84.3% 42,179 79,810 37,630 89.2%Total Expenditures3,969 2,913 (1,056) -26.6% 5,658 16,821 11,163 197.3% 6,926 6,188 (737) -10.6% 16,553 25,922 9,369 56.6%Net Revenues9,781 24,060 14,279 146.0% 9,367 11,308 1,941 20.7% 6,479 18,520 12,041 185.8% 25,627 53,888 28,261 110.3%Month of OccupancyRevenue To City2019 2020 2021Percent VarianceNovemberJanuary18,304 17,381 10,625 -38.9%DecemberFebruary16,576 17,708 9,541 -46.1%JanuaryMarch18,600 19,555 11,155 -43.0%FebruaryApril18,373 11,429 11,141 -2.5%March May22,597 5,688 13,698 140.8%April June22,730 12,244 16,336 33.4%MayJuly25,927 16,925 17,850 5.5%June August36,190 14,750 22,015 49.3%JulySeptember36,503 13,638 26,950 97.6%August October38,724 14,843 28,082 89.2%SeptemberNovember28,219 13,211 24,644 86.5%OctoberDecember23,103 13,142 -100.0%Year End Adjustment209 (14,923)Total YTD 306,055 155,591 192,037June Activity (August Tax Receipts)Increase/(Decrease)Increase/(Decrease)Lodging Tax Operating FundApril Activity (June Tax Receipts) May Activity (July Tax Receipts)Increase/(Decrease) Increase/(Decrease)Increase/(Decrease) Increase/(Decrease)July Activity (Sep Tax Receipts)Total Q3August Activity (Oct Tax Receipts) September Activity (Nov Tax Receipts)Increase/(Decrease)Increase/(Decrease)Lodging Tax Revenue 2021 vs. 2020 Comparison by Month Using Month of Tax Revenue ActivityTotal Q2Increase / (Decrease)Jan Activity (March Tax Receipts) February Activity (April Tax Receipts)Increase / (Decrease)March Activity (May Tax Receipts)Increase/(Decrease)Total Q1Increase/(Decrease) Visit Kent 2022 TOURISM PROGRAM PROPOSAL February 2, 2022 WEBSITE SERVICES (Hosting, Maintenance & Content)Budget Q1 Q2 Q3 Q4 Perform website maintenance and content updates to include events calendar, hotel/business listings, homepage banners, packages & deals and one blog per quarter (4)x x x x Annual hosting, domain, software and plug-in subscriptions *These are third-party costs not controlled by JayRay. Budget reflects current pricing x x x x Annual technical support plan includes resolution of bugs/errors, uptime monitoring, fast website restore (when down), necessary theme and plug-in updates x x x x SUBTOTAL 13,088$ SOCIAL MEDIA SERVICES Budget Q1 Q2 Q3 Q4 Write social media content and post 3 times per week on Instagram and Facebook; leverage hotels packages and deals content x x x x Community management and engagement on Instagram and Facebook (schedule/post content, grow followers, respond to posts and proactively engage, upload events, curate photos from followers)x x x x Social media giveaway shoulder-season campaigns (2) to promote events and grow page followers x x Ad allowance for boosted posts/page ads on social media to drive visits to hotels and basecamp webpages on VisitKent.com $1,200 x x x x SUBTOTAL 18,675$ MARKETING SERVICES Budget Q1 Q2 Q3 Q4 Geolocation data subscription (12 months) with Datafy to track visitors from 50+ miles away. Includes 5 clusters, dozens of geofenced points of interests (hotels, sports, outdoor recreation, shopping, downtown), measurement dashboard and monthly consumer spending report. $ 15,192 x x x x Creative allowance for campaign concepting (2 campaigns) to promote overnight stays in Kent (creative brief, two concepts per campaign, graphic assets, landing page). x x Create animated gifs/social media reels (an affordable approach for video-like content) to reach and engage target markets through social media (determine 4 quarterly themes in advance)x x x x Ad allowance for geolocation marketing campaigns (using geolocation data) to target past/look-alike audiences 24,000$ x x Geolocation data analysis, coordination and reporting (ongoing)x x x x SUBTOTAL 52,847$ PROJECT MANAGEMENT Budget Q1 Q2 Q3 Q4 Develop project work plans, track goals and provide quarterly reports (4) of services provided and annual report x x x x Quarterly project status calls (4) with client x x x x SUBTOTAL 5,390$ TOTAL 2022 BUDGET:90,000$ MEDIA RELATIONS SERVICES Budget Q1 Q2 Q3 Q4 Craft media pitches (2) for shoulder season and send story ideas to targeted media. Includes development of media list and media-follow-up. Leverage past story pitches and recent attendance/media contacts made at Travel & Words Media Show to send stories to those who are now familiar with Kent as a travel destination. x x Cision media database subscription (media lists, coverage monitoring) $ 1,000 x x x x Media hosting allowance (to cover PR/travel writers overnight stays in hotels) $ 1,200 x x SUBTOTAL 8,000$ TOTAL 2022 BUDGET WITH MEDIA RELATIONS:98,000$