Comments on TMD/TOT meeting of Sep 10 - Part 2 : TMD

 

        

 

 

 

 

 

 

Any way you shake this tree, the only real GUARANTEED beneficiary of forming a Tourism Marketing District is:

 

1) Calaveras Visitors Bureau – Direct beneficiary

2) The COUNTY – Indirect beneficiary as this may enable them to misappropriate even more TOT funds.

 

The THEORY is that the benefit to CVB will allow them to expand their marketing which will "trickle" down

"primarily" to the Lodging industry.  I use the word primarily because up until this time ONLY the Lodging Industry

is being targeted to bear the financial burden of the TMD (in the same way as TOT).

 

But before I go on, let me digress for a moment and consider the viability of this "trickle down" theory,

at least in terms of how it relates to Our business and perhaps other businesses with similar demographics.

 

It might not make everyone appreciate or sympathize with our position, but hopefully it will

make them understand our position is not based on ignorance, misinformation, meanness, greed

or any of the other things we're been wrongfully accused of.

 

= = = = = = = = = =

 

We realized that San Andreas is NOT a destination point back in 1997 shortly after purchasing the Robin's Nest.

 

Our midweek business was almost exclusively NON-Tourist.  The bulk of our guests were here for business (i.e. County),

visiting family, court, hospital, etc.

 

Weekend business was a mix of non-tourist (family visits) and OVERFLOW from Murphys and Angels Camp when

they filled up their limited rooms.

 

The weekend overflow started diminishing as new lodging facilities started popping up in Murphys and Angels Camp.

 

After the crash of 2008, overflow became virtually non-existent, even  during  Ironstone Concerts!

The good news: we have so few weekend guests that we can attend the concerts!

 

All of our bookings are entered into our reservation system complete with point of origination.

In the last year (figures rounded):

- Repeat & Business (i.e. County & Hospital) Guests :      35%

- Direct website (Google click-ads, Booking.Com etc):     60%   

- ALL OTHERS – INCLUDING Calaveras Visitors Bureau:     5%

 

Direct website advertising is based on Click-Advertising and booking Commissions.

In other words – we only pay for REALIZED business. 

The cost for us in direct website bookings is about $2,500.00

 

The cost of our CVB membership is generally $250.00

We tried an additional Banner Ad one year which more than doubled that cost.

This year we're adding a 2^nd listing and will pay $350.00

 

A friend asked "why are you a member of CVB if they generate so little business?"

 

My answer is simple:

1) As small as their percentage of realized business is, it certainly covers the cost.

2) Loyalty to a local organization (despite being thrown under the bus by some members). 

 

The formation of a TMD and a 2.5% "ACCESSMENT" would force us to raise our prices accordingly

and represent in the range of $2,000 to $3,000 based on the last 4 years of revenue.

 

So lets compare:

 

EXISTING:

- $2,500.00 "voluntary" advertising expense for 60% of my business:                                       Direct Website

               

- $00.00 advertising expense for 35% of my business:                                                                     Repeat and Business

PROPOSED:

- $2,000 - $3,000 "mandatory" advertising  expense for less than 5% of my business:        CVB – TMD

 

Advertising with Google, Booking.Com and others costs me NOTHING if they don't generate business

and I can quit any of them at any time.

 

The CVB-TMD assessment ($2.000 - $3,000) is based totally on blue-sky trickle-down wishful thinking

and once it's in place, there's virtually no way to quit on an individual business basis.

 

And let me reiterate: if CVB can't fill my rooms on Kautz Ironstone Concert Weekends, what can they possibly

do that's a bigger tourist draw than that ?

 

And don't get me wrong.  It's not CVBs fault.  The market can only bear so much no matter how much money

you invest in Marketing.

 

= = = = =

 

Civitas (consulting firm)  made a point of letting us know that the TMD fees were an ASSESSMENT rather than a TAX

as if that had some great significance. I pointed out that what you CALL the fee is meaningless.

What's important is:

1) It forces us to increase our rates (during a global recession no less)

2) It only requires a 51% majority vote to keep it in place or raise it.

(TOT at least requires a 2/3rds majority vote)!

 

Let's talk about the 51% vote that Civitas claims makes it easy to quit if you don't see a benefit.

 

Does every lodging facility get an equal vote?  NO!

 

The more revenue a lodging facility generates the bigger their vote !!!!!

 

Let's put some meat on those bones:

 

- Angels Camp generated over $700,000 or 72% of T.O.T. revenue in 2011

 

- The County generated under $300,00 or 28% of T.O.T. revenue in 2011

 

- The key destination area:  Angels Camp & Murphys represent AT LEAST 600  guest rooms (I stopped counting).

                And we wonder WHY there is no longer any overflow to peripheral areas!

 

- North Calaveras: San Andreas, Valley Springs &, Moke Hill represent about 36 guest rooms.

 

- That gives the key destinations a 94% - 6% advantage in terms of revenue and votes.

 

So once the TMD is in place and it's found that it benefits the key destination areas,

which most likely it will, but a peripheral area like North Calaveras discovers it doesn't

benefit them and even hurts them, there is NOTHING North Calaveras lodging facilities

will be able to do to extricate themselves from this assessment fee.

 

And assuming that the Bear Valley and Arnold  areas find themselves in a similar position,

they represent approx 5% and 15% in terms of rooms which isn't near enough to

oppose the key destinations.

 

= = = = = =

 

Perhaps the TMD would help level the playing field between destination and peripheral

areas of the county?

 

But it's been proposed that Angels Camp facilities will only pay a 1.5% Assessment (not a tax) Fee

while the County pays a 2.5% fee!

 

But wait. there's more.  Apparently the 2.5% versus 1.5% assessment (not a tax) isn't

even guaranteed for the term of the TMD term, which CIVITAS suggested as a minimum of 5 years.

Members can vote to change or INCREASE the assessment (not a tax) during the term.

 

I can easily make an argument that this is only fair when you consider that Angels Camp raises

the most revenue and already pays 10%  T.O.T. as compared to 6% for County facilities.

 

But I can also make the argument that since Angels Camp is nearer most of the County's Attractions

and conveniently located along the route 4 corridor, that they benefit much more from both the

tourist attractions and efforts of CVB than those of us in the peripheral areas, especially the North.

 

There's obviously much more to consider than these 2 over-simplified arguments however

it's seems pretty obvious that what's been proposed will only widen the gap between the

haves and have-nots of Calaveras County.

 

= = = = = = =

 

Michael Ninos posed a question along the lines of : "What happened to pursuing

other businesses, such as Attractions being included in the TMD?  I find it interesting

how that issue seems to have quietly disappeared".

 

Before Civitas had a chance to do too much obfuscating I expanded his question:

 

Question:            You consider yourself experts in this kind of thing.

Civitas   :               Yes

 

Question:            You've done many of these before.

Civitas:                  Yes   (I can't recall if they stated how many)

 

Question:            In how many districts that you've formed were

                                OTHER than Lodging facilities involved.

Civitas   :               NONE

 

Question:            Why is that?

Civitas:                  It's EASIER to limit it to Lodging Facilites.

                                (that's the short condensed answer minus the obfuscation)

 

The question I didn't ask was why they had made it sound so viable and likely

when they made their first presentation, because I already knew the answer.

 

It's called SPIN and perhaps BAIT & SWITCH.

 

Like the implications that we would all get an equal vote, that it would be EASY

to quit the TMD.

 

So who is guilty of trying to deceive us here:

- Civitas ?

- CVB  or more accurately the powers behind CVB ?

- Both ?

 

= = =

 

I personally can't even conceive of supporting a TMD without at least 2 provisions:

1) being able to QUIT if it doesn't benefit us.

                (perhaps an annual commitment)

2) being able to vote on individual assessment amounts by District.

                                (perhaps some kind of electoral college)

                                                                - or –

                     eliminating the differential between assessments

 

 

William Konietzny

 

Robin's Nest B&B – San Andreas