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Sarasota Thursday, Nov. 1, 2018 3 years ago

Promotional Considerations: County examines tourism strategy

As it debates the allocation of tourist tax funds, the County Commission has questioned the fundamentals of its relationship with Visit Sarasota County.
by: David Conway Deputy Managing Editor

Just to be clear, County Commissioner Paul Caragiulo says he has no specific problems with how Visit Sarasota County promotes the region.

He believes the tourism bureau tries diligently to bring visitors to Sarasota. The staff works hard. He assumes their efforts are generally successful, bringing some benefit to the county.

All that acknowledged, he concedes there is one critical issue he wants to address: He doesn’t know how to actually check if those feelings are justified, or to what extent.

Caragiulo is a member of a County Commission that has shown increasing skepticism about the efficacy of Visit Sarasota’s promotional strategies. This year, as county officials have discussed the money it gives to Visit Sarasota as a marketing contractor, Caragiulo has been one of several commissioners to question the fundamentals of a long-standing relationship with the agency.

The questions popped up during an Oct. 23 discussion on how the county spends its tourist development tax revenue. The county collects a 5% tax on rentals of six months or shorter. As outlined in a county ordinance, 30% of that revenue was dedicated to promoting tourism in Sarasota.

But, faced with $16.5 million in looming capital expenses at Ed Smith Stadium over the next decade, county staff devised a solution: The money would come from the promotional budget. The County Commission unanimously passed a revised ordinance that allows the board to lower the proportion of money spent on tourism marketing. The changes in place will allow the county to dedicate between 25% and 30% to promotion each year, depending on other budget conditions.

At times, county officials framed the decision as a necessary response to a specific circumstance. The county has a contractual obligation to improve Ed Smith Stadium. Staff projections indicated the marketing allocation would be reduced just twice in 10 years.

But at other points, the commission hinted at a willingness to re-examine the fundamentals of the county promotional strategy. Commissioner Mike Moran pointed out the county uses Visit Sarasota as a contractor, and the allocation for promotional spending does not have to be given to the tourism bureau.

“It is committed to promotional dollars,” Moran said. “It is not dedicated to the VSC. Again, nothing to be insinuated by that. I’m just trying to understand what our options are on this board or any future board.”

Caragiulo jumped on that same point, confirming his understanding of the pertinent regulations with the county attorney.

“I think the only thing that’s required is for us to approve a tourist development plan,” Caragiulo said. “I don’t think it provides a mandate for a specific organization to do that, is that correct?” (It was.)

Caragiulo confirmed he wanted to continue to explore that line of conversation. He said he was considering a proposal that would put the county’s tourism promotional contract out to a competitive bid — opening the door for an entity other than Visit Sarasota to handle the marketing work.

Caragiulo pointed out that Visit Sarasota would be encouraged to respond to the bid process, and he thinks there’s a good chance the organization would win the contract, should it come to that. But Moran pointed out the annual promotional allocation had grown from $1.85 million in 2002 to $6.8 million in 2018. Caragiulo had a problem with the notion the marketing budget would steadily increase as tourist tax revenue did, that there was no discussion to be had about the most effective way to spend money.

Putting the contract out to bid is an opportunity to have that discussion, Caragiulo said.

“The question is: What are our options?” Caragiulo said. “What do we think is a plan that will get us the best effect?”

Measuring success

Virginia Haley, Visit Sarasota’s president and CEO, doesn’t think the organization’s relationship with the county is in serious danger.

That’s partially because she’s confident no other group could more effectively market Sarasota.

“We know there is no entity that could do the work for Sarasota County that we do,” Haley said. “We have the fullest confidence that, no matter how they look at our job, they will be impressed in every aspect.”

She called the conversation at the Oct. 23 meeting a productive dialogue. She said county officials were asking the right questions. The onus is now on Visit Sarasota to provide satisfactory answers.

“We haven’t spent enough time making sure the commission is aware of what we’re doing,” Haley said.

She thinks county officials have several key misconceptions. The organization isn’t just doing traditional broadcast and print advertising, she said. The bureau has a series of metrics it uses to monitor the efficacy of various promotional initiatives.

Via online marketing and the use of data programs such as Arrivalist, Visit Sarasota can track the number of views and clicks advertisements get on various platforms. In some cases, the organization can tell whether a person who sees an ad eventually books a trip. 

“We can see when we served someone a message, what the particular message was — and then we can tell when they arrived in the destination with their mobile device or tablet,” Haley said.

As evidence of Visit Sarasota’s data-gathering capabilities, Haley points to a $150,000 promotional campaign in Columbus and Cleveland from January to March.

The spend included TV commercials, magazine ads and “out-of-home” marketing on digital and physical billboards. According to data Visit Sarasota gathered, more than 800 trips from that region were related to the campaign, an increase in 140% over 2017. The agency conducted a post-campaign survey that indicated additional visitors from Ohio would trigger about $24 million in additional spending.

Although Caragiulo has questioned the significance of the data he’s seen in the past from Visit Sarasota, Haley stands by it as substantive evidence the promotional strategy is working.

Haley also took issue with the county budget projections that forecasted a 5% increase in tourist tax revenue annually going forward. Although the county has seen sustained growth in tourist tax collections, a Visit Sarasota-commissioned study said revenue would remain flat through 2024 if there was no increase in the tourism budget. By contrast, the study said, tourist tax collections would grow from $21.3 million to $30 million by 2024 if the county increased the marketing budget 8% a year.

That was before red tide hurt tourism in the area, the effects of which Haley expects to linger. Haley fears the tourist tax won’t hit the county’s projections, and to make up for lower revenue, more money will be moved over from the tourism budget to pay for the Ed Smith Stadium work.

“You’re going to start a downward spiral,” Haley said.

And with other organizations such as Mote Marine Laboratory & Aquarium expressing an interest in tourist tax funds from an otherwise budget-constrained county, Haley is concerned about the prospect of more funding being steered away from marketing. Given the high demand for tourist tax money, Caragiulo said the county had to make some hard decisions.

“It’s a resource management exercise,” Caragiulo said. “It’s not a popularity contest.”

At the Oct. 23 meeting, Visit Sarasota board members pointed out the county spends less on tourism promotion per capita than many of its neighbors. Caragiulo took issue with using other counties’ spending as a measuring stick, but Haley said across the state and country, governments see tourism promotion as an effective tool for stimulating the industry.

“Even when you have the name, like a Las Vegas — you still see Las Vegas ads on Sarasota television,” Haley said.

Visit Sarasota is in the process of producing a strategic plan that analyzes the work it’s doing and its arrangement with the county. It intends to present the information in March. Haley is optimistic an ongoing discussion with county officials will be productive.

Caragiulo, meanwhile, welcomed any chance to more closely examine how the county promotes Sarasota as a destination.

“Let’s make it better,” Caragiulo said. “To me, making it better doesn’t only solely come in the form of throwing more money out there. Nobody would run any business that way.”

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