Scottsdale City Council votes June 21 on contract terms
By Terrance Thornton | Digital Free Pres
Scottsdale carries a billion-dollar marketing brand and those behind the lucrative marketing mystique of the southwest will be before Scottsdale City Council this upcoming week.
The reason? The destination marketing contract held by Experience Scottsdale is up for final approval at City Hall. Experience Scottsdale serves as the destination marketing firm for the city of Scottsdale.
The contract, which comes to a total of $11,446,664 in bed tax dollars, will go to a vote 5 p.m. Tuesday, June 21 at City Hall, 3939 N. Drinkwater Blvd.
“Experience Scottsdale anticipates its total FY 2022-23 operating revenue budget to be $17,232,164 of which the city agreement and 50% of the Fiesta Bowl contract amount is $11,446,664,” said Karen Churchard, Scottsdale Tourism and Events director, in her report to City Council.
“The city’s FY 2022-23 adopted operating budget forecasts bed tax revenue at $25,000,000. Forty-five percent of the forecast total revenue derived from the bed tax is paid to Experience Scottsdale to execute their agreement at $11,250,000 and the remaining 5% of destination marketing funds at $1,250,000 will be allocated to the city’s newly created destination marketing reserve fund.”
Experience Scottsdale Community Affairs Director Stephanie Pressler says the upcoming contract, which is for the next five fiscal years, is better suited for serving both membership of the marketing firm, but also the residents of Scottsdale.
“Experience Scottsdale looks forward to continuing our longstanding partnership with the city of Scottsdale with a new agreement that will allow us to serve our members, clients, stakeholders and residents over the next five years,” she said. “We spent months working closely with city staff on an agreement that will meet the needs of the industry and community. Experience Scottsdale is eager to begin working on our strategies and programs for the 2022-23 fiscal year as the industry continues its recovery.”
Lessons learned amid the pandemic, Ms. Pressler contends, has refocused Experience Scottsdale toward a digital, 21st century approach to doing old things in new ways.
“With the City Council’s approval of our new program of work, in the coming year, we’ll hone the lessons we learned throughout the pandemic, from entering new markets to leaning into digital trends,” she said.
“We will host focus groups and assess our advertising to ensure that we are always positioning Scottsdale in the best possible light. Our continued efforts in the diversity, equity and inclusion space will open the destination to new and more diverse visitors and groups. We also will help implement the city’s 5-year tourism strategic vision while focusing on building a responsible, sustainable tourism landscape.”
How does this all work?
Ms. Churchard explains since 1977 Scottsdale has maintained a public-private partnership funded by what city leaders call “transient occupancy tax” or “bed tax” providing destination marketing services for both Scottsdale and immediate region.
“The general direction and major activity areas undertaken annually by Experience Scottsdale are reflective of the primary mission of a destination marketing organization and include marketing, communications, convention sales and services, and tourism,” Ms. Churchard offered as an overview.
Since July 1, 2010, Scottsdale has been imposing a bed tax of 5% with remits of those rates funneling into the Tourism Development Fund of which 50% is used for destination marketing activities.
“The destination marketing program has been implemented between the city and Experience Scottsdale through a 5-year destination marketing agreement approved by City Council in August 2017 that expires on June 30,” Ms. Churchard said.
Starting in year 1 of the 5-year agreement, Experience Scottsdale must meet certain tenets of compliance with municipal and state law guidelines including a detailed business plan.
“The Tourism Development Commission, per requirement of the agreement, reviewed and unanimously recommended (6-0) on May 17 that the City Council approve the Experience Scottsdale FY 2022-23 strategic business plan, budget and performance standards,” Ms. Churchard said of the checks and balances. “The agreement will be monitored on an ongoing basis by the city’s contract administrator through quarterly performance measures, programming updates and financial reports.”
Also, Ms. Churchard explains a direct approach at City Hall as tenets of the public-private agreement confirm an annual audit and year-end financial and performance reports.
“The contract administrator and other city staff will meet regularly with Experience Scottsdale staff to coordinate and review marketing activities,” she pointed out.
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Performance standards reported
The terms of success for the contract are agreed to by city officials and Experience Scottsdale representatives, Ms. Churchard explains. Those terms include:
- The organization’s overall budget;
- Prior year performance;
- Priority areas where revenue will be deployed in the coming year, economic and business cycles; and
- The capacity of Experience Scottsdale’s staff and resources.
Furthermore, Ms. Churchard reports to City Council 19 performance metrics to be deployed and monitored at City Hall. Within the 19 performance standards, are five that are specific to businesses, entities and areas within municipal limits:
- Number of media placements that include entities within Scottsdale city limits.
- Number of travel trade professionals trained about Scottsdale specifically via product training seminars.
- Number of convention sales leads for properties within Scottsdale city limits.
- Number of meetings booked into properties within Scottsdale city limits.
- Number of estimated room nights from meetings booked into properties within Scottsdale city limits.
