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HomeMy WebLinkAboutI-1 - Conference and Visitor's BureauCITY OF NEWPORT BEACH OFFICE OF THE CITY MANAGER July 28, 1986 TO: MAYOR AND CITY COUNCIL FROM: City Manager SUBJECT: CONFERENCE AND VISITORS BUREAU COUNCIL AGENDA NO. I-1 BY THE CITE' COUNCIL C TY 6F NEWPORT BEACH, JUL 2 8 1986 Nothing different or new has occurred concerning the request to contribute the equivalent of a 1% increase in the Transient Occupancy Tax to the Conference and Visitors Bureau to promote the industry, except possibly a report on the meeting that occurred May 22nd. On May 22nd representa- tives of the Cities of Costa Mesa, Irvine, Laguna Beach and Newport Beach met to evaluate the status within each city of the requests to financially aid each City's Conference and Visitors Bureau. Irvine reported that an increase in the U.T.O.T. is not acceptable to the Irvine City Council. In lieu of an in- crease in the U.T.O.T., however, Irvine is exploring the pos- sibility of adding a "service charge" to each hotel or motel which would raise an equivalent amount of money to help fund the promotion of tourism in Irvine. A service charge would not be subject to the state's limitation of taxes and would not have to be reduced if the new Gann Initiative passes in November, 1986. Costa Mesa indicated that the current City Council probably did not favor financial assistance to a Con- ference and Visitors Bureau. Laguna Beach's position paralleled that of Costa Mesa. All three cities indicated a desire to study a joint Conference and Visitors Bureau. J �J ROBERT L. WYNN V J C'� i�iE 6'!T-4 C.6J NNIL CiaY OF NEWPORT BEACH AUG 11 1986 NEWPORT BEACH CONFERENCE & VISITORS BUREAU Post Office Box 2417, Newport Beach, CA 92663, (714) 756-2072 NEWPORT BEACH CONFERENCE AND VISITORS BUREAU REQUEST FOR FUNDING PREPARED FOR THE NEWPORT BEACH CITY COUNCIL JULY 21, 1986 NEWPORT BEACH CONFERENCE & VISITORS BUREAU Post Office Dox 2417, Newport Beach, CA 92663, (714) 756-2072 July 21, 1986 Dear City Councilmember: The Newport Beach Conference and Visitors Bureau hereby requests funding of approximately $417,000, as specified in a contract with the City, to refine and implement a strategic marketing plan aimed at attracting upscale guests to our fine city. As explained in the enclosed materials, these funds will aid the hospitality industry and the rest of the economy of Newport Beach while continuing to generate funds that the city uses to maintain our high quality of life. So as not to short change the general fund, the hotel industry is willing to accept a one percent increase in the transient occupancy tax in order to compensate for this expenditure. Of course, this is a risk for the hotels of Newport Beach because the tax would be higher than in nearby cities. But this is a risk the hotel industry accepts because of the benefits to the local economy, to the social and cultural life of the city and to the citizens of Newport Beach. Thank you for your consideration of this important opportunity for Newport Beach. Sincerel , Chip Stuck Peyer President OneSte pO Contents NEWPORT BEACH CONFERENCE AND VISITORS BUREAU INDEX SYSTEM EXECUTIVE SUMMARY ORGANIZATIONAL DIRECTIVES: Action Timeline Preliminary Budget Executive Director Duties 2 STRATEGIC MARKETING PLAN 3 BYLAWS 4 5 6 7 8 0 10 Cardinal EXECUTIVE SUMMARY NEWPORT BEACH STRATEGIC MARKETING PLAN PREPARED FOR THE NEWPORT BEACH CITY COUNCIL BY THE NEWPORT CONFERENCE & VISITORS BUREAU JULY 21, 1986 EXECUTIVE SUMMARY NEWPORT BEACH CITY COUNCIL OVERVIEW This summary has been prepared for the Newport Beach City Council to support the rationale for city participation in a marketing program to present Newport Beach as a tourist destination for upscale, quality -seeking guests. You are being asked to make an investment in the future of our city consistent with the actions you have taken in the past to insure our residents a high quality of life here. The Newport Conference and Visitors Bureau, established in 1975, has primarily been a very small scale operation -- using a sparse budget to provide information, establish trade show booths and work against increasing competition to convey positive image of Newport Beach as a destination for the upscale visitor. The current $53,000 budget, gathered through fundraising and membership dues, has done little in competing with other destination sites which spend millions of dollars each year on promotion to the quality -seeking guest. Volunteers and a lone secretary have attempted to coordinate the bureau's increasingly difficult activities. We have recognized --for the reasons cited in the attached Strategic Marketing Plan and Executive Summary --that in order to be effective we must reach out to the upscale visitor and draw an attractive picture of Newport Beach that will appeal to the quality -seeking guest. Your participation in this venture is a business decision. You have made extensive physical infrastructure investments in this city and continue to spend for operational costs. This request represents an investment in our economic infrastructure - primarily for the thousands of small business people whose livelihood depends to some degree on the tourist industry. Target marketing is a business method used to attract upscale individuals to the city through the use of focused advertising and promotion. These are people whose visits help to economically and socially contribute to the well-being of our city with minimum negative impact on traffic and on our limited resources. By investing in this marketing program for Newport Beach you will be protecting the city's current and future revenue base in the (1 ) face of increasing competition from activist resort/destination cities. We would like to address six key points: 1. Newport Beach benefits from a visitor economy. 2. Our city faces strong competition. 3. We want to attract a quality -seeking guest. 4. Target marketing is a business decision and a wise city investment. 5. Visitors Bureaus are effective city marketing tools. 6. Newport Beach benefits from the Conference and Visitors Bureau (2) 1. NEWPORT BEACH BENEFITS FROM A VISITOR ECONOMY. Upscale visitors already attracted to Newport Beach contribute greatly to our economic and social vitality. Economically, visitors to Orange County last year spent more than $2.2 billion, according to the California Office of Tourism. For Newport Beach businesses, small and large, this meant at least $84 million was spent locally. This is based on an extrapolation of Laventhol & Horwath's study of visitor spending per day for the Irvine area. Small clothing stores, gift shops, and other small businesses drew direct benefits, as did restaurants, hotels and florists. In addition, studies indicate that no part of a city's economic life is untouched by the boon of tourism. Money that is spent in the city actually circulates twice according to the California Office of Tourism. This represents a huge multiplier effect that translates our cumulative visitor economic impact to $168 million a year. Revenues generated for the city were $3.3 million from the bed tax alone. In addition, the restaurants and lounges of the city generated another $1.5 million in sales tax revenues. These funds went directly to support our community services: police, public works and other community projects and to maintain our high quality of life in Newport Beach. Any decline in this level of support would obviously mean an equivalent slippage in our general funding ability. We propose that the City has strong incentive to protect and insure the health of the visitor economy. (3) 2. OUR CITY FACES STRONG COMPETITION. Newport Beach faces stiff competition throughout the marketplace for both the business and pleasure traveler. For the pleasure visitor, Newport Beach's competition is well- financed and intense. As a resort/destination city, Newport Beach is in a league with, and in direct competition with, Long Beach, San Diego, Santa Barbara, Palm Springs, and Monterey. Each of these cities has made a policy determination to fight for upscale visitor dollars. Their commitments have come in the form of funding city Conference and Visitors Bureaus with significant investments. Below are the total annual budgets of each city bureau for 1986. *San Diego...............$3.8 million *Monterey................$1.1 million *Palm Springs ............ $1.1 million *Long Beach..............$975,000 *Santa Barbara ........... $680,000 With extensive investment in the development of their marina communities, the cities of Carlsbad and Ventura/Oxnard will not be far behind in pursuing the upscale resort visitor. With competition this strong, it is reasonable to either a commitment must be made or that we will decline in the upscale visitor who is so valuable market place will not allow neutrality. (4) assume that begin to see a to us. This 3. WE WANT TO ATTRACT A QUALITY -SEEKING GUEST. The focus of the Newport Beach Conference and Visitors Bureau will be to target a special type of guest for the city. This guest expects the best and is willing to pay for it. A sample profile of the upscale guest, based on experience in the area, is an upper -middle to upper -management executive or consultant, in the 35 -plus age group, with annual income of $75,000 -plus, who dines at the finest restaurants, is a high- volume shopper and demands quality goods and services throughout the visit. In addition, the Bureau will play other vital roles in the city. The services provided by the Bureau will lend a sense of the specialness of the City. VIPs and other visitors to Newport Beach will know what it means to visit a first-class city. The Bureau will also act as a central source of information for every day questions and those harder -to -answer queries. Information will be up to date and accurate. (5) 4. TARGET MARKETING IS A BUSINESS DECISION AND A WISE CITY INVESTMENT. Newport Beach has natural beauty, an outstanding climate, and unbelievable ambiance. One would think we would need little marketing to attract visitors. But on closer inspection, it becomes clear that target marketing is critical for Newport Beach for two reasons: First, the city has made a substantial capital investment in infrastructure and provides excellent services. These are investments made to maintain the high quality of life primarily for its residents. If visitors choose to stay in surrounding communities yet still "drop in" to Newport Beach, the city is carrying the burden of investment with little or no return. Second, we must focus on a particular type of visitor --one who expects quality and is willing to pay for it. This visitor spends a great deal of money in the city without placing any strain on the city's services or infrastructure. We are looking for people who bring more to the city than they take away. Target marketing --reaching those upscale visitors who spend time and money in our city --is a prudent business decision and will be the central function of the Newport Beach Conference and Visitors Bureau. (6) 5. VISITORS BUREAUS ARE EFFECTIVE CITY MARKETING TOOLS. When facing strong competition from other cities, a city like Newport Beach must use all of the tools at its disposal to selectively market. The Conference and Visitors Bureau is one such tool that has been used successfully throughout the country to promote individual cities. The Newport Conference and Visitors Bureau will operate as a strong, independent organization. The Bureau will act on established business principles, using the research, planning and execution outlined in the marketing plan. To insure a well run, effective, efficient organization, which reflects the broad based sensitivity to the concerns and objectives of our entire community, the Board of Directors will be re -structured to include: (2) Representatives of community small business (2) Newport Beach citizen representatives appointed by the Bureau Board (1) Representative of the Chamber of Commerce (1) Representative of the Newport Beach Restaurant Association (1) Representative of Fashion Island (1) Representative of the airline industry (7) Representatives of the hotel/motel industry Responsible to the Board, the Executive Director will be charged with meeting the Bureau's central marketing objectives in a controlled, cost-effective and timely manner. The Director will be required to have strong business background, with effective management and marketing skills. A preliminary budget has been included in the Bureau's Marketing Plan. Based on a city -prepared estimate of the one percent increase in the bed tax yielding about $417,000, this budget presents a general pattern of how these funds will be spent. The Executive Director and new Board will of course be responsible for developing a more specific budget that meets these policy guidelines: 1. Not more than 30 percent of the amount budgeted shall be used for administration/operation of the Bureau. The remaining 70 percent of the budget shall be used only for advertising/promotion to meet the Bureau's stated marketing objectives. 2. If the actual dollar amount received by the Bureau increases, the additional amount will be used primarily for advertising/promotional costs, not for administration. (7) 6. NEWPORT BEACH BENEFITS FROM THE CONFERENCE AND VISITORS BUREAU. We ask you to support the Newport Beach Conference and Visitors Bureau's plan to target market our city because it makes basic economic sense. Target marketing provides us with a means of reaching the visitors that we seek and protecting our city's resources with a minimum investment. We hope that you wi 11 agree and take this step to insure the economic and social vitality of Newport Beach. (8) ACTION TIMELINE NEWPORT BEACH CONFERENCE AND VISITORS BUREAU Sept. 1, 1986 --New Board of Directors takes office --Develops job description for Executive Director --Ratifies budget --Begins search process for Executive Director Oct. 15, 1986 --Executive Director selected --Begin development of selection process for marketing program Jan. 1, 1987 --Marketing program to Board for approval --Begin selection process for advertising, marketing, public relations resources. NEWPORT BEACH CONFERENCE & VISITORS BUREAU PRELIMINARY BUDGET JANUARY - DECEMBER 1987 INCOME: $492,000 EXPENSES: $417,000 - City Funding $ 50,000 - Dues (1986 level) $ 25,000 - Fund Raisers - 1986 Sales & Promotion - $325,000 - Production of brochure to be used in Direct Mail programs, response to inquiries, travel agencies, travel writers, etc. - Production and placement of ads, typical publications to include Sunset Magazine, Travel and Leisure, Palm Springs Life, and newspapers in key market cities. To support small conference business; Successful Meetings, Insurance Conference Planner, Medical Meeting News. - Direct-mail to travel agencies in key market cities such as Phoenix, Chicago, San Francisco, etc.; to key conference planners in Chicago, New York, Washington, D>C> - Familiarization trips for travel writers, key travel agencies, conference planners from key markets to show attributes and amenities of Newport Beach. - Sales trips to target cities, attendance at key trade shows such as Meeting Planners International, Western Conference of Association Executives, Insurance Conference Planners, Incentive Travel Management. Administration - $147,000 Includes Salaries and Benefits*, Office Rent and Supplies, Insurance, Telephone, Equipment lease/repair. *Staff includes Executive Director, Sales/Membership Manager, Secretary. NEWPORT BEACH CONFERENCE & VISITORS BUREAU Executive Director General Responsibilities - Develops Marketing Plan - Administers Budget Operation - Manages Office Administration - Provides Account Servicing - Oversees Advertising and Public Relations - Directs Sales Activities - Manages Research Reports to the President of the Conference and Visitor Bureau. Profile - College degree or equivalent experience - Prior Convention Bureau experience (at least five year). - Stable and outgoing personality. - Proven record in: - Sales Ability - Fiscal Responsibilities - Office Administration - Proven growth in career positions. - Demonstrated leadership qualities. - Sound administration skills. - Effective communication skills NEWPORT BEACH VISITOR/CONFERPNCE BUREAU MARKETING PLAN 1986 Prepared by; Newport Beach Visitor Bureau February 10, 1986 Purpose The purpose of this document is to define and review the immediate and intermediate objectives of the Newport Beach Visitor and Conference Bureau and to present the recommended strategies to achieve these objectives. -1- Position Statement The city of Newport Beach is the superior visitor and conference destination for the highly profiled, upscaled business and recreational traveler who possess high standards of taste, quality, selection, service and value. Newport Beach can expect to continue to attract and to build trial and awareness among an affluent populace disposed to the amenities of Newport Beach through advertising and public relations programs orchestrated and directed by an aggressive and active Visitor and Conference Bureau. It is the purpose of the Newport Beach Visitor and Conference Bureau to reinforce the city's viability as a tourist destination, conference site, and thriving modern business and cultural center. -2- Background Location Newport Beach, the preeminent visitor destination of all the Orange County cities, as well as one of the most desirable destinations on the entire West Coast, is located approximately halfway between Los Angeles and San Diego. This dynamic area, with its world wide reputation for one of the most beauti— ful yacht harbors for fishing excursions and pleasure boating, numerous beaches as well as historic places to visit is accessible to the coastal route (Highway 1) and major freeways. The John Wayne Airport, several miles to the north, services the area with regional and national flights. Amenities In addition to its natural resources of bay, beach, harbor and historical landmarks, a strong restaurant and hotel base complemented by diverse retail selection and the nearby cultural opportunities for enrichment at the South Coast Repertory Theatre and the Orange County Performing Arts Center represent compelling reasons to visit the area. -3- Visitor/Conference Market/Definition The visitor/conference market consists of those persons traveling to Newport Beach for either business or pleasure or a combination of both, and who probably require an overnight stay. A. Newport Beach is a particularly unique traveler destination due to both its high visibility, pleasure and business appeal. The visitor/conference market is comprised of two groupings: 55% are pleasure/vacation; 45% are business.l The Newport Beach, Costa Mesa, Irvine area attracts mostly busi- ness travelers (30% pleasure vis-a-vis 70% business). However, businessmen are often accompanied by their wives who are along for vacation. Since the primary purpose of their visit is his business, they are qualified to pay a corporate rate and are thus considered vacation. In any case, the busi- ness traveler is a prime candidate to return to the business destination as a vacationer, if an enjoyable experience has developed. It should be noted that the number of women traveling on business has been steadily increasing over the past decade and that increase is expected to continue. B. Because of an expanding hospitality industry in Orange County (the total number of hotels has increased over 400% in the last three years) the number of hotels and hotel rooms that cater to the target market will continue to increase significantly over the next two years. Newport Beach projects to take advantage of an additional 12,000 room nights expected to be generated by the activity of the Newport Beach Visitor and Conference Bureau. In 1980 there were six upscale hotels, totaling 3,142 rooms, and in 1984 the number reached 18 hotels and 9,050 rooms. Last 1 Anaheim Visitor and Conference Bureau, Newport Beach Visitor Bureau, Telephone Survey of Local Hotels Wlm year, an additional hotel was built and several existing properties added rooms, bringing the room total to 10,048. Projections are that next year, Orange County will have a total of 25 upscale hotels, with 12,348 rooms. The city of Newport Beach presently -accounts for 1,700 rooms and will be adding over 850 rooms in the next three years.2 In 1985, tourism enjoyed a record year with 32.4 million visitors to Orange County. C. Industries that benefit from increased travel and tourism in the city of Newport Beach go beyond the restaurants, lodging base, and include surface transportation agencies, airlines, and purveyors in numerous categories. In local tax generated, each dollar invested in promotion and travel generates revenue (return on investment) of $7.00 to $18.00. In the case of Newport Beach, for each dollar invested, there will be a $10.00 return to the Newport Beach business community. Of the $4.5 billion spent by visitors to Orange County, 30 percent or $1.35 million was spent on lodging, 28 percent or $1.26 million on meals, 23 percent or $1.04 million on recreation, 16 percent or $720,000 on shopping and 3 percent or $135,000 on transporta- tion.3 The state of California in July of 1984 implemented through state statute SB 1061, a $5 million tourism program. Legislation passed in 1985 continued Governor George Deukmejian's tourism committment, with another $6 million appropriation. In the current campaign, Newport Beach is featured as the most representative city in all of Orange County, and in magazine, bill - 2 Trends in the Hotel Industry - Orange County Edition, Pannell, Kerr, Forster 3 Annual Report/Anaheim Visitor and Conference Bureau, 1985 -5- boards and newspaper ads, Newport Beach is the centerpiece. California - bound travelers spent a record $31.1 billion in 1984. Last year's figures are not yet available. The three counties which received the highest level of travel expenditures were Los Angeles, Orange County and San Diego, accounting for almost one-half of the state's total. MM Visitor Market to Southern California By City The United States (most major cities)1 Southern California Santa Barbara Ventura 22% San Diego North Los Angeles Northern California San Francisco Say Area 12% San Jose North West Seattle 12% Portland Salt Lake City Phoenix Scottsdale g% Dallas Houston Midwest Chicago Kansas City Denver 11% St. Louis Minneapolis Oklahoma City North East States New York Boston Philadelphia 7% Washington D. C. South Atlantic States Atlanta 8% Miami Sub total 82% 1 Copley International Corporation Market Research -7- Since 80% of the arrivals to John Wayne Airport are business travelers, it cannot be discounted that many combine pleasure with business. In addition, a large proportion of U. S. travelers come to Orange County by way of LAX or Los Angeles. Foreign Visitor Market 2 Canada Vancouver Calgary Edmonton Toronto Japan Australia/New Zealand United kingdom Mexico Europe/Other 80 11% sub total 19% Note that most foreign travel to Southern California arrives via Los Angeles and is predominantly pleasure oriented. 2 Foreign Tourist Arrivals, Los Angeles, U. S. Department of Commerce, U. S. Travel Service -8- Visitor Target Market Visitor/Conference Target Profile Eighty eight (88) percent of the visitors to Orange County stay in hotels. With a total of 3,303,250 hotel days per year (number of upscale hotel rooms X 365 days), at an average projected occupancy of 75% and an average projected double occupancy of 15%, there are approximately 2,849,054 Orange County visitor days per year in the upper/middle to upper class categories. Of this number, probably one-half of the market identified represents a target market for Newport Beach to attract, or approximately more than 1 million visitor days per year (not necessarily 1 million new visitors because many might be repeat visitors). Demographic Profile of Orange County Visitors Travelers, professional people and skilled workers stay an average of 3.5 nights per trip. They spend an average of $27.00 per day per person on goods and services, excluding food and lodging. The average group size is three (3). Acme: 30 + Sex: Male/Female Income: Upwardly mobile, top or middle management, combined with household income of $50,000 +. Psychographics Newport Beach visitor patron is well-educated and discerning in all aspects of his/her visitor related experience. This person, representing the target market for Newport Beach, is interested in a quality experience, and demands high standards of taste, value, quality, selection convenience and service. Competitive Environment The competitive environment for Newport Beach is comprised of other cities and hotels, all committed to aggressively attracting the visitor market. At present, the city of Newport Beach operates under an annual budget of $53,000. ° The city of Irvine has added 1000 rooms in the last two years; 630 rooms to be added in the next three (3) years. ° The city of Santa Ana added 500 rooms; 790 rooms to be added to the inventory this year. ° The city of Costa Mesa will add 1000 rooms over the next two (2) years. ° The city of Laguna Niguel with the Ritz Carlton added 400 rooms and another 900 are planned in the next three (3) years. ° Irvine has committed $300,000 for a newly establised Visitors Bureau. ° Santa Ana will commit $250,000 for its new Visitor Bureau. Other cities, comparable in resort/destination development programs include: ° City of Long Beach/$975,000 funded Visitor Bureau ° City of San Diego/$2.7 million funded Visitor Bureau ° City of Santa Barbara/$680,000 funded Visitor Bureau -10- ° City of Palm Springs/$1.1 million funded Visitor Bureau ° City of Monterey/$1.1 million funded Visitor Bureau -11- Marketing Objectives To continue to build trial and awareness among affluent visitors, resulting in a positive effect on the local economy through increased hospitality sales by: 1. Promoting awareness of Newport Beach as a destination with the finest selection of leisure time pleasure activities to be found any where in Southern California. 2. Educating visitors about Newport Beach and its offerings. 3. Advising visitors of the wide range of amenities (hotels, stores, restaurants, things to do) available during the visit. 4. Establishing Newport Beach as an enjoyable shopping, dining, pleasure experience while visiting the area. 5. Working with travel industry professionals, including travel agents, meeting planners, and corporate coordinators to apprise them of Newport Beach's value to them in preparing itineraries for their clients. 6. Continuing to establish working relationships with current and new hotels, as well as restaurants and to provide leadership and represent the various local hospitality interests. -12- Marketing Strategies A. Identify and define the target market (the business and executive eschelon, key corporate meeting planners, national, state and regional association execu- tives) that will result in positive impact on the city of Newport Beach and will also result in Newport Beach being selected over other visitor destinations, including Hawaii, Canada, and such California cities as San Francisco, Carmel, Monterey, Santa Barbara, et al. 1. Member Communication a. Work with members to maximize effectiveness of advertising efforts and marketing focus that will increase the total membership base and support of private contributors in the following manner: ° Provide members with the most updated information on target markets and demographics. ° Communicate the information of all Visitor and Tourism Bureau meetings to all members via regular newsletter. ° Offer a cooperative advertising program directed to key visitor groups and key feeder markets through appropriate trade publications and direct mail. 2. Consumer Communication a. Generate high awareness among visitor audience of the quality, unique, and one -of -a -kind pleasure experience only available in Newport Beach through "Fam" trips, sales calls/trips, trade shows, special events list- ings aimed to the target market, brochures and pamphlets and various guides. b. Position Newport Beach as an upscale conference and vacation site -13- where shopping, dining, and the pleasurable experience is second to none and where affluent visitors and tourists can experience the high standards of taste and quality synonymous with their own lifestyle. c. Increase business and visitor -trade during the "off" seasons with selected marketing programs. 3. Research To provide the proper information and focus that will verify and validate the appropriate measures being undertaken and accordingly conduct research to further refine the destination development progress and track results. -14- Public Relations Objectives/Strategies To support the overall marketing objectives of attracting the desired visitor(s) groups to Newport Beach by implementing a consistent public relations program designed to enhance Newport Beach's competitive edge and to increase its. -share of the market, to be accomplished by: 1. Assisting with regional and national print/electronic media to develop stories that focus on the high-quality, upscale image of Newport Beach and its attractiveness as a destination -oriented place to visit. 2. Develop information and inform appropriate media about activities, events in Newport Beach through personal contact and press releases which will further "position" and differentiate Newport Beach from its competition. 3. Aggressively pursuing increased editorial credit for members of the bureau in print/electronic media by establishing a.system that alerts media to appropriate story material and facilitates their access to it. 4. Promoting events in the city of Newport Beach which will generate maximum press coverage. 5. Continuing to educate the target audience about Newport Beach and its "fulfillment capabilities" through appropriate brochures, direct mail, and other publications and guides. -15- 6. Developing new and innovative ways to capitalize on Newport Beach's position as the "dominant, most desirable" destination on the south coast. -16- Background There is hardly any business that is not impacted and does not benefit from a healthy tourist industry. The growth in tourism receipts in the United States has out paced the rate of growth in Gross National Product every year for the past decade. 1986, according to U. S. Travel Outlook Forum, will be the best growth year since 1981. Why? Because Americans have restocked in major durables and are diverting their increasing discretionary dollars to leisure travel. Busi- nesses are financing more travel as the economy generates more sales and investment opportunities. Travel to the Pacific region which showed the greatest increase (23%) in 1985, again will demonstrate to be the fastest growing region in the U. S. To ensure a fair share of tourism receipts from this billion dollar industry (tourism is a $25 billion a year business in California and as the number one job and tax producing industry employs 500,000 people) the Newport Beach Visitors Bureau was formed. The Newport Beach Visitors and Conference Bureau, with additional funding from the city of Newport Beach will be in a more formidable position to capitalize on the assets of the city to attract our target markets. -17- BY-LAWS OF THE NEWPORT BEACH CONVENTION AND VISITORS BUREAU a California Non -Profit Corporation ARTICLE I Section 1 NAME: The name of this non profit California Corporation is the Newport Beach Convention and Visitors Bureau. Section 2 OFFICES: The principal office of the corporation shall be in the City of Newport Beach, County of Orange, State of California or in such other place within said County as the Board of Directors may, from time to time, fix. ARTICLE II Section 1 ELIBIGILITY: All persons, firms, and corporations interested in the aims, goals and programs of this corporation shall be eligible for membership in this corporation upon payment of dues as herinafter provided, and upon approval by the Board of Directors. Section 2 APPLICATION FOR MEMBERSHIP: Each application for membership shall be in writing, signed by the applicant in a form prescribed by the Board of Directors. In the case of a partnership or corporation, the application shall state the name of the person or persons who shall represent the member, and the person or persons so designated shall cast the vote to which the member is entitled hereunder, enjoy the privileges and perform the duties of membership subject to revocation and change by the member giving written notice thereof to this corporation. Section 3 APPROVAL OF APPLICATION FOR MEMBERSHIP: Every application for membership must be approved by an affirmative vote of a simple majority of the Directors present at any meeting of the Board of Directors at which a quorum is present. Section 4 DUES: All members shall pay regular membership dues. The amount of such dues and additional fees for special services shall be fixed from time to time by the Board of Directors. Section 5 DUES PAYMENT: Dues which commence on the date designated on the application shall be payable in advance but may be paid other than annually at the discretion of the Board of Directors. Section 6 VOTING: Each member shall be entitled to one (1) vote and may vote or act by proxy except for election of directors. All proxies must be in writing, executed by the members themselves, or by their duly authorized attorneys, and must be filed with the secretary of the corporation at or before the meeting of the members. Section 7 SUSPENSION FOR NON-PAYMENT OF DUES: A member in -arrears in payment of dues for a period of t irty 30) days shall be considered delinquent. If a member is still delinquent at the end of 60 days he shall be considered in a state of suspension. Final suspension shall be at the option of the Board of Directors. Members suspended for non-payment may be restored to membership by full payment of current year's dues. Section 8 DISCIPLINARY ACTION: Any member shall be subject. to suspension or explusion if, upon due notice and hearing before the Board of Directors, such member shall be found guilty of violation of any By-law, rule or regulation of the Bureau,.or of conduct prejudicial to the best interests of the Bureau. Section 9 TRANSFER OF MEMBERSHIP: Membership may not be transferred, sold, assigned, or in any way alienated, and any attempt to do so shall revoke the membership. If and when an organization, corporation, partnership, etc. changes hands, the membership passes to the new corporation, partnership, firm, etc. and the new ownership or management shall designate the represen- tative to this association. ARTICLE III Section 1 ANNUAL MEETINGS: The annual general membership meeting will take place in January of each year. This meeting will also include the announcement of the Board of Directors for the ensuing year and the installation of officers. Section 2 SPECIAL MEETINGS: Special meetings of the members for any purpose whatsoever may be called at any time by the Presi- dent or by the Board of Directors or by written petition signed by not less than ten (10) members entitled to vote thereat. Section 3 ADJOURNMENT: Any meeting of the members, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the members, but in the absence of a quorum, no other business may be transacted at such meeting. When any meeting of the members, either annual or special, is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid, it shall not be necessary to give any notice of the time and place of the adjourned meeting or of the business to be transacted thereat, other than the announcement at the meeting at which such adjournment is taken. Section 4 QUORUM: A majority of the membership present in person or by proxy shall constitute a quorum at the annual meeting or any special meeting of the general membership. In the event a quorum is not present at any meeting, such meeting shall be adjourned. Section 5 WAIVER OF NOTICE: The transactions of any meeting of members, either annual or special, however called and noticed, shall be as valid as though had at a meeting duly held after regular call and notice if a quorum be present, if, either before or after the meeting, each of the persons entitled to vote not present at the meeting either in person or by proxy, signs a written waiver of notice or a consent to the holding of such meeting or an approval of the minutes thereof. All such waivers, consent or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Section 6 WRITTEN NOTICE: Any action, which, under any provisions of the California non-profit corporation law may be taken at a meeting of the members, may be taken without a meeting if authorized by a written notice signed by all of the persons who would be entitled to vote upon such action at a meeting filed with the Secretary of the Corporation. Section 7 VOTING: Every member entitled to vote at any election for directors shall be allowed one vote for each vacancy to be filled. The candidates receiving the highest number of votes up to the number of directors to be elected shall be elected. Names of candidates for inclusion on the ballot forms shall be selected by the Standing Nominating Committee who shall present their list of candidates to a meeting of members to be held in October preceding the annual general meeting. At this time, additions to the list of candidates may be made from the floor, subject to the agree- ment of such candidates. In November, prior to the annual general meeting of the member- ship, ballots will be mailed to each member eligible to vote. Such mail ballots must reach the secretary prior to the Annual Membership meeting in January by a date prescribed by the Board of Directors. Members who are unable to attend the annual general meeting may vote for election of directors by mail, on ballot forms obtainable by application to the Secretary. Such mailed ballots must reach the Secretary prior to the annual general meeting. Section 8 NOTICE OF MEETINGS: Written notice of each annual meeting shall be given to each member entitled to vote, either personally or by mail or other means of written communication, charges prepaid, addressed to such member at his address appearing on the books of the corporation or given by him to the corporation for the purpose of notice. If a member gives no address, notice shall be deemed to have been given if sent by mail or other means of written communication addressed to the place where the principal office of the corporation is situated. All such notices shall be sent to each member entitled thereto not less than seven days before each annual meeting, and shall specify the place, the day and the hour of such meeting, and shall state such other matters, if any, as may be expressly required by statute. ARTICLE IV Section 1 NUMBERS: The executive and administrative power of the corporation shall be vested in a Board of Directors, which shall consist of nine (9) persons, one of whom shall be the current Presi- dent of the Newport Harbor Chamber of Commerce. In addition, there shall be such ex -officio members of the Board of Directors of the corporation as shall from time to time be appointed by the Board of Directors. Said ex -officio members shall serve as such during the balance of the fiscal year in which they were appointed and shall have all the rights and privileges of Directors, except the right to initiate motions and the right to vote. -3- Section 2 TERM OF NOTICE: The term of notice of the directors, except o'r the President of the Chamber of Commerce, shall be for three (3) years, except that at the second annual election, in order to obtain staggered terms, two (2) directors shall be elected for one (1) year, two (2) for two (2) years and two (2) for three (3) years. Section 3 ELIGIBILITY FOR RE-ELECTION: Each director is eligible for re-election and shall serve during his term of office and until his successor is elected or appointed. lu Section 4 VACANCIES: Vacancies occurring in the Board of Directors shall be filled by appointment of the Board of Directors from a list of candidates provided by the Standing Nominating Committee. A director so appointed by the Board of Directors shall serve until the next annual general meeting, at which time a director shall be elected to complete the full term of the director who has resigned. Section 5 TERMINATION: A member elected to the Board shall relinquish his Board membership should he terminate his relation- ship with the member firm with whom he has associated at the time of his election. Section 6 MEETINGS: Regular meetings of the Board shall be held every month. Absence from three consecutive regular meetings without an excuse deemed valid and so recorded by the Board of Directors will be considered as a resignation at the option of the Board. Section 7 SPECIAL MEETINGS: Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the President, or, if he is absent, by a Vice President, and shall be called by the Manager on written request of any three (3) or more Directors. Written notice of such special meetings shall be given in the same manner as for regular meetings of the Board of Directors and shall specify, in addition to the place, day and hour of such meetings, the general nature of the business to be trans- acted thereat. Section 8 NOTICE OF ADJOURNED MEETINGS: Notice of the time and place of holding an adjourned meeting shall be given to absent Directors even if the time and place be fixed at the meeting adjourned. Section 9 WAIVER OF NOTICE: The business transacted at any meeting of the Board of Directors at which a quorum is present, regardless of how said meeting is called or noticed, or when or where the same may be held, shall be as valid as though said business had been transacted at a meeting duly held after regular call and notice, if either before or after such meeting, each of the Directors not present thereat signs a written waiver of notice and a consent to holding such meeting or an approval of the minutes thereof. All such waivers, consents and approvals shall be filed with the corporate records or made a part of the Minutes of the meeting. Section 10 QUORUM: A majority of Directors shall constitute a quorum for the transaction of all business. Section 11 ADJOURNMENT: The quorum of the Directors may adjourn any directors meeting to meet again at a stated day and hour, provided, however, that in the absence of a quorum, a majority of the Directors present at any Directors' meeting, either regular or special, may adjourn from time to time until the time fixed for the next regular meeting of the Board. Section 12 REMOVAL FOR FAILURE TO ATTEND MEETINGS: Any member of the Board of Directors, whether regular or special, absent from more than two (2) consecutive meetings may be removed from office at the discretion of the Board of Directors. Section 13 ATTENDANCE OF MEMBERS: Any members of the corporation may attend any meeting of the Board of Directors and voice an opinion or make suggestions therein at the pleasure of the chair. No member attending such a meeting shall have the power to make motions or vote. Section 14 NOTICE OF MEETING: Written notice of the time and place of special meetings shall be delivered personally to the Directors or sent to each director by mail or other form of written communication, charges prepaid, addressed.to him or her at his or her address as it is shown upon the records of the corporation, or if it not so shown on such records or is not readily ascertainable, at the place in which the meetings of the directors are regularly held. In case such notice is mailed, it shall be deposited in the U.S. Mail at least 48 hours prior to the time of the holding of the meeting. In case such notice is delivered personally as above provided, it Shall be so delivered at least 24 hours prior to the time of the holding of the meeting. Such mailing, or delivery as above provided, shall be due, timely, legal, and personal notice to such director. ARTICLE V Section 1 OFFICERS: The officers of the corporation shall be a President, a Vice President, a Secretary, Treasurer, and such other officer or officers as the Board of Directors may from time to time determine. The President shall not also be the Secretary. Section 2 ELECTION OF OFFICERS: The officers of the corpora- tion except such officers as may be appointed, shall be chosen annually by the incumbent and newly elected Directors as a meeting held prior to the annual general membership meeting. Section 3 REMOVAL AND RESIGNATION OF OFFICERS: Any officer may be removed with or without cause by a majority of the Directors at any regular or special meeting of the Board of Directors. Any officer may resign at any time by giving written notice thereof to the President or Secretary. All effects and properties of the corporation in possession of the officer at time of resignation or removal from office shall be immediately surrendered to the corpora- tion. -r, - Im Section 4 VACANCY: A vacancy in any office, for whatever cause, shall e filled in the manner prescribed in these By-laws for the regular appointment to such office. ARTICLE VI Section 1 PRESIDENT: The President shall be the Executive Director of the corporation and shall, Subject to the control of the Board of Directors, have general supervision, direction and control of the Director and officers of the corporation. He shall preside at all meetings of the members and at all meetings of the Board of Directors. He shall appoint all standing committees and special committees as needed, and may act as ex -officio chairman of said committees. In addition, he will represent the corporation as a member of the Executive Committee of the Chamber of Commerce and will have such other powers and duties as may be prescribed by the Board of Directors or these By-laws. Section 2 VICE PRESIDENT: In the absence or disability of the president, the Vice President shall perform all of the duties of the president, and when so acting, shall have all the powers of and shall be subject to all of the restrictions upon the President. The Vice President shall have such other powers and perform such other duties as may from time to time be prescribed for him by the Board of Directors or these By-laws. Section 3 SECRETARY: The Secretary shall keep or cause to be kept at the principal office of the corporation, or such other place as the Board of Directors may order, a Book of Minutes of all meetings of the Directors and members, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present at Directors' meetings, the number of votes -represented at meetings of the membership, and the proceedings thereof. He shall give, or cause to be given notice of all the meetings of the members and of the Board of Directors required by these By-laws or By-law to be given, and shall keep the seal of the corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or these By-laws. Section 4 TREASURER: The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disburse- ments, gains, losses and surplus. The books of account shall at all times be open to inspection by any Director. The Treasurer shall deposit, or cause to be deposited, all monies and other valu- ables in the name and to the credit of the corporation with such depositaries as may be designated from time to time by the Board of Directors. He shall disburse the funds of the corporation, or cause the same to be disbursed, as may be ordered by the Board of Directors, and shall render, or cause to be rendered to the President and Directors upon request, an accounting of all his transactions as Treasurer and of the financial condition of the corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or these By-laws. ARTICLE VII Section 1 STANDING NOMINATING COMMITTEE: There shall be a Standing Nominating Committee of at least three (3) members which shall be elected by vote of the members at a general meeting of the members to be held at least two (2) months prior to the annual general meeting. Section 2 The duties of this committee shall be: 1. To prepare a list of candidates to fill vacancies on the Board of Directors by election at the annual general meeting. 2. To prepare a list of,candidates to fill interim vacancies on the Board of Directors by appointment of the Board of Directors. ARTICLE VIII Section 1 FISCAL YEAR: The Fiscal Year of the corporation shall commence January first and end December thirty-first of each year. Section 2 ANNUAL REPORTS: At the annual meeting of members the Board of Directors shall submit a balance sheet and profit and loss statement showing the operation of the corporation for the preceding fiscal year. Section 3 BUDGET: During the first month following the commencement of the fiscal year, the Board of Directors shall adopt a budget for the then current fiscal. Section 4 OPERATING STATEMENTS: The manager shall submit to the Board of Directors, at least once a month, an operating statement showing the financial condition of the corporation for the then preceding month, and said statement shall be submitted by the Treasurer to the Board of Directors at its regular meeting. Section 5 MISCELLANEOUS: The books of the corporation shall be open to inspection upon the written demand of any member at any reasonable time and shall be exhibited at any time when required by the demand of ten percent (10%) of the members or at any meeting of the members. Such inspection may be made in person or by an agent or attorney, and shall include the right to make extracts. Demand for inspection other than at a meeting of the members shall be made in writing upon the President or the Execu- tive Vice President. Section 6 POWERS OF AGENTS: Subject to the provisions of the Articles of Incorporation, these By-laws and the California Non -Profit Corporation Law, the Board of Directors may authorize any officer or officers, agent or agent, to enter into any contract or execute any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances; and, unless so authorized by the Board of -7- Directors, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or to any amount. Section 7 BY-LAWS: The corporation shall keep in its principal office for the transaction of business the original or a copy of these By-laws, as amended or otherwise altered to date, certified by the Secretary which shall be open to inspection by the members at all.reasonable times during office hours. Section 8 CONSTRUCTION: Unless the context otherwise requires, the general provisions, rules of construction and definitions contained in the California Non -Profit Corporation Law, shall govern the construction of these By-laws. Without limiting the generality of the foregoing the masculine gender includes the feminine and the neuter, the singular number includes the plural, the plural number includes the singular, and the term "person" includes a corporation as well as a natural person. ARTICLE IX Section 1 BY DIRECTORS: These By-laws may be amended at any time, or from time to time, by a two-thirds (2/3rds) vote of all the members of the Board of Directors. All proposed amend- ments must be submitted in writing at a meeting of the Board of Directors, and before action can be taken thereon, a copy of the proposed amendments shall be delivered to each Director, either personally or by mail. No'action shall be taken by the Board of Directors on any proposed amendment at the meeting at which said proposed amendment is fully submitted. A quorum must be present before any vote can be taken on any proposed amendment. Section 2 BY MEMBERS: These By-laws may be amended at any time and from time to time by the members at any meeting of the members, by a majority vote of the total votes cast, provided, however, that notice of such meeting shall be delivered to each member, either personally or by mail, at least ten (10) days before the date thereof. Said Notice Shall set forth the date, time and place of said meeting, and the amendment or amendments to be proposed thereat. A quorum must be present before any vote can be held on any proposed amendment.