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17 - VNB Annual Marketing Plan
2EW PART CITY OF NEWPORT BEACH C ^GFORN,' City Council Staff Report Agenda Item No. 17 November 12, 2013 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Dave Kiff, City Manager 949- 644 -3002, dkiff(cDnewportbeachca.gov PREPARED BY: Tara Finjgag6iblie Information Manager APPROVED: TITLE: (' //Vis),M, ewport Beach, Inc. Annual Marketing Plan, Financial V ,Ia ements and Budget and the Newport Beach Tourism Business /Improvement District Annual Report ABSTRACT: Visit Newport Beach, Inc. (VNB) is the destination marketing organization for the City of Newport Beach (City), VNB provides marketing services to the City under a 2011 agreement between the City and VNB for Tourism Promotion, Branding, and Marketing Services (Agreement). Under the Agreement, VNB is required to annually submit certain records to the City Council for its review and /or approval. VNB also serves as the administrator for the Newport Beach Tourism Business Improvement District (NBTBID). VNB has submitted the NBTBID's Fiscal Year (FY) 2013 - 2014 Annual Report for the Council's review and approval. RECOMMENDATIONS: 1. Authorize a one -time waiver of the timelines provided in Section 6 of the Agreement; 2. Review VNB's Performance Standards / Marketing Goals Report; 3. Review VNB's Annual Marketing Plan; 4. Review, approve and %or modify VNB's FY 2013 -2014 budget; 5. Review VNB's FY 2011 -2012 and FY 2012 -2013 Audited Financial Statements; and Visit Newport Beach, Inc. Annual Marketing Plan, Financial Statements and Budget and the Newport Beach Tourism Business Improvement District Annual Report November 12, 2013 Page 2 6. Review and approve the FY 2013 - 2014 NBTBID Annual Report. FUNDING REQUIREMENTS: The current adopted budget includes sufficient funding for this project. Under its agreement with the City of Newport Beach, VNB receives 18% of all Transient Occupancy Tax collected by the City to fund destination marketing services and activities. The NBTBID assesses its seven member hotels 2.0 % of gross short -term (stays less than 30 days) room rental revenue. The assessments levied for the NBTBID are applied toward the activities described in the Management District Plan (amended by the City Council on April 24, 2012) and summarized in its annual report. DISCUSSION: Visit Newport Beach, Inc. (VNB) VNB, a non - profit organization (under IRS code §501(c)(6)), is the destination marketing organization for Newport Beach. Under an agreement with the City, VNB provides marketing services to the City and community using transient occupancy tax revenues. The Agreement was first entered into on May 12, 2004 and was last amended on September 27, 2011. The current Agreement will expire on June 30, 2016. Gary Sherwin, President and CEO of Visit Newport Beach, provided an overview of VNB's marketing progress and plans during the City Council's September 24, 2013 Study Session. Pursuant to the terms of VNB's Agreement with the City, the following records are attached for the Council's review: a performance standards / marketing goals report (Attachment A), VNB's Fiscal Year 2013 — 2014 Marketing Plan (Attachment B), and VNB's audited financial statements for FY 2011 -2012 and FY 2012 -2013 (Attachment D). VNB's FY 2013 -2014 budget is included as Attachment C for the Council's review and approval. The Agreement specifies dates that each of the required records must be presented to the City Council and /or submitted to the City. VNB's marketing plan, budget and performance standards are to be presented to the Council in July of each year. The audited financial statements and expenditure reports are due to the City by the end of September. The audited financial statements are then to be presented to the Council for review. City staff and Visit Newport Beach representatives will develop a timeline to help each organization track the progress of the records development and better meet future submittal deadlines. Newport Beach Tourism Business Improvement District (NBTBID) The NBTBID is a business improvement district formed pursuant to the Property and Business Improvement District Law of 1994, codified in Streets and Highways Code Section 36600 et seq., which helps fund marketing and sales promotion efforts for Newport Beach tourism businesses. It was established by Council Resolution 2009 - 21 Visit Newport Beach, Inc. Annual Marketing Plan, Financial Statements and Budget and the Newport Beach Tourism Business Improvement District Annual Report November 12, 2013 Page 3 on April 28, 2009 and is administered by VNB. The NBTBID's Management District Plan - the document that details the district's boundaries, funding and programs - was amended in April 2012. The NBTBID includes seven hotels or resorts, each consisting of 100 hotel rooms or more, located within the City of Newport Beach. They are: the Balboa Bay Club and Resort, the Fairmont Newport Beach, the Hyatt Regency Newport Beach, the Newport Beach Marriott Bayview, the Newport Beach Marriott Hotel & Spa, the Newport Dunes Waterfront Resort & Marina, and the Radisson Newport Beach. VNB, on behalf of the NBTBID owners association, has prepared the NBTBID's Fiscal Year 2013 — 2014 Annual Report (Attachment E) for the City Council's review and approval. The report includes a summary of the NBTBID's proposed activities and budget for the current fiscal year. The report does not contain recommendations to alter the BID boundaries or the method and basis for levying assessments in this fiscal year. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the Califomia Environmental Quality Act ( "CEQK) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Submitted by: Tara Finnigan Public Information Manager Attachments: A. Performance Standards / Marketing Goals Report FY 2013 -2014 B. Visit Newport Beach, Inc. Marketing Plan 2013 -2014 Visit Newport Beach, Inc. Annual Marketing Plan, Financial Statements and Budget and the Newport Beach Tourism Business Improvement District Annual Report November 12, 2013 Page 4 C. Visit Newport Beach FY 2013 -2014 Budget D. Visit Newport Beach Audited Financial Statements for FY 2011 -2012 and FY 2012 -2013 E. Newport Beach TBID FY 2013 -2014 Annual Report pv.?il�9: Tex. �4; �r_• s!.. x,,.cf )yi,'wiCi6:+9;3ae'i'�•w�: >srm+a _may.. mt® n� ...tee ��, �� ��. - Attachment A r`�wp ort &COMPANY Marketing Goals 2013 -2014 Fiscal Year r )<S' {1f) ^ `2 I \,�ht � . ),i v!�`[4yA/J:V•6�4 } i,y '. t i+i` I � �. a j� tc 1, N♦ r.ta ..V. Tbn b� D Ki'¢ 51 i l .l.'�95.. Unique Visitors 485,552 510,558 95% 536,000 5% Web Visits 598,251 600,713 99% 630,700 5% Total Pageviews 1,708,525 1,965,526 87% 2,058,000 5% Avg. Time on Site 2:19 min 2:55 min N/A 2:40 N/A Pages Per Visit 3 4.3 N/A 4.5 N/A .y t6 r ' . ..<'.G�/•wf�j�:yF.i�?:� -„ ��C . : �) Y .2,��•)� ���y a .. ti `F3W. Y�) k>! . Av .�J... . Y P "I ,` \ {r,(y. RQ'Qi }Tt• - ry ^e .t +;::� Facebook Followers 38,208 37,800 101% 42,000 11% Twitter Followers 10,863 9,135 119% 12,000 31% YouTube Video Views 46,333 38,250 164% 47,000 23% T I S' n �'. �.� fi1� y5 ti R >M5 ^ 4sira ADUEtuT4 1 s WON i'" Total Ad Impressions 94,069,765 102,900,000 91% 108,045,000 5% Online Ad Clicks /Visits to Site 127;314 204,750 62% 215,000 5% Travelocity Bookings from website 131 1 116 113% 1 N/A— book direct N/A !•!'IT uy�,rt;q n,ElGSq�ws Oi�• � ®e ..am�ro �,. _® s�� �� .�— —.— r .y I 'd - W 1. '. �.�y ����� �. ..', �J.`6 {� S 7�� 4 � � � 'y� t�• A �. },N 6��t ,.en:.v•S,•�ro4.+Y'��*,G+A't�•y ate++ -.. ...' -,+i 4..'.Y• a. wS f+. - t {ja •SLy .,S ❑ry, x, h _u, hyr �• t,�3�yy J. Visitors Guide 1.00,000 100,000 100% 100,000 N/A Visitors Guide CD 2,500 2,500 100% 2,500 N/A Visitors Guide USBs 2,500 2,500 100% 2,500 N/A Maps 10,000 10,000 100% 10,000 N/A w ,y vex sg t:°',� ` +3G+' ° s k�V. i%C RC'.S•Ai O d� R:i•a t J .I, - `�,[ m. �. .,1 - M. �y , �,�, it?t.I ,t +�- ^• tN ai. }3•. f }: - ' 4'4��1 * � � �'3 Media Pitches out 396 278 142% 400 44% Partner Leads 116 65 179% 110 69% Ad Equivalency $4,617,452 $4,611,170 101% $4,841,728 5% Print Circulation 47,594,353 35,795,953 133% 48,243,705 35% Unique Visitors 288,613,026 222,775;987 130% 302,585,019 .36% Impressions 3,578,181,680 2,431,670,292 147% 3,233,004,068 '33% Total Media Assists 199 195 102% 205 5% Domestic Media Destination Visits 66 53 125% 70 32% International Media Destination Visits 58 58 100% 60 3% Y M `Fi .., 8• A .'!r' t ? Community Partner Businesses 352 325 108% 341 5% 't'a .Y �' sel n AMP .. .K. �� l� S ah• Y Wholesaler Companies 44 34 129% 52 5% Wholesaler* Companies 15 26 57% 15 0% Attachment B Marketing Plan 2013/2014 Brand Promise, Mission, Vision Priorities Values Organizational Structure Governance Research -16 Economy Sentiments Forecasts Media Visitor Profile Sustainability Mobile E- Communications Advertising Promotions Public Relations Community Relations Strategic Corporate Partnerships Visitors Concierge International Marketing Finance & Administration Sales- 86 Overview & Initiatives Markets Events, Sales Missions Tradeshows & Promotions Partnerships Market Situation Appendix- 108 Sources Calendar 2 Staff UI -I Contents �• Introduction and Overview 3 Marketing- 4S - Letter from the President Objectives .,. � _ Newport Beach & Co. Collateral Strategic Destination Plan Website Visit Newport Beach Inc. Social Media Brand Promise, Mission, Vision Priorities Values Organizational Structure Governance Research -16 Economy Sentiments Forecasts Media Visitor Profile Sustainability Mobile E- Communications Advertising Promotions Public Relations Community Relations Strategic Corporate Partnerships Visitors Concierge International Marketing Finance & Administration Sales- 86 Overview & Initiatives Markets Events, Sales Missions Tradeshows & Promotions Partnerships Market Situation Appendix- 108 Sources Calendar 2 Staff Introduction and Overview M ..' �' � :III l �.a t.• .� 1' r - - ' •� .rte•» � ^T � 1�M` �,.. . t ._ � �} lip ry r ,1.rq.I;4y YTJ ' a _tea YA.� Bid AC .., �)oi�l 4 Ap •�'i7t7 ",., +fir 3 Newport Beach, California Population: 85,990 Incorporated: 1906 Neighborhoods: Airport District, Back Bay, Balboa Island, Balboa Peninsula, Cannery Village, Corona del Mar, Crystal Cove, Fashion Island, Mariner's Mile, Newport Coast, Westcliff/ 171h Street Location: Orange County 45 miles south of Los Angeles 90 miles north of San Diego 102 miles west of Palm Springs 138 miles south of Santa Barbara z Ocean: 9 miles of ocean 25 miles of Harbor 237 acres of recreational beach property Newport Harbor: 9,900 boats 1,230 docks Accessibility: Adjacent to John Wayne Airport, Orange County; 20 miles south of Long Beach Airport; 45 miles south of LAX Climate: Average temperature of about 75° F r ` !ll Letter fr ®m the President ` +�'�11+ UI'1 In today's technology and app driven world, it's certainly no secret that how people learn about new travel products and services is rapidly changing. Except for long haul vacations, people plan their leisure escapes only days and sometimes hours ahead of time. Even the meetings industry has been impacted and booking cycles are tighter than ever before. The pace is so fast that even a three month marketing plan appears long range these days. Yet here we are, presenting another annual Visit Newport Beach Marketing and Business Plan. While this plan does outline a year's worth of work, its important to note that while the tactics may change, every destination needs a singular strategic focus. This year's plan, like the ones before it, emphasizes a unified direction for the entire hospitality community. Great new marketing programs are useless unless there is a shared understanding of what success ultimately looks like. So theoretically, we might plan another direction on how to get there as the year goes on, but the destination is always the same. This plan, crafted under the direction of our talented Executive Vice President and Chief Marketing Officer Vicki Higgins, relies on useful research data from a variety of sources to help validate and illuminate our direction. Please use any of the information for your own marketing plans. You'll find it under Situation Analysis and many of our tourism partners find it the most popular part of this plan. As you might have heard, Visit Newport Beach is now included under the new marketing umbrella for the city, Newport Beach and Company. This new entity is designed to better integrate and coordinate all marketing activities for the city. You will find the new organization chart for this new entity on Page 6. Some of the business components, which require city funding and approval, are still in the development stage at this writing, but they are expected to be finalized soon. Once they are, many parts of this Marketing and Business Plan will be incorporated into a larger and more integrated approach to selling Newport Beach. Both Newport Beach and Company, and Visit Newport Beach Inc. fulfill an important function in the city and that is to serve as its chief economic development program. We are fortunate that in a city rich with wonderful assets, economic development in Newport Beach does not mean revitalizing seriously depressed neighborhoods, but rather selling our world- renown product to even greater audiences. And, as an added bonus, we get to have them all realize how truly lucky we are to live and work here. As always, we welcome your questions and comments. Gary C. Sherwin 5 Newport Beach and Company Newport Beach and Company A Strategic Clustered Approach to the Brand Marketing and Selling of the Newport Beach Community Destination Marketing Sales and Services bloating Planners Visitors Wand 501(c)6 TWO BOD Industry Partner Invostmenl Board o(Diroctors 1 501(c)6 TOT I Newport Beach Foundation t 501(c)3 BOD Community Leadership Fit rlciaN —! Development Administrative Team�j PresidonUCEO Brand Marketing I Team I Marketing. Sales and Services • Residents Visitors • Special Evens RBIO City Contract Industry Parner Inveotment Marketing, Sales, Services and Operations Select Event Execudon New Event Development Sports Support City Contract Sell - Supporting Revenue Marketing, Sales and Services • Residents Visitors • Community Events City Contract Self - Supporting Revenue Marketing, Sales and Services SitelFaclllty Development Film Attraction Services Film Inconllvas City Contract Permit Revenue Marketing, Sales and Services BID Communications • BZB Support • Business Retention City Contract DID Partner Invosmtenr 0 u.n-= Cu, orl Newport Beach Strategic Plan In 2011, Visit Newport Beach Inc. developed a three -year Strategic Plan. The Strategic Plan is developed to create a long term direction for the organization. The three -year Strategic Plan identifies Strengths, Weaknesses, Opportunities and Threats of the overall destination of Newport Beach shown here in this SWOT analysis. This Annual Marketing Plan is then developed to fulfill the objectives outlined in the Strategic Plan. Visit Newport Beach Inc, Brand Promise Newport Beach is an Orange County coastal fantasyland that represents a "taste of the perfect life, a place where visitors can experience a friendly, sophisticated, aspirational lifestyle that permits them to escape from daily reality. Comprised of a collection of unique islands and neighborhoods that form their own distinct character, the destination. offers a combination of affluence, quaintness, casual glamour and attention to detail. Coupled with the man -made and. natural beauty of the destination, this is the place that allows the visitors to relax and dream what can be. Vision. As a brand- driven and entrepreneurial destination leadership organization, Visit Newport Beach Inc. is innovative and professional in securing new visitor business to the city. It does for its stakeholders what they cannot do for themselves in telling the compelling Newport Beach story. Mission Statement As the City of Newport Beach's official destination marketing organization, the mission of VisitNewport Beach Inc. is to partner with the tourism and hospitality industry by protecting and nurturing the destination brand and to deliver additional spending by leisure and conference visitors, leading to enhanced community economic vitality and quality of life. 9 OrLyanizational Priorities Integrated Destination Marketing m cart 1 , , n Visit Newport Beach Inc. has reviewed the organizational structure to better integrate all forms of destination marketing beyond tourism. This review resulted in the development of Newport Beach & Company (NB & Co.) This entity will market many areas of the destination include dining, film and events so that all external messaging regarding the destination can be served by a unified umbrella brand and consistent communications. Drive Market Campaign This past year several campaigns were conducted to capture a share of the drive market. In an effort to continue overnight conversion from the LA and Inland Empire drive market, Visit Newport Beach Inc. will launch a new ad campaign in this fiscal year. Public Service Hospitality Training This past year a new program was rolled out in partnership with the Newport Beach Police Department to better educate all of their public safety officers and volunteers on quality visitor service training. The next phase of this program will be created in partnership with other public service organizations (i.e., harbor commission, fire department or lifeguards) in the city. International Markets Visit Newport Beach Inc. will continue working closely with Black Diamond (UK) and Gate 7 (Australia) in order to increase the international visitation to Newport Beach. This year, Visit Newport Beach Inc. has partnered with the Orange County Visitors Association to open the first ever Orange County office in China. Conference Sales Client Engagement The Visit Newport Beach Inc. sales team recorded the largest number of booked room nights in its history this past year. To maintain the team's momentum, Visit Newport Beach Inc. will continue to focus on new programs to enhance existing client engagement and make Visit Newport Beach Inc. the "go to" organization for group bookings in the city, including a continuation of the "Live the Dream" sweepstakes program. 9 Organizational Values r. Visit Newport Beach Inc. believes the corporate values should be lived, not just written down. The values below help make Visit Newport Beach Inc. a great organization to work for and will help bring value to our community: 1. INNOVATION - Strive to always be relevant and trending ahead 2. CUSTOMER AND STAKEHOLDER CENTRIC -Develop a fundamental shared message to drive cooperative work 3. LEARNING AND KNOWLEDGE - Enrich destination expertise and stay on the cutting edge through new developments 4. FLEXIBILITY - Work to be strategic but willing to adapt to opportunities S. RESPECT - Always treat others with respect 6. ENJOYMENT - Exude a positive attitude and passion for the destination 7. WELLNESS - Take responsibility for smart choices and foster life balance 8. RESOURCEFULNESS - Do more with less, be efficient, and share best practices 9. INTEGRITY - Be ethical and provide transparent communication 10. COMMITMENT - Providing the marketing efforts for Newport Beach domestically and internationally requires complete commitment 10 `�•�: 619. U! "1 Organization Structure Michelle Donahue Sr. Vice President of Sales Amanda Kliem National Sales Manager Hillary Burton National Sales Manager Open Research /Account Bette Haddock National Sales Manager Lori Hoy National Sales Manager Erin Stapley Sales & Research Board of Directors Executive Committee Gary Sherwin President & CEO Alicia Snyder Executive Assistant to CEO/ Office Manager Mark Rudyk Director of Online Marketing Brianna Saucedo Online Marketing Coordinator Lesley Swain Chief Financial Officer Jeffrey Soto Director PR & Erin Ramsauer Public Relations & Vicki Higgins Executive Vice President, Chief Marketing Officer Ruby Gualberto Vice President of Open Director of Sarah Marshall Visitor Concierge at NB &Co. Visitor Concierges at Fashion Island DonniLove Leon Rodgers Rhonda Mais Stacy Alfaro 11 Governance Executive Committee 2013 -2014 Debbie Snavely Newport Beach Marriott Hotel & Spa Chairperson Andrew Theodorou Newport Dunes Waterfront Resort & Marina Vice Chairperson Linda M. Beimfohr Hornblower Cruises & Events Secretary Daniel Kuperschmid Hyatt Regency Newport Beach Treasurer Candace Bisconte ACCESS Destination Services Member at Large Homer Bludau Former City Manager Member at Large Dennis O'Neil City of Newport Beach City Delegate 12 Governance c Board of Directors 2 013 -2 014 Debbie Snavely Newport Beach Marriott Hotel & Spa Chair Andrew Theodorou Newport Dunes Waterfront. Resort& Marina Vice Chair Brion Amendt Newport Channel Inn Kandee Anderson Newport Beach Marriott Bayview Craig Batley Burr White Realty Linda M. Beimfohr Hornblower Cruises & Events Candace Bisconte ACCESS Destination Services Homer Bludau Former City Manager Annika Chase Disneyland Resort Dieter Hissin The Balboa Bay Resort Russ Kline American Express Karl Kruger Fairmont Newport Beach Daniel Kuperschmid Hyatt Regency Newport Beach Giuseppe Lama. The Resort at Pelican Hill Robert Leck Radisson Hotel Newport Beach Carol McDermott Government Solutions Dennis O'Neil City of Newport Beach Cynthia Pirtle Cowell Newport Beach Public Library Tom Pollack ExplorOcean Nina Robinson Hoag Hospital. Gregg Schwenk Newport Beach Film Festival Donald Stamets Island Hotel Newport Beach Tanya Thomas Fashion Island Dan Matusiewic7 Jim Walker Finance Director, City of Newport Beach Bungalow Restaurant 13 Governance Tourism Business Improvement District Board of Directors Kandee Anderson Newport Beach Marriott Bayview Daniel Kuperschmid Hyatt Regency Newport Beach Dieter Hissin Balboa Bay Resort Robert Leck Radisson Hotel Newport Beach Karl Kruger Fairmont Newport Beach Debbie Snavely - Chair Newport Beach Marriott Hotel & Spa Andrew Theodorou - Vice Chair Newport Dunes Waterfront Resort & Marina iCl Governance Marketing Committee 2013 -2014 Kevin Lorton Hornblower Cruises and Events Chairperson Pam Clark Fairmont Newport Beach TBID Kevin Gasparro Balboa Bay Resort TBID Heather Humphries Hyatt Regency Newport Beach TBID Jan Hollis Radisson Hotel Newport Beach TBID Lindsey Strutzenberg Newport Beach Marriott Hotel & Spa TBID Wendy Boyd American Express Sheri Drewry Wilmas Patio Tara Finnigan City of Newport Beach Gina Kerley OC California's Golf Coast Jenny Wedge John Wayne Airport, Orange County ,_� cn• or•t ALI 15 Research �c�r art z� Research The National Economic Climate: Signs of Momentum 'Fort As this marketing plan is written, the nation's economy seems poised for an improvement in the pace of the recovery, however significant and persistent risk abounds. Following the nation's slowest post -war recovery from a recession on record, key economic indicators are showing signs that the economy is ramping up. In recent weeks, many positive signs have emerged, including: • Retail sales expanding at their fastest clip in five months • Leading economic indicators rising at a greater rate than expected • Existing home sales climbing to a three -year high • The Federal Reserve signaling it will maintain its highly accommodative monetary policy • The stock market continuing it strong forward progress The latest signs of momentum are good news for an economy facing serious headwinds from higher taxes and pricier gasoline. These headwinds are likely to persist in the near future, as the effects of the federal government sequester will be felt later in the year. These factors have led many economists to predict a moderately improved economic climate in the coming year. 17 Research " The National Economic Outlook: Sustained Moderate Growth Expected The current economic recovery has been accompanied by sustained high levels of unemployment and challenges to job creation. However, the U.S. economy gained an average of 181,000 jobs a month in 2012 and many forecasters expect equivalent gains in 2013, with acceleration to 200,000 jobs a month in 2014 and 220,000 in 2015. As a result, by the end of 2015, the unemployment rate will fall to about 6.5 percent. Leading economic forecasters seem to agree that the next year will be one of sustained moderate growth. The projections of three leading organizations look as follows: • The Federal Reserve Bank believes that the outlook is mixed, and growth in the nation's GDP will be around 2.8 percent in 2013 • The UCLA Anderson Forecast says the nation's gross domestic product is poised to surpass the 2 percent annual growth rate of the past four years and reach 3 percent by 2014 • Oxford Economics expects GDP growth of 2.7 percent in 2013 W, Research The National Tourism Industry: Continued Strength .': '111 ON As we move deeper in 2013 and beyond, America's $1.9 trillion travel industry is expected to experience healthy growth and be a continued source of significant strength to the overall economy. The U.S. Travel Association (USTA) forecasts that domestic person trips will grow by 1.1 percent this year, followed by a 1.6 percent expansion in 2014. Furthermore, international visitation is expected to grow by 4.0 percent in 2103, followed by 5.4 percent in 2014. This growth in visitor volume is expected to create substantial growth in travel- related spending. In the next two years, overall travel expenditures are forecasted to grow by 3.6 percent and 4.5 percent, respectively. This spending will be punctuated by large increases in spending by international visitors of 7.1 percent this year and 7.3 percent in 2014. A similarly important projection is that overall inflation in the costs of travel is expected to be moderate in the coming year. The U.S. Travel Association predicts that its Travel Price Index will increase by a modest 3.0 percent in 2013. Inflation in domestic travel prices is expected to hold at this rate through 2014. If it comes to fruition, these moderate price fluctuations will be good news for an industry that has been battered in recent years by rapid and unexpected changes in fuel prices. Moil Source: U. S. Travel Association Travel Forecasts. Updated Nov 1, 2012 'Based on chained 2005 dollars. "1982 - - -84 =100 - Excludes international visitors' spending on traveling to the U.S. on U.S. flag carriers. and other mist. transport ation. '*-One person trip of 50 tulles or 2� more, one way, away from home or including one or more nights away from home. Sources: U.S. Travel Association's Travel Forecast Model, BLS. Department of Labor; OTTI, BEA. Department of Commerce. . / / /!`'1V Urt Research t I ,. _= Forecasts tr• 2009 2010 2011 2012 , o - ;Q14 2015 r Real GDP ($Billions)' 13,161.90 12,757.90 13,063.00 13,299.10 13,592.40 13,900.80 14,291.30 14,726.80 15,164.00 Unemployment Rate ( %) 5.8 9.3 9.6 8.9 8.2 7.7 6.7 5.9 5.3 Consumer Price Index (CPI)•• 215.3 214.6 218.1 224.9 229.3 234.3 239.5 2451 250.8 Travel Price Index (TPI)" 257.7 241.5 250.7 266.9 275.6 283.7 292.2 303.3 313.5 Total Travel Expenditures in U.S. (S Billions) 772.5 699.8 747.4 812.9 851.5 882.3 922.3 971.3 1,019.50 U.S. Residents 662.1 605.6 643.9 696.7 726.8 748.8 779.1 818.1 856 International Visitorso" 110.4 94.2 103.5 116.1 124.7 133.5 143.2 153.2 163.5 Total International Visitors to the U.S.(Millions) 57.9 55 59.8 62.7 65.1 67.7 71.3 75.4 78.5 Overseas Arrivals the U.S. (Millions) 25.3 23.8 26.4 27.9 29.2 30.5 32.2 34.4 36.1 Total Domestic Person Trips" "(Millions) 1,964.90 1,900.10 1,963.70 1,998.80 2,035.20 2,058.40 2,091.70 2,126.50 2,160.30 Business 461.1 437.7 449.5 454.2 460.2 464.5 470 475 480.1 Leisure 1,503.80 1,462.40 1,514.20 1,544.60 1,575.00 1,593.90 1,621.70 1,651.50 1,680.20 Source: U. S. Travel Association Travel Forecasts. Updated Nov 1, 2012 'Based on chained 2005 dollars. "1982 - - -84 =100 - Excludes international visitors' spending on traveling to the U.S. on U.S. flag carriers. and other mist. transport ation. '*-One person trip of 50 tulles or 2� more, one way, away from home or including one or more nights away from home. Sources: U.S. Travel Association's Travel Forecast Model, BLS. Department of Labor; OTTI, BEA. Department of Commerce. Research California's Economic Outlook: On Pace for Slow Yet Steady Growth T California's economy in many ways is expected to mirror national trends. The UCLA Anderson forecast for the California economy calls for steady, unexceptional economic growth in the current year, with gradually accelerating growth in the following two years. Real personal income growth is forecast to be 1.4 percent in 2013, followed by 3.6 percent in 2014 and 3.3 percent in 2015. Unemployment in California is forecasted to fall through 2013 and will average about 9.6 percent this year. In 2014, the unemployment rate is expected to fall to 8.4 percent and then to 7.2 percent in 2015. Local and State Travel- Generated Revenues by Type of Tax, 2011 Source: Dean Runyan Associates, Inc. Property taxes and fees, and taxes of selective goods and activities not 21 included. Slate Income taxes Include personal and corporate. Research Domestic Traveler Sentiment: Enthusiasm for Travel at an Historic High cI o1,1 Americans appear to be in the mood to travel once again. Two recent traveler sentiment tracking surveys show that domestic travelers are enthusiastic about increasing both the number of trips and their travel budgets in 2013. Results from Destination Analysts, Inc.'s January 2013 edition of The State of the American Traveler'" survey show travelers are once again feeling optimistic about their upcoming leisure trips. The percent of leisure travelers expecting to travel more in the upcoming year (compared to the previous year) is approaching its highest level since before the 2008 economic meltdown. In January of this year, the proportion of leisure travelers planning to travel more increased to 34.2 percent, up from 27.5 percent six months ago. Spending expectations are also high, with 33.4 percent expecting to increase their leisure travel spending in the coming year, a strong rise from the previous survey conducted six months prior. Improved financial outlooks and moderate gas prices appear to be driving these positive results. In the latest survey, significantly fewer travelers reported that either personal financial concerns or high gas prices had kept them from traveling more than they would have otherwise preferred in the past 12 months. Only 40.9 percent reported that "personal financial reasons" have kept them from traveling more, compared to 47.6 percent six months ago. Similarly, only 40.7 percent said that high gasoline prices have had a similar effect, down from 46.6 percent in July 2012. 22 Leisure Travel Expectations for the Next 12 Months 11did a o 106 1 �1116 1 � rLnnn lIh N o Ln 00 L N IN 1 ' 'a 'N c c o n o N Ln M , N , M I N , M Leisure Travel Spen FF,VolrM UZ 00 dine for the Next 12 Months F-4- U U.10 r ri 1 a �Ln 'C* 1 �� 1 1Ln o 0 0 ~ Ln \ a r4 LA N MINIMM -, 1,1u oll Research - t USTA's Travel Sentiment IndexT`" Similar research by the U.S. Travel Association also reaffirms domestic travelers' heightened enthusiasm. The USTA Traveler Sentiment Index" (TSI) is a quarterly measurement of consumer attitudes toward leisure travel based on the following factors: available time and finances, interest, affordability, safety of travel and quality of service. The TSI is indexed to a March 2007 base of 100. A score above 100 means the perception is more positive than negative, while a score below 100 reflects a more negative perception. The downward trajectory in the overall Traveler Sentiment Index that began last April came to a dramatichalt in February as the overall TSI soared to 100.8 according to the February 2013 travelhorizons'' survey, upon which this score is derived. This marks the first time since the travelhorizonsT" survey began that the overall TSI has surpassed the March 2007 base of 100. The February 2013 TSI increased 7.2 points from a February 2012 Index of 93.6, and increased ten points from the October 2012 overall TSI ,(90.4). All six components comprising the overall TSI realized gains from February 2012, most notably "affordability of travel," which increased from 102.6 to 11.4.5.6 24 Research 110 105 100 95 MI 85 E:i7 75 70 o� o� p� p� p� p° o° o� o°' p°' p°� o°' ;�° ti° ti° ti° ti� titi titi titi titi titi titi titi Source: MMGY Global travelhorizonsTM via US Travel 25 Research International Visitation: A Rapidly Evolving Force Approximately 66 million international visitors arrived in the United States last year, and spent $168.1 billion.while in market By far the largest feeder markets for the United States are Canada and Mexico, contributing to nearly half of all visitors. Still, many countries contribute significant numbers of visitors each year, The table shows the most recent arrivals data from the Federal government. As is typically the case, the United Kingdom, Japan and Germany are the Country's largest overseas contributors of visitor traffic. Although not given the publicity of more emerging markets, travel stalwart Japan experienced strong growth (13.9 %) in the first ten months of 2012. Japan is the fourth largest contributor to international visitation to the United States. Interestingly, however, the sixth largest feeder market is now the emerging market of Brazil, which contributed over 1.6 million visitors in the first 10 months of 2012. 'Phis marks a 16.8 percent growth rate from the first 10 months of 2011. Immediately behind Brazil on the list is China, contributing 1.3 million visitors in the same period, an astonishing 37.3 percent growth rate when compared to the salve period one year earlier. Nevertheless, future prospects for international visitation are indeed bright. The U.S. Department of Commerce Office of Travel & Tourism Industries (OTTI) both tracks and forecasts levels of visitation to the United States. Their most recent forecasts predict an increase of 2.7 million visitors to the United States in 2013, an increase of 4.1 percent. An additional 3.0 million visitors will be added to the mix in 2014, which would mark a 4.3 percent increase from the currentyear. , „1, cu• uJr( cl t 11 II..•: 2012- Top Tourist Generating Countries for U.S. RANK COUNTRY OF RESIDENCE NUMBER OF ARRIVALS % ZHANGE 1 CANADA 15,876,017 5.4 2 MEXICO 9,117,034 6.2 3 UNITED KINGDOM 2,466,672 -1.6 4 JAPAN 2,434,677 14.7 5 GERMANY 1,240,164 4.8 6 BRAZIL 1,107,953 17.9 7 FRANCE 1,039,448 -1.1 8 PEOPLE'S REPUBLIC OF CHINA (EXCL HK) 1,031,072 .39.4 9 KOREA, SOUTH 840,599 6.8 10 AUSTRALIA 705,15S 5.6 11 ITALY 577,173 -6.2 12 INDIA 525,143 7.6 13 SPAIN 414,206 -12.3 14 ARGENTINA 412,242 20.7 15 NETHERLANDS 403,128 -0.3 16 VENEZUELA 379,914 23.0 17 COLOMBIA 362,105 16.3 18 SWITZERLAND '317,315 4.0 19 SWEDEN 283,381 0.5 20 IRELAND 212,375 -4.3 TOTAL TOP 20 FOR Y -T -D 39,745,773 6.3 Source: Office of Travel &Tourism Industries, International Trade 26 Administration, U.S. Department of Commerce U Research Compared to the last forecast (prepared by Office of "Travel and Tourism Industries in 2011), this year's Travel Forecast represents a slight upward revision in each of the five years of the Spring forecast period. The upward revisions begin in year 2012 and ultimately produce an upward adjustment of nearly one million additional total growth over the 2012 -2016 period. The Spring forecast called for growth for most countries; the Fall forecast does the same, just a different and often higher level of growth. We note this change as it is another indication of the growing confidence shown by economists in the near term prospects for the economy. 90 80 70 60 s0 40 30 20 10 0 00 O, Off' 01 Oy OID 0A O� O° ti0 N, NS\ \N \�\ \� \k:\ \N 10 10 10 LO y0 y0 10 10 y0 LO 10 LO OtiL 0,� 0yP Otis Oyro 011 L L L L L L 27 Source: U.S. Dept. of Commerce, ITA Office of Travel and Tourism Industries (OTT)), Secretarla de Mexico (Mexico), Statistics Canada- Fall 2012 Forecast Research California: Strong Tourism Demand Drives Growth California is an exceedingly popular destination among both domestic and international visitors. Its strong tourism brand and vast array of attractive destinations and attractions hold deep appeal. Traveler surveys consistently show that a significant proportion of Americans are actively considering a visit to the state. According to national research commissioned by Visit California, nearly 40 percent of Americans intend to travel to the Golden State at some point within the next 12 months. Similarly, Destination Analysts found in its January 2013 The State of the American Traveler survey that approximately half of adult leisure travelers say they are at least "somewhat likely" to travel to or within California in the next two years. Fully 15.2 percent said they were "certain" to visit or travel in California, and an additional 15.9 percent were "very likely" to. 45% - 40%- 35% - 30% 25% 20% 15% 10% 5`Yo 0% Source: Visit California 38.7% 36.1% 39.6 29.0%31.5 2.5% 31.4% 27.3% 28.3% Fall Jan Feb Mar May Aug Oct Mar May Dec Apr Feb Jun Dec 108 109 109 109 109 109 109 110 110 110 110 '12 '12 '12 Kfl Research 160,000.00 140,000.00 120,000.00 100,000.00 80,000.00 60,000.00 40,000.00 20,000.00 0.00 aes,S hPC�e y �o� ' pca,�e � �e `0 Oya Jc Oya orOea F Qs�� h� Q�x a aoa Oe �o Sac (.o `�6 map, ¢�Q Qa� Sacs lac � Source: Dean Runyan Associates, Ca. Travel Impact by County, April 2012 Or( 02010 02 011 29 Research California Accommodation Spending Day Travel, $23.38 Hotel, Motel, $51.36 -\ Vacation Home, 54.213 Campground, $3.46 Private Home, $13.2B Source: Dean Runyan Associates, Ca. Travel Impact by County, April 2012 " CN' of "l i I I I z 30 Research tip lorl The hotel industry's performance is perhaps the most reliable indicator of the travel industry's health, and California's popularity has expressed itself mightily in the current year through strong demand in nearly every metropolitan area. In 2012, the national hotel occupancy rate stood at 61.4 percent, while California's was over 7 points higher at 68.8 percent. Nationally, the average daily rate for hotel rooms was $106.10, while California's was 16.1 percent higher at $123.23 per room. Across California, metropolitan areas performed extremely well in 2012. Overall, revenue per available room (RevPar) grew 9.6 percent in California, compared to 7.3 percent nationally. In 2012, the top performing metropolitan. areas for RevPar growth in California included Oakland ( +16.3 %), San Jose -Santa Cruz ( +14.8 %), San Francisco -San Mateo ( +12.8 %), Tulare - Visalia (11.8%), Los Angeles -Long Beach ( +11.0), and Stockton - Modesto ( +10.2 %). Nearby Anaheim -Santa Ana (Orange County region) recorded a 3.1 percent increase in occupancy and 6.0 percent growth in its average daily room rate, resulting in a healthy 9.3 percent increase in RevPar for the region. Like much of the state, in Newport Beach, occupancy, ADR and RevPar were all up in 2012 over 2011. Occupancy increased 4.5 percent to 63.1 percent in 2012. ADR increased 7.1 percent to $171.88 leading to a 12 -point RevPar increase to $108.46 from $96.85 in 2011. 31 Research T jjjjffp��w Ocr 2012 % 2011 Year to Date- Dec. 2012 AIDIR RevPar 2012 2011 2012 vs. Dec. 2011 2012 Occ Percent ADR Change RevPAR from YTD Room Res Null" Room Avail Room Sold United States 61.4 59.9 106.1 101.8 65.17 61.02 2.5 4.2 6.8 7.3 0.5 3.0 Pacific 67.9 65.6 125.98 119.05 85.49 78.06 3.5 5.8 9.5 9.7 0.1 3.6 California 68.8 66.4 123.23 116.50 84.81 77.36 3.6 5.8 9.6 9.6 -0.1 3.6 Anaheim/ Santa Ana (OC) 73.0 70.8 120.28 113.50 87.86 80.38 3.1 6.0 9.3 9.6 0.3 3 5 Los Angeles/ Long Beach 75.4 71.7 130.12 123.24 98.11 88.42 5.1 5.6 11.0 9.8 -1.0 4.0 Riverside /San Bernardino 58.3 55.8 91.79 89.68 53.47 50.09 4.3 2.3 6.8 7.4 0.6 5.0 San Diego 70.7 68.7 131.60 126.02 93.01 86.58 2.9 4.4 7.4 7.6 0.1 3.0 San Francisco/ San Mateo 80.4 79.0 171.72 154.83 137.99 122.36 1.7 10.8 12.8 12.6 -0.1 1.6 San Jose/ Santa Cruz 71.9 68.8 124.38 113.26 89.39 77.87 4.5 9.8 14.8 14.7 -0.1 4.4 California South /Central 58.3 57.2 74.81 73.54 43.65 42.10 1.9 1.7 3.7 4.6 0.9 2.9 California Central Coast 65.4 63.2 137.51 132.63 89.96 83.87 3.5 3.7 7.3 7.7 0.4 3.9 Newport Beach 63.1 60.4 171.88 160.44 108.46 96.85 4.5 7.1 12.0 -- - 32 Source: Smith Travel Research, visit California Report, Dec. 2012 Research Domestic visitation to California is expected to grow throughout the remainder of this year and accelerate in the next two years. Industry forecasts prepared by Tourism Economics for Visit California show the industry's strong 2012 performance continuing this year. Overall, the number of domestic visits to the state is forecasted to increase 1.9 percent this year, followed by growth of 2.2 percent in 2014. According to Tourism Economics, spending by domestic visitors to California will also increase from $109.0 billion to $114.6 billion this year. In 2014, domestic visitor spending in California will climb further to $120.7 billion, a 5.3 percent jurnp from the current year. On top of these expected increases from the domestic market, California is expected to reap the benefits of rapidly expanding international visitation. Tourism Economics predicts even faster growth in California's international markets. This year, 5.1 percent more international visitors are expected to visit the state than in 2012 and these visitors are anticipated to spend $22.6 billion, an increase of 7.9 percent from a year earlier. In 2014, this growth is expected to continue, with 5.0 percent growth in international visitor volume and 8.3 percent increase in spending. Total Visits Total Visits Leisure Visits International Total % Change Overseas Mexico Canada Leisure % Change Overseas Mexico Canada 6.8% 5.9% 3.3% 2.5% 2.2% 2.5% 2.7% -6.6% -7.0% 5.6% 4.9% 2.8% 3.1% 2.2% 2.2% 1.9% 2.0% 2.2% 2.3% 2.5% 2.6% -9.1% 9.0% 9.1% 5.8% 5.1% 5.0% 4.8% -13.1% 18.2% 10.5% 5.1% 5.6% 5.5% 5.4% -7.3% 1.8% 8.5% 6.8% 4.8% 4.7% 4.2% -1.9% 10.0% 6.4% 3.5% 4.8% 4.9% 4.9% -3.4% 10.6% 9.1% 5.5% 4.5% 4.4% 4.3% 0.2% 18.2% 10.5% 5.0% 5.1% 5.0% 5.6% -7.3% 5.3% 8.5% 6.6% 4.1% 3.9% 3.4% 3.3% 10.0% 6.4% 2.6% 4.0% 4.2% 3.8% Source: Tourism Economics. Historical sources: TNS Global (domestic); CIC Research, OTH (international); Dean Runyan (expenditures) via Visit California 33 Research Orange County's Opportunity: Product Differentiation & Brand Awareness The environment in which Visit Newport Beach Inc.'s Fiscal Year 2013 /2014 marketing strategies will be implemented is one of some challenges but great opportunity. Industry research suggests that while Newport Beach is clearly a premium destination, there exists opportunities for building brand awareness and interest in visitation. San Francisco Los Angeles San Diego Napa County 1c )Uri The state's iconic cities ranked at the top of this list, Lake Tahoe Area with San Francisco (43.3 %), Los Angeles (40.2 %) and Beverly Hills San Diego (35.5 %) being selected by the most survey West Hollywood respondents as places they hope to visit in the next five California's Gold Country years. Beyond these cities, however, many destinations Orange County/ Anaheim with generally similar levels of traveler interest. Other 34 Santa Monica destinations ranging from Lake Tahoe, Beverly Hills, Santa Monica, and even the Gold County and Sacramento Sacramento garnered similar levels of interest to Monterey Orange County/Anaheim, which was selected by 13.4 Santa Barbara County percent of American leisure travelers. Sonoma County According to a 2011 Study of Newport Beach San Jose Perceptions conducted by the Y Partnership, Santa San Luis Obispo County Barbara, Palm Springs and Beverly Hills are perceived Oakland by travelers to offer experiences most similar and /or Berkeley competitive to Newport Beach. It seems clear that for Marin County the greater domestic markets, building a deeper understanding of Newport Beach's attributes and Mendocino County - effectively focusing its advertising and marketing Eureka efforts on the most appropriate and lucrative visitor 0.0% S.0% 10.0% 15.0% 20.0% 2S.0% 30.0% 35.0% 40.0% 45.0% 50.0% segments is paramount. Source: State of the American Traveler, Destination Analysts, Inc. January 2013 34 I� rr r P i p efforts on the most appropriate and lucrative visitor 0.0% S.0% 10.0% 15.0% 20.0% 2S.0% 30.0% 35.0% 40.0% 45.0% 50.0% segments is paramount. Source: State of the American Traveler, Destination Analysts, Inc. January 2013 34 Research 1 i Like domestic leisure travelers, international leisure travelers would also like to visit California's iconic areas, such as Los Angeles and the San Francisco Bay Area. Although the proportions of international travelers who would like to visit Orange County are not as large as those who report that they would like to visit the state's iconic areas, there appears to be awareness and interest in Orange County amongst the global travel market. According to research conducted on behalf of Visit California by Hall & Partners, nearly half of Chinese travelers would like to visit Orange County. Similar proportions of travelers from Australia (39.0%), UK (37.0 %), Canada (35.0 %) and Japan (32.0 %) report that they would like to visit Orange County. There is also an interest in learning more about Orange County as a leisure travel destination, with the highest interest expressed by travelers from China (53.0 %), Canada (50.0 %) and Japan (44.0 %). Of these five international markets, 30 percent or less report that they are not interested in visiting Orange County. As in the domestic markets, there is a great opportunity to generate and enhance Newport Beach's brand awareness in international markets, particularly in the emerging market of China. Communicating Newport Beach's unique offerings will be critical in setting it apart from California's other alluring destinations. China Australia UK Canada ■ Uke to Visit ■ Uke to Learn more About IS Not Interested Source: Hall & Partners Percent of Travelers who would Like to Visit California Areas (Average for Travelers from China, Australia, UK, Canada & Japan) San Frandsco Ilan Los Angeles C San Diego C Central North High Central Orange C Gold Cc Inland Ei Shasta Cas e% 10% 20% Sox 40% 50% 60% 7o% 35 Research z Building familiarity with the destination abroad will surely take time and resources. Nevertheless, research conducted by Visit California shows that Newport Beach's attributes are a good fit for the general travel interests of travelers in the majority of international markets. This research shows that "rest and relaxation" (resorts, spas and beaches) is a preferred vacation type throughout the world, Newport Beach's proximity to iconic Los Angeles and San Diego, as well as Southern California's extraordinary theme and amusement parks are also likely to be a powerful asset. Visit California's research shows that the second most popular vacation type in most markets is "family fun" (theme parks, zoos, water parks, beaches, museums and historical sites.) Again, this vacation type is especially popular in the Asian nations of China, South Korea and Japan. Rest and Relaxation 54% 52% 47% 47% 65% Visiting resorts, spas, beaches Family Fun Theme parks, zoos, aquariums, water parks, beaches, museums, 35% 26% 22% 28% 47% historical sights Outdoor Adventure Visiting national/ state parks, surfing, skiing, snowboarding, hiking, 29% 21% 16% 18% 41% biking, whitewater rafting, boating, camping, fishing Big City Entertainment Performing arts (plays/ musicals/ dance), museums, galleries, 29% 30% 25% 34% 55% nightlife, live music events, sporting events, people watching/ celebrity sightings, shopping Off - the - Beaten Path 27% 20% 23% 18% 17% Visiting small towns, road trips, scenic byways Culinary Visiting wineries, restaurants, food and wine festivals, farmers 14% 11% 12% 20% 57% markets, cooking classes 36 Source- Tourism Economics, CIC Research, OT-n Research Media Consumption: Addressing Travelers Diverse Needs ^ I li' i, ON ,,-;=I I %1 11 ,,, Research suggests that domestic travelers are relying on an ever - expanding array of resources in planning their trips. As new resources have become available (e.g., advanced online functionality, user - generated content, group discount websites) they have been quickly adopted. Interestingly, however, in the midst of this rapid change, travelers have continued to use traditional media resources (magazines, print guides, etc.) to find inspiration and plan their travels. This broadening of consumer options for travel planning supports DMO marketing strategies that reach out to potential visitors in a variety of ways, both new and traditional. Domestic leisure travelers report significant level of usage of DMO resources, both website and print. Nearly one third of travelers will use a DMO website and 14 percent will use a printed visitors guide. Research recently conducted by Destination Analysts shows how the marketing tools used by Visit Newport Beach Inc. are used by segments of the traveling public: 35% 30% 25% 20% 15% 10% 5% 0% July Jan. July Jan. July Jan. 2010 2011 2011 2012 2012 2013 Source: State of the American Traveler, Destination Analysts, Inc. July Jan. July Jan. July Jan. 2010 2011 2011 2012 2012 2013 37 Research 30% 25% 20% 15% 10% 5% 0% July Jan. July Jan. July Jan. 2010 2011 2011 2012 2012 2013 Social media: Approximately one quarter of the traveling public look to social media resources (Facebook, Twitter, Linkedin, etc.) to gather travel planning resources. 26% 25% 24% 23% 22% 21% 20% 19% July Jan. July Jan. July Jan. 2010 2011 2011 2012 2012 2013 Print advertising and PR efforts: Approximately one quarter of travelers use lifestyle or travel magazines to gather travel inspiration and information. Just under 20 percent use newspaper travel sections as well. In total, nearly half (48.7%) report having used at least one type of print resource to plan their travels in the past year. 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% July Jan, July Jan. July Jan. 2010 2011 2011 2012 2012 2013 • � ctl� vrt Mobile content: The type of travel planning that has seen the largest recent growth is mobile content, which approximately 40 percent of travelers say they have used to plan their travels. As mobile continues to grow in popularity, the need for reliable mobile content is even more essential. July Jan. July Jan. July Jan. 2010 2011 2011 2012 2012 2013 E- newsletters: E -mail newsletters continue to be a resource travelers turn to for information. These communications have been used by a consistent 10 -15 percent of travelers for the past several years. Source' State of the American Traveler, Destination Analysts, Inc. W Research Visitor Demographics & Behaviors The demographic profile of California's domestic traveler is straightforward. They primarily reside in state (75.5 %), are affluent (51.4% have an annual household income over $75K), mature (52.4% are over 45 years old), married (60.4 %) and typically White or Asian. These travelers also have a high propensity to have children living at home (35.4 %). GIY 01.1 Top Feeder Markets Household Income California 75.5% Less than $25,000 11.4% Arizona 3.4% $25,000- $50,000 18.3% Nevada 2.8% $50,000- $75,000 18.8% Texas 1.9% $75,000 - $100,000 31.7% Illinois 1.2% Ethnicity New York 1.2% White 78.991, Oregon 1.2% Black /African American 3.8% Washington 1.1% Asian or Pacific Islander 8.6% Florida 1.0% American Indian, Aleut Eskimo 0.5% Colorado 0.8% Other No Answer 5.0% 3.2%, Marital Status Now Married 60.4% Travel Party Composition Net- with Children 34.5% Travel Party Size 2.7 under 18 Household Size per Reporting Travel member 2.1 Age 18 -20 1.9% Trip Spending 21 -24 5.4% Expenditure per person /day $138 25 -34 19.6% Expenditure per person (trip level) $415 35 -44 20.8% Total Expenditure at Trip Level $687 Source: 7N5 TravelsAmerica 45 -54 20.6% 55 -64 17.8 65+ 14.0% ail Research Visitor Demographics & Behaviors Ae orl Similar to the profile of the California visitor, the Newport Beach visitor primarily resides in -state (57.0%), is affluent (average annual household income is $123,400) and is married (60.0 %). According to the 2007 Economic Impacts and Profile of Newport Beach Visitors Report by Lauren Schlau Consulting, 50.0 percent of Newport Beach Visitors have children under 18 at home. On average, these visitors have 2.1 children. The average visitor is 38.8 years old. They are also frequent travelers, taking 5.8 trips per year on average The vast majority of Newport Beach visitors are day -trip visitors (88.3%), which makes an obvious opportunity for the community's tourism stakeholders to attempt to generate more overnight stays and thus economic impact. Newport Beach hotel guests spend an average of $333 per day, compared to just $55 for day -trip visitors. Over 60 percent of Newport Beach visitors are repeat visitors. This may be attributable to 92% of visitors being "Extremely satisfied" or "Very satisfied" with their Newport Beach visitor experience. While three in four (74 %) leisure travelers interested in visiting Newport Beach consider Newport Beach as offering "the ideal Southern California vacation experience," in terms of the destination experience sought by Newport Beach, relaxation, romance and family fun appear to be top amongst potential visitors. Roughly four in five of Newport Beach Travelers see the destination as offering coastal elegance (83 %), great water sports (83 %) and as a great place to just rest and relax (80 %); Three in four also believe Newport Beach to be an ideal vacation spot to visit with their spouse or significant other (76 %) and to be an ideal romantic getaway (75 %); Nearly seven in ten (68 %) regard the destination to be ideal for a family vacation. M Source: Newport Beach Perceptions & Intentions Study, Y Partnership Wilt Research Sustaina'bility: Newport Hotels The Resort at Pelican Hill has taken bold steps in sustainability. Located in close proximity to the marine habitat at Crystal Cove, Pelican Hill has taken extra steps to reduce waste and protect the reserve. The resort is proud to use locally sourced ingredients in both their restaurant menus and spa treatments, many grown on the property grounds. The golf courses utilize an innovative water irrigation system that eliminates over -use and prevents runoff to the ocean. The Courses at Pelican Hill were named a top eco- friendly course by Forbes. After under going their recent renovation, the Hyatt Regency Newport Beach has adopted a "sustainable luxury" model that includes measures such as using fresh, thoughtfully sourced food ingredients. To encourage businesses meeting at the Hyatt to go green, the hotel offers three percent off to those that commit to follow their 10 steps to a green meeting. Nationally, Hyatt has adopted a green policy that focuses on awareness and education to promote and reinforce a culture of environmental consciousness through all facets of Hyatt's global operations. Fairmont Newport Beach has adopted the Fairmont Hotels Green Partnership Program. Initiatives include recycling and organic waste diversion in the hotel's kitchens, retrofitting energy efficient lighting, and redistributing gently used goods and food to those in need. Meeting planners also have the option to "eco- meet," where sustainability initiatives are implemented, such as using organic foods, recycled notepads, and china instead of paper goods. The Radisson Hotel Newport Beach is a 100% non smoking facility, adding to the cleanliness of the grounds. The Radisson' s Goldpoints Plus program gives members the opportunity to redeem their Gold Points earned during their stay for carbon reduction projects that balance out the equivalent CO2 associated with their trip. Island Hotel Newport Beach has taken efforts to reduce waste through recycling and conservation efforts including replacing paper towels with cloth in restrooms, using recycled materials for bathroom amenity packaging, and use of reusable food and beverage service items. It also supports natural resources by utilizing natural light in 80% of conference centers and providing vegetarian/ vegan menus. Newport Beach Marriott Hotel and Spa has taken efforts to reduce paper waste in addition to the national Marriott Standards. Paper television guides and menus have been removed from the rooms and made available by request only. It has received Energy Star building status. 41 Research Sustainability: Newport Hotels •..�� rlr)t)rf t Newport Beach Bay-view Marriott reduces their environmental impact by using landscaping irrigation sensors, INNCOM guestroom HVAC occupancy sensors, and waterless public fixtures. It has received Energy Star building status. Marriott Hotels International has achieved a top performance rating and been named a Partner of the Year for the past six years from Energy Star, The Balboa Bay Resort always looks for new ways to help the environment by reviewing their sustainable habits monthly. The resort has taken measures to implement new sustainable products and methods of recycling, such as encouraging meeting and conference attendees to use USB drives, increasing the use of digital brochures to reduce printing and using bio- degradable materials for gourmet lunch boxes. Sustainability: Local Government The City of Newport Beach has taken many measures to become more sustainable. Some of the initiatives include: • Committing to reducing their carbon footprint 15 %, making it a Southern California Edison Platinum Partner in energy efficiency • Banning the use of Styrofoam cups at all Newport Beach restaurants to help keep beaches clean • Sponsoring Orange County Coastkeeper, an organization whose mission is to protect and preserve Orange County's marine habitats and watersheds through education, advocacy, restoration, and enforcement • Offering several Water Use Efficiency Programs that provide tips, events and educational resources on how residents and commercial businesses can conserve water • Proclaiming July "Smart Irrigation Month" to help raise awareness of the need to conserve California's water resources • Following the California Costal Commission's Boating Clean and Green campaign to strengthen clean boating practices in Newport Harbor 42 Research Sustainability: Airport The Los Angeles Metro Area has been named the #1 Energy Star performer nationally since 2008. John Wayne Airport, Orange County managed by the County of Orange, has kept up with the region's demand for sustainability through numerous measures including: • Encouraging the use of low- emission electric vehicles by installing electric charging stations for ground service equipment on • Requiring airport and fleet vehicles to operate on clean burning compressed natural gas • Enforcing an airport -wide Storm Water Pollution Prevention Plan, which monitors water quality and removes oil from runoff • Implementing water conservation efforts including low -flow toilets, diversion of run -off to a retaining basin, and an aircraft dry- washing plan • Maintaining one of the most stringent aircraft access and noise monitoring programs in the world, which monitors every aircraft, 24 hours a day John Wayne Airport, Orange County (SNA) 43 Research Sustainability: Green Activities f� 11111 L,111 Yol t. 1 1 Newport Beach's Environmental Nature Center is a LEED platinum certified learning facility - the first in Orange County. The 9,000 square foot facility provides hands on education with nature and demonstrates indigenous California vegetation and habitats. The building integrates sustainability in every way: solar panels, bicycle storage, drought tolerant, indigenous landscape, waterless urinals and low -Flow faucets and efficient storm water management and daylight harvesting. Newport Beach offers some of the most beautiful ecological landscapes, wildlife and marine habitats in Southern California. To ensure that the natural beauty of the destination from the parks to the oceans and the ecologically important Back Bay Preserve, the city continues to establish programs to sustain the destination's natural beauty for all to enjoy for years to come. Visitors can partake in one of the numerous environmentally friendly activities Newport Beach provides: • Kayaking in Newport Harbor • Hiking or camping in at Crystal Cove State Park in El Moro Canyon • Learning about different local plants at the Sherman Library and gardens • Duffy electric boats "Beach Clean -Up Days" and "Adopt-a- Beach" programs are hosted throughout the year by the California Coastal Commission to collect trash and recyclables from all beaches, lakes and waterways throughout California. The Newport Bay Conservancy works to protect and preserve the natural resources of Upper Newport Bay. It strives to involve the public and local businesses in its efforts to promote stewardship and education. The Upper Back Bay provides the perfect backdrop for environmentally sustainable activities. Walk or jog through the trails Volunteer to help preserve the natural resources in the canyon Hornblower Cruises aims to reduce their carbon footprint and stimulating others to do the same with their "Green Awareness" program which focuses on adopting more eco- friendly cruise operations through smart choices and 44 effective awareness, and creating new opportunities to encourage others to adapt a sustainable culture. Marketing etv Url z 6 r .� ; 'Y' '•_.. IL U P", 45 " "0 CN' Ori Marketing Objectives Integrated Destination Marketing Visit Newport Beach Inc. is reviewing its organizational structure to better integrate all forms of destination marketing beyond tourism. Those functions include dining, film and event marketing so that all external messaging regarding the destination can be served by a unified umbrella brand and consistent communications. Visit Newport Beach Inc. will be reviewing new organization structures to explore new marketing and management options. Drive Market Campaign This past year several campaigns were conducted to capture a share of the drive market. In an effort to continue overnight conversion from the LA and Inland Empire drive market, Visit Newport Beach Inc. will launch a new ad campaign in this fiscal year. Public Service hospitality Training This past year a new program was rolled out in partnership with the Newport Beach Police Department to better educate all of their public safety officers and volunteers on quality visitor service training. The next phase of this program will be created in partnership with other public service organizations (i.e., harbor commission, fire department or lifeguards) in the city. International Markets Visit Newport Beach Inc. will continue working closely with Black Diamond (UIC) and Gate 7 (Australia) in order to increase the international visitation to Newport Beach. This year, Visit Newport Beach Inc. has partnered with the Orange County Visitors Association to open the first ever Orange County office in China. ENO Collateral Visit Newport Beach Inc. produces a variety of collateral materials in order to promote Newport Beach and its partners to visitors, event and meeting planners, and local residents. Materials are available as a printed piece, a digital version on our website and in specific cases on CDs and USBs. Official Visitors Guide The 2013/2014 Official Visitors Guide has been redesigned to match the high -end, elegant style of Newport Beach. It's published annually and details everything that Newport Beach has to offer. It provides key information that is important to visitors, including accommodations, a calendar of events, itineraries, an explore section with detailed maps, outdoor activities, shopping, dining, family fun, pet friendly and weddings. In addition, there is a fold out map that provides a detailed map of Newport Beach, as well as a micro version of the Balboa Peninsula. Map of Newport Beach The Newport Beach map outlines accommodations, beaches, major attractions, transportation, shopping and dining. There is also a panel with key information for each neighborhood. rE1AWA Visitors Guide Spring /Summer 2013 'it' Ul7 47 „, 14C N' ort Collateral = E ” 2013 NEWPORT BEACH Calendar SPA 'NO, SUMMER Calendar of Events Spring /Summer 2013 Calendar of Events This is a multi -fold brochure with events shown in a calendar format as well as by category such as boating events, culinary events, running events, etc. This brochure highlights all of the great events in Newport Beach and directs people to our website for a more comprehensive look at activities to encourage them to plan their stay in Newport Beach around some of the fabulous events. There will be two different versions highlighting two times of the year. Great Stays Guide This publication was redesigned in the fiscal year 2011/2012 and highlights all of the small inns, boutique hotels, cottages, camping, and vacation rentals, as well as the hotels & resorts in Newport Beach. It provides photos, maps, and descriptions on each of the properties. Although it was redesigned and produced in the fiscal year 2011/2012, it will be revised in the fiscal year 2013/2014 due to the many hotel renovations in Newport Beach. Other Material: • A Wedding Guide will be produced during the fiscal year 2013/2014 in order to capitalize on the large wedding segment in Newport Beach. • As other business units come on board, Visit Newport Beach Inc. will assist with their collateral needs Collateral Publication Quantity Audience Distribution Official Visitors Guide 100,000 printed Visitors • Sent to visitors prior to their arrival • May- Spring /Summer • Online • October- Fall /Winter • Attractions in Orange County, Disneyland Hotel, 2,500 USB drives California Welcome Centers, Fashion Island, Car Rental 2,500 CDs Companies, Local Hotels, john Wavne Airport Map of Newport Beach 100,000 Visitors • Sent to visitors prior to their arrival • Online • Attractions in Orange County, Disneyland Hotel, California Welcome Centers, Fashion Island, Car Rental Companies, Local Hotels, john Wayne Airport Great Stays Guide 10,000 Visitors • Sent to visitors prior to their arrival • Online • Attractions in Orange County, Disneyland Hotel, California Welcome Centers, Fashion Island, Car Rental Companies, Local Hotels, john Wayne Airport Calendar of Events 5,000 Visitors and Locals • Sent to visitors prior to their arrival • Distributed by the City of Newport Beach to their constituents Kiosk Directory Map 3 locations Visitors and Locals • Balboa Island • Balboa Pier • Newport Pier Mini Pocket Guide 5,000 Visitors and Locals • Distributed by the Newport Beach Police Department when interacting with visitors • Opportunity for partners to order Annual Report 200 Partners and Political • Distributed at the Annual Dinner & Marketing Outlook Officials Marketing Plan 75 Board of Directors, • Distributed to the Board of Directors and all Committee Committee Members, Members Partners, and Staff • Digital version is available online Wedding Guide TB1) Engaged couples • Online 2 •. Website Visit Newport Beach Inc. will debut a new leisure website for fiscal year 2013/2014. Built from the ground up, the new site will focus on delivering a complete representation of the destination with new photography, immersive 360 degree virtual tours and intuitive tools for the consumer to plan their next trip to Newport Beach. Designed with a mobile first approach, the new Visit Newport Beach Inc. website will incorporate responsive technology to make the transition from desktop to tablet to smart phone seamless. An Expedia study found that 44% of those looking to travel used a mobile device while planning, and that number will continue to grow. Orange County was one of the top ten destinations for mobile bookings, making the need for Newport Beach's strong mobile presence essential. .vo ' 1"�14L' UI'l Visit Newport Beach Inc.' s website has been designed with the following features in mind: • Promote content and functionality that enables planning and research by the visitor through a streamlined user experience • Encourage logical functionality and flow for ease of browsing content through a navigation overhaul • Establish a more prominent social media presence through social feeds and visual galleries • Focus on the visitor experience with a unique breakout of the many neighborhood districts, giving individuality to each specific area • Offer partners new content promotion spots on key landing and content pages that coincide with preferential interests of their businesses • Integrate a new blog and press room as part of the main site, increasing SEO exposure and keeping all navigation within the leisure website • Create a new corporate website for Newport Beach & Company that outlines objectives, board members and mission statements W Website Search Engine Optimization & Search Engine Marketing Organic Search continues to grow each year, and Visit Newport Beach Inc. will continue to focus on growth of the natural listings and increasing the organic listing results for all Newport Beach and partner related keyword searches. Additionally, an increased budget will push the success of the paid search advertising campaigns, bringing targeted increased traffic back to the VisitNewportBeach.com website. The following measures will be taken to ensure Newport Beach SEO and SEM stay strong: • Continue growth of the Google+ brand pages and the Google places listing accounts for all Visit Newport Beach Inc. business units, insuring proper indexing for maximum organic results • Use all URL "friendly" addresses on the new website to keep shorter, informative web URLS, providing easier crawling to search bots • Continue to rewrite and optimize top content pages for maximum copy indexing per topic and partner name searches • Continue social media channel growth, which provides additional search results pointing back to more gateways into Newport Beach content and paths to the main consumer website • Focus on paid campaign optimization for targeted initiatives such as hotel stays, restaurant reservations and activities requests • Increase the creation of more paid search campaigns to compliment other marketing efforts, both digital and traditional, to increase awareness of key events and sales opportunities • Look into new platforms such as Google Engage that will allow Visit Newport Beach Inc. to take a bigger roll in guiding destination partners' digital footprint in paid search advertising Website Goals 12/13 Actual (as of 4/13) 2013/2014 Goal Visits 555,568 630,700 Unique Visits 450,815 536,000 Pageviews 1,591,576 2,058,000 51 Social Media Social media for Visit Newport Beach Inc. has expanded to many areas, giving the consumer multiple touch points that create a consistent and a resonating feel for the brand as they navigate the digital realm. From smart phones and tablets to computers and laptops, people are more consistently connected to the things they love most. People have a passion for Newport Beach, and by staying on the cutting edge of technology, Visit Newport Beach Inc. can ensure a presence, engaging the Newport Beach enthusiast. Key initiatives include: • A redesigned website promoting more opportunities to engage and join various social media channels for Visit Newport Beach Inc. • Concentrating on growth potentials by leveraging 360 degree campaigns that include a strong social media component. for awareness, outreach and contest promotion • Incorporating more partner sharing and postings to promote their key events and product. • Focusing on more subsets of social media. campaigns tied around promoting the uniqueness of the different neighborhoods and what they offer Starting phase two of extending the reach and followings of our many social channels by focusing on growth and concentrating on more touch points that lead back to the main consumer website. • Increasing use of video for content by filming more quick hits of life and events in Newport Beach for quick, same day video turn- around on social media • A social media calendar with dedicated campaigns, scheduled postings and seasonal messaging. • Increasing the use of custom Facebook tabs for contests, information and additional social content plus conference sales promotions to meeting planners Social Media Goals 12/13 Actual (as of 4/13) 2013/2014 Goal Facebook Likes 37,433 42,000 Twitter.Followers 10,548 12,000 YouTube Views 45,754 47,000 52 . INI' c I 0!'l Social Media: Facebook & Twitter 4 I I 1 Admm Panel w.n•u.en ua na. or,v a.ea H. - . � - +•._ A Newport Beach - Southern California a Livo it Em a � w' �. •..e•. NU••.ta � T�Iati��L Dronrw a- �_...r.,..•na.. -v ItYa {I naq IACCI,rbl ..++• w. t...... . �..- - Cz= ` _ •mow { ew z p•e,vc av utMVs w � Maaa�le - 0 � Wae lbv1aa010ce 1•.aala+a u+.. I wraltrroc fpr i _ V�laa•t.Nna. a9aS.,cv+ arar"ee1 i 0.9a 1AI1 10.600 to Tweets IIPT Newpo eeee4. Cell midNapp,• ta41' Ilal'1 Law laa� q 9c'✓W ttl cuoao+a «+' c yyajr r\^ �pFWI116YFlryt 'lJ'Y1:�T'6�L'H'I ".._ lllr+ Noapon Udon. Ca41 Mid111 !:1•n t ^': v 1411 ^'Q KA] CdR/ tllemfq errs J NrAt� Nemn. G h. OVW Neweert Dean. CaW Itl .:` "t: ^.c.. rG•t y4l wCn .: •. m.a11 J,h AwiN Or•>t �I r.m •Tp. ;'rnlM'anbal Va�o, tp.tl ?! r1r"L ". 't :,yn( �� NMVCaq eeVll. rJlll HaIO/FY.1•WaeH.nwe ' fM.p,IIro CNHwaIOM .n:jKrnCrJa an,w unn(tiT t /rrq � TI '' /to lnlrpy,(A NCMn]'/la0.'RgIM/d y� +• fpNr.l e+f.lrM.• n).yile.if,.. 53 Social Media: Instagram .Ia,I eir ort i PI! ', ( !! I\. !ice' 9% 1 rm Z, ' Mn b:o 4W ar, O m� Ci Imi .A .rS�•aa. ^ynvea *X& *• , •, " bmr W 4 r visitnewportbeach Hewpon tleaN :lan rn �n, f nYnp x� urge Cnr+v, a me ur�p¢• •mun�ta ^vro' .� �e n.ai:u,:�. vaunw msx.nmana :neon e„aMV nwe Min cnwr.x^�mpenosxn [dn 11 10 ., ? ' - �7i. i w '64 54 Social Media: Pinterest & You wwpull M.uh shopping aa`- y� Yount C cart be Ste wpm YF.I.w' ]D•�K • v. �. Yr.M•l G..:I CJ uy...a. • a.0 0_.0. kvV . Fdt ROtYe Vrwpun Nurh OUWmn \ewpnrl tl.uh IIDIAa VrwportNwhl.valb ECM EMt ]IO 'mwnm bhomy \ewpn,t Orvch MrYllufanN EMI Irotagrama Amnira thr Ilraulilul �rwpon tlruh 1YaJ.L ngv ECn EMI A..0 J Arvpnn 11,,0 EM, 55 am Newport Beach MOwn lGr p,p[,ulaNw b.w.dNa V.¢NC a'W tM UI'J+emAa1N14.I VM1Y+ Rrpm.tom yak, bake Cemawca IJLIV IWUyp NDwla l4 .,cnnaU�[3(.v9DCOYVnurvt /LCDIrd NrYJ'wn �IMnD MCC•Oy E• Y 0 u). nw ^lac n.a.•nw+ � slDren oDre.n 0_.0. kvV . Fdt ROtYe Vrwpun Nurh OUWmn \ewpnrl tl.uh IIDIAa VrwportNwhl.valb ECM EMt ]IO 'mwnm bhomy \ewpn,t Orvch MrYllufanN EMI Irotagrama Amnira thr Ilraulilul �rwpon tlruh 1YaJ.L ngv ECn EMI A..0 J Arvpnn 11,,0 EM, 55 am Mobile Application r�1 i i i Mobile is poised to take over desktop search by 2015, showing the strength of devices such as smart phones and tablets. As people become more connected, the convenience factor of searching for something at a moment's notice has become the norm. By focusing on how people look to consume information for a destination on digital devices, Visit Newport Beach Inc.'s major focus is to stay top- of -mind to the consumer and provide what people are looking for regardless of what device they use to search. Visit Newport Beach Inc. will utilize the mobile application by: •Continued promotion of the Visit Newport Beach Inc. native mobile app for IOS and Android, with greater participation by destination partners *Releasing the redesigned website that merges the need for mobile and desktop versions by using responsive technology to parse one website to an optimum format on any device or screen size *Divert more advertising to mobile platform devices including Pandora Radio, iOS ads and Google mobile advertising *Focus on educating partners on the advantages of business based mobile applications such as Yelp and Trip Advisor that have an impact on future business and reputation *Look into newer technology that replaces use of QR codes with augmented reality overlay content, serving up media rich information alongside traditional print materials •Focus on analytics informing how people interact with the new website and what components work best or least to ensure the best experience independent of device 56 E- Communications •�•: C1tpU!'1 With a database of approximately 37,000, digital newsletters remain a key initiative of Visit Newport Beach Inc.'s marketing and communications efforts. Working with the PR & Communications team, both consumer and partner information is funneled from concept to monthly deployment with. the key destination and partner information. Visit Newport Beach Inc. will look to keep a 20% growth pattern for the consumer database by focusing on partnerships with media outlets such as KOST, Los Angeles Times and other digital websites to run promotions and contests that bring people and cross - pollinate the other digital arms of leisure marketing, including social media and. VisitNewportBeach.com, the main hub of information. Key initiatives include: o Partner offer promotions and contests for major events (Newport Beach Film Festival, Newport to Ensenada Race, Christmas Boat Parade, 411' of July Celebrations) that leverage all channels, and funnel back to one collection and entry portal o Leverage off -line marketing to get information, and collect email sign -ups at trade shows and the new concierge desk at Fashion Island o Use List rentals to add opt -in messaging that allows exposure to outside groups of key targeted demographics, preventing a decline and saturation among continual channels of acquisition o Look to incorporate more standout offers from select partners in the e- communications that draw distinct attention to their brand and products Email communications are distributed monthly among the following channels: • Consumers • Community Partners e Media and Story Starters 57 Advertising Strategy Visit Newport Beach Inc. is developing a new leisure advertising campaign for this fiscal year. The new campaign will showcase the beauty of Newport Beach while communicating the essence of our brand - "Elegant yet approachable. Fun yet sophisticated. " Not only will it capture the aspirational lifestyle of Newport Beach, but also the quaint, accessible feeling. Objectives: • Clarify Newport Beach's market position relative to its primary competitors: - Greater Los Angeles area beach communities - Palm Springs - Santa Barbara - Laguna Beach - Huntington Beach - San Diego • Convert more Southern California day visitors to overnight guests • Attract more visitors to the destination website • Implement a campaign that engages industry and community stakeholders s r i4 orl co Advertising Strategy Unique Selling Propositions: Newport Beach is an aspirational Southern California lifestyle destination that emphasizes a taste of the perfect life. • Eclectic mix of neighborhoods • Charming seaside village • World's largest small yacht harbor Key Categories: (based on June 2011 study by YPartnership): • Seaside • Fun • Hip, cool, contemporary • Family- oriented • Healthy • Beautiful scenery • Interesting T • yam^ � F , f • L 611JI Advertising Strategy" Annual Advertising Focus: Seasonal ad campaigns - since our hotel partners need help during the shoulder seasons, the majority of the advertising will be placed January through mid -May and September through mid - November; however, advertising will also be placed in annual publications Newport Beach events - tie room nights to key events throughout the year Themed advertising - develop programs to tie a theme /message to hotel room nights, such as: wedding, luxury, dining or shopping Target Audience Women aged 35 - 64 years old with an annual Household Income of $125,000+ Drive Markets: Greater LA market area - Palm Springs - San Diego • Feeder Markets: - Phoenix - Dallas - Denver - San Francisco NEWPORT BEACH, CA -S your Germ dOthno,on la It:s year s getawoyl Ilia suoudc oa'ad so u n0stsed along 10 m'es of - mnfno So�lhcrn CoWwr a cop51Yrta pelyypnrt Los nnge:os and Son Diego 11 n rho petfecl pbco to ary0y a'p QPIC 01C0ts0 01 o tun 6400 In" vocalvortl NOWOart Beech olfon wh;t0 Wirtd npochps. n S0010no yacht 110100r. 0110 O relnana ec000cal INOWN0. t tewf)w Beoch is hz)n`e 10 FOSh.'0n hitfrxl. W, upscp'O Open 04 Um!yc center for the n ost CacCrri ng lost0. A I f wm0pdM Cti:OCnpn OI OCCOmmppOlipnl Allan e'egont tetoft owliqup hales One v,ao renloh. Go 10 vlsBNewponBeoch.com MCI Ilrld mmiToron IV your omom L'1tp OT( coostol gCtOwpy. t' i t f I ,r 1.11141, el •'•' � C Its )(!1'( Advertising Strategy Advertising Mix The new campaign will be placed in various markets, including direct -to- consumer, trade and corporate audiences domestically and internationally. • Online Advertising the majority of the media buy will be done online where visitors do a majority of their research. Focus will be placed on sites that reach consumers during the exploration /idea phase instead of during the purchasing stage on online travel agency sites. • Print Advertising - traditional advertising in magazines and newspapers is especially important when reaching consumers during the exploration /idea phase. • Radio - online streaming and on -air advertising with radio networks • Out of Home - advertising at John Wayne Airport, Orange County, Los Angeles Times Travel Show, events, and cinema o Video - use new video footage from the 2012/2013 fiscal year to engage consumers As other business units come on board, Visit Newport Beach Inc. will also develop a similar advertising strategy. Advertising Goals 12/13 Actual (as of 3/13) 2013/2014 Goal Total Ad Impression 88,178,346 9.08,045,000 Online Ad Clicks to Site 47,917 215,000 Travelocity Bookings from Website 90 N /A.- book direct A Promotions eIt, oll z i 1 In addition to advertising, Visit Newport Beach Inc. will generate additional exposure and room nights through a variety of promotions and special packages throughout the year. In addition to the below - mentioned promotions, Visit Newport Beach Inc. will explore additional opportunities in the new fiscal year. Media promotions by leveraging ad buys •Event Based Promotions - Newport Beach Restaurant Week - Newport Beach Film Festival - Summer Concerts - 411, of July - Christmas Boat Parade •Themed promotions and packages - Key holidays (i.e. Mother's Day, Father's Day, 41h of July, other holidays) - Special Events (i.e. birthdays, anniversaries, weddings) - Shoulder Season promotions (i.e. date night, girlfriend getaway, date night, dining, shopping) - Luxury promotions •General brand awareness with mass appeal to generate overall exposure for Newport Beach - Let's Make A Deal - Price is Right - Wheel of Fortune As other business units come on board, Visit Newport Beach Inc. will also develop a similar promotional strategy. ENTER TO WIN u• mrI 4P r Win a Roma 1tir r , Getawa 1 to ` Newport Beach! l?sh�rnrnrfNniaiiaui!kmm�nm 800.94.COAST 62 Promotions 2014 Bowl Championships Series Visit Newport Beach Inc. assisted with and booked the 2014 Vizio Bowl Championships Series (BCS) National Championship Game this fiscal year. This event represents thousands of room nights for Newport Beach partner hotels. The 2014 Vizio BCS National Championship Game will be held at the Rose Bowl in Pasadena on January 6, 2014. A total of 5,697 room nights are booked in Orange County with the majority (4,260) contracted at Newport Beach properties. There will be a large delegation of teams, alumni and fan groups, family and friends dispersed throughout Newport Beach hotels, attractions, restaurants, and retail stores. As the host city of the 2014 Vizio BCS National Championship Game, several amenities and activities will be executed to make sure our guests receive "WOW" Service. This will be rolled out in the following phases: • Prior to Departure • Upon Arrival at John Wayne Airport, Orange County (SNA) • Upon Arrival at Hotels • Activities throughout the week Post BCS o 0 BORI.cpAMPlON q 63 Public Relations "r` z The Public Relations function at Visit Newport Beach Inc. has grown exponentially in the past year —and will continue to do so in Fiscal Year 2013/2014, encompassing more robust outreach to media locally, regionally, nationally, and internationally. Last year, Visit Newport Beach Inc. began to implement a more comprehensive and strategic public relations plan, helping the team to achieve a new benchmark in media coverage that positioned Newport Beach as a world -class destination to a diverse range of target audiences, generating more than 2.3 billion media impressions. We plan to best that record in Fiscal Year 2013/2014. As part of its mandate, the Public Relations team at Visit Newport Beach Inc. performs a wide variety of cross - functional activities that not only support its media relations efforts, but also lend strategic assistance to the marketing and other departments at the organization. In addition to generating publicity, the PR team is charged with developing messaging for the organization and its constituencies, drafting copy for all collateral marketing and sales materials, and more. Co IM N : N; s r THE E ORANGE COUNTY Tt Ei I: . 0 marieclaire ( Co Angelve9%s c�ime� TRAVEL+ LEISURE ., Public Relations Media Relations & Outreach The PR team at Visit Newport Beach Inc. reached new levels of success in publicity this year, furthering its strong relationships with local, regional, and national media across all delivery platforms - online, print, and broadcast. Taking a very proactive approach to media relations netted more than $4.3 million of ad equivalency - a record result for the team - and one that will be extended in Fiscal Year 2013/2014. In addition to mounting aggressive outgoing pitch campaigns, the team will continue to be responsive and nimble in reacting to press inquiries, as well as to the PR support needs of its partners. Good Day LA segment on the Lexus Newport to Ensenada Yacht Race 65 Public Relations KTLA segment on Taste of Newport Ctt Orf PR Efforts The Visit Newport Beach Inc. Public Relations department will continue to provide effective, strategic public relations support to the events and promotional marketing campaigns within its charter, and will expand those efforts to achieve additional media coverage in Fiscal Year 2013/2014. Highlights of these efforts will include: • Public relations support and media relations complementing seasonal luxury ad campaigns - summer, fall, winter, and spring • Public relations support and media relations to publicize signature Newport Beach events, with a focus on promoting overnight stays for: - Newport Beach Restaurant Week - Newport to Ensenada Yacht Race - Newport Beach Film Festival - 41h of July - Christmas Boat Parade - Key holidays (i.e., Mother's Day, Father's Day, 4th of July, the Holidays) • Themed media relations campaigns tying hotel room nights to themes (holidays, birthdays, anniversaries, wedding, date night, girlfriend getaways, dining or shopping). • Unique Newport Beach stories Nle Public Relations Foundational PR Elements for Visit Newport Beach Inc. A li, Uri In anticipation of Fiscal Year 2013/2014 being a watershed year for Visit Newport Beach Inc., the Public Relations team has developed a completely revamped press kit designed to better position Newport Beach with media, and to capture the excitement of this dynamic and evolving destination. As part of this effort, the team completed a media coverage analysis; researched emerging trends in travel, dining, recreation and retail; and developed detailed "story starter" pitches for use across media categories. In addition, the team worked to develop "36 Hours In" itineraries to appeal to varied visitor interests, including romance, dining, family fun and shopping. In addition to these important new foundational materials, the Public Relations department also developed, and will continue to refresh the following items: • Press Kit • Fact Sheets • Historical & Background Information Sheets • Custom Itineraries • Basic Copy Points • E- Communications Copy • Editorial Calendar for Pitches • Public relations plan for the balance of calendar year 2013 and into 2014 International Media FAM from the UK 67 Public Relations COPY The Public Relations team will continue to deliver highly compelling and effective, strategy- driven copy for all Visit Newport Beach Inc. collateral materials. This will include brochures, the Visitors Guide, advertorials, blogs, a -news (both consumer and partner monthly editions), and script writing. Crisis Communications & Reputation Management In Fiscal Year 2013/2014, the Visit Newport Beach Inc. Public Relations team will be focused on developing an updated Crisis Communications Plan that can be used to provide support and information in the event of an emergency or natural disaster in the City of Newport Beach. " �r orl KTLA segment on Newport Beach Christmas Boat Parade Photography & Video Production The trend for consumers and news media to discover and share content through photography and high- definition video continues. The Public Relations team at Visit Newport Beach Inc, will continue to produce high - quality photos and customized videos to enhance our messaging and visual asset library. .: Public Relations Results Measurement and Goal- Settine In order to most effectively measure the ROI of our public relations efforts and deliver the most meaningful metrics to our constituencies, the Public Relations team has revised its Proposed Goal Structure for Fiscal Year 2013/2014 (see below). These largely new parameters were developed after soft - sounding analysis with our colleagues at Visit California, and will provide more significant insight into the team' s efforts and results. Metric 12/13 Actual (as of 3/13) 2013/2014 Goal Media Pitches 371 400 Partner Leads 103 110 Ad Equivalency $4,447,858 $4,841,728 Print Circulation 45,946,386 48,243,705 Unique Visitors 288,176,209 302,585,019 Impressions 3,079,051,494 3,233,004,068 Domestic Visits 66 70 International Visits 57 60 olt 99 Community Relations = �' The relationship Visit Newport Beach Inc. has with the City of Newport Beach and the community partners is integral to the marketing of Newport Beach. Not only does Visit Newport Beach Inc. sit on many boards and committees, but the company also acts as the liaison between the hospitality industry partners, visitors and the City. Furthermore, Visit Newport Beach Inc. is committed to providing inspiring activities that will help partners with their businesses and grow tourism for Newport Beach. Visit Newport Beach Inc. Staff at the 2013 Annual Marketing Outlook Dinner Credit: Jim Collins 70 yy Community Relations Community Relations Activities: Educational Workshop and Member Mixer: Partners have requested additional opportunities where they can learn something new, as well as interact and network with industry colleagues and Visit Newport Beach Inc. staff. These workshops and mixers provide the opportunity to interact with partners and provide them with. valuable information about key trends, research and new knowledge. Marketing Summit: This event is held in June or July and the sole purpose is to present and educate partners on Visit Newport Beach Inc.' s new Marketing Plan. Annual Marketing Outlook Dinner: This annual event is held in September and is the perfect opportunity for partners, city officials and other stakeholders to network and see a recap of the accomplishments of Visit Newport Beach Inc.' s efforts. Annual Holiday Party: This event is held during the holiday season and brings together all partners to celebrate the season and network. Community Visits: In Fiscal Year 2012/2013, the Visit Newport Beach Inc. staff met with partner hotels in an attempt to interact with them, brainstorm on projects, and learn more about unique selling points to help promote them to clients and visitors. In this fiscal year, Visit Newport.Beach Inc. will schedule meetings with all partners in an attempt to promote partners and sell their products and services better. As other business units come on board, Visit Newport Beach Inc. will also develop a similar community relations strategy. 71 -A ,- UPt Community Relations , Community Event Partnerships Visit Newport Beach Inc. supports and strategically partners with businesses, organizations and events that assist in promoting Newport Beach as a travel destination with the purpose of increasing overall visitation. Partnership is activated primarily through cooperative advertising, public relations assistance, research, photography, social media support, and exposure on VisitNewportBeach.com. These events may include, but are not limited to: • Newport Beach Restaurant Week • Lexus Newport to Ensenada Yacht Race • Newport Beach Film Festival • 41' of July • Summer Concert Series at the Hyatt Regency • Christmas Boat Parade Christmas Boat Parade Participant 72 Community Relations Hospitality Training Program In fiscal year 2012/2013, Visit Newport Beach Inc. rolled out the inaugural Hospitality Training Program and trained the entire Newport Beach Police Department. Newport Beach is extremely proud of its first responders. They are ambassadors of the city and provide an extremely high level of service to this community. The "WOW Service" is synonymous with Newport Beach as the city hopes to continually exceed expectations. The next phase of this program will be to roll out a similar program to the Harbor Commission then the Fire Department and Lifeguards in fiscal year 2013/2014. The program consists of the following elements: • Video Introduction • Interactive Training Sessions • Visitor Focused Pocket Guide • Refreshments Newport Beach Police Department Hospitality Training Video 73 "�• cn• crr•! Community Relations Partner Engagement: Partners of Visit Newport Beach Inc. receive several benefits that provide additional exposure through the following channels: • Marketing Collateral & Publications -the Official Visitors Guide, Meeting Planner Guide, Great Stays Guide, Official Map and Visitor Kiosk Directories • Website and Mobile Application - categorical listings, photos, editorial copy and special offers • Social Media- additional exposure for partners; opportunity to participate in Social Media promotions • Public Relations- additional exposure for partners through press releases and media outreach • Photo Gallery and Video /B -roll Footage Access - opportunity for partners to use select images and footage to promote their business • Monthly Partner E- Newsletters - provides key information about Visit Newport Beach Inc., industry news, research, community events and opportunities 74 Strategic Corporate Partnerships In an increasingly cluttered world, smart brands and companies look for a way to extend their reach and engage with their customers in an impactful way. Visit Newport Beach Inc. realizes that Newport Beach has a lot to offer to corporate partners since it attracts visitors looking for an aspirational lifestyle, as well as a fun yet sophisticated, and elegant yet approachable environment. In fiscal year 2013/2014, Visit Newport Beach Inc. will identify corporations to partner with and create value for both parties. It will look for partners that will understand each other, have similar values, and help extend its reach and meet Visit Newport Beach Inc.' s goals as much as theirs. These partners may include, but are not limited to: • Airline • Apparel • Automotive • Beverages • Budget Relieving • Credit Card • Financial • Luxury Brands • Telecommunication 75 Visitors Concierge ON On May 15t, 2013, Visit Newport Beach Inc. opened a Visitors Concierge Desk at the high traffic destination of Fashion Island. The Visitor Concierge will be located next to the Fashion Island Concierge desk, which is located in the Fashion Island Atrium Court. It will be staffed by Visit Newport Beach Inc. staff, as well as part time staff. The Visitor Concierge will provide visitors with destination information, including Newport Beach maps, guides, attractions, dining, and Fashion Island information. This move will extend the Visitor Concierge hours to seven days per week, as well as extended holiday hours, to better serve the destination of Newport Beach. Newport Beach Visitor Concierge Fashion Island Atrium Court 401 Newport Center Drive Newport Beach, CA 92660 Hours: Monday- Friday 10:00 am - 9:00 pm Saturday: 10:00 am - 7:00 pm Sunday: 11:00 am - 6:00 pm git FASHION ISLAND Nf WPORI CENTER -NEWPORT BEACH Fashion Island Concierge Desk 76 International Marketing- Australia and the UK International Representation Due to the resources and funding Visit California spends on marketing the State of California, Visit Newport Beach Inc. will continue to partner with them in their international marketing and advertising efforts in Australia and the United Kingdom. Gate 7 in Australia and Black Diamond in the United Kingdom have done a great job showcasing Newport Beach as a premier California destination. In Fiscal Year 2013/2014, they will continue to further enhance the relationship with the international travel industry through their training and outreach, wholesale marketing, public relations efforts, and consumer promotions in order to increase visitation to Newport Beach and increase overall awareness of the destination. International FAM from the United Kingdom 77 International Marketing- Australia Australia Efforts Consultant: Travel & Public Relations - Gate 7 - www.gate7.com.au Australia Activities • Destination Visits — Gate 7 assists several wholesalers with the planning and coordinating of educational trips to Newport Beach, such as let Set Travel World. • Product Development Meetings — Gate 7 will continue to attend industry specific shows in Australia, as well as continue their efforts to increase room night sales through meetings with operators. In Fiscal Year 2013/2014, Visit Newport Beach Inc. will explore opportunities to partner with Gate 7 at select shows and meet with specific operators. • Promotions — Gate 7 will work with third parties to execute a consumer promotion that includes a travel trade component in an effort to increase visitation to Newport Beach. • Public Relations - Gate 7 will continue to integrate with the in -house public relations team to create ongoing interest in the destination, original content for the Australia market, and dynamic itineraries for visiting media. fv ors ve vie 'bye lie vie a tide e e 'Ve le 2004 ' 2005 ' 2006 ' 2007 ' 2008 ' 2009 ' 2010 ' 2011 '78 Source: Intemational Trade Administration, Office of Travel and Tourism Industries o� 1 ■ t t I`■ ■ ■ t 2004 ' 2005 ' 2006 ' 2007 ' 2008 ' 2009 ' 2010 ' 2011 '78 Source: Intemational Trade Administration, Office of Travel and Tourism Industries International Marketing- United Kingdom United Kingdom Efforts Consultants: Travel Relations & PR - Black Diamond - www.blackdiamond.co.uk /travel United Kingdom Activities o Destination Visits - The UK team assists several wholesalers with the planning and coordinating of educational trips to Newport Beach, including North American Travel Service, Virgin Holidays, British Airways, Trailfinders, Thomas Cook, and Wexas. © Product Development Meetings & Events - In an effort to increase exposure and room nights, Black Diamond will continue to educate travel agents and tour operators about Newport Beach, and encourage them to promote Newport Beach as a destination. Examples of such consumer - focused events are the North American Travel Service event, Bon Voyage Consumer Evening, Aspire Luxury Forum, and the Tour Operator Advisory Board. In Fiscal Year 2013/2014, Visit Newport Beach Inc. will explore opportunities to partner with Black Diamond at select shows and meet with specific operators. o Promotions - Black Diamond will collaborate with third party businesses that align with the Visit Newport Beach Inc. brand to develop consumer promotions throughout the UK to encourage travel to Newport Beach. o Public Relations - Black Diamond works seamlessly with the in -house public relations team to create ongoing interest in the destination. Together they create exciting campaigns with original content customized to the UK market that is disseminated though press releases, blogs, social media and dynamic itineraries for visiting media. o Trade Events - Black Diamond will continue to participate in a number of regional trade events consisting of general networking and presentations on California (including Newport Beach). In the new fiscal year, Black Diamond will explore opportunities that will garner further exposure at these events. 79 •, C'xr or1 International Marketing- United Kingdom 900 800 700 600 500 400 300 200 100 Doti o°�' o°a o°y o°�0 01 o°� �o ` d otiti ti ti ti ti ti ti ti ti ti ti ti Source: International Trade Administration, Office of Travel and Tourism Industres 2004 2005 2006 2007 2008 2009 2010 2011 'i International Marketing- China Due to the increased number of visitors from China, Visit Newport Beach Inc. has partnered with the Orange County Visitors Association and Ed Fuller to reach the Chinese market. This is an extremely lucrative market for Newport Beach due to their high spending potential, desire to travel to California, and interest in high -end products, services, and destinations. China Efforts Consultant: Ed Fuller and the Orange County Visitors Association (OCVA) China Activities: • Packages & Itineraries - Newport Beach will be included as part of different packages and itineraries sold in China through Galaxy Tours. • Destination Visits - OCVA will assist with the planning and coordinating of educational trips to Newport Beach, such as Galaxy Tours and media. • Public Relations - Newport Beach is included in the China media kit, which will create ongoing interest in the destination, provide original content for the China market and offer dynamic itineraries for visiting media. OCVA China Media Visit FOOS International Marketing- China 800 700 600 500 400 300 200 100 Source: International Trade Administration, Office of Travel and Tourism Industries 2004 2005 2006 2007 2008 2009 2010 2011 m Marketing Calendar 6'11' ort LUVJ /Ul JAUG ISEP OCT INOV IDEC IIAN FEB MAR JAPA I MAY IJUN Advertising Promotions U Times Travel Show NAI West Summit Event Specific Advenising 6 Promotions Effons Ongoing PR Efforts (i.e. press releases, media pitches) Vises California Media Pitches Event Specific PR Efforts Social Media (Facabook, Goo le., Pinterest, Twitter, YwTubc) E- Communicatnns Event Specific Online Efforts Annual Dinner 6 Marketing Outlook Annwl Partner HoWay Part Social Media Workshop and Mixer Marketing Summit Map Great Step Guide Calendar of Events Weddina Guide Annual Report Marketing Plan Partnership Packets Travel Trade FamJbriaation Tours (depends upon apponunitV- Focus during slsokfer season) International or emotions Training LUVJ Finance and Administration TOT MARKETING BUDGET FOR FISCAL YEAR 2013 -2014 Leisure - Advertising 476,000 Local Event - Advertising 138,000 Media Promotions 10,000 Non -Media Promotions 60,000 Other Consulting Fees - Agency Management 4,992 Fees and Expenses 90,000 Ad Production 12,000 Creative Design /Development 30,000 Contests /Consumer 8,000 Promotions 49,058 Photography 50,000 Other Contingencies 42,500 Total Agency Management 231 058 TOTAL ADVERTISING r Community Relations ,Visitors 10,000 Guide 16,500 Map of Newport Beach 38,000 Great Stays Guide 29,000 Mini Maps 4,992 Calendar of Events 6,100 Wedding Guide 10,000 Destination Brochure - Community Report 8,000 Marketing Plan 2,000 Partnership Packets 3,000 Collateral Shoot Expenses 42,500 Collateral Distribution 45,000 Pet - Friendly Guide to NB 3,000 Trails Guice 3,000 Special Interest Leisure Guide 3,000 Total Collateral 214,092 Community Relations Research 10,000 Trade Shows - Community Sponsorships 26,500 Annual Marketing Outlook Dinner 50,000 Awards 2,000 Video 20,000 Promotional Items 21,000 VNB Inc. Events 16,000 6Hospitality Training 18,000 Memberships - LocalEvent Marketing* 130,000 Total Community Relations 163,500 Ac�RJl'f 0 Finance and Administration z Consulting Fees 72,500 Social Media 5,040 TTI FAMs 20,000 Website Maintenance 20,000 Promotions 40,000 Online Search Advertising 50,100 Trade Shows 4,750 Digital Advertising 6,000 Airfare 4,000 Online Contests /Promotions 3,000 Accommodations 7,500 Mobile Application 5,000 Meals 1,750 Consulting Fees - Transportation Costs 3,500 Website Redesign 100,000 Other Travel Costs 750 CRM Annual Licensing 6,000 Business Meals /Entertainment 2,500 Software (non- Deprec) 21,992 Promotional Items 5,000 Total Online Marketing 217,132 Total International Marketing 162,250 OTAL MARKETING 823,92 Media Services 26,000 Media FAM Tours 50,000 Promotions Consulting Fees 15,000 Special Programs 6,000 Trade Shows 9,000 Media Relations 6,000 Total Public Relations 112,000 OTAL MARKETING 823,92 Conference Sales cir vrt Conference Sales u�u' G1U 0Tl Overview The Conference Sales department of Visit Newport Beach Inc. is responsible for representing and managing the organization' s conference, meeting and group sales efforts. The department works with industry partners to help increase overall market share of the meetings market and, in turn, generate additional revenue to help grow the Newport Beach Hotel and tourism industry. Visit Newport Beach Inc. targets meeting planners, association executives and other decision makers and influencers in several geographic and vertical market segments (corporate, state /regional associations, national associations, government, religious, sports events, medical, education, etc.) to generate hotel room nights, delegate spending and other meetings related revenue. Business will be solicited through direct sales efforts to existing markets as well as emerging vertical and geographic market segments. As a specialized economic development agency for Newport Beach, Visit Newport Beach Inc. will position and alter strategies as necessary to pursue future conference and meeting business. Initiatives • Building and driving an active pipeline to ensure the room -night conversion opportunities to meet and exceed team goals for the 2013 -2014 fiscal year. • Maintain momentum of the "Live the Dream" campaign, a national promotion across all market segments to generate interest in Newport Beach as a meeting destination. • Continued focus on delivering outstanding client events and experiences in Newport Beach for new and existing clients and TBID partners creating valuable face time to connect with one another. Enhanced exposure to targeted clientele through participation in appointment based shows, in market sales calls and.a select few premiere trade shows. Seek additional opportunities to provide potential clients with compelling sponsorship and incentive packages. Advance our relationships with HelmsBriscoe and ConferenceDirect through our destination partnership and annual conference participation, targeting associates who plan programs in our area. M Conference Sales TBID Communication Visit Newport Beach Inc. meets with hotel sales leaders to maintain open lines of communication. Valuable information is provided to the TBID hotels regarding all sales related functions, production, forecasts, strategies and cooperative opportunities. Communications include the following elements: Quarterly Director of Sales meetings including the sales leadership from TBID hotels and the sales team from Visit Newport Beach Inc. to discuss all relevant sales related issues including production, forecasts, strategies, marketing and cooperative opportunities o End of month reports to General Managers and Sales leaders including critical sales activities, room night production and pace, economic impact calculations, as well as monthly highlights e TBID Committee meetings as necessary throughout the fiscal year to discuss sales goals and production. Regional ]Markets o Continued focus on California State Association, National Association, Corporate and Incentive groups, as well as portfolio accounts with a strong emphasis on California o Colorado, Texas, Florida, Pennsylvania and Canada have been targeted as potential growth markets for Newport Beach and will be pursued accordingly a Ongoing development of the National Association market in the greater Washington DC area will continue to be an area of emphasis. :: Conference Sales,,';' Deployment Michelle Donahue, Senior Vice President of Sales Strategic business development, administrative management of department and industry partnership oversight Amanda Kliem, National Sales Manager Los Angeles, Colorado, Nevada, Utah, New York, Northeast US, Washington DC /VA /MD and Western Canada Bette Haddock, National Sales Manager Orange County, Midwest and Eastern Canada Hillary Burton, National Sales Manager All California State Associations and Pacific Northwest Lori Hoy, National Sales Manager Northern California, San Diego, Arizona, Texas and Southeast. Erin Stapley, Sales & Research Coordinator Coordinating tradeshows, economic impact calculator, empowerMINT oversight, client events and site visits. Sales & Service Associate (Open) Develop and manage conference service program, assist with research, prospecting and follow up tradeshow. '7 Conference Sales Client Events, Sales Missions, and Tradeshows • Developing and expanding client relationships through consistent communication and contact ��'►t' Urt • Customized destination familiarization experiences designed to support the TBID hotels in extending their reach to key customers and influencers • Leverage DMO partnership to ensure market share with portfolio accounts by HelmsBriscoe and ConferenceDirect. Senior VP of Sales to manage and foster actual partnership relationships & Sales Managers to attend HelmsBriscoe and ConferenceDirect annual conferences to connect with associates in key markets • In market sales calls with TBID hotel partners to Los Angeles, San Diego, Sacramento, Bay Area, Seattle, Denver, Dallas and Washington DC • Participation at appointment -based hosted buyer events such as SMART MART, Meetings Focus Live, Meeting & Incentive Forums, COLLABORATE marketplace and a select few trade shows. Anticipating a lineup of over 45 trade shows in 2013/2014. In addition, remaining consistently active in our local /regional chapters of MPI, SITE and PCMA .� Conference Sales Duffy Boat Access tr vrt The Newport Harbor is a unique selling point that helps Newport Beach shine over other destinations. Duffy Boat access provides the sales team the opportunity to showcase Newport Beach's beautiful harbor to potential meeting clients. Hotel partners are encouraged to join on sites when appropriate or request that a Visit Newport Beach Inc. sales manager offer a harbor tour for themselves and one of their own clients. Newport Beach embodies the essence of coastal California living and no element of that experience makes it more ideal than a Duffy Boat tour of the stunning Newport Harbor. 91 Conference Sales Opportunities to Host Industry Events :Y In 2012/2013 Visit Newport Beach Inc. focused on industry events and meetings as a way to bring many qualified planners to the destination. As a result of those efforts, Newport Beach had the benefit of hosting 3 industry events this fiscal year (MPI Educational Summit in September, HelmsBriscoe West Coast sales meeting and Successful Meetings "Destination California ") resulting in wonderful destination exposure to over 150 meeting planners. These opportunities afford the same benefits as the traditional "FAM" experience but at a fraction of the cost and time to our staff and exponentially more exposure to clients. For 2013/2014, Visit Newport Beach Inc. has confirmed Meeting & Incentive Forum for September 2013. This appointment based show is well established on the east coast with an annual spring show in Palm Beach Florida. They have looked for the right opportunity and destination to host an inaugural west coast event and are very enthusiastic to partner with Visit Newport Beach Inc. In addition, Meeting Focus West is strongly considering a proposal from Visit Newport Beach Inc. and partners for spring of 2014. Finally, Visit Newport Beach Inc. will look for one portfolio account meeting to round out the goal of three industry events in the destination per year. 92 Conference Sales Client Events ♦1111 , orl z The signature winter event for top tier conference sales clients is the Annual Christmas Boat Parade event on the Wild Goose. This event offers the opportunity for Visit Newport Beach Inc. clients to enjoy a wonderful regional event while getting to know the conference sales team, all TBID partner sales leaders, and general managers in a festive yet relaxed atmosphere. It has become a very popular event that fills within a matter of days. In addition to the Christmas Boat Parade event, Visit Newport Beach Inc. will introduce a new spring event offered to local and regional clients. It will be a weekend "lifestyle event" that focuses on fashion, health, spa, food & wine. TBID partners will be actively involved as we work together to showcase the quintessential and aspirational lifestyle of the destination. 93 Conference Sales TBID Employee Destination Familiarization As an added value to TBID partners, and part of the TBID partner engagement program, the conference sales team has developed a destination familiarization for the employees in the sales, catering and convention services departments with the goal of providing a fun and productive experience of Newport Beach. The hotel employees in these disciplines have much opportunity to share destination knowledge and insights with clients. In addition, this experience enhances their own personal buy in of the city they are working in. The first outing occurred in February and was extremely well attended. Visit Newport Beach Inc. will budget for two per year moving forward so the TBID partners can count on getting any new employees acclimated in a timely way. �• = cm ur•t c M Conference Sales A-7 orf "Live the Dream" Promotion The "Live the Dream" promotion aimed at meeting planners has been very successful and will continue into its third year. It provides an incentive to motivate and reward Request for Proposal (RFP) submissions and definite bookings in TBID properties. It serves as a way to open the door for discussion about Newport Beach with planners who might not have known about or considered the destination before. The incentive culminates into a grand prize drawing of a weeklong luxury vacation for two in the destination for all who have booked a meeting in Newport Beach. This grand prize offering gives way to wonderful promotional material in digital and printed meeting publications and further inspires sourcing RFP's through Visit Newport Beach Inc. 95 Conference Sales 81N )orl 1 I I I 14t,. Industry Partnerships and Intelligence Cvent Destination Guide Cvent, established in 1999, is the largest event management software in the United States. Three years ago, they began partnering with DMOs with their online destination guide. Their presence is noticed by over 100,000 visitors a month, So far in 2013, Orange County has seen over 3,200 requests for proposal (RFPs) from Cvent. Visit Newport Beach Inc. wants to capture as many of those as possible by highlighting the destination in their online guide. The cities with upgraded listings are receiving on average of 20 times more RFPs than those with the basic listing. Upgraded listings represent about 15% of the search results in O.C. but are receiving about 70% of the RFPs. The Diamond listing package offers Visit Newport Beach Inc. a "copy CVB" button on the RFP page. empowerMint empowerMint is a DMO exclusive database, with over 40,000 meetings from 20,000 organizations. This is an "owner operated" database that is strengthened each day by additional bookings and histories from over 150 DMOs. Over SO% of the meetings in the database have less than 200 rooms on peals night making it a valuable resource for second and third tier cities. empowerMINT provides the Visit Newport Beach Inc. sales team with abundant opportunities to search and query for more intelligent prospecting, which translates to better customer communication and more room nights. HelmsBriscoe Valued Partnership With over 1,200 associates worldwide, HelmsBriscoe is the global leader in meeting procurement. The HelmsBriscoe Destination Partnership Program was launched in 2010 and follows the success of the company's Hotel Partnership Program. This program is designed to combine the power of the HelmsBriscoe network with the power of the destination (DMO) allowing Visit Newport Beach Inc. to increase destination awareness within the HelmsBriscoe worldwide network. Benefits include preferred listings and enhanced information within all HelmsBriscoe channels, registration for their Annual Business Conference, access to all HelmsBriscoe offices, access to analytics and opportunities for HelmsBriscoe FAM and event opportunities. In October 2012, HelmsBriscoe was the host city for the West Coast Sales Meeting, allowing us to showcase the destination to 75 associates. Conference Sales- Market Situation Situational Analysis The Southern California lodging market is supported by sound fundamentals, although they were sorely tested in the recent past as the worldwide recession and following economic certainty negatively affected hotel demand and revenues. Southern California as a destination remains one of the most visible and popular regions in the United States for the .following reasons. The region has been a thriving economic powerhouse with technology and biotech, apparel manufacturing, shipping and freight, creative and financial services, aerospace engineering and manufacturing, and entertainment production providing the area with a large base of commercial demand generators Favorable climate, hundreds of miles of pristine beaches, world -class theme parks, and unparalleled dining and shopping make Southern California a popular leisure destination for travelers from around the country and around the world Cities like Los Angeles, Anaheim, San Diego, and Long Beach also boast state -of- the -art convention centers that draw large group meetings from both coasts to Southern California Although the Southern California lodging market suffered between 2008 and 2009 due to the declining economic growth, historically high unemployment levels, a declining home values, and depressed consumer confidence, it appears that the worst is now behind us. The hotel industry performed much better than expected in 2010 and into 2011. In looking forward we are cautiously optimistic about the region's economic recovery, lodging fundamentals are projected to remain positive. The industry is anticipated to benefit from continued growth in corporate profits, international visitation, personal income growth in the professional ranks, and limited new hotel supply. In 2011, the Southern California lodging market as a whole is seeing the demand for hotel rooms increase from 2010 levels, with a number of submarkets estimated to return to, or surpass peak 2007 occupancy levels. Therefore as a result, we are forecasting that in many areas 2012 will be a year of strong average daily rate growth as markets focus their efforts on recapturing rate lost during the economic downturn. 97 Source:. PKF Consulting USA —1013 So Cal Lodging Forecast Conference Sales- Market Situation Orange County Market Orange County continues to attract a large number of visitors to the area. In 2011, the estimated number of visitors totaled 42.9 million. The county's tourism hub is the City of Anaheim, a metropolitan area with more than 150 hotels and nearly 20,000 hotel rooms. Visitors to the county spent an estimated $7.74 billion, based in -part to a. robust convention calendar, the Disney theme parks and a $100 million renovation of the Fashion Island Regional Shopping Center in Newport Beach. Of the visitors to Orange County, more than 60 percent came from the Western United States, while eight percent were international travelers. The peak months of visitation typically are July through September. Orange County is home to the Disneyland Resort and Knott's Berry Farm theme parks, two of the nation's most popular recreational attractions. Additional activities in the County include beautiful beaches, numerous shopping venues, and the Anaheim Convention Center, together providing for a popular destination amongst international /domestic tourists and business travelers. Throughout 2012, Orange County has undergone, and is continuing to undergo, changes that will enhance its offerings to both visitors and residents. Several notable projects include: • The opening of a new 130 -room Residence Inn in San Juan Capistrano • The opening of "Cars Land" at Disney's California Adventure Theme Park in June • The Anaheim Convention Center's $20 million renovation and expansion • The $22.8 million Orange County Great Park 30 -acre expansion expected to be completed in mid -to -late 2013 AirTran Airways nonstop service to Cabo San Lucas and Mexico City in June 2012 • The addition of professional indoor soccer with the Anaheim Bolts at the Anaheim Convention Center Arena • The new Anaheim Regional Transportation Intermodal Center (ARTIC), slated to open in late 2014 ti • Source: PKF Consulting USA — 2013 So Cal Lodging Forecast. Conference Sales- Market Situation Orange County Market f continuedl John Wayne Airport, Orange County (SNA) has, in recent years, become one of the country's biggest regional airports. As such, the County of Orange approved the John Wayne Airport Improvement Program to increase the terminal size and accommodate six additional gates. An extension to the South of Terminal B houses the new bridged passenger boarding gates called Terminal C. Construction of the Improvement Program was completed in 2011/2012. Since 2002, annual passenger traffic has increased to a compound annual rate of 0.9 percent. The Orange County area has a diverse employment structure with major employers in industries including tourism, theme parks, recreation, businesses, government, healthcare, education, high -tech, manufacturing, service and finance. Construction of new business parks is expected to continue over the long -term to create jobs in business services, engineering services and wholesale trade. One such recent example is The Irvine Company agreeing to build a 380,000 square foot office tower at 650 Newport Center Drive in Newport Beach to be used by Pimco as their new headquarters. The project is slated to be completed in 2014. Our 2013 estimate for overall Orange County market is positive across all econometric indicators. In 2013, the annualized rooms of the 130 -room Residence Inn in San Juan Capistrano will enter the market, as will the under construction 149 - room Residence Inn and 145 -room Fairfield Inn & Suites, both in Tustin, which are expected to open in August. We anticipate a 0.3 percent increase in supply for the year, following a 0.4 percent increase in 2012. We forecast a 1.6 percent increase in occupied rooms, a 4.3 percent in ADR, and a 5.6 percent increase in RevPAR. Market occupancy is expected to reach 74.5 percent in 2013, which is above the historical range, yet reasonable given the new additions to supply, expansive hotel renovations and new attractions developing in this market. forever summer Source: PKF Consulting USA — 2013 So Cal Lodging Forecast .. Conference Sales- Market Situation Anaheim and Greater Anaheim t rr or! Tourism in Anaheim is the principal economic force and the center of Orange County's lodging industry. The Greater Anaheim submarket, the largest in Orange County in terms of rooms revenue, is situated in north - central Orange County, and also includes those properties in the cities of Garden Grove and Orange that compete directly with Anaheim Resort hotels. The hub of Orange County's tourism industry, the largest city in the county and home to the Anaheim Convention Center, Anaheim Stadium, home to the MLB' s Angels, the Honda Center, home to the NHL' s Anaheim Ducks as well as a number of unique entertainment and dining venues. The Anaheim Convention Center is a critical draw for the group and convention business in Anaheim, which has spurred further expansion. Preliminary plans have been evaluated for the sixth expansion of the Anaheim Convention Center, which would add significantly more meeting and exhibit space to the already 1.6 million- square -foot center. The expansion would include an additional 250,000 square feet of space for exhibits and meetings, with an estimated 1,500 parking spaces. Overall, the expansion aims to attract higher- tiered convention business meetings in the national convention market. According to Anaheim Convention Center officials, the $15 million Grand Plaza expansion broke ground in May 2012 and is expected to be completed by January 2013. The convention center expansion is expected to break ground in mid -2013 and be completed by 2015. In addition to the expansion, beginning in January 2012 the center offers complimentary wireless internet service to all attendees, giving it a competitive advantage, as it is the first convention center in the western region of the US to offer free Wi -Fi throughout the facility. Source: PKF Consulting USA— 2013 So Cal Lodging Forecast 100 �n�s, Ic'1'111ir 11 i�, Conference Sales- Market Situation Los Angeles Los Angeles County typically acts as an excellent barometer for the performance of the greater Southern California lodging market. As the largest and most diverse of the major Southern California markets, individual hotel performance often greatly varies. However, when taken as a whole, the growing pains and opportunities of the Los Angeles County area often reflect those seen in other areas. Los Angeles International Airport (LAX) is the busiest airport on the West Coast and a bustling domestic stop and important international hub. The airport has an enormous impact on tourism and travel in the greater Los Angeles area as many international tourists use LAX as a gateway to the United States. In terms of the hotel market, 2011 saw a shift from 2010 with strong increases in average daily rate, amid a slight positive shift in demand as represented by the increase in occupied room nights. The overall county lodging market has seen a faster recovery than anticipated, from when the economy began to falter in the latter part of 2007. Downtown Los Angeles Downtown Los Angeles, following a model set forth in other city centers where redevelopment has been successful, has been working to improve its image and attract more residents and consumers. Some of the initial catalysts were the openings of the $375 million Staples Center in 1999 and the $274 million Walt Disney Concert Hall in 2003, which spurred new restaurants, as well as other residential and commercial developments in Downtown Los Angeles. This momentum continued at a strong pace and even to some degree through the Great Recession, in large part due to the continued success of L.A. Live, South Park's $3.5 billion entertainment, lodging and residential complex. According to the Downtown Center Business Improvement District, $15.7 billion has been invested in Downtown Los Angeles since 1999. As a whole, given these and other exciting developments, Downtown Los Angeles is quickly becoming a world -class destination. 101 Source: PKF Consulting USA -2013 So Cal lodging Forecast Conference Sales- Market Situation Long Beach. .In the last decade few cities have seen a large turnaround as the City of Long.Beach. Its downtown area hasbeen revitalized with ample shopping and dining opportunities. The Grand Prix of Long Beach, the Aquarium of the Pacific, and the redevelopment of downtown with mixed -use developments have all provided Long Beach with a growing base of leisure business to complement its traditional commercial business. Long Beach continues to position itself as a regional destination, offering numerous quality lodging facilities, leisure amenities, a 340,000 square foot convention center, and a vibrant downtown area. In February 2009, The Long Beach Convention and Entertainment Center completed a four month long, $8 million renovation, which most notably included a new coat of paint and upgrades to the restroom complexes. Additionally, multi- colored LED lighting was installed in conjunction with the multi- colored illumination of Downtown Long Beach to promote a pedestrian friendly environment. Long Beach Airport (LGB) is often seen as an excellent alternative to other regional airports. With what was once one of the best kept secrets in Los Angeles County, the addition of Flights from JetBlue has boosted the visibility of this airport. Year to date through September 2012, LGB posted a 7.0 percent increase in passenger counts, at 2,492,153 in 2012 versus 2,329,851 for the prior year.. The Long Beach Airport Modernization project was approved in 2010 and is anticipated to be completed in 2013. The 136 million dollar renovation project will modernize the airport, while maintaining its art - deco, vintage appeal. There is one addition to supply in 2013, as the 159 room Courtyard by Marriott Long Beach Airport is anticipated to open in March 2013. Also, the Hyatt Regency Long Beach completed major renovations and was rebranded as the Myatt at The Pike in February 2012. The Westin Long Beach renovated all of its guestrooms completed February 2013. Source: PKF Consulting USA —2013 So Cal Lodging Forecast 102 Conference Sales- Market Situation Hollywood ei>>port Hollywood has been one of the most visible hotel and retail markets in recent years. The opening of the Renaissance Hollywood Hotel (now Loews Hollywood Hotel) in late 2001, the repositioning of the Hollywood Roosevelt, and the opening of the W Hollywood Hotel and Residences have redefined the quality level of this market. Many other area attractions continue to assist in making Hollywood the place to stay for visitors to the area as Hollywood is most famous for its movie stars and movie theaters. Santa Monica Santa Monica presents a number of luxury and mid- level, full service ocean front properties. Its waterfront location and vibrant atmosphere assisted in making this market one of the strongest in the county. The Stability of the market can be attributed to the presences of a stable commercial segment combined with high end group and leisure business. Local businesses consist of entertainment, financial services and creative arts businesses that are based in Santa Monica. Many of the hotel s in this market are located within walking distance of the Pacific Ocean, one of the most important demand generators in Southern California. The hotels and resorts that line the beaches provide accommodations for travelers from virtually every price point There are no additions to supply in 2012. Source: PKF Consulting USA — 2013 So Cal Lodging Forecast 103 ,„ ' f v ON Conference Sales- Market Situation I I A C n i. Coachella Valley Situated in Riverside County, the Coachella Valley is a collection of resort communities including Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Desert Hot Springs, Indian Wells, La Quinta, Indio and Coachella. Given the abundance of sunshine and its proximity to the Greater Los Angeles area, the Coachella Valley is a popular winter and weekend retreat for Southern California residents. With its large inventory of recreational facilities in the area, including more than 100 golf courses and over 600 tennis courts, the valley is also an established resort and group destination. The Palm Springs valley, as it has been termed, has also become a known location for Indian casinos as it contains the Agua Caliente Spa Resort Casino in downtown Palm Springs, the Casino Morongo in Cabazon, the Fantasy Springs Casino Hotel in Indio, and the Agua Caliente Hotel in Rancho Mirage, among others. The Coachella Valley occupies an area of approximately 600 square miles. The year -round climate in the valley averages a 71 degrees, with average daytime temperatures of 88 degrees and nighttime temperatures dropping to an average of 55 degrees. A low average rainfall of approximately 5.5 inches per year ensures that the skies are sunny typically 350 days per year. While the climate attracts a large number of visitors during the winter months, the extreme hot weather conditions in the summer generally cause a decrease in economic activity and visitors during this period. Palm Springs Airport (PSP) is the only commercial airport in the Coachella Valley and currently is served by 10 airlines that connect to hundreds of cities worldwide. Every year, PSP welcomes visitors from over 500 cities around the world. It is considered to be a positive growth factor as it works to meet the challenge of an expanding convention market and tourism -based economy. However, the airport tends to inhibit growth given the lack of direct service to major markets, reduction of frequency during summer months, and expensive air fares. These issues pose a challenge for a destination that would like to reach beyond Southern California as a feeder market. The overall Valley is at a disadvantage in terms of attracting national groups relative to competing Southwest desert resort destinations, such as Phoenix and Scottsdale. Source: PKF Consulting USA— 2013 So Cal Lodging Forecast 104 Conference Sales- Market Situation San Diego * C1U ort The San Diego Metropolitan Statistical Area (MSA), which consists of San Diego County, is located approximately 125 miles south of Los Angeles and is immediately north of the Mexican border, The San Diego community, once dominated by the presence of nearby Naval, Air Force and Marine bases, as well as the defense - related aerospace industry, has diversified. San Diego has developed into one of America' s foremost centers of technology, particularly in the emerging biomedical field. Manufacturing has shifted towards electronics, computers, instrumentation and other high technology products, and development of such sectors as services, research and development, and health services has been strong. The State of California's Department of Finance reported that San Diego County had an estimated aggregate population of approximately 3.14 million persons as of January 2012. San Diego is home to LEGOLAND, the San Diego Wild Animal Park, SeaWorld, and the San Diego Zoo. Additional activities in the region include beaches, casinos, racetracks, concert and sport facilities, numerous shopping venues, dozens of golf facilities, and the San Diego Convention Center. These attractions provide for a popular destination amongst international /domestic tourists and business travelers. Throughout the periods of economic growth and decline, these sources continue to be major drivers of tourism activity and, ultimately, hotel demand. The San Diego County hotel market continued to experience a recovery in 2011, posting the first year of both ADR and occupancy growth since 2007. For 2012, we estimate a slowdown in growth in occupied rooms as markets such as Downtown approach their peak occupancy levels. This is estimated to combine with a 3.8 percent growth in ADR to post RevPAR growth of 5.8 percent. In 2013, we forecast a further slowdown in growth in occupied rooms along with 4.6 percent ADR growth for a RevPAR growth of 5.0 percent. Source: PKF Consulting USA — 2013 So Cal Lodging Forecast 105 Conference Sales - Market Situation San Diego (continued) cu+ 011 t I ,a C I I The Convention Center has demonstrated a high level of success in capturing convention demand, though the 2008 -2009 downturn impacted this market along with every other convention market. According to the San Diego Convention and Visitors Bureau, the events of 201.1 generated 734,000 hotel room nights. A study completed by CIC Research indicated that 30 to 40 percent of hotel room nights that attendees' book are not part of the official block, and thus, are not counted in reported numbers. An expansion of the San Diego Convention Center is being planned. Pending financing, the project is slated to begin late next year and be completed by 2016. There have been few additions to the San Diego lodging market in 2011 and 2012, with limited openings slated for 2012. Several projects in the planning stages continue to be on hold or have been withdrawn due to continued difficulties associated with obtaining financing and the high replacement costs relative to going concern value for new construction. There are two addition to supply in San Diego market in 2012. The Hyatt Place Vista opened July 10, 2012, and the Hilton Carlsbad opened July 1, 2012. In 2013, there are three anticipated openings, including the 78 -room Seacoast in Imperial Beach in June 2013, the 89 -room Holiday In Express Hotel Circle in October 2013, and the 182 -room Hampton Inn Mission Valley in July 2013. Additionally, numerous projects are in the planning phase for 2014 and beyond, including multiple projects in downtown, the Bay areas, and throughout the county. We expect additional projects to enter the pipeline in Downtown and North Coastal over the next several years. PKR estimates the overall San Diego hotel market occupancy to recover to 73.9 percent occupancy by year -end 2012, correlating to a 2.9 percent increase in occupied room nights. Average daily rate is estimated to increase 3.8 percent to $156.34. In 2013, PKF forecast growth of 1.7 percent- in occupied rooms amidst a 1.4 percent increase in supply and 4.6 percent growth in ADR to result in RevPAR growth of 4.9 percent. Source: PKF• Consulting USA— 2013 So Cal Lodging Forecast 106 Finance and Administration TBID CONFERENCE SALES BUDGET FOR FISCAL YEAR 2013 -2014 Salaries 829,109 Site Inspections 18,000 Benefits 111,276 Client Events 57,500 Insurance 6,770 Data 39,340 Office Expenses 83,964 Conference Services 3,000 Operating Expenses 92,522 Trade Show Expense Research 3,500 Travel Expenses 48,000 Total Expenses 1,127,141 Registration 77,161 Booth Expenses 17,000 ADvatTISING Shipping 3,600 Meetings Advertising 89,035 Total Trade Show Expense 145,761 Sponsorships Production 8,000 Group Incentives 45,000 Other Consulting Fees 12,000 Industry Events 36,600 Special Promotions Industry Partnerships 15,000 Gift Cards 55,000 Customized Destination Support 25,000 Promotional Events 6,500 Total Sponsorships 121,600 Client Gifts 20.000 Total Conference Sales 385,201 Total Special Promotions 81.500 Total Advertising 190,535 MUM Airfare Accommodations Meals Transportation Costs Other Travel Costs Total Travel Sources PKF Consulting USA - 2013 50 Cal lodging Forecast 7,800 6,000 2,400 1,800 18,600 -4, Ol f 107 Appendix o1 tipA Sources Balboa Bay Resort CIC Research City of Newport Beach County of Orange Dean Runyan Associates Destination Analysts, Inc. Energy Star Expedia Fairmont Hotel Newport Beach Federal Reserve Bank Hall & Partners Hornblower Cruises and Events Hyatt Regency Newport Beach Island Hotel John Wayne Airport, Orange County (SNA) Marriott Hotels Newport Beach Marriott Hotel and Spa Newport Beach Bayview Marriott MMGY Global Oxford Economics PKF Consulting USA Radisson Hotel Newport Beach Resort at Pelican Hill Secretaria de Mexico {Mexico) Smith Travel Research Statistics Canada TNS Travel America Tourism Economics C ort travelhorizons UCLA- Anderson Forecast United States Bureau of Economic Analysis United States Department of Commerce .International Trade Administration (ITA) Office of Travel and Tourism Industries (OTTI) United States Department of Commerce United States Travel Association (USTA) Visit California YPartnership 109 Calendar JULY 2013 Newport Dunes Fourth of July Celebration Newport Dunes will host its annual July 4th celebration with resort wide activities. Featured entertainment will be the popular folk rock band America, whose hits include "Horse with No Name" and "Tin Man ". Shakespeare by the Sea A flat grassy area is the perfect spot to lay your blanket down at Newport Beach's Bonita Canyon Sports Park to experience the lively theatre portrayal of Shakespeare's renowned plays. Each year, the Newport Beach City Arts Commission presents two different productions performed by professional actors Concerts in the Parks Diverse musical acts fill the air by joining in one of the many summer events offered in Newport Beach. Free and open to the public, the Newport Beach City Arts Commission hosts two evenings of family arts entertainment at local parks. From showcase singers to street bands, simply bring your lawn chairs and blankets, and picnic outdoors with family and friends. r Old Glory Boat Parade See Newport Harbor strewn with the "American Spirit" as the "Old Glory Boat Parade" hosted by the American Legion Yacht Club, features boats adorned with red white and blue decorations to celebrate the birth of the United States of America. 78th Annual Flight of the Lasers Boat Race Known as the starting point for many blue -water sailors, more than 100 small, single- masted catboats fill the Newport Bay to compete in what has become a local tradition. Beginning at the Balboa Pavilion and circumventing the entire bay, sailors may test their skills come race day, free of charge. 110 Calendar AUGUST 2013 Concerts in the Parks n Ort Diverse musical acts fill the air by joining in one of the many summer events offered in Newport Beach. Free and open to the public, the Newport Beach City Arts Commission hosts two evenings of family arts entertainment at local parks. From showcase singers to street bands, simply bring your lawn chairs and blankets, and picnic outdoors with family and friends. Su' Annual Lobster Fest The Lobster Fest at Newport Beach is a celebration of summer designed for fun, entertainment and most importantly to raise funds for deserving charities. Maine lobster is flown in fresh on the morning of the event and prepared on site along with a bevy of other traditional seafood fare including clams, crab claws and shrimp. W 111 Calendar SEPTEMBER 2013 Lido Yacht Expo "The best place to sell big boats and yachts in the West!" With more than 250 big vessels on display, along with gear that makes owning one more enjoyable, this boat show's continued growth has created the word of mouth that drives buyers to the ideal location of Newport Beach —a popular destination for active and affluent boaters. 261h Annual Newport Beach Surf Championships Dedicated to acknowledging the local surfers that have defined "the hottest 100 yards" of Newport Beach for decades, the competition will consists of surfers in seven age divisions, ranging from Elementary School to Masters to Legends. Style Week Orange County Orange County's biggest and original fashion week, returns this fall to Fashion Island, Irvine Spectrum Center, and for the first time - The Market Place! Guests are invited to enjoy the definitive style experience with designer runway shows, fashionable fun, celebrity guests, and more. C'N' Ul'f Corona Del Mar Coastline Car Classic Thousands of people gather in the seaside venue of Corona Del Mar to view a unique blend of European and American Classics, Exotic Sports Cars, Hot Rods, Customs and specialized dealer select vehicles. With festivities including live entertainment, food and beverages, unique vendor exhibits, and VIP hospitality, the Pacific Ocean backdrop purely serves at the icing on the cake at this extraordinary beachfront car show 112 Calendar OCTOBER 2013 52nd Annual Sandcastle Contest Corona Del Mar supplies the sand, while the Commodores Club of the Newport Beach Chamber of Commerce brings together thousands of spectators in an event that features a variety of skill levels in the artistry of Sandcastle sculpting. From children to professional architects, talented groups compete for the winning title or to simply have a great time while supporting the community. ens Url Harbor Heritage Run Newport Harbor High School PTA celebrates 25 years of community with the 25th Harbor Heritage Run. Join in a 5K Feature Race, 2K Fun Run /Walk, and a Kids' Klassic Race and free Fitness Fair. Newport Beach Triathlon The longest running triathlon will take place in Newport Beach once again! Triathletes can take in the scenic views of Back Bay and the Newport Beach coastline as they run, swim, and cycle. NOVEMBER 2013 Holiday Tree Lighting One of Orange County's most popular holiday traditions returns when Fashion Island hosts an evening of holiday festivities including a musical performance, culminating with the lighting of the Christmas tree in the Neiman Marcus- Bloomingdale' s Courtyard. 113 Calendar DECEMBER 2013 350i Annual Corona Del Mar Christmas Walk As one of the oldest events the Chamber of Commerce is proud to present, the holiday festivities for family, friends, and associates should not be missed. Fun - loving people gather at the Village of Corona Del Mar for entertainment, food, prizes, and games in true holiday spirit. What better way is there to visit with Santa, meet the community, and participate in the joy of the holiday season? 10501 Annual Newport Beach Christmas Boat Parade Since 1908, boat owners in Newport Beach have "decked the hulls" of their seagoing vessels from beautiful multi- million dollar yachts to small boats and canoes with dazzling holiday lights and music to fill the air. The splendor of Christmas, and the holiday spirit shines vividly across the waters of the harbor as the Christmas Boat Parade —a magical holiday tradition for all ages— continues to be a premier event for the holiday season in Southern California. The New York Times even hailed it as "one of the top ten holiday happenings in the nation." A; orf 17th Annual Balboa Island Holiday Home Walking Tour One of Orange County's most loved Holiday Home Walking Tours with eight holiday decorated beach cottages and dazzling homes on Balboa Island. The homes showcase creative holiday d6cor that is sure to ignite the spirit of the season! 114 Calendar JANUARY 2014 Bch Annual Restaurant Week Start off the New Year by quenching your pallet at one or more of almost 100 of the finest establishments featured in the Newport Beach Restaurant Week. During this time, some of the best chefs create 3- course gourmet meals to satisfy a lunch outing with friends, or a special dinner for two. Discounted prices combined with beautiful scenery, make for an unbelievable dining experience that will not break your wallet, but keep you coming back for more. Whale Watching (January through March) The annual Grey Whale migration takes whale watching in Southern California to a new level. Hundreds of Grey Whales swim along the Laguna Beach coastline, only minutes away from Newport Harbor. These majestic mammals migrate from the Bering Sea to Baja California and back —they are truly a sight to see for all ages. Charter companies like Newport Beach's Davey' s Locker, Newport Landing, and Balboa Pavilion offer the best viewing opportunities with daily whale watching excursions starting as low as $10 per person. rw ort FEBRUARY 2014 14th Annual Newport Beach Jazz Party Enjoy the multi- faceted style of jazz while eating brunch, lounging poolside under the afternoon sun, or dressed to the nines sipping on cocktails in the Grand Ballroom. Performances include all -star musicians, and true geniuses of the trade that is jazz music. 115 Calendar MARCH 2014 e ort f i Newport -Mesa Spirit Run Celebrate health and education with a community event designed for the entire family to enjoy. A variety of races are implemented to appeal to all, from: 4 -12 year olds, mothers and fathers with strollers, competitive or leisure runners, as well as whole family "walks ". With all proceeds benefitting the Newport -Mesa schools, the "spirit" behind the run is truly mentally, as much as it is physically rewarding. Toshiba Classic, PGA Tour of Champions Held on the green at the Newport Beach Country Club, the Toshiba Classic is a world- renowned event that takes place annually. The event combines an atmosphere filled with the prestige of golf legends and greats like Hale Irwin and Fred Couples, with the distinguishing maturity of the 50- year -old golf course located along Pacific Coast Highway for a scenic view of Newport Beach. 116 Calendar APRIL 2014 15TH Annual Newport Beach Film Festival Movie Maker Magazine named the Newport Beach Film Festival one of the "25 Film Festivals: Worth the Entry Fee." The festival spotlights hundreds of films every year, and offers filmgoers a rare opportunity to meet the filmmakers. It is an experience filled with several premieres and galas, followed by awards ceremonies, and a chance to hear from directors, screenwriters, and cinematographers about the behind - the - scenes magic involved with making a film. ort Y Newport Beach Boat Show With more than 300 boats on display in- water- including three legendary lines —at the Lido Marine Village, and a host of exhibitors on hand to showcase innovative products and services that make owning and operating a big boat more enjoyable, this is the one show serious buyers will not want to miss. 66th Newport to Ensenada Yacht Race AHOY! The world's largest boat race accompanied by a variety of festivities kicks off every year with the traditional "Launch Party" through to the annual "Send -Off Fiesta" where you can mingle with the skippers and crew. This unusually fun event, and the views of the boat -laden harbor, is something that you have to experience to believe. March of Dimes Walking in the annual March for Babies not only makes you a part of the largest fundraising event of the year for Orange County March of Dimes, but it also allows you to give hope to the more than half a million babies born premature every year. The money you raise will support programs in your community that help moms have healthy, full -term pregnancies. 117 Calendar MAY 2014 OC Marathon Join thousands of other community- minded runners and walkers who will view scenery equal to the best of Orange County, beginning at Newport Center before crossing into Upper Newport Bay towards the finish line. Pledges will benefit over 15 local charities, and prizes will be given out to a number of first, second, and third place winner. Balboa Island Art Walk South Bayfront Promenade (from Marina Avenue to Pearl Avenue) on Balboa Island features over a mile of art. Ninety plus artists will exhibit original oil paintings, acrylics, watercolors, glass, ceramic, sculpture, jewelry and photography —many of which are talented local artists. 111h Annual Food and Wine Festival Enjoy wines from Italy, epicurean delights and spirits on the idyllic waterfront setting of The Balboa Bay Club & Resort Where acclaimed winemakers, celebrated chefs, master sommeliers, and noted experts will serve as guides captivating festival goers with educational seminars, enticing tastings, as well as extraordinary dining experiences. Newport Dunes Movies on the Beach at Dusk join us on Fridays and Saturdays from May through September for free movies shown on a giant screen at the Newport Dunes Waterfront Resort & Marina. Beginning at dusk, bring the kids, lounge chairs, and treats for a summer night the whole family will enjoy. Hyatt Regency Newport Beach jazz Festival Three days filled with world -class performances by 25 top jazz artists brings smooth sounds of jazz to the Hyatt Regency Newport Beach. Featured as Southern California's most famous Smooth Jazz Festival, combined with popular tunes and great classics —along with a selection of food and wine —makes for an unforgettable setting. 118 Calendar JUNE 2014 Corona Del Mar Scenic Sk For over 25 years, the Corona Del Mar Chamber of Commerce and the City of Newport Beach presents the Scenic 5k Race, 2 Mile Fun Walk, and 1 Mile Kids Dolphin Dash —three signature special events you will not want to miss. Come join thousands of people for a race /walk that ends along the bluffs of Big Corona State Beach where restaurant row, merchant booths, and live entertainment await your arrival. Summer Concert Series at Hyatt Regency With a stellar line -up of musicians bringing a range of genres to the stage including jazz, smooth jazz, contemporary, acoustic and vocals. As the longest running music series in California, and recognized as bringing revered musicians to southern California every year. Russo and Steele Collector Car Auction A car lover's dream encompasses all of the attributes that Barrett - Jackson has been able to deliver, giving them the reputation for the World's Greatest Collector Car Auctions. From mint - condition Classics, to Muscle Cars, Hot Rods, Resto -Mods, Exotics, and Contemporary Collectibles, Barrett- Jackson boasts the same amount of class as the vehicles which cross its showroom floors. Balboa Island Parade Show your Patriotism and join one of California's most charming seaside towns in their annual parade which draws more than 5,000 residents, merchants, and community neighbors down Marine Avenue. This Balboa Island tradition is filled with children on bikes, island dogs, decorated Golf Carts and Floats, Vintage Cars, and various local groups, marching bands, and dignitaries. Help the island welcome summer with family, friends, and good old American fun. 119 ew ort 4/ EACH & COMPANY r Ir Staff cu' vrt 11 ON. Gary Sherwin President & CEO Organizations: Newport Beach Commodores, OC Visitors Association, CalTravel Association, DMAI, 7Cs, California State University Fullerton Dean's Advisory Board Favorite thing about Newport Beach: 1 love the fact that this is a sophisticated community with a small town feel. It's where you can enjoy a spectacular breakfast by the pool at Pelican Hill and then go to the candy shop on Marine Avenue on Balboa Island within minutes. It is the home of every luxury car dealership in the world, but people drive them in shorts and Flip flops. It also probably has more drop dead beautiful views of the ocean than you'll find anywhere. Favorite thing to do in Newport Beach: Driving down Coast Highway on a clear sunny day by Crystal Cove after a great lunch at the Div Bar (amazing BBQ burnt ends!) and a morning on a Duffy ride in the harbor. The people watching at Fashion Island is also a great way to spend the afternoon. Vicki Higgins Executive Vice President & Chief Marketing Officer Organizations: DMAI, CalTravel, Visit California, OCVA, Women's Speakers Association, California Women's Conference Favorite thing about Newport Beach: The lifestyle - it is wonderful living in paradise every day Favorite thing to do in Newport Beach: Outdoor activities - stand up paddle board, hike, run, kayak or a sunset picnic at Lookout Point Lesley Swain Chief Financial Officer Organizations: Completing the CDME course with DMAI Favorite thing about Newport Beach: The beautiful sunsets Favorite thing to do in Newport Beach: Spend an afternoon in a Duffy boat 121 Staff It o r t Michelle Donahue Senior Vice President of Sales Favorite thing about Newport Beach: The "small town feeling" of Newport Beach. Favorite things to do in Newport Beach: Driving or walking in residential neighborhoods looking at the awesome houses and yards, and shopping at Rogers Gardens Amanda Kliem Group Sales Organizations: Society of Incentive Travel Executives (SITE), Meeting Planners International (MPI) (Southern California Chapter Favorite thing about Newport Beach: Newport Harbor Favorite thing to do in Newport Beach: Boating is a big hobby of mine and my family and most of my free time is spent on the water. 1 even met my husband at our yacht club (Balboa Yacht Club). Bette Haddock National Sales Manager Organizations: SITE, MPI (Southern California Chapter) Professional Convention Management Association (PCMA) Favorite thing about Newport Beach: The incredible weather in Southern California, the sunsets in Newport Beach and being able to explore our harbor on Duffy Boats Favorite thing to do in Newport Beach: Shop, shop, shop! Hillary Burton National Sales Manager Organizations: Associate Vice Chair, California Society of Association Executives Favorite thing about Newport Beach: The Weather Favorite thing to do in Newport Beach: Sit at Inspiration Point and read 122 Staff F11Ao' (:. "�C'itnOf'1 Lori Hoy National Sales Manager Memberships: MPI and PCMA Favorite thing about Newport Beach: The natural beauty of the city, you can tell that people take pride in their city. Its s clean, beautifully manicured, sophisticated yet relaxed. Favorite things to do in Newport Beach: Shopping Erin Stapley Sales and Research Coordinator Organizations: DMAI Favorite thing about Newport Beach: Crystal Cove Favorite thing to do in Newport Beach: Cruise on the harbor Alicia Snyder Office Manager /Executive Assistant to the CEO Favorite thing about Newport Beach: The Beaches, Balboa Island and the Ferry Favorite thing to do in Newport Beach: Surfing with my son at the Wedge. After surfing we eat lunch, grab an ice cream and rent bikes. 123 Staff ��`'` " "' Ruby Gualberto Vice President of Marketing Development Organizations: American Marketing Association, American Management Association, DMA1, CalTravel Association, Orange County Visitors Association Favorite thing about Newport Beach: All of the outdoor activities, gorgeous views, and great restaurants Favorite thing to do in Newport Beach: Kayak by moonlight around the Back Bay and Harbor; ride my bike around Balboa Peninsula and Back Bay Mark Rudyk Director of Online Marketing Organizations: DMAI, Cal Travel Association, speaker with the Orange County Visitors Association Favorite thing about Newport Beach: Living here - waking up to the sounds of the waves in the morning and heading out on a paddle, getting on the beach cruiser for a ride down the boardwalk, walking down to the local bar for a game of pool or grabbing a bite of tasty seafood at Bear Flag Fish Co. Favorite things to do in Newport Beach: Take in all the beauty around me, and translate that to inspiring posts via social media channels to all the tens of thousands I get to reach on a daily basis and share rich photos and inspiring posts on everything that is Newport Beach. Jeffrey Soto Director of PR & Communications Organizations: PRSA, OC PRSA Favorite thing about Newport Beach: It is the ideal location for relaxation artists to create their own individual painting of leisure. There is something savory to sample for everyone. Favorite things to do in Newport Beach: Taking a family bike ride along the peninsula and hopping aboard the ferry over to Balboa Island for a Balboa Bar or frozen banana. It's the best way to encounter the friendly people in Newport Beach, and we oftentimes run into old friends along our path. 124 Staff Brianna Saucedo Online Marketing Coordinator Organizations: CalTravel, OCVA, DMAI, Recipient of the CalTravel 30 under 30 award Favorite thing about Newport Beach: The diverse neighborhoods that make up Newport. Crystal Cove, the Peninsula and Balboa Island are my favorite neighborhoods because they all have different characteristics to the area and different activities to partake in. Favorite thing to do in Newport Beach: Go to the peninsula and enjoy the ocean. l love to layout during the day and then later in the afternoon go rollerblading on the boardwalk! Erin Ramsauer Public Relations & Communications Coordinator Organizations: PRSA, CalTravel, OCVA, DMAI, Recipient of the CalTravel 30 under 30 award Favorite thing about Newport Beach: The unique and alluring juxtaposition between high end luxury and casual beach vibe the city offers to locals and visitors. Favorite thing to do in Newport Beach: Spending time outside whether it's on the beach, an outdoor activity, dining al fresco, shopping, or simply strolling through a village and discovering something new. Sarah Marshall Visitor Concierge Organizations: Orange County Concierge Association (OCCA) Balboa Island Improvement Association (BIIA) Favorite thing about Newport Beach: The charm of our neighborhoods from Crystal Cove to Cannery Village there is always something unique and exciting to explore. Favorite thing to do in Newport Beach: Try new things! From fun in the sun to restaurants and shopping I am constantly discovering new adventures! 125 TOT Visit NelvportBeach Inc. Proposed Budget - FY2014 - 62115 - Office Move Expenses Ordinary Income/Expense Income 46000. Income - 41000 • TOT Income 3,509,829 42000 • Partnership Fees 4,000 43000 - Co-Op Advertising income 1,750 44000 - Event Hosting 44200• Annual Marketing Outlook Dinner 6,SOO Tota140000 • Income 3,522,079 Total Income 3,522,079 64115. Office Equipment(nan- deprec) 3,522,079 Expense - 61000 - Salaries 61010 - Salaries 39,874 61015 - Bonuses and Commladons - 61020 - Auto Allowance - 61030 • Payroll Tax Expenses 3,146 Total 61000 • Salaries 43,020 61100 - Benefits 61110 • Medical Insurance 61120 • Dontal Insurance 61125 • Vision Insurance 61130 -Life Insurance 61140 • Redrement Plan (401k) 61150. Flexible Spending Plan 61160 - Personnel Benefit Total 61100 - Benefits 62000 -Office Expenses 62100 Lease - 62110. Office Repairs and Maintenance - 62115 - Office Move Expenses Total 62000.081 ce Expanses 63000• Insurance 63100 - General Liability Insurance - 63200 - Workers Compensation Insurance 63300 - Board of Dfcerars Insurance 2,255 Tom] 63000 • Insurance 2,255 64000.Operating Expenses 64100. Office supplies - 64101 • Stationary - 64110.Ofnce Equipment Leases - 64115. Office Equipment(nan- deprec) - 64120 - Equipment Repairs & Maintenance - 64125-Compucer5afnvare (non- deprec) 64130 - Voice, Data & fable • OMcc 600 64135 - Telephone • Mobile - 64136•Cable 64140. Postage - 64145 • Shipping Charges - 64150 • Bank Fees 540 64151- Mcmhunt Account Fees 250 64160 , Membership Dues 50 64165 - Subscriptions - 64170 - Team Meetings - 64175 - Govcrnanm Meetings - 64180 - Education 64190 • Business Licensing and Fees - 64195 • Auto Lease and Expenses 64196 -Lcaso 3,620 64197 - Repairs and Maintenance 600 Attachment C Newport Beach Company Proposed Budget FY204 Ordinary lncome/Expeltse - Income 40000•Income 41010.•VNB Inc Income 1,680,267 41015 • City of NB Revenue 240,000 41020 • BP Venture Revenue 20,000 Total 40000- Income, 1,940,267 Total Income e Expense 51000 -So lades 61010 - Salaries 61015 - genuses and Commissions 61020 , Auto Allowance 51030 - Pavrall Tax Expenses Tom] 61000 • Salaries 6110D•Benefits fill 10 • Medical Insumme 61120 • Dental Insurance 61125 - Vision Insurance 61130 - Life Insurance 61140 - Retirement Plan (01k) 61150 - Flexible Spending Plan 61160 - Personnel Benefit Total 61100• Rcne0ts 62000.Office Expenses 62100•Lease 62110 • Office Repairs and Maintenance Total 52000 •Office Expemmc; 63000• Insurance 6100 - General Liability Insurance 63200 • Workers Compensation Insurance 63300 - guard of Matters Insurance Total 53000- Insurance 64000.Operating Expenses 64100.Office Supplies 64101 Stationary 64110 • Office Equlpmwt Leases 64115 •OfAce, Equipment (non- deprec) 64120 • equipment Repairs & Maintenance 64125 - Computer Software(nomdeprec) 64130 - Voice, Data & Cable - Office 64135 - Telephone - Mobile 64140 • Postage 64145 - Shipping Charges 64150 -exnk Fees 64151 - Merchant Account Fees 64160 • Membership Dues 64165• Subscdp0ons 64177 • Team Meetings 64175 - Governance Meetings 64190•Edumllon 64190 • Business Licensing and Fees 64200 Professional Services 64201 -Audit Fees 64202 -Tax Preparation Fees 64203 - Recruiting Fees 54204 • legal Fees 1,940,267 1,940,267 921,697 131.745 15,000 84,300 1,L52,742 84,712 8,246 1,699 5,600 72,691 750 4,080 177,778 230,116 I'M 231,616 1,109 5,940 2,255 3,3D4 12,000 3,800 7,867 6,000 10,404 2,000 4,990 6,720 90D 4200 1,200 500 3,950 1,000 14,550 8,200 18,000 750 5.000 1,000 1,000 2,500 Attachment D VISIT NEWPORT BEACH INC. (A Non - Profit Organization) FINANCIAL STATEMENTS For The Years Ended June 30, 2013 and 2012 with INDEPENDENT AUDITORS' REPORT THEREON VISIT NEWPORT BEACH INC. (A Nou•Profit Organhatlon) CONTENTS Independent Auditors' Report .................................................................. ............................... l -? Financial Statements: Statements of Financial Position .......................................................... ..............................3 Statements of Activities ....................................................................... ..............................4 Statements of Cash Flows ................................................................... ............................... 5 Notes to Financial Statements ............................................................ ............................... 6 Supplemental Information: Schedule I — Statement of Financial Position by Funding Source .... ............................... 15 Schedule II — Statement of Activities by Funding Source ................ ............................... 16 KPa A T ! Cnrl�i n ,_Y, 1V1..6 ; C;etnpanY gvz4ihss A(i, ^ . 1c. oni Audu Independent Auditors' Report Board of Directors Visit Newport Beach Inc. Report on the Financial Statements We have audited the accompanying financial statements of Visit Newport Beach Inc. (a non - profit organization) (the "Organization "), which comprise the statements of financial position as of June 30, 2013 and 2012, and the related statements of activities and cash flows for the years then ended, and the related notes to the fmancial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in. accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the f nancial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis £or our audit opinion. p 714 M -3 6565 f 714 380 b5a6 555 Anton Blvd Suite 1000 Costa Mesa CA 92626 Icmlpsrineiscpa.rom p 818 999 5865 f 818 704 4683 20720 Ventwa Blvd Suite 160 Woodland Hills CA 91364 p 750 431 5465 f 760 431 3566 .2768 Loker Avenue West Suite 101 Carlsbad CA 92010 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Visit Newport Beach Inc. as of June 30, 2013 and 2012, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Report on the Supplementary Information Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information contained in Schedules I and II on pages 15 -16 is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the 2013 financial statements. The information has been subjected to the auditing procedures applied in the audit of the 2013 financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the 2013 financial statements or the 2013 financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the 2013 financial statements as a whole. "3- \ kkw b ' J LLp KMJ I Corbin & Company LLP Costa Mesa, California October 3, 2013 ASSETS Current assets: Cash and cash equivalents Investments Accounts receivable Related party receivable Prepaid expenses and other current assets Total current assets Property and equipment, net Website development costs Deposits and other assets LIABILITIES AND NET ASSETS Current liabilities: Accounts payable Related party payables Accrued expenses Accrued payroll and related expenses Deferred rent Total current liabilities Deferred rent Total liabilities Commitments and contingencies Net assets: Unrestricted, undesignated Unrestricted, designated for appropriations Total net assets VISIT NEWPORT BEACH INC. (A Non -Profit Organization) STATEMENTS OF FINANCIAL POSITION June 30, 2013 2011 S 913,143 S 626,698 278,975 579,751 4,516 2,173 5,049 63,025 228.865 205,517 1,430,548 1,414,139 53,241 107,532 113,000 16,250 9,619 9.619 $ 1.606.408 $ 1.547.540 $ 104,076 S 165,390 43,632 - 35,299 46,791 33,779 63,025 19.169 5.770 235,955 280,976 103.842 86,502 339.797 367.478 1,180,611 1,088,062 86.000 92.000 1.266,611 1,180,062 $,_ l.M"o $ 1,547.540 See accompanying notes to.financial statements 3 VISIT NEWPORT BEACH INC. (A Non - Profit Or;anization) STATEMENTS OF ACTIVTIES Expenses Marketing For The Years Coded June 30, 2,134 218 2013 2012 Support and revenues: General and administrative 1,159,406 Service fee revenue S 5,214,701 $ 4;729,191 Sponsorships 6,301 5,461 Interest income 2,333 1,601 Other income 10.803 4,539 Total support and revenues 5,234,138 4340,792 Expenses Marketing 2,392,057 2,134 218 Salaries and benefits 1,450,108 1,771,968 General and administrative 1,159,406 878,633 Depreciation and amortization 32,099 54,357 Contribution of fixed assets to a related party 112,607 - Loss on disposal of property and equipment 1,312 18,546 Total expenses 5,147,589 4,857,722 Increase (decrease) in unrestricted net assets 86,549 (116,930) Net assets, beginning of year 1,180,062 1.296,992 Net assets, end of year $_120Szll $ 1.180.06 See accompanying notes to financial statements 4 VISIT NEWPORT BEACH INC. (A Non- Profit Organization) STATEITENTS OF CASH FLOWS Supplemental disclosure of non -cash investing activity: Additions to leasehold improvements through tenant improvement allowance $3212 $ 78.182 See accompanying notes to financial statements 5 For The fears Ended June 30, 2013 2012 Cash flows from operating activities: Increase (decrease) in unrestricted net assets $ 86,549 $ (116,930) Adjustments to reconcile increase (decrease) in unrestricted net assets to net cash provided by (used in) operating activities: Depreciation and amortization 32,099 54,357 Provision for bad debt expense 150 5,828 Contribution of fixed assets to a related party 112,607 - Loss on disposal of property and equipment 1,312 18,546 Changes in operating assets and liabilities: Accounts receivable (2,493) 1,032 Related party receivable (5,049) - Prepaid expenses and other current assets (23,348) (178,327) Accounts payable (61,314) (324,107) Related party payable 43,632 - Accrued expenses (11,492) 7,573 Accrued payroll and related expenses (29,246) 13,743 Deferred rent (2.518) (3,49S) Net cash provided by (used in) operating activities 140,88 (521.780) Cash flows from investing activities: Proceeds from sale ofinvestments 300,776 120,389 Purchases ofproperty and equipment (58,470) (20,690) Purchases of website development costs (96.750) (16.250) Net cash provided by investing activities 145.556 81449 Net change in cash and cash equivalents 286,445 (438,331) Cash and cash equivalents at beginning of year 626,698 1.065,029 Cash and cash equivalents at end of year $ 913.143 $ 626,698 Supplemental disclosure of non -cash investing activity: Additions to leasehold improvements through tenant improvement allowance $3212 $ 78.182 See accompanying notes to financial statements 5 VISIT NEWPORT BEACH INC. (A Non - Profit Organization) NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2013 and 2012 NOTE 1— ORGANIZATION Nature of Operations Visit Newport Beach Inc. (the "Organization ") is a non -profit organization formed under the laws of the State of California. The Organization currently has an agreement ("TOT Agreement ") with the City of Newport Beach (the "City'), extending through June 30, 2016, to promote tourism and serve the needs of visitors to the City. Under the terms of the TOT Agreement, the Organization is responsible to develop, plan, carry out and supervise a program to market and promote the Newport Beach brand and to promote tourism in, and serve the needs of, visitors to the City as well as increase the amount of Transient Occupancy Tax collected through its promotional activities. Transient Occupancy Tax ( "TOT ") The City collects a Transient Occupancy Tax as well as a Visitor's Service Fee applied to the transient rental of lodging rooms (collectively, the "TOT"). The City pays the Organization 18% of the annual TOT in monthly installments. As the Organization is not entitled to its share of the TOT until paid by the City, amounts are recognized when received. The City shall have the right, in its sole discretion, to adjust the payment (increase or decrease the percentage of TOT paid to the Organization) as part of its once - annual budget adoption process for any reason after notice to the Organization and an opportunity for the Organization to formally comment on the adjustment, For each of the years ended June 30, 2013 and 2012, the Organization received approximately 67:0 of its service fee revenues from the City through the TOT. The City has the right to terminate the TOT Agreement, without cause, by giving the Organization three hundred sixty-five days' written notice of its intention to tenninate. Should the City reduce or stop its funding to the Organization due to the Organization's default or termination of the Agreement, the Organization's operations will be impacted. Tourism Business Improvement District ( "TBID ") The Newport Beach Tourism Business Improvement District ( "NBTBID ") was established April 28, 2009, for a five -year term that will expire on April 28, 2014 pursuant to the Management District Plan (the "Plan"). The NBTBID is funded by assessments levied on participating lodging businesses within a specified district. The assessments are restricted for use for sales promotion and marketing programs to market the City as a tourist, meeting and event destination as outlined in the Plan. Either party may terminate this agreement by providing the other party ninety calendar days' written notice prior to the effective date of termination. As the Organization is not entitled to its share of the assessments collected until paid by the City, amounts are recognized when received. For each of the years ended June 30, 2013 and VISIT NEWPORT BEACH INC. (A Non-Profit Organization) NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2013 and 2012 NOTE 1. — ORGANIZATION, continued 2012, the Organization received approximately 33% of its service fee revenues from the City through TBID assessments. As of June 30, 2013 and 2012, the NBTBID is represented by six (6) hotels within the city of Newport Beach which collect a 2.0% tax on short-term stays. The City is entitled to 0.25% of the receipts annually for the collection of the assessments and disbursements of the NBTBID. NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of. Presentation The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor - imposed restrictions. As of and for the years ended June 30, 2013 and 2012, the Organization had no temporarily or permanently restricted net assets. Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor - imposed restrictions. Expenses are reported as decreases in unrestricted net asses. Gains and losses on investments and other assets are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulations or by law. The Organization incurred expenses related to program activities of approximately $3,500,000 for each of the years ended June 30, 2013 and 2012. Use of Estimates The preparation of financial statements requires the Organization to [Hake estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by the Organization's management include, but are not limited to, the recoverability of long -lived assets and the allocation of expenses to program expenses as disclosed above. Actual results may differ from those estimates. VISIT NEWPORT BEACH INC. (A Non -Profit Organization) NOTES TO FINANCIAL S'TATENIENTS For the Years Ended June 30, 2013 and 2012 NOTE 2 – SUNMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued Cash and Cash Eauivalents The Organization considers all highly liquid investments purchased with an initial maturity of three months or less to be cash -equivalents. The Organization maintains its cash balances at various financial institutions. The total cash balances are insured by the Federal Deposit Insurance Corporation ("FDIC ") up to $250,000 per institution. At June 30, 2013, the Organization had approximately $355,000 of uninsured balances. The Organization periodically reviews the quality of the financial institutions it has deposits with to minimize risk of loss. Investments and Fair Value Investments consist of certificates of deposit which are carried at cost, which approximates fair value. Donated investments are recorded at the market value at the date of donation and thereafter carried in accordance with current accounting guidance. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or in the absence of a principal market, the most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs in priority that may be used to measure fair value: Level 1— Quoted prices in active markets for identical assets or liabilities. Level 2— Observable inputs other than quoted prices included within Level 1, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (such as interest rates and yield curves, credit risks, and default rates) or other inputs that are principally derived from or corroborated by observable market data by correlation or by other means; and Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Organization's certificates cf deposit are considered Level 2 investments VISIT NEIATORT BEACH INC. (A Non -Profit Organization) NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2013 and 2012 NOTE 2 — SUMNLARY OF SIGNIFICANT ACCOUNTING POLICIES. continued Accounts Receivable Accounts receivable from various sponsors are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts at year end. Management determines the allowance for doubtful accounts by identifying troubled accounts based on current and historical experience. Receivables are written off when deemed uncollectible. At June 30, 2013 and 2012, the Organization considers receivables to be fully collectible and accordingly did not record an allowance for doubtful accounts. Property and Equipment Property and equipment are stated at cost. Donated assets are recorded at their fair market value when received. The cost of purchased assets or fain market value of donated assets is depreciated using the straight -line method over the estimated useful lives of the related assets which range from three to seven years. Leasehold improvements are amortized over the lesser of their estimated useful lives or the related lease term. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. It is the Organization's policy to capitalize property and equipment over $1,000. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation or amortization are removed from the accounts and any resulting gain or loss is reflected in the statements of activities. Website Development Costs In accordance with the accounting guidance, the Company accounts for the costs of developing its website by capitalizing the costs during the application development stage when it is probable that the project will be completed and the property will be used to perform the function intended. Website development costs will be amortized on a straight-Line basis over their estimated useful lives when completed, which approximate three years. The recoverability of intangible assets is evaluated periodically; taking into account events or circumstances that warrant revised estimates of useful fives or that indicate that impairment exists. For the years ended June 30, 2013 and 2012, the Company capitalized 596,750 and $16,250, respectively, related to qualified costs. 0 VISIT NEWPORT BEACH INC. (A Non - Profit Organization) NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2013 and 2012 Imoainnent of Long -Lived Assets The Organization evaluates long -lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of in asset are less than the carrying value, a write -down would be recorded to reduce the related asset to its estimated fair value. At June 30, 2013, the Organization's management believes there is no impairment of its long -lived assets. There can be no assurance, however, that market conditions will not change or demand for the Organization's services will continue, which could result in impairment of long -lived assets in the future. Net Assets Designated for Annropriations The Organization segregates unrestricted net assets appropriated for specific activities as determined by the board of directors as unrestricted net assets, designated for appropriations in the statement of financial position. The Board of Directors of Visit Newport Beach has designated $86,000 as of June 30, 2013 for capital expenditures and other future promotional events. Contributed Materials and Services Donated materials and other noncash contributions (if any) are reflected in the accompanying statements at their estimated fair market values at date of receipt. Contributions of services are recognized if the services received create or enhance nonfinancial assets or require specialized skills, are provided by individual(s) possessing those skills and would typically need to be purchased if not provided by donation. Other volunteer services that do not meet these criteria are not recognized in the financial statements as there is no objective basis of deriving their value. One of the services provided by the Organization in its efforts to promote the City is to organize site inspections and other promotional events with a variety of potential visiting groups. These groups are introduced by the Organization's staff to the various hotels, restaurants, and other local businesses involved in the tourism industry in Newport Beach. All businesses visited are also sponsors of the Organization. Many of the Organization's sponsors contribute materials, such as meals and rooms, in connection with this program. During the years ended June 30, 2013 and 2012, the Organization determined there were no significant contributed materials acrd services. Additionally, a substantial number of unpaid volunteers have made significant contributions of time to the Organization. No amounts have been reflected in the financial statements for these donations as they do not meet the required criteria. 10 VISIT NEWPORT BEACH INC. (A Non -Profit Organization) NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2013 and 2012 NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued Income Tax Status The Organization qualifies as a tax - exempt organization under Section 501(c)(6) of the United States Internal Revenue Code and California state income taxes under Section 23701(d) of the California Revenue and Taxation Code; therefore, the Organization has no provision for federal or state income taxes. During the years ended June 30, 2013 and 2012, the Organization had no unrelated business income. The Organization annually evaluates tax positions as part of the preparation of its exempt tax return. This process includes an analysis of whether tax positions the Organization takes with regard to a particular item of income or deduction would meet the definition of an uncertain tax position under current accounting guidance. The Organization believes its tax positions are appropriate based on current facts and circumstances. The Organization's policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. At Aine 30, 2013, the Organization did not have any unrecognized tax benefits. The Organization is no longer subject to U.S. federal, state or local income tax- examinations by tax authorities for years before 2009. Subsequent Events The Organization has evaluated subsequent events through October 3, 2013, the date which the financial statements were available to be issued. No events have occurred through this date requiring recognition or disclosure in the financial statements. Reclassifications Certain amounts in the prior year have been reclassified to conform with the current year presentation. 1I VISIT NEWPORT BEACH INC. (A Nan -Profit Organization) NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2013 and 2012 NOTE 3 — PROPERTY AND EOUIPMENT Property and equipment consists of the following at June 30: Leasehold improvements Computer equipment Office furniture and fixtures Less accumulated depreciation and amortization NOTE 4 — COMMITMENTS AND CONTINGENCIES Lease Agreements 2013 S 33,257 25,228 58,485 (5,244 2012 $ 78,182 43,168 118,811 240,161 (132,629) S-107= The Organization is obligated under teases for its facility and certain equipment, which are accounted for as operating leases. The leases expire through November 2016 and rent is payable between $375 and $22,404 per month. The facility lease contains a five -year extension option at the end of the lease tenn. Total rent expense incurred by the Organization wider operating leases was approximately $248,000 and $267,000 for the years ended June 30, 2013 and 2012, respectively, and is included in general and administrative expenses. Minimum future payments due on non - cancelable facility and equipment lease commitments in excess of one year are as follows: Years Ending June 30, 2014 S 314,000 2015 327,000 2016 343,000 2017 39,000 $— _LSL23<0Q0 12 VISIT NEWPORT BEACH INC. (A Non -Profit Organization) NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2013 and 2012 NOTE 4 — COMMITMENTS AND CONTINGENCIES. continued Commitments The Organization also has several commitments for databases and services regarding marketing, promotion and other contracts ranging from approximately $15 to $10,000 per month over various terms with one year or less remaining at June 30, 2013. From these commitments, the Organization incurred approximately $211000 and $227,000 of expenses for the years ended June 30, 2013 and 2012, respectively, which are recorded in marketing expenses in the accompanying statements of activities. Guarantees and Indemnities The Organization has made certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation to certain actions or transactions. The Organization indemnifies its directors, officers, employees and agents, as permitted under the laws of the State of California. Pursuant to the TOT Agreement, the Organization also indemnifies the City and all of its related boards, councils, officers, employees, and volunteers from claims related to the conduct of the Organization or any of its officers, employees, or associated individuals. In connection with its facility leases, the Organization has indemnified its lessor for certain claims arising from the use of the facilities. The duration of the guarantees and indemnities varies, and is generally tied to the life of the agreement. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Organization could be obligated to make. Historically, the Organization has not been obligated nor incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying statements of financial position. NOTE 5 — RETIREMENT PLAN The Organization has a 401(k) retirement plan covering all eligible employees. The plan provides for matching contributions based upon employees' voluntary contributions and the Organization's contributions. The total expense recorded by the Organization during the years ended June 30, 2013 and 2012 was approximately $67,000 and $88,000, respectively. 13 VISIT NEWPORT BEACH INC. (A Non - Profit Organization] NOTES TO FINANCIAL STATERIENTS For the Years Ended June 30, 2013 and 2012 NOTE 6 — RE, LATE'D PARTY TRANSACTIONS During the year ended June 30, 2013, the Organization had transactions with related parties. At June 30, 2013 and for the three -month period then ended, all TOT- related facility, payroll and related costs are paid by a related party and billed to the Organization for reimbursement. For the year ended June 30, 2013, the Organization incurred 5474,465 from the related parties for these operating expenses, which are recorded in general and administrative expenses in the accompanying statements of activities. Also, the TOT - related fixed assets were contributed to a related party during the year ended June 30, 2013, with a net book value of $112,607, which was recorded as a contribution expense in the accompanying statements of activities. As of June 30, 2013, the Organization has a related patty receivable and payable of $5,049 and $43,632, respectively, recorded in the accompanying statements of financial position. 14 VISIT NEWPORT BEACH INC. (A Non -Profit Organization) SCHEDULE 1- STATEMENT OF FINANCIAL POSITION BY FUNDING SOURCE , t t K. �ta2: .:a.Y.ssi(�S' +;i+- s.* \'G"X -a+XY wY.i ,:a 'kLYt 4 %,c.�r -s ``.A�*n'- i?ryw. - Ji'i.:>L�c:N :iEt -rte °tea- 44�6?L.L .YA a.rsC..- •;a,.:'71 TOT* TBID Eliminations Total Current assets: Cash and cash equivalents Investments Accounts receivable Related parry receivable Prepaid expenses and other current asset$ Total current assets Property and equipment, net Intangible assets Deposits and other assets Current liabilities: Accounts payable Related party payables Accrued expenses Accrued payroll and related expenses Deferred rent Total current liabilities Deferred rent Total liabilities Net assets: Unrestricted, undesignated Unrestricted, designated lot appropriations 'total net assets S 858,275 $ 54,868 278,975 - 58,036 80,000 5,049 138,293 90.572 1,338,628 225,440 53,241 113,000 9.619 S___ 461 247 $ 77 8 68 ] S - S 913,143 278,975 (133,520) 4,516 5,049 228.865 (133,520) 1,430,548 53,241 113,000 9,619 S (133:520) $ 1.60fi.408 $ 161,523 $ 76,073 S (133,520) $ 10076 7,184 36,448 43,632 12,498 22,801 35,299 31,535 2,244 - 33,779 11938 5131 19.169 226,678 142,797 (133,520) 235,955 75.816 28026 103.842 302.494 170.823 (133,520) 339.797 1,158:753 21,853 - 86000 1.158.753 107.358 $ 1061.247 $ 278.68.1 v Includes balances; for other marketing and administrative costs. 1,180,611 86.000 1.266.611 $_ -.606 40� 15 VISIT NEWPORT BEACH INC. (A Non -Profit Organization) SCHEDULE II - STATEMENT OF ACTIVITIES BY FUNDING SOURCE +' Includes balances for other marketing and administrative costs. 16 For The Year Ended June 30, 2013 TOT* TBID Eliminations Total Support and revenues: Service fee revenue $ 3,511,347 $ 1,703,354 $ - $ 5,214,701 Sponsorships 6,301 - 6,301 Interest income 2,175 58 - 2,333 Other income 10.803 10.803 Total support and revenues 3.530.726 1.703.412 - 5,234,138 Expenses: Marketing 1,716,014 676,043 - 2,392,057 Salaries and benefits 630,906 819,202 1,450,108 General and administrative 971,397 188,009 1,159,406 Depreciation and amortization 26,855 5,244 - 32,099 Contribution of fixed assets to related party 112,607 - - 112,607 Loss on disposal of property and equipment 1312 - 1.312 Total expenses 3.459.091 1,688.498 5.147,589 Increase in unrestricted net assets 71,635 14,914 - 86,549 Net assets, beginning oryear 1.087,118 92.944 1,180.062 Net assets, end of year $_ 1.1 W$1 $ ]07.$ 8 $ - $---L 6 611 +' Includes balances for other marketing and administrative costs. 16 Attachment E NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT ANNUAL REPORT FOR FISCAL YEAR 2014 JULY 1" 2013 THROUGH JUNE 30n' 2014 ORIGINATION Implemented beginning May 11% 2009 through an approved ordinance by the City Council, the Newport Beach Tourism Improvement District (NBTBID) will be in effect for five years before the TBID is up for the renewal process before the City Council. The NBTBID is a benefit assessment district proposed to help fund marketing and sales promotion efforts for Newport Beach lodging businesses. Visit Newport Beach, Inc, serves as the administrator for the NBTBID. This is the annual report of the NBTBID for the FY2013 -2014 fiscal year and is to be filed with the City Clerk, according to the California Streets and Highways Code Sections 36650. PURPOSE: The NBTBID is responsible for representing and managing conference, meeting, and group sales efforts in partnership with the seven TBID lodging businesses. These services are designed to benefit the seven hotels that will be assessed within the City of Newport Beach as well as generating additional revenue to grow the Newport Beach hotel and tourism industry. The current participating lodging businesses are as follows: • Newport Beach Marriott Resort and Spa • Fairmont Newport Beach • Radisson Newport Beach • Newport Beach Marriott Bayview • Hyatt Regency Newport Beach • The Balboa Bay Club and Resort • Newport Beach Dunes Waterfront Resort and Marina. COST BASIS AND EXPECTED REVENUE FOR FY2013 -2014: Annual assessment rates are 2% of gross short term (less than 30 days) room rental revenue on the participating lodging businesses within the City limits of Newport Beach. Lodging business stays of longer than 30 consecutive days shall not be assessed. Based on the benefit received, stays by airline personnel and government employees on government business shall not be assessed. Stays at time shares shall not be assessed. 2014 is the renewal year for the NBTBID. The expected revenue for FY2013 -2014 is $1.721M. Revenue forecasts are revisited in January of each fiscal year by the NBTBID Board of Directors to determine if adjustments need to be made. ACTIVITIES FOR FY2013 -2014: The strategic initiatives detailed in the VISIT NEWPORT BEACH INC. FY2013 -2014 Marketing Plan include maintaining momentum for the "Live the Dream" campaign — a national promotion across all market segments to generate interest in Newport Beach as a meeting destination, continuing with enhancing exposure to targeted clientele through participation in appointment -based shows, and advancing relationships with portfolio accounts such as HelmsBriscoe and Conference Direct. A summarized breakdown of the strategic initiative marketing and advertising budget for FY2013 -2014 approved by the NBTBID Board of Directors is as follows: ADVERTISING Meeting Advertising $89,000 Production 8,000 Special Promotions 81,500 Fees (to NB &Co) 12.000 $190,500 CONFERENCE SALES Site Inspections $18,000 Client Events 57,500 Database /Lead Development 30,948 Trade Show Expense 145,765 Sponsorships 96,600 Research 3,504 Customized Destination 25.000 $377,317 ASSESSMENT AND BOUNDARIES: No changes in assessment or boundaries are currently proposed, but the NBTBID Board of Directors has been discussing revisions to the Management District Plan to propose to the City Council during the TBID's renewal process in 2014. ESTIMATE OF NON - ALLOCATED FUNDS CARRIED OVER FROM FY2012 -2013: $27,210.15 AMOUNT OF ANY CONTRIBUTIONS OTHER THAN ASSESSMENTS LEVIED IN FY2012 -2013: $0.00