Presentation of Findings Aran Ryan, Tourism Economics The Economic Impact of the Elimination of Tourism Improvement Districts in California Presentation of Findings Aran Ryan, Tourism Economics August 12, 2016

California Tourism Improvement Districts Agenda California Tourism Improvement Districts Overview Rationale Proven returns Economic impact analysis: Elimination of TID funding

1. Overview

Wisdom of the California model 96 California TIDs with a combined assessment of $207 million Wisdom of the California model | Tourism Economics

Model adopted throughout California CA counties with active TIDs 32 Total active US TIDs 150+ | Tourism Economics

2. Rationale

The vital role of destination promotion Challenge Solution: Destination promotion 1 The visitor economy is fragmented Provides the scope and strategic vision supporting a wide array of individual businesses 2 The primary motivator of a trip is usually the experience of a destination, beyond the offerings of one business Articulates the brand message that is consistent with consumer motivations 3 Effective marketing requires scale to reach potential visitors Pools sustained resources to provide the economies of scale and marketing infrastructure required to generate impact | Tourism Economics

Destination marketing = Economic Development | Tourism Economics

TID advantages Notable characteristics of the TID model Focused Stable Account- able | Tourism Economics

3. Proven returns of the TID structure

TIDs measure and report results Proven results across nine measurement categories  Marketing ROI studies Press and PR reports Website and inquiry conversion studies Perception and image studies Group sales results Social media followers and interactions Website hotel booking referrals Tax revenue collections Event development | Tourism Economics

TMD funds held in limbo during much of 2013 Case studies San Diego TMD funds held in limbo during much of 2013 Immediate and significant slowdown in demand and a loss of pricing power | Tourism Economics

4. Economic impact analysis: Elimination of TID funding

Loss of a portion of out-of-state visitors and their spending Scenario assumptions TID elimination scenario Loss of a portion of out-of-state visitors and their spending Entire elimination of $207 million of annual TID funding for CA destination marketing organizations (DMOs) Proportionate reduction in DMO activities, such as group sales and leisure marketing Loss of California jobs, income and tax revenues in tourism and downstream sectors | Tourism Economics

Reduction in DMO activities | Tourism Economics

Group sales impacts Negative impacts as a result of reduced group sales $39 million less spending on group sales 2.2 million lost room nights $719 million of lost out-of- state spending | Tourism Economics

Non-group marketing impacts Negative impacts with reduced non-group marketing $154 million less spending on marketing 8.1 million lost room nights $2.6 billion of lost out-of- state spending | Tourism Economics

Total visitor spending reduction 8.2 million fewer out-of-state visitors Total visitor spending reduction 22.8 million fewer visitor nights, including 10.4 million fewer hotel room nights Elimination of $207 million of TID funding results in: $3.3 billion reduction in visitor spending | Tourism Economics

Total economic impact results Elimination of $207 million of TID funding results in: Tourism (direct) CA economy (total) Lost output (business sales) $3.3 billion $6.4 billion Lost jobs 32,000 52,000 Lost labor income $1.0 billion $2.1 billion Lost state and local taxes $177 million of lodging taxes $460 million Annual impacts | Tourism Economics

Impacts in context Lost tax revenues that would cover starting salaries of 11,000 teachers Lost income equivalent $160 per CA household Lost jobs equivalent to an increase in CA unemployment rate to 6.5%, up from 6.2% | Tourism Economics

Conclusion

In contrast to TID elimination…  Continued support of the TID model + Supplements existing destination marketing + Attracts incremental visitors + Supports 52,000 jobs for local residents + Supports $460 million of tax revenues for local governments annually | Tourism Economics

| Tourism Economics