Aspen marketing investment a loan or a giveaway?
December 7, 2009
ASPEN – When the Aspen Chamber Resort Association presents its 2010 marketing plan to the City Council tonight, there’s likely to be discussion about whether the local government is on the hook for a $400,000 advance to the agency.
The council last month agreed to give ACRA a $100,000 grant and a $400,000 loan to make up for lost revenue as a result of a botched Local Marketing District (LMD) ballot question this past fall. The question was pulled because of a technical error and if passed, the 1 percent bed tax would have generated about $1 million a year.
So instead of enjoying an estimated $1.45 million budget, ACRA’s destination and marketing arm has $950,000 to sell Aspen next year – about $450,000 is estimated to come from an existing 0.5 percent lodging tax, along with $500,000 from the city.
Next year’s budget is only $135,000 more than 2009, which was $815,000.
Mayor Mick Ireland told the ACRA board last month that if the LMD doesn’t pass next November, the city wouldn’t require the chamber to pay the money back. But that hadn’t been discussed publicly with the rest of the council. The last discussion among council members contemplated that ACRA would pay the loan back at $100,000 a year either through the voter-approved LMD or from the existing 0.5 lodging tax.
Julia Theisen, ACRA’s vice president of sales and marketing, has tweaked the 2010 budget to reflect the reduced revenue.
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She pointed out that the money funds the chamber’s destination and marketing arm, and not ACRA itself.
“It’s an investment that the city is making for the community,” she said. “ACRA is not taking anything for this … there are no raises or salary increases.”
She said comparatively speaking, Aspen as a resort spends much less on marketing that its competitors – Vail will spend $1.8 million next year on summer marketing alone; Breckenridge has $1.457 million; Crested Butte has budgeted between $1 and $1.2 million and Estes Park has $2.8 million.
As proposed, ACRA’s 2010 budget for salaries and benefits remains unchanged from last year – $150,000.
Special events is a new line item for 2010, and $35,000 is earmarked to fund a new event either in early or late summer, or to support an existing one that requires more marketing to reach its full potential, Theisen said.
The public relations budget is proposed at $142,900, about $7,000 less than last year. The effort will remain the same, but ACRA has found cost-saving measures.
Theisen said it’s an important aspect of the budget, and this past summer’s effort that was funded by an additional $200,000 from the city proved it: The message of “affordable Aspen” written by a Denver-based journalist reached hundreds of newspapers around the country.
Theisen said results from ACRA’s PR campaign in 2009 total more than $6 million in advertising value.
“It works well because we are creating the messages and can control it,” she said.
The marketing effort that partners with local lodges remains the same as last year, which is $25,000 and goes toward advertising in various publications.
Print advertising for 2010 is budgeted at $120,000 – $44,000 less than last year. More money will be allocated next year to online advertising – last year $63,000 was spent; for 2010, $80,000 is earmarked.
More money will go toward website features as well. Improving the chamber’s website like putting a mechanism online that translates English to various international languages will drive more usage, Theisen said.
That’s partly in response to the notion that 80 percent of visitors book their vacations online.
Theisen said the photography line item is going up $4,500 next year to keep fresh images of Aspen on the chamber’s website.
“It’s the picture that sells,” she said.
Sponsorships will be increased from $8,000 last year to $25,000. Part of that money will be put toward ACRA hosting an event next May for public relations industry representatives from around the country.
The budget for group sales will double to $80,000 next year. The effort is supported by lodges, who pay a “pillow fee” for ACRA to get group business to Aspen. The effort includes pitching event planners, destination groups and going to trade shows.
“It’s been an area that’s been doing well but has more potential,” Theisen said. “We want to keep that going strong.”
Money put toward research also will significantly increase next year – from $10,500 in 2009 to $50,000 in 2010.
It includes a higher contribution to a market research organization that tracks mountain resorts’ occupancy levels, daily average room rates and competitors’ marketing efforts.
ACRA also will conduct a survey next summer of visitors to help determine the demographics, spending habits and vacationing patterns of the Aspen guest.
“It gives us a detailed picture of our summer visitor and who they are,” Theisen said, adding the survey is done every other year.
Theisen said the 2010 marketing plan stretches the limited dollars as far as they can go, and hopefully the 2011 budget will be padded with an additional $1 million after the LMD is approved next November.
“It’s a well-rounded effort and allocation of the funds,” she said. “Hopefully we’ll be in a better position this time next year.”