Alderman proposes short term CVB marketing contract extension to permit fact gathering

190421 BR Logo Local News Website 600x337 - Alderman proposes short term CVB marketing contract extension to permit fact gatheringDuring its June 4 Study Session, the Branson Board of Alderman discussed the marketing contract it has with the Branson/Lakes Area Chamber of Commerce & Convention and Visitors Bureau (CVB.) The discussion was at the request of Ward I Alderman Larry Milton.

In 2014, the City of Branson advertised for proposals for an organization to handle its marketing using approximately $3.3 million per year from the City’s Tourism Tax proceeds. As has been historically done, the contract was awarded to the CVB, for a term of five years running from January 1, 2015 through December 31, 2019. The initial contract was for one year with the city having the option to renew, in one year term increments, for an additional four years. This contract expires in 2019.

Milton’s presentation was grounded in a proposal to extend the existing CVB Marketing Contract for 12 months rather than to initiate a process that would result in the city being tied to another multi-year marketing contract. He said that such an extension, “will allow this Board the time necessary to gather the facts so we can make a more educated decision affecting our future visitor base.”

Milton had a number or reasons for his request. A major concern is about the decline in the rate of first-time visitors to Branson. He said that about 13 years ago, when they were trying to get the 1% Retail TECD Tourism Sales Tax for marketing passed, one of the driving reasons for its passage was because the declining rate of first-time visitors. It had hit an all-time low of 20 percent in 2004.

Milton said that with the passage of the TCED Tourism Tax, the annual marketing budget went from about $3 million annually to about $11 million, a 400% increase. He pointed out that for the years2009 through 2013 the of first-time visitations averaged 26.0%. During the last five years, the rate of first-time visitation has dropped to 21.4%.

He noted that when the Branson CVB, made a recent marketing presentation to the Board on its 2018 results, it used a slide with the caption, “First-Time visitation slipped a bit this year, after experiencing big growth in 2017, falling slightly below the Historical Average.” Milton said that the heading could just as well read, “Uh-Oh, over the past five years our first-time visitor count is reaching dangerous levels.”

Another concern of Milton is the Return on Investment that Branson is getting for its marketing dollars. He quoted CVB generated figures of $13 million in tax dollar revenues that it says it generated from the city’s $3 million investment.

While acknowledging that’s a very good Return on Investment, Milton pointed out that the $13 million in tax revenues is not solely from the city’s $3 million in City Tourism Tax dollars but is the result of combination of the millions of marketing dollars spent on marketing Branson. This includes millions of dollars in TCED Tourism Tax dollars, and millions of dollars in marketing Branson from other sources such as Silver Dollar City, Dolly Parton’s Dixie Stampede, Sight and Sound Theatre, and dozens of other Branson shows and attractions.

Another concern of Milton’s is that city marketing dollars are being spent generating traffic to WWW.ExploreBranson.Com resulting ticket sales from which the city get no tax benefit. The CVB sells ads on that site to Ticket Resellers. When those visitors click on any Ticket Resellers ad, they are redirected to the Resellers website. If they purchase a ticket from that site, the Reseller pays no tourism or other sales taxes on the difference between the “wholesale” price it was purchased for and the retail “price” it’s sold for.

Milton said that when he was involved with the ticket reselling industry, they estimated that about 30 percent of all ticket sales were from Resellers. He said, “I think that it is safe to assume the percentage is higher than that today.” While not attributing any percentage of the loss to the ads on the CVB site, he estimates the loss in tax revenues to the city from Ticket Resellers to be in the millions.

He is also concerned about the way that shows are being marketed. In illustrating how important shows are to Branson Milton used a golfing analogy, saying, “Those of us in this room may not be golfers, but golfing is a huge business. We may not be NASCAR fans or Hockey fans, but there are plenty that are.

“We in this room may not be attending shows, but someone is. Visitors are still attending shows, in 2018, over $88 million was spend on show tickets, generating over $3.5 million in tax revenue. Shows are the 2nd highest classification of tax revenue for our city. In fact, shows have been the 2nd highest tax generating category for as long as we have tracked this number, second only to lodging and lodging is not a driver of tourism.”

Ward III Alderman Kevin McConnell said that he appreciated Milton’s presentation and rationale for his request. He said, “Another by product of just extending the current CVB contract for an additional year would be that we’d be able to see and use the results of the Chamber of Commerce’s comprehensive study of Branson’s theatre industry in making a long-term marketing commitment. The contract for the study has been awarded and is expected to be completed within nine months.

In a recent news article, Grant Sloan, vice president of member engagement for the Branson/Lakes Area Chamber of Commerce and CVB, said, “In order to make educated decisions, you have to start with research-based information. This is a way to truly understand current dynamics within the industry and have strategies brought forward that can strengthen it, not only today, but long term.”

Milton request that his request to extend the CVB contract be placed on the agenda for a regular Board of Alderman Meeting for further discussion and a vote. Study sessions are non-voting informational sessions for the alderman. Although, they are open to the public to attend, unlike a regular Board meeting, where the public get an opportunity to speak, there is no such opportunity.