by Max Marbut
Staff Writer
Visit Jacksonville CEO Daniel O’Byrne, who cited financial reasons in cutting two staff positions two weeks ago, presented a proposed 2011-12 budget that caps administrative costs at $800,000.
That represents 24 percent of the requested $3.29 million in revenues for the coming year, which he said is down from one-third of the budget in years past.
“We’ll hold that as hard dollars and as revenues go up, the percentage will go down,” said O’Byrne.
O’Byrne said he heard “loud and clear” from Tourist Development Council members at its past meeting who were concerned about staff expenses. He quickly cut two staff positions.
The council approved the budget.
Visit Jacksonville is the sales and marketing division of the Tourist Development Council and is contracted to receive 70 percent of the council’s annual revenue. That revenue comes from bed tax revenue in Duval County and interest income.
Visit Jacksonville’s requested budget is lower than its current budget. The 2010-11 budget totals $3.3 million, consisting of a $3.1 million operating budget and $219,526 in marketing dollars.
The Tourist Development Council projects almost $6.1 million in revenues for 2011-12, consisted of $4.5 million in tourist development taxes, $58,500 in interest earnings and $1.5 million in a fund balance transfer.
That’s up from $5.48 million in the current year, with bed taxes of $4.2 million and fund-balance transfer of $1.2 million. Interest income was $60,000.
Obligations for the coming year include $350,000 for Gator Bowl expenses plus a $150,000 marketing appropriation for the game and $90,000 in expenses for the University of Florida vs. University of Georgia football game.
Additional expenditures for supplemental marketing initiatives have previously been approved for Visit Jacksonville based on the recession’s impact on the tourism industry.
In terms of marketing expenditures, O’Byrne said that’s divided between two groups of tourists – those who visit Jacksonville as part of a group or professional association and those who visit for leisure purposes.
He said Visit Jacksonville proposes to spend about $2.4 million marketing the destination to those groups, with 60 percent, or $1.4 million, earmarked for the group travel market.
The council approved O’Byrne’s request for separate funding of $469,997 for a diversified media marketing program aimed at leisure travelers to be designed and administered by the Dalton Agency.
Agency President and CEO Jim Dalton said the plan is “a culmination of what has worked in the past,” including placing an advertisement in Oprah Winfrey’s magazine, “O.”
He said the magazine produced 4,300 inquiries about Jacksonville last year and described the publication as a “lead generator.”
“Room nights are the benchmark, but we’re trying to drive inquiries,” he said.
Tourist Development Council member Fred Pozin questioned why the marketing plan was set up to spend 80 percent of the marketing budget in the first six months of the calendar year when the local hotel industry “needs help” in the last six months of the year.
Dalton said some of the advertising media included in the plan produce results year-round and “it’s a 12-month plan.”
O’Byrne said based on spending $10 per room night, the marketing initiative should bring an increase of 47,000 room nights to the market for an economic impact of about $3.5 million, based on the current $70 average room rate.
O’Byrne described the additional marketing plan as a “living document.”
“We’re just at the jumping off point. The budget can’t change, but Dalton can change the allocations,” he said.
The council did not approve a request from Visit Jacksonville to increase the Convention & Visitors Bureau Grant Fund from $100,000 to $235,000.
O’Byrne said the Visit Jacksonville budget already includes $100,000 from the CVB Grant Fund, which is used for small grants – usually below $5,000 – to close agreements with group travel accounts.
He said the additional amount requested would be a reimbursement account and any funds not spent by Visit Jacksonville by the end of the fiscal year would be returned to the Tourist Development Council’s account.
City Council President Stephen Joost, chairman of the Tourist Development Council, compared the additional grant request to a line of credit and asked O’Byrne if Visit Jacksonville lost any business last year by not having access to additional CVB Grant funds.
“I can’t tell you any,” O’Byrne said.
“Then why change it?” said Joost.
Meanwhile, Assistant Council Auditor Janice Billy reported bed tax collections of $437,439 for June, an increase of 7.08 percent compared to the same period last year.
She said the Tourist Development Council’s grant activity to date is $3,294,095 which leaves an available balance through Sept. 30 of $82,553.53.
No grant applications were received by the Aug. 1 deadline.
The next meeting is scheduled at 10:30 a.m. Nov. 17 at City Hall.
356-2466