THE PROSPECT FOR CAPTURING more revenue for Ventura's city coffers is looking bleaker these days with a skidding economy sending collection of sales taxes down 10 percent and a faltering housing market setting off alarm bells that property tax revenues will soon be on the decline. City Hall has announced belt-tightening measures that will cut back some city services.
Yet in the middle of this gloom and doom is a bright ray of Ventura sunshine: our Transient Occupancy Tax (TOT) collections are up. What does that mean to those of us who don't converse in "Cityspeak"? More and more tourists are coming here and staying in our hotels. They are also eating in our restaurants and shopping in our boutiques. They are going out to visit the Channel Islands, hiking in the nearby mountains and relaxing on our beaches. All this activity brings TOT revenues to the general fund, keeps locals employed and brings in sales tax revenues, too.
According to Jim Luttjohann, director of the Ventura Visitors & Convention Bureau (VVCB), annual TOT revenues have grown from $3 million in 2003 to $4 million as of December 2007. We've also enjoyed an increase in revenue per available room of 7.9 percent while nearby Oxnard has remained nearly flat, he said. According to a recent study, visitor spending in Ventura was $458,315,800 in 2006.
Unfortunately, the engine helping to drive this mini-economic boom is falling under the budget axe itself. The VVCB's contract is housed within the City of Ventura's Cultural Affairs Division, which is being recommended for an across-the-board 11 percent reduction in funding. Cultural Affairs also supervises other revenue-generating activities like ArtWalk and the Street Fairs.
The VVCB budget will likely see a reduction of $83,000 from current year funding (about $132,000 from anticipated funding based on a contract funded at 2% of collected TOT). The cut will greatly affect the VVCB's ability to reach the tourist market, Luttjohann noted. "For us to shrink right now is potentially devastating."
IS SHRINKING A REVENUE-GENERATING portion of
city government a good idea in bad economic times? Not according to Monterey's City Manager, Fred Meurer. In 2002-04, when Monterey experienced a loss of $8 million in revenue over three years, it actually grew its tourism budget while cutting other services, Meurer said. "One area the City Council wanted to increase was tourism and marketing promotion to help build its coffers," he said.
"When business is down, you should be working on increasing your bottom line."
Bill Watkins of the UCSB Economic Forecast Project also noted an uptick in county tourism in his latest report: "Sectors that we expect to add a significant number of jobs from 2008-2010 include trade and leisure hospitality."
Ventura's VCB has been successful in drawing visitors interested in three major areas, Luttjohann explained: heritage and cultural tourists, gourmet diners or "foodies," and outdoor adventurers. "The foodie tourism market has been great to us," he said.
Two new hotels are also scheduled to be built here within the next few years: an Embassy Suites near the Fairgrounds and a Hyatt Place near Seaward and the 101 Freeway. "It will be very difficult to sell more rooms with fewer dollars," Luttjohann said.
But marketing all these great amenities involves employing a sales force to attend trade shows in addition to placing stories and making expensive ad buys in magazines like Sunset, Westways, Southwest Art, Gourmet and National Geographic Traveler. "We have to be in the really high-profile publications," Luttjohann said. "That's where you're getting your leisure travelers." And a state-of-the-art online presence is essential. "Sixty percent of travel planning is now done online," he said.
AN 11 PERCENT REDUCTION in marketing will certainly mean fewer visitors, Luttjohann said, which could also mean millions in reduced spending. A cut in Colorado's tourism and marketing budget a few years back, he said, caused a decline of 37 percent in overnight stays. And Monterey's Meurer pointed to nearby Pacific Grove, which recently withdrew from a regional cooperative advertising contract only to quickly opt back in the following year.
The bureau is considering taking on additional services for the city in exchange for maintaining its current budget structure, Luttjohann said. "Alternatively, we will have to reduce staffing and media placements and programs like the non-profit marketing grants that help our local organizations reach tourists in marketing they would not otherwise be able to afford."
Is cutting $130,000 from the Visitor's Bureau and then potentially losing millions from tourists a wise budget move?
It's time to visit this again.
don't reduce the budget!! tourism and culture bring in money- think of the loss to all the small businesses - keep the budget the same- it isn't worth the loss to ventura's cultural makeup.
You make strong arguments and so does Jim. One of the four principles we are taking to the Council tonight is:
"That programs and initiatives that produce income or save future expenses should generally be given higher priority than those that simply consume revenue."
That said, it is not necessarily true that every dollar spent is spent effectively (by anybody.) Effectiveness is not measured by the amount of money thrown at a problem.
Can the Visitor's Bureau economize? That's what we are asking of every department in the City. That's the same standard we're asking the Council to apply to the Visitor's Bureau.
The next question is: if we don't save $130,000 here, where else do we save it?
For a fuller picture of all the reductions that we're recommending click on to the Council agenda report:
http://www.ci.ventura.ca.us/newsmanager/articlefiles/4118-item%2001.pdf
Rick, you ask a valid question - can the Visitor's Bureau economize? I'm sure they feel they are stretched as far as possible as does everyone else.
I think it is a mistake to cut down on what is effectly Ventura's advertising. But perhaps the money can be spent more wisely.
I'll click on the agenda report and see what the options might be - but I go in with a bias that we protect the advertising dollars.
It's a lot more complex than you can imagine....Ventura has to remediate our current preexisting condition's like the Homeless issues Downtown, BEFORE we can advertise what a great place it is to visit. The panhandling is an issue, for one, that needs focused attention.
Infrastructure on ALL levels...do your homework first, before you go out and play...It still applies, even as adults.
And, why has Ventura looked for band aid solutions ? It's a bigger issue, than the tourist's coming to town.
It's indicative of all of "America's running on empty mentality"...everyone is out of emotional gas. We're all overwhelmed, by everyday life. By everyone doing their part, not just the few, we can be a part of the solution.
Get off the couch, and participate.
We can't address the panhandling problem if we reduce police presence.
Unfortunately, the budget report Rick suggested doesn't have total $$ budgeted. I'll go out on a limb and suggest that the city shouldn't offer services that parents should be responsible for providing. Make the cuts in this area first. There, I said it.
People who work with the homeless population every day tell me they think it's getting better. This is due to the new program which discourages panhandling, the new One Stop station and the city's hiring of someone to outreach to the homeless population (and of course my friend Sherry).
The 911 fee (hate to bring this up yet again) will pay for three officers for high-needs areas like Downtown.
A lot of our visitors come for the activities at the harbor. They go out on boats to the Channel islands. They then need to be directed to our Downtown for more activities.
I've seen the budget, Katie. It isn't spread evenly across the board. What I noticed right away was that areas which handle different portions of our General Plan goals were assigned different targets for cuts. And that's fine, but it didn't help the VVCB.
For instance, the Healthy and Safe portion was targeted only for a 7 percent cut. Our Creative Community was targeted for an 11 percent reduction. The VVCB falls under that because some time ago they were trying to align it with Cultural Affairs because of the increase in cultural tourism.
But I think the VVCB should be put in the Prosperous -- economic generating activities -- category (or at least considered in that category), which is only targeted for an 8 percent reduction. That would help.
Cultural Affairs is getting a big hit, too. Our Cultural Grants which go out to struggling arts groups (which also generate revenue) will be reduced by $40,000. Many other things will be cut in that area, too.
I'm not sure what you mean in the city's budget about things parents could pay for. The children's arts classes the city offers actually bring in revenue. Parents pay for them.
In answer to Rick's question above, I think Jim's suggestion of asking the VVCB to take on extra tasks for the city in exchange for a lesser budget reduction is a good one. They will have more work, but will still be able to do all their outreach.
Our number one concern and priority should be for public safety, for all the community. Once the community safety is secured, the tourist populations will follow.
The new City Budget Report addresses across the board budget cuts with reduced Staff and City goverment operations and hours. Good job, by taking the lead and setting the example ! The Community needs to pull their weight and hunker down, do your part. We will all have to sacrifice.
Post Depression and WWII, this Country healed, the economy got back on it's feet all by working together collectively.
I agree. Public safety is number one. We need to join Oxnard in their efforts toward a general revenue half-cent sales tax measure and do it here, too. Or we can drive over there and spend our money and make Oxnard better.
Skip, are you nuts? The voters of Ventura would never approve a half-cent sales tax increase. They wouldn't even approve a quarter-cent sales tax increase aimed specifically at improving public safety. The death knell for tax increases in Ventura was the sneaky 911 phone tax recommended by Councilman Cole and approved by the 6 amigos.
Mongo, what are your feelings about increasing tourism in the city?
Marie, I think cutting the Visitors' Bureau budget would be penny wise and pound foolish. The TOT tax is the one revenue source that's trending up and the City is considering cutting this budget? Talk about killing the goose that's laying the golden eggs.
We have three things we agree on now.
Only 3, Marie? C'mon, we can do better than that. I'm looking outside right now and the sky is blue. Can I get a second on that? That would make 4, at least.
I hope you realize that, most of the time, I just like to have a little fun on these blogs and, as I'm sure you've noticed, I enjoy laughing at myself sometimes. For me, it's a stress reliever. After all, life is short, right?
I do enjoy the banter and I appreciate all your efforts in sponsoring this blog. I know it must be very time consuming for you, but you've raised a lot of very important and worthwhile local issues. Kudos to you and keep on bloggin'!
The sky is gray here. :-) Seriously, it IS!
Yes, this is time-consuming and they aren't paying me much. I spend a lot of time doing research before I post and it always has multiple sources. I care about accuracy very much. Basically, this is just another volunteer job for me (I have at least 12 others).
But lately I've been getting some very nice emails from people in the community who are regular readers. They aren't posting comments here -- not everybody feels comfortable doing that -- but they're reading it. As long as it remains fun, I'll continue.
I feel comfortable posting and yes, I think we should go back to the voters with a sales tax increase. Make it general revenue like Oxnard's which only requires 50% passage. Lots of communities in CA have done this. I know it doesn't float your boat Mongo, but unless you want to see things deteriorate around here it's necesary. But hey you can go shop in Oxnard and pave their streets instead.
I have shopped in Oxnard for many, many years. They have much better stores and shopping opportunities than Ventura. I like Wal-Mart and, guess what, Oxnard has one and Ventura does not.
Same with T.O., where my family and I shop quite frequently. The Oaks Mall is at least 100 times better than the Pacific View Mall (absolutely no comparison).
Ventura needs to get it together with some sort of an economic development program. The Economic Development Director they have (Sid White) is completely useless. All the guy seems to know how to do is argue in front of the City Council and try to prove how much he knows and how much they don't know. What a joke!
Agreed. The Pacific View Mall stinks.
We must not cut the Cultural Tourism budget! I have friends who were here last week-end, staying at the Pierpont. They went to the lobby to find materials on the arts (they enjoy seeing a play, attending an art walk etc. while in town). The Inn had NOTHING in the lobby. They ended up going to the VVCB for information and attending a play. (Also, going out to dinner, shopping etc.) If anything, the VVCB needs more resources to be sure their wonderful brochures are well placed in all our hotels.
As I understand it, 51% of the tourists come for the beach. They then eat, sleep somewhere, shop, and may even like it so much they would like buy a house and live here. So what do we do....we let the beaches fill up with garbage and debris, make access on the steps dangerous, and then cut back on advertising so no one will even know the beach is here. Great moves in a faltering economy.