After 5 years, Del Mar’s tourism district awaits renewal by council

With Del Mar’s Tourism Business Improvement District up for renewal later this year, the district moved up its annual report to the June 15 City Council meeting.

The Del Mar City Council authorized formation of the district in September 2010, allowing hotel operators to charge guests a 1 percent fee that’s used to attract more visitors to the city. Five years later, the tourism district is set to automatically expire at the end of September.

A representative from each of Del Mar’s hotels, motels and inns — Del Mar Inn/Clarion, Del Mar Motel on the Beach, Hotel Indigo, L’Auberge Del Mar, Les Artistes Inn and Secret Garden Inn — make up Visit Del Mar, the nonprofit created by the district to manage the assessments. Visit Del Mar was incorporated in 2010 and received tax-exempt status in March 2011.

General managers of five of the hotels, as well as L’Auberge Del Mar’s director of sales and marketing, sit on the board. The board meets monthly at one of the hotels.

“One of the things we feel is most important about this organization is the value of cooperation with the hotels of Del Mar — working together,” said Shaun Beucler, general manager of L’Auberge Del Mar. “We feel that this organization creates a level playing field, where all properties are working together in unison to improve overall visibility of our destination, and to promote tourism and the growth of tourism for each property, generating additional foot traffic into the local businesses.”

Since its establishment, the district has launched a marketing campaign and designed a logo and tagline, “Your California Dream.” Although each hotel maintains a separate website, the district also launched its site, dreamdelmar.com. The site allows visitors to book directly. It also offers information about hotels, restaurants and things to do in the coastal city.

According to the 2014 annual report, the district had a nearly $300,000 budget, of which 74 percent went toward marketing.

The Dream Del Mar online marking campaign commenced in February 2014. There were 119 million total ad impressions, resulting in nearly 125,000 site visitors, according to the report. From those visitors, on average, there were 200 hotel booking clicks per month.

“As you know, the TBID has had a rough start over the last five years,” Beucler acknowledged. “But we feel we’ve really hit our stride this year, especially on the marketing end.”

The transient occupancy tax has increased every year since the district’s inception, Beucler noted. In 2011-12, it was just over $1.8 million. It is projected to be nearly $2.5 million in 2015-16.

“These numbers are really showing that the hotels are doing their part — the TBID is doing its part to drive TOT tax to the city of Del Mar,” Beucler said.

At the council’s request, a report was also provided on the district’s performance and travel spending impact.

According to the report by Strategic Marketing Group Consulting, it is estimated that the incremental increase resulting from the district’s marketing programs has generated approximately $16 million in travel spending, of which $2.7 million is in increased lodging revenues. The programs have also generated an estimated $342,000 in incremental tax revenue, including transient occupancy tax and sales tax.

Overall, overnight visitors to Del Mar have increased from 78,873 in 2011 to 82,629 in 2014, a 5 percent increase, according to the report.

Occupancy rates, as reported by the lodging properties, have increased from 63 percent in 2011 to 66 percent in 2014, a 3 percent increase. Overall travel spending generated by overnight visitors staying in Del Mar was an estimated $111 million in 2014.

“That means the TBID’s generating roughly about 15 percent of incremental value to the overall travel spending,” said Carl Ribaudo of SMG Consulting. “That number is very consistent with a range of studies we’ve done in a variety of travel destinations.”

Although the report was slated for September, which is the end of the district’s fiscal year, board members decided to give their presentation early, since the district is set to expire later this year. Board members and stakeholders hope the council will renew the district, especially with the Breeders’ Cup headed to Del Mar in 2017.

The district is required to provide the council with an annual update. In prior years, the council expressed frustration regarding the lack of data.

“I think this is a good annual report,” said Councilman Don Mosier, who serves as a liaison to the district, after the report. “It had a lot more substance in this report than anything we’ve seen before. We now have numbers to support the performance of the TBID.”

Although Mayor Al Corti, who also serves as a liaison, said he appreciates the group’s progress, he is “still not convinced that it’s the best use of the dollars.”

Councilman Dwight Worden wasn’t that impressed with the increase in occupancy rates and overnight visitors, and also questioned whether the district is the best use for the funds. At his suggestion, the council later voted to have the city’s finance committee look at the report.

In response, Beucler said that L’Auberge Del Mar is having “its best year to date.”

“It’s my job to do everything possible to protect those results moving forward,” he said. “This is just another one of those channels that opens up our lines.”

As part of the renewal process, the district plans to go before the council again in July to present the 2015 year-to-date results.

If it’s renewed, Beucler said the district plans to continue its online marketing programs, tracking its success by the unique visitors to the Dream Del Mar website.

The district also aims to strengthen its relationship with the Del Mar Village Association, which shares the goal of keeping Del Mar Village economically vital.

“We, the board of hoteliers, are fully committed to this organization and its results moving forward,” Beucler said. “We recognize that we’ve had some organizational challenges, quite frankly. As part of our plan ... we plan to modify our current governance as part of the renewal process.”

KC Vafiadis, a Del Mar native and commercial property owner who serves on the DMVA board and as a liaison to the district, said the district has benefited the community.

“I have watched them grow and strengthen over the last couple of years,” she said. “I’m proud of where they’re at right now.”

To date, the district has supported several downtown initiatives, including the Del Mar Village brochure, historical walking tours program, commercial zone improvements, and grants for community events, including Santa by the Sea, Taste & Art Stroll and the Pop-Up Culture Series, among others.

The district plans to partner with the Del Mar Village Association to work on additional promotional programs, particularly related to the Breeders’ Cup, downtown shuttle programming, and public arts and culture, Beucler said.

The district also plans to present a new governance plan that would establish the DMVA as the district’s owners association, Beucler said. The assessed hotels would be part of a subcommittee within the Del Mar Village Association.

“We feel that a partnership with the DMVA is absolutely necessary moving forward, as part of our renewal process,” he said. “We feel this would provide more structure, alignments, with all things related to the downtown initiatives.”