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HomeMy WebLinkAboutSR - CVA - Marketing Campaign to Increase Airline SvcCITY OF PALM DESERT COMMUNITY SERVICES STAFF REPORT REQUEST: Consideration of a request for funding of the CVA co-op marketing campaign to increase airline service. SUBMITTED BY: Kristy Kneiding, Marketing Manager DATE: November 8, 2007 CONTENT: CVA Co-op Marketing Results Report Draft Marketing Committee Minutes October 16, 2007 Recommendation: By Minute Motion: 1) Concur with the recommendation of the Marketing Committee and support the CVA co-op marketing campaign in the amount of $50,000; 2) appropriate funds from the Unobligated General Fund to Account Number 110-4417-414-3221; 3) make finding that this promotion is of benefit to the City of Palm Desert. Executive Summary: The Palm Springs Desert Resorts Convention and Visitors Authority (CVA) is currently finalizing its 2008-2009 marketing plan which once again includes a cooperative marketing campaign. This campaign focuses on a Tong -term objective of growing airline service to the desert resorts. The major strategy to accomplish this task is the continuation of a cooperative partnership between the CVA, the cities, and the airport. Last year's pilot program was deemed a success, and it is imperative to keep the momentum going to reach its goals of increasing air service to Palm Springs. Alaska Airlines was extremely pleased with the results of the promotion and is considering the Palm Springs Airport for some additional planes that are becoming available. By participating, the City of Palm Desert will benefit from the overall marketing of the area that occurs with this type of promotion, as well as benefit from the results of increased air service over the next few years. While the program does not offer city - specific advertising, the benefits of participating include having the opportunity to offer Palm Desert hotels and attractions as part of the promotional package. For example, this past year the Desert Springs JW Marriott was the second most popular package CVA Co -Op Marketing Airline Service Campaign Staff Report Page 2 booked. Desert Willow Golf Resort also participated, thereby ensuring the visitors actually stay and play in Palm Desert. Staff did not budget funds for this program this year because results had not yet been realized by the budget deadline. Based on the significant results from a first -year effort, staff is recommending concurrence with the Marketing Committee and the appropriation of $50,000 to once again support this promotion. Discussion: In the past, the City of Palm Desert has contributed additional funds to the CVA to assist in increasing airline service; however, those funds were paid directly to the airlines without additional benefits. In this program, the CVA places advertising and coordinates promotions in conjunction with discounts offered by Alaska Airlines and American Airlines. While trying to achieve the goal of increased air service, the Desert Resorts also receive both advertising and promotional benefits from this type of program. The 2007 cooperative marketing promotion ran March — September 2007, and was directed to the following markets: Chicago, Portland, Seattle, and San Francisco. The experience -driven campaign was designed to attract visitors to the area through themed vacation packages. Advertising of vacation packages was supported by radio contests, online and print advertising directing consumers to book through the two participating airline websites. With the support of area hotels, restaurants, and attractions, and the added value provided by the airlines and media, the total value of the promotion was just over $1 million with a cost of just $6 per thousand reached. The total co-op raised last year was $550,000 which included $200,000 from the CVA and $350,000 from cities and airport participation (Palm Desert, Indian Wells, La Quinta, Rancho Mirage, Palm Springs Airport, Cathedral City, Desert Hot Springs, and Indio). A similar budget is being presented this year. According to Mr. Peek, he has verbal commitments from the seven other cities to participate again this year. American and Alaska Airlines supported this campaign by offering discounted fares not just for travelers originating in the targeted cities, but from all locations flying into Palm Springs. They also promoted the packages to their email databases and provided a web splash page announcing and describing the promotion. In addition, they also offered bonus miles and other 'incentives to travelers. Woody Peek, Vice President Travel Industry Sales & Membership, made a presentation to the Marketing Committee, outlining the results of this year's campaign which included the above figures. In his last meeting with Alaska Airlines, they noted there was a direct CVA Co -Op Marketing Airline Service Campaign Staff Report Page 3 relation to load factors and the promotion, and since it ended, the load factors on the planes had decreased. Therefore, Alaska is extremely interested in continuing the partnership and requested that Vancouver, Canada, be added to the promotion since a large number from that area booked packages in this promotion. The ultimate goal of the CVA is to keep this promotion going year-round in order to have a constant presence in those key markets and to build demand for the desert resorts the entire year. Staff recommends concurring with the Marketing Committee to support the CVA spot marketing campaign in the amount of $50,000. Funds are not available in the current marketing budget and would need to be appropriated from the Unobligated General Fund. Submitted By: kristy Kn Jding 0 Marketing Manager Approval: Carlos L. Ort-. -- a City Manager Department Hea Sheila R. Gilligan -- Assistant City Manager Paul Gibson Director of Finance 2ITY COUNCIL ACTION: APPROVED .,. DENIED RECEIVED......,, OTHER .._ .. . C :ETI;. rE AYE, S : NOES: ASSENT: pile, ABSTAIN:%1'57► 9 VERIFIED BY: _ ')riginal on File w •.h City Clerk's OffirE a1CAI rZily