December 9, 2014 ACVB Board Meeting

BOARD OF DIRECTORS MEETING TUESDAY, DECEMBER 9, 2014 | 8:00a.m.

CENTER FOR CIVIL AND HUMAN RIGHTS

CALL TO ORDER BRAD KOENEMAN VICE-CHAIR OF THE BOARD AND EXECUTIVE COMMITTEE

WELCOME DOUG SHIPMAN CEO, CENTER FOR CIVIL & HUMAN RIGHTS

DESTINATION REPORT MARK VAUGHAN EVP & CSO

ATLANTA OCCUPANCY OCTOBER 2014 October 2014 YTD Occupancy

2013

2014

ACVB Tax Revenue District

68.7%

73.0%

Hotels w/500+ rooms

66.6%

72.2%

Hotels within 1-mile radius of GWCC

66.1%

71.0%

Metro Atlanta

64.5%

70.0%

Source: STR

KEY SALES ACTIVITES Currently through July we are at 94.2% of our room night goal and 114% of our lead goal Demand share growth (October)+.18 (5.56%) in the top 25 markets and +.24 (8.78%) in the top 15

Direct Sales Events

• • • • • •

American Bus PCMA RCMA Experient Annual Meeting Travel South Destination Showcase

St. Louis Chicago Birmingham Anaheim Shreveport Washington

BOOKINGS NOVEMBER 2014

Additional Rooms

2,030

Grand Total

95,324

2014 YTD

Additional Rooms Grand Total

127,334 1,366,628

Note: These numbers differ slightly from the Productivity Report due changes in room blocks and distribution of booking credit.

MAJOR GROUPS FOR FUTURE YEARS

2015 BUSINESS AND FINANCIAL PLAN WILLIAM PATE PRESIDENT & CEO

GREGORY PIERCE EVP/CAO/CFO

MISSION To sell and market metro Atlanta and Georgia globally as the premier conventions, meetings and tourism destination in the regional, national and international marketplace and favorably impact the Atlanta economy through conventions and tourism.

2014 HIGHLIGHTS Total room nights

Goal 1,620,000

Estimated 1,650,000

% of Goal 102%

2013 Actual 1,570,550

City wide room nights

1,200,000

1,250,000

104%

1,162,198

# of major citywides > 5000 peak nights 3 year running average

20

20

100%

18

Room nights for 2,500 peak+

925,000

930,000

101%

748,681

4,535

4,525

100%

4,402

520

550

106%

578

100%

108%

108%

111%

Leads Total # of Leads # of city-wide leads Attendance goal for major city wides

2014 HIGHLIGHTS  Continued productivity growth from Group Sales and Convention Services efforts Group sales lead volume up 12% over goal Projected year end room night bookings to exceed 100% of goal Booked 15 new business opportunities (not in Atlanta for >5 years) representing 190,240 room nights o Enhanced sales efforts with major third party distribution channels resulting in a 30% increase in hotel room nights and 1% market share growth o 28 of 30 conventions have exceeded their attendance goals YTD by 8% o Maintained TAP report pace at 109% o o o

 16 confirmed new business opportunities from hosting ASAE in August 2013 representing 230,253 room nights

2014 HIGHLIGHTS CONT.  Launched new responsive design website (Atlanta.net)  Strong growth and focusing of marketing initiatives Increased web traffic by 5% year over year o Increased our social media reach by 189% year to date o

 Significantly enhanced the Sales presentation with video and bid book process  Won a Platinum Adrian award for the ATLFiles Meeting Planner video campaign  Successfully executed 4 consumer co-op campaigns integrating radio, TV, social media, and digital for summer, Big Boo, Buckhead, and holiday, meeting or exceeding goals  Expanded successful I Am ATL campaign to consumer markets  Developed 5 in-language marketing videos for International in partnership with BrandUSA and Georgia  Developed a suite of attendance building videos to support customers promoting their meetings

2014 HIGHLIGHTS CONT.  *Continued positive momentum with visitor metrics from 2013 in City of Atlanta: o Occupancy up 6.7% from 2013 to 72.6% o REVPAR up 10% from 2013 o Demand up 6.9% from 2013  *Metro market share of demand in top 25 destinations up 4% to 5.57% from 5.38%

* YOY through 09/30/2014

2015 GOALS Increase room night bookings and maximize 1% Convention Marketing Fund o Room nights: •1,225,000 room night goal for trade show sales •420,000 room night goal for in-house sales o 3-year average of major citywide conventions booked/events (5,000 peak nights and above) to continue at 20 o 925,000 room nights booked for 2,500 peak and above o Leads to increase by 3% over year-end actual

Achieve 100 percent attendance goal for major citywide conventions Increase visibility of Atlanta as one of the top U.S. meeting and travel destinations Maintain atlanta.net as the premier hospitality online marketing platform Continue to position ACVB as an industry expert nationally and as the singular voice of hospitality in Atlanta

Increase room night bookings and maximize 1% Convention Marketing Fund New or significant ramp up in focus 

Maximize opportunity with hosting TSNN (Trade Show News Network) Awards in Atlanta 



       



50 of top US trade shows are recognized for their significant growth in exhibit space and attendance High visibility to the top 250 trade shows in the US

Promote a Future Vision of Atlanta during our Update presentations throughout the year   

Continue DC and Chicago Updates New Updates in Northeast and West Coast markets Conduct market updates to major hotel brand national sales offices

Identify opportunities within the emerging “Independent Show Organizer” (for-profit) market Full integration of Online bid books Further integration of GWCC and ACVB CRM systems for real-time data and revenue optimization Revamp sales programs to maximize exposure Optimize enhanced ASAE partnership directed at key decision makers Further optimization of in-house sales efforts and small meetings Investigate opportunities with Delta on HUB city partnership focusing on the meetings and convention market Launch new, scalable, and compelling minisites to reach all non city-wide groups

Increase room night bookings and maximize 1% Convention Marketing Fund Continue or enhance focus from prior year         

Host four meeting planner FAM tours, totaling 100 participants Attend one major prospect’s event per quarter Quarterly regional sales calls by each manager Identify 25 trade shows not considering Atlanta and attend their convention Continue efforts in the medical, manufacturing, construction, financial, energy and education industries to support the sales team’s emerging industries strategy Host 25 FAM trips for international tour operators, totaling perspective clients Participate in 70 industry events and trade shows to highlight Atlanta as a premier meeting and convention destination Further enhance our partnership with the major third party partners and monitor production quarterly Continue to optimize Atlanta’s destination advertising campaign targeted to meeting planners to achieve maximum reach and impact

Achieve 100% attendance goal for major citywide conventions New or significant ramp up in focus 

Work with convention planners to maximize destination marketing opportunities and utilization of attendance building enhanced services offerings     

Coordinate with PR on Media FAMs for top city-wide groups Coordinate hosted events/exhibitor FAMs for top city-wide groups Launch new attendance building video with customization for top city-wide groups Redesign international websites to provide international attendees relevant destination content Continue coordination of attendance building enhanced services: website, e-newsletters, integrated destination content with housing company, customized collateral/content, videos and etc.  Implement supplier road show (UP NEXT) to highlight Atlanta’s offerings for events and services

Continue or enhance focus from prior year    



Ensure ACVB efforts are aligned with clients’ goals for major groups Continue targeting attendees with destination content through social media channels Continue exploration of most effective manner to facilitate increased international meeting attendance Develop integrated branding mini-sites, providing online attendance-building marketing for all full service citywide groups Attend 11 customer events to promote Atlanta for their 2016 convention

Increase visibility of Atlanta as one of the top U.S. meeting and travel destinations New or significant ramp up in focus  Provide Sales with enhanced collateral and tools o Print pieces and trade show booths  Maximize regional partnerships/alliances focusing on international visitation  Expand leisure marketing of the I Am ATL destination awareness campaign, and evolve the meeting planner campaign  Launch a social media influencer FAM/Conference  Redesign layout and upgrade content of AtlantaNow visitor magazine with JV partner Continue or enhance focus from prior year  Enhance the media buying strategy to more effectively span digital and social channels to reach the target audiences  Extend partnership approach with EventSphere to other Housing companies to influence attendance of midsize groups  Continue integration of brand messaging across all communication channels  Integrate storytelling approach to evolve brand creative and messaging for richer destination experiences  Leverage new and emerging product, existing assets, industry research and current news to drive continuous editorial destination coverage.  Continue with refreshed summer, Halloween, and holiday co-op campaigns  Curate weekend getaway experience packages for target audience

Maintain atlanta.net as the premier hospitality online marketing platform

New or significant ramp up in focus   

Design and execute for mobile – to reflect significant behavioral shift online from desktops to mobile devices Significantly expand use of video and strong visuals to drive traffic Train Sales and Convention Service to leverage the new online resources and increase relevancy and visibility of AtlantaMeetings.com

Continue or enhance focus from prior year     

Optimize new responsive design website with curated mobile content Continue positioning atlanta.net assets (web, mobile web, social) as the definitive source for information on what to see and do in Atlanta Ongoing refinement of successful search engine optimization (SEO) strategy to drive qualified traffic to the key content categories Ongoing refinement eCRM (includes social) program to maximize user engagement while growing user base Optimize ad model to leverage growth of mobile and provide additional revenue opportunities

Position ACVB as an industry expert nationally and as the singular voice of hospitality in Atlanta New or significant ramp up in focus  Implementation of recommendations for revamping entire membership strategy and structure  In-depth review of company-wide CRM software and benchmark against other industry options. Implement changes/updates where required Continue or enhance focus from prior year  Continue focus on cabinet alignment against industry priorities and initiatives  Engage public and private sector by serving on boards, speaking engagements and utilizing Atlanta executives in ACVB sales efforts  Maintain relationships with city and state administrations  Maintain leadership positions on hospitality industry boards  Highlight industry expertise through guest columns and editorials

2015 FINANCIAL PLAN

2015 Financial Plan Points • Total revenue flat • Public sector revenue up 3.5% over 2014 forecasted year-end (2014 up 8% over 2013) • Payroll and related expenses, for ACVB only, up 5% • 2.5% performance based merit increase pool, • Annual increase in employee benefits of 6%(renewals on group insurance plans) • Operating expenses, direct promotional expenses and expenses for capital assets are relatively flat

2015 Summary Budget

Total revenue Total expense Excess(deficiency)

2015 Budget 2014 Forecast $ 29,490,968 $ 29,424,419 29,229,266 29,021,169 $ 261,702 $ 403,250

Total Public Sector Revenue Georgia World Congress Center-Atlanta Georgia World Congress Center-Fulton Co Atlanta Convention Marketing Fund - 80% Atlanta Convention Marketing Fund - 20% City of East Point Total Public Sector Revenue

2015 Budget 2014 Forecast $ 12,032,000 $ 11,590,400 27,000 35,285 6,111,492 5,887,187 1,527,873 1,471,797 625,000 $ 19,698,365 $ 19,609,669

Total Private Sector Revenue Contributed services Co-op cash support Grants/sponsorships Internet revenue Membership dues Membership services Other revenue Publication ad revenue Total private sector revenue

$

3,700,000 1,320,000 15,000 1,716,603 1,375,000 20,000 221,000 1,325,000 9,792,603 $

3,345,000 1,300,500 11,750 1,720,000 1,475,000 19,000 385,000 1,390,000 9,814,750

Total Expense Direct promotional expense Expense against capital assets Other operating expense Payroll and related expense Transfer to ACMF reserve Total expense

2015 Budget 2014 Forecast $ 11,827,042 $ 12,350,982 1,575,000 1,541,500 973,510 910,000 8,742,222 8,331,500 6,111,492 5,887,187 $ 29,229,266 $ 29,021,169

Total Budget by Corporate Entity Atlanta Convention & Visitors Bureau, Inc. ACVB Enterprises, LTD ACVB Foundation, Inc.

2015 Revenue 2015 Expense $ 24,923,365 $ 24,747,277 3,041,603 2,981,989 1,526,000 1,500,000 $ 29,490,968 $ 29,229,266

ATLANTA JEWISH FILM FESTIVAL MATTHEW BERNSTEIN 2015 AJFF STEERING COMMITTEE

CHINA OPPORTUNITY WILLIAM PATE PRESIDENT & CEO

China Outbound Travel Market

China Economic Overview 2010

2011

2012

2013

Population (m)

1,341

1,347

1,354

1,361

Nominal GDP (US$ bn)

6,040

7,298

8,447

9,250

Real GDP growth (%)

10.4

9.3

7.7

7.7

GDP per head (US$ at PPP)

4,361

5,414

5,432

6,796

8.2

10.3

9.4

8.0

Household Consumption Expenditure (%)

China Outbound Travel 120 100

97.3

80

70.2

82

57.38

60 40 20

114

16.620.22 12.13 7.14 7.59 8.18 8.43 9.2310.47

45.84 47.5 40.95 28.85 31 34.52

2007

2005

2004

2003

2002

200 million outbound

2001

2020 (est.):

2000

114 million outbound spending $140 billion

1999

2014 (est.):

1998

97 million - world’s #1 source market

1997

2013:

1996

83 million - 6% of China’s population

1995

2012:

2006

0

Destinations of Chinese Travelers

Only 10% of Chinese outbound travelers flying long-haul Only 1.5% of Chinese outbound travelers visiting the U.S.

Chinese Travel to the U.S.

Aspirational Long-haul Destinations for Chinese 2013

2014

France

58%

United States of America

50% 54%

Australia

53% 50% 42% 44%

Canada

42% 43%

New Zealand

37% 38%

Italy

35% 37%

United Kingdom

32% 36%

Germany Brazil Greece

24% 24% 20% 22%

Question: What country(ies) will you likely visit during your next holiday to a destination outside of Asia? Select all that apply.

Base: China intercontinental travelers (2013 N=1,475, 2014 N=1002) Source: Brand USA Custom Study

63%

Chinese Visitors to the U.S. Key Message: China has soared up the rankings to #5 in terms of overseas visitor number and spending in the U.S. in 2013, and is projected to rise to become our top overseas source market within 6 years.

2003

Under 200,000

2012

1.4 million

2013

1.8 million (+22.6%) #5 overseas market 2.18 million (+21%) #4 overseas market

2014 est.

2017 est.

2018 est.

3.66 million (+18% ) #3 overseas market 4.31 million (+18%) #2 overseas market

Sources: U.S. Department of Commerce, ITA, National Travel and Tourism Office

Chinese Expenditure in the U.S.  

Spend Per Person Per Trip: $6,000 spend per person per trip to the U.S. makes Chinese the highest spending visitor group per person per trip to the U.S.

 

Travel Spend: China’s middle and upper classes spend 19% of their annual salaries on overseas travel – dramatically more than any other source country

 

Luxury Spend: 75% of Chinese tourists purchase more than 3 luxury items per trip

 

Global Force: Chinese tourists make up 25% of global spending on luxury goods

China Airlift to the U.S. China’s Gateway Cities to the U.S            

Beijing Shanghai Guangzhou

Chengdu (June) Wuhan (December) Hangzhou (April 2015)

U.S. Visa Updates under 5 days 4-5 days France & Australia:  Close to 90% of non-immigrant applications from Chinese nationals are approved  New on-line system allows Chinese applicants to:  Schedule visa interview appointments  Pay visa processing fees  Check on status of issued visas on-line rather than person 

Next Goal: the U.S.? 

5-year multiple-entry visas for Chinese to

in

China Travel Trends

Preferred Leisure Pursuits

by Chinese Middle/Upper Class

Key China Trends ● Rapidly Evolving Profile of Chinese Travelers  Leisure travel soaring: 63% share and rising  Package tours still key (70% share) and will dominate for the next decade  Rapid shift from multi-destination to multi-experience  Accelerating shift from package tours to air-tel/FIT – 30% and rising thanks to visa flexibility and rapidly growing sophistication of Chinese travellers  $1,100 spent per day when traveling (excluding accommodation) 

Implications

 Beyond-the-Gateway Potential: the Chinese travel trade are hungry for new itineraries and new tour products  FIT/Luxury Booming: FIT/luxury travel products are rapidly becoming established and will see the greatest growth over the coming decade  MICE Market: China is a huge MICE market, esp. for mid- size and large-size incentive groups to the U.S.

Duration of Next Trip: 2014 3 nights or less

1%

% Total

10%

4-‐6 nights

8% 57%

7-‐13 nights

55% 29%

14-‐20 nights

21+ nights

Likely Visit U.S. in Next Trip

33% 4% 4%

Question: How long will this holiday likely be?

Base: China intercontinental travelers (N=1,002), China travelers who will likely visit the U.S. in their next intercontinental trip (n=539) Source: Brand USA Custom Study

Months Likely to Travel January February March April

2% 3% 4% 5% 3% 2% 4% 5%

Total Likely Visit U.S. in Next Trip 17% 18% 15% 17%

May June

20% 22% 21% 23%

July August

17% 19%

September

29% 29%

October November December

4% 4% 3% 3%

Question: In what month(s) will you likely take this holiday? Select all that apply.

Base: China intercontinental travelers (N=1,002), China travelers who will likely visit the U.S. in their next intercontinental trip (n=539) Source: Brand USA Custom Study

Booking Window for Pre-packaged Holiday/ Guided Tour Packages - 2014 1 day or less/did not reserve in advance

1% 2%

Total Likely Visit U.S. in Next Trip 11% 10%

2 to 6 days

27% 28%

1 to 2 weeks

23% 25%

3 to 4 weeks 1 to 2 months

23% 8% 8%

3 to 5 months 6 to 12 months More than 1 year

27%

2% 3% 0% 1%

Question: How far in advance of your departure date did/will you book the travel products for this holiday? Select one option from the drop-down box.

Base: China intercontinental travelers who booked /will likely book pre-packaged holiday or guided tour package (N=360), China travelers who will likely visit the U.S. in their next intercontinental trip (n=194) Source: Brand USA Custom Study

Chinese Destinaiton Selection Drivers

Destination Selection Criteria 61%  “Affordability”  “Dining” 58%  “Safety” 57%   

Destination Selection Tools 1. Travel Agencies: travel agencies remain the dominant destination selection tool with most Chinese travelers still using local bricks-and-mortar travel agents and travel agency or airline websites in making a final destination selection 2. Online channels: including destination websites, travel portals, social networking channels, and blogs are soaring in importance as a destination selection channel 3. Word of Mouth: �bragging rights� are extremely important in the China market -- being able to boast to friends and family about having visited a given destination and purchased given luxury goods – increasingly on-line word of mouth is becoming key via blogs and video sharing sites

China Market Recap: Alignment of Key Factors  



Size: massive market size of 1.3 billion Potential: only 7% of this population now traveling overseas – versus 25% for Korea Growth: number of outbound travelers to double in next 6 years to 200 million



U.S. Market Share: only 1.5% of outbound Chinese travelers are now traveling to the U.S.



Desire to Visit: rapid growth in aspiration to visit the U.S. Disposable Income: Chinese incomes growing at 10-20% per year Willingness to Spend: 19% of disposable incomes spent on travel RMB appreciation: making travel to the U.S. increasingly affordable U.S. Visa Barrier: now manageable for Chinese travel trade

 

      

Booming Airlift: new gateways and airlift to the U.S. rapidly developing Hungry Travel Trade: want new U.S. packages beyond the gateways Hungry Media: on-line and off-line media hungry to feature the U.S. Spend: per visitor per day already leads all overseas markets Arrivals: #1 overseas market for the U.S. within 6 years

Xie Xie! Thank You!!!

Presidents Report WILLIAM PATE PRESIDENT & CEO

Old Business Election of 2015 Officers and Executive Committee

2015 Election of Officers • •

Nancy Oswald Niles Harris –

• • • •

Ruth’s Chris Sheraton Atlanta

Secretary

Consultant/GSU

Chair, Diversity Committee

Ken Bernhardt –

Chair, Advisory Board Vice Chair

Chair, Atlanta Convention Marketing Fund Committee

Ben Shanley Erica Qualls

Treasurer Vice Chair-

The Coca-Cola Company Atlanta Marriott Marquis

Stan Wilson

Compensation Committee Vice Chair-Finance & HR

Elarbee, Thompson, Sapp & Wilson

Staff Officers • William Pate • Mark Vaughan • Gregory Pierce • Andrew Wilson

President & Chief Executive Officer Executive Vice President & Chief Sales Officer Executive Vice President & Chief Administrative Officer/CFO Executive Vice President & Chief Marketing Officer

2015 Election of Executive Committee Members • • • • • • • • • • • • • •

Ed Baker Stephanie Barrell Chris Coan Debby Cannon Thomas Dortch, Jr. Jo Ann Herold Sharon Goldmacher Brad Koeneman Raymond King George McKerrow Pete Moraitakis Frank Poe Jeff Portman Kris Reinhard –

Chair, Membership Committee

Atlanta Business Chronicle Bank of America Gas South GSU TWD, Inc. Interface Communications 21 Hilton Atlanta Zoo Atlanta Ted’s Montana Grill United Distributors GWCCA AmericasMart Fifth Group

2015 Election of Executive Committee Members-cont.

• • • • •

Derek Schiller Alexis Scott Armand Vari Peter McMahon Ron Tarson

Atlanta Braves Atlanta Daily World Jacoby Development Hyatt Regency Atlanta Westin Peachtree Plaza

New Business

Adjourn