Attachment 4 - Public Comment Received 1100 am June 2 to 1101 am June 3 2022From: Donna McCurrie <donna@losgatoschamber.com>
Sent: Thursday, June 2, 2022 2:51 PM
To: Council <Council@losgatosca.gov>
Cc: Catherine Somers <catherine@losgatoschamber.com>; Randi Chen <randi@losgatoschamber.com>
Subject: Visit Los Gatos Agreement-June 7 Town Council Meeting
EXTERNAL SENDER
Dear Mayor Rennie and Council Members,
For your consideration prior to the June 7, 2022 council meeting.
Thank you,
Donna McCurrie
ATTACHMENT 4
Los Gatos Chamber of Commerce
10 Station Way, Los Gatos, CA 95030
losgatoschamber.com, 408-354-9300
June 2, 2022
Dear Mayor Rennie and Council Members,
The Los Gatos Visitor Center would like to pull the Visitor and Information Center Contract from the June 7 Consent Agenda.
The past few years the Visitor Center staff has been committed to building the Visitor and Information Center into Visit Los
Gatos CA. Visit Los Gatos CA is the destination marketing arm for Los Gatos. This continuing commitment entails building and
marketing the Visit Los Gatos CA brand through social media and the destination website in addition to the brick-and-mortar
visitor and information center.
The money from our annual $55K agreement plus the $55K ARPA one-time emergency destination marketing funds have
allowed us to build these foundations over the past year. In order to maintain, grow the brand and bring more visitors to Los
Gatos, we are requesting an annual increase of $33.5K to our existing agreement bringing the total to $88.5K. (See Charts 1 & 2)
The Chamber fully understands the Town’s current financial constraints and concern regarding a projected $1,000,000 shortfall
in TOT from 2018-2019. While the staff is still navigating the destination & digital marketing learning curve, studies have shown
there is a direct positive impact on visitor spending per $1 invested in sales and marketing. (See Chart 3). Increasing our brand
awareness as a destination location has the added benefit increasing our hotel occupancy rate and in return a financial benefit
for the Town. In other words, heads in beds increases TOT and sales tax revenue. (See Chart 4)
There are two questions Council should consider:
1. “Do you want Los Gatos to be a destination location?”
Visit Los Gatos CA plays a vital role in the development of Los Gatos as a destination location.
• Boosts audience engagement and following. Followers have increased by 47.6% since the transition
from Experience Los Gatos to Visit Los Gatos.
Experience Los Gatos (1999-6/7/21)-2706 Followers
Visit Los Gatos (6/8/21-Present)-5685 Followers
• Increases brand awareness of Los Gatos as a destination by reaching potential visitors outside of Silicon
Valley.
• Represents and promotes ALL businesses in Los Gatos. Whereas the Chamber social media accounts &
website promote members only, Visit Los Gatos CA levels the playing field for all businesses. It gives all
businesses free marketing and advertising exposure.
• Promotes non-business sectors of Los Gatos: parks, hiking, biking, and Town and community
organizations’ special events.
• Establishes the Social media staff person as an influencer who drives our message to a target audience.
Through the creation of targeted, engaging and quality content, our social media influencer has
established themselves as an expert. They continue to build credibility and trust among our followers
who in turn recommend the site and social media accounts to others.
2. How much longer can Los Gatos rely only on its residents to financially support the Town?
Tourism plays a critical role in funding the Town’s budget and takes the tax burden off the residents.
As an example, in their destination business plan supplement for 2022, Newport Beach and Company, the
Destination Marketing Organization (DMO) for Newport Beach, CA summarizes it as follows:
“By enticing visitors to stay in Newport Beach, the City of Newport Beach generates Transient-Occupancy Tax (TOT),
its third-largest revenue source. This income to the city benefits residents, saving each household an average of
$1,139 in additional taxes every year, while maintaining the exceptional infrastructure and city services expected in
Newport Beach. To keep the Newport Beach economy churning at the same levels and to keep thousands of local
businesses open, each household would have to spend an additional $43,922 more locally each year in Newport
Beach, to make up for the economic benefits of tourism.”
Source: https://newportbeachandco.com/wp-content/uploads/2021/05/DBP_2022.pdf
Los Gatos Chamber of Commerce
10 Station Way, Los Gatos, CA 95030
losgatoschamber.com, 408-354-9300
Visit California recently published its California’s Visitor Economy Travel Forecast & Key Drivers for April 2022 with the follow
major takeaways.
• Tourism spending in California grew to $100.2 billion in 2021, 69% of the 2019 amount.
• Travel-related spending from Domestic visitors is expected to recover to 104% of 2019 levels in 2022, while
international spending will only recover to 53%.
• Total travel-related spending in California is not expected to reach pre-coronavirus levels until 2023 and 28% above
2019 spending levels by the end of 2026.
• Overall, Leisure travel (person trips) could recover to 94% of 2019 volume in 2022, while Business-related travel will
recover to 79%.
• International Inbound travel spending increased 3% in 2021, and is expected to reach $15 billion, or 53% of 2019
spending in 2022.
• Travel-generated tax revenue increased to $15.0 billion in 2021, an increase of 23.1% from the prior year. Compared
to 2019, travel-generated tax revenue is down 25.4 percent.
• Visitors who stayed in a Hotel, Motel, or STVR spent $52.4 billion in 2021, an increase of 44.0%. Visitors who stayed in
a Private Home with friends and relatives spent $17.0 billion in 2021, an increase of 136.1%.
• Direct travel-related spending in California grew to $100.2 billion in 2021, a 46.3 percent increase from the previous
year. Compared to the peak of 2019, travel spending was down 30.9 percent in 2021.
• Statewide hotel occupancy averaged 71.5% in April 2022, a 19.4% increase from 2021.
Note: San Francisco Bay Area occupancy averaged 67.1% in April 2022
• The state’s average daily rate was $188.95 per night, up 41.3% year over year and 12.3% vs. 2019.
Note: San Fran Bay Area average daily rate was $186 per night
Source: https://industry.visitcalifornia.com/research/economic-impact
The short answer to all of this is, now more than ever, we must be competitive to increase our share of the domestic travel
market. There is money to be had. Each additional visitor to Los Gatos will incrementally increase the Town’s TOT and sales tax
revenue. (Chart 5) (Chart 6)
The requested increase in the Visit Los Gatos CA budget is a short-term funding fix. The requested $33.5K increase will fund
social media outreach, further website enhancements, and inviting street pole banners.
Long-term funding strategies such as Tourism Improvement Districts (TID) combined with a percentage of TOT that puts the tax
burden on the visitors and not the residents require further discussion. Municipalities across the state and country have
invested in forming tax-funding mechanisms that support their destination marketing efforts. If this is a consideration perhaps
Council can convene a work study session with stakeholders; Town staff, Chamber, Visit Los Gatos CA, Finance Commission, and
hotel representatives to consider the direction going forward.
Thank you for your consideration in this matter.
Respectfully,
The Executive Director and Staff of Visit Los Gatos CA
Los Gatos Chamber of Commerce
10 Station Way, Los Gatos, CA 95030
losgatoschamber.com, 408-354-9300
Chart 1
Scope of Services Visit Los Gatos CA
FY 2022-23
Item Cost
Visit Los Gatos CA Visitor Center $55,000
Visit Los Gatos CA social media salary $24,000
Visit Los Gatos CA website maintenance $2,500
Street Pole Banners $7,000
Total $88,500
Chart 2
Visit Los Gatos CA Pie Chart
Chart 3
Visitor spending per $1 invested in Sales & Marketing
City Year Visitor $
Visit
Baltimore
2019 $36
Visit San
Antonio
2019 $50
Visit SLO 2018 $44.40
Source: https://www.lovecatalina.com/tbid/
Note: A consultant could provide Los Gatos with this information.
Where to Find us on social media
https://www.facebook.com/LosGatosChamberofCommerce/
https://www.instagram.com/losgatoschamber/
Los Gatos Chamber of Commerce
10 Station Way, Los Gatos, CA 95030
losgatoschamber.com, 408-354-9300
Chart 4
Los Gatos chamber of Commerce Occupancy and TOT Analysis
Source: LGCC & https://industry.visitcalifornia.com/research/researchdashboard
Town of Los Gatos
Proposed 22/23 $1.6M
Forecast 23/24 $1.7M
24/25 $1.8M
25/26 $1.9M
26/27 $1.9M
27/28 $2.0M
Source: https://www.losgatosca.gov/DocumentCenter/View/30442/FY-2022-23-Proposed-Budget
Los Gatos Chamber of Commerce
10 Station Way, Los Gatos, CA 95030
losgatoschamber.com, 408-354-9300
Chart 5
The following Chart summarizes information published by Visit California for
2021 Travel Related Spending & State & Local Tax Revenues generated.
Source: https://industry.visitcalifornia.com/research/economic-impact
Chart 6
Overnight Visitors to California by Origin State
Location ’21 Travel related
spending
’21 State & Local
Tax Revenue
By County
% total
CA ’21 State & Local
Tax Revenue
California $100.2 B $9.8 B
Santa Clara County $4.1 B $368.4 M 3.76%
Santa Cruz County $692.8 M $69.8M .70%
Monterey County $2.5 B $264 M 2.69%
Sonoma County $2.0 B $197.6 M 2.0%
Napa County $1.5 B $159.5 M 1.62%
San Francisco
County
$6.1 B $539M 5.5%
LA County $19.6 B $2.3 B 23.5%
San Diego County $9.4 B $878.7 M 8.9%
Source: https://industry.visitcalifornia.com/research/researchdashboard