Tourism Council Details : Explore Minnesota Tourism

Explore Minnesota Tourism Council Meeting Minutes, December 6, 2011

Release Date: Dec 06, 2011

Explore Minnesota Tourism Council Meeting
Tuesday, December 6, 2011

Present: Fred Bobich, Bonnie Carlson, Senator John Carlson, Bill Deef, Chuck Dougherty, Randy Gutzmann, Nancy Hanson, Denelle Hillard, Brad Jones, Doug Killian, David Langhoff, Deb Lloyd, Julie Lunning, Terry Mattson, Bill Morrissey, Mark Novotny, Cynthya Porter, Mark Ronnei, Senator Tom Saxhaug, Ingrid Schneider, Kathy Silverthorn, Charles Skinner, Sam Thompson

EMT Staff: John Edman, Leann Kispert, Peggy Lindquist, Peggy Nasby, Colleen Tollefson

Guests: Amy Myers (Colle + McVoy)

Welcome/Introductions: Council members were asked to introduce themselves and to provide outlook on 2012:

Holiday light tours are seeing a lot more activity, which typically means a good economic outlook
Minneapolis hotel occupancy is good; looking forward to the return of the Timberwolves to the Target Center
Paul Bunyan will celebrate his 75th birthday in Bemidji this summer
St. Cloud is nearing completion of the convention center. St. Cloud is host to the Canada-America games for police, EMS and fire personnel. There will be a total of 52 tournaments coming to the area.
Delta is resuming flights to Hibbing
Congratulations to Mall of America for being named "America's Top Mall"
Mall of America saw a good year with 10 new stores opening that past summer and an additional 12 stores for the holidays
Looking forward to the branding Minnesota project
Rochester saw an increase in occupancy and rates in 2011. Three new hotels are scheduled to open in 2012
Stadium issue continues to be a hot topic in the legislature. Will need to be a bipartisan vote
Consumers are experiencing "frugal fatigue" meaning they are tired of being cheap
Stillwater has seen an increase in occupancy. Working to get a new bridge over the St. Croix
Lutsen Mountains saw a 10% increase in the last year and is expected to see an increase again this year. The area is working on a county-wide brand.
RV sales remain steady and the RV community is active in Minnesota
Anxious to see results from the impact of school year start date results, as well as the "Quality of Life" project that MnDOT is rolling out
Grand View Lodge recorded the largest year in history. They are seeing results from the mountain biking trails in Crosby.

Approval of Minutes: Bill Deef moved to approve the minutes from the September 14th meeting as submitted. Nancy Hanson seconded the motion. All Council members in attendance voted to approve the minutes as submitted.

Legislative Update:
Tourism Funding Proposal
Minnesota's tourism office budget ranks 30th in the nation. An additional $500,000 was cut from Tourism's budget this past legislative session. Moving ahead, different funding methods need to be looked at in order to move Minnesota forward.

EMT has put forward a 2012 legislative initiative for alternative funding to drive tourism. The request is that the 6.2% car rental tax that was originally put in place for the Super Bowl (and never taken off the books), be used as a funding source for tourism.

Explore Minnesota Tourism relies on the general fund for about $8.7 million each year. Under this new proposal, the existing 6.2% car rental tax would remain; however it would be dedicated to Explore Minnesota Tourism for tourism marketing. This would generate approximately $13 million for Explore Minnesota Tourism. EMT's general fund appropriation could be eliminated, thus saving the state $8.7 million each year. This would result in a net decrease of $4.3 million to the General Fund. The $4.3 million increase to the budget for EMT through dedication of this existing tax would replace the proposed 1% increase in the state's car rental tax the Governor had recommended to increase state tourism marketing.

To further the impact of the state's investment in tourism, the required private-sector match should be increased to $3 million per year from non-state sources. Up to one-half of the total match could be in-kind contributions.

The additional funding would allow the state to significantly expand its marketing, increasing advertising in current markets and expanding to new markets where there has been little Minnesota promotion.

There is also a new law to collect sales and use tax from on-line travel companies. This new tax revenue could also offset the decrease to the general fund.

Comments from the Council:

Will there be pushback from online intermediaries?
This is a win-win proposal. EMT would be required to live within the means of how the tax does.
EMT's budget would not be up for debate every legislative session
Concern that this is a nice big, one-time bump, but will it continue to grow tourism in the future?

A resolution for new funding sources to promote Minnesota Tourism was drafted which states:

"Whereas, leisure and hospitality is an $11 billion industry in Minnesota that accounts for 17% of Minnesota's state sales tax and provides over 238,000 full and part-time jobs (11% of total private sector employment);

Whereas, nationally Minnesota ranks 22nd in travel spending, 18th in travel generated employment, 14th in travel generated payroll and 9th in travel generated tax receipts;

Whereas Minnesota's tourism office budget ranks 30th nationally;

Whereas regional competitors such as Wisconsin, Illinois, South Dakota and Michigan outspend Minnesota;

Whereas Explore Minnesota Tourism works on partnerships between private-sector destinations and businesses as well as public and state-operated facilities that maximize human, fiscal and other resources; and

Whereas the Explore Minnesota Tourism Council, which provides strategic direction and represents all major sectors of the tourism industry, has set a goal to make leisure and hospitality a $20 billion industry in Minnesota by the year 2020; which will increase jobs to 271,500.

Whereas additional funding would allow the state to significantly expand its marketing, increasing advertising in current markets and expanding to new markets;

Whereas significant new revenues will be provided to the general fund from a new online travel tax;

Now therefore, the Explore Minnesota Tourism Council resolves:

To generate new sources of revenue for tourism marketing beyond state general fund, including but not limited to, dedicated taxes on tourism and partnerships with state and tribal governments and organizations.

To replace Explore Minnesota Tourism's general fund with dedication of the existing 6.2% car rental tax to Explore Minnesota Tourism for tourism marketing; and

To increase the required private sector match generated by Explore Minnesota Tourism to $3,000,000 per year from non-state sources."

Brad Jones moved to approve the resolution, with Denelle Hillard seconding the motion. A discussion following the motion included:

A statement should be added to state how an increase to the Tourism budget will increase jobs in the state.
Also add that an increase to the tourism budget would be used to market the state. (This is addressed in the paragraph that begins "To generate new sources...")

Update to the discussion comments: The two requested areas are addressed.

With the above-mentioned suggestions, a motion to approve the resolution was passed by all Council members in attendance.

Governor's Meeting
A meeting with Tina Smith (Governor's Chief of Staff) and representatives from the Council will be held to discuss this proposal. Council members will be provided an update following the meeting with the Governor's Office.

U.S. Senate Commerce Hearing
John Edman testified at a hearing on travel and tourism. Senator Klobuchar chairs the committee. Topics included visa waiver issue and future of travel & tourism.

Other Legislative Issues
The Public/Policy committee did not meet since the last Council meeting.

A question was raised as to whether or not there is a need for the Council to step forward to support the expansion of the Mall of America. MOA hosts 40 million visitors a year. The Mall is in Phase II of the project. They are in discussion with the city and the developer. It is highly supported by the industry. The Mall went to the legislature on three occasions. They are now working with the City of Bloomington. A Radisson Blue will be built in early 2013 as part of the project. They are currently not looking at any tax increase to fund Phase II. It is supported by lodging and entertainment taxes. The economic impact that the Mall provides to the state is significant. This may be an issue for the Public/Policy task force to review to determine how the Council can support.

Governor's Job Summit: Governor Dayton held a Job Summit in October. More than 700 leaders from Minnesota's business, nonprofit, government and academic sectors gathered in St. Paul to discuss ways to position the state's economy for success now and into the future. Tourism was part of the discussions and break out sessions. John Edman was on a panel that discussed the branding initiative and Mark Ronnei was also on a panel on reducing government costs.

Branding Update – Amy Myers, Colle + McVoy: EMT is moving forward with public and private entities to present a unified "Minnesota" message. There is an opportunity to unify public and private marketing organizations to create a cohesive brand for Minnesota. The goals are:

To ensure the best use of funds to advance the perception of Minnesota
Marshal the collective strength of state agencies in unison with private sector
Elevate pride among residents
Create a long-term unified brand message and narrative about Minnesota

A research study was completed over the summer to gauge consumer and industry knowledge of Minnesota.

Key findings of the research:

Overall, consumers and stakeholders see Minnesota in a similar light and agree on what makes the state appealing.
- Perceptions and appeal center around Minnesota's natural beauty, including its lakes/rivers, and outdoor activities.
- Secondarily the state is known for and appealing for its wholesome character and lifestyle.
- Overall, stakeholders and consumers aligned on these views.
Consumers are most likely to recommend Minnesota for 'play', followed by 'work' and then as a place to live.
- Being seen as a state that is 'fun and exciting' has the potential to derive both travel and leisure and interest in living in Minnesota.
- However, for the 'work' side, the key driver is a successful, growing economy.
Among consumers, Minnesota is best known as "The Land of 10,000 Lakes". This is also the most appealing tagline, followed by the "Explore Minnesota" tagline.
- In contrast, among Stakeholders, recall of "Explore Minnesota" slightly edged out "The Land of 10,000 Lakes". However, "The Land of 10,000 Lakes" edged out "Explore Minnesota" in appeal.

Key takeaways of the Minnesota brand perception/appeal:

Overall, the majority of consumers associate Minnesota with lakes and rivers
Those living in Minnesota also associate the state with outdoor activities while people further away from Minnesota associate the state with cold winter weather, the quality of life and the wholesome character of the state
The state personality continues to be best known as 'nice', with other comforting and relaxing descriptions common
Stakeholder perceptions of the state are consistent with consumer perceptions
Minnesota is noted for the appeal of its scenery and outdoor activities among consumers across all regions and also among stakeholders
Minnesota is also seen as a place that has a wholesome overall quality of life – safe and clean, with charming small towns and lots of activities
As with its wholesome quality of life, the state's personality is also considered 'nice', 'calm' and 'welcoming'

Key takeaways from Minnesota mottos and taglines:

When prompted, consumers identify 'Land of 10,000 Lakes', the 'Gopher State' and 'Explore Minnesota' as the most recognizable taglines for the state
- Land of 10,000 Lakes and Explore Minnesota are seen as the mottos/taglines that best suit the personality and appeal of the state
Among stakeholders, Explore Minnesota is the most memorable motto promoting the state, closely followed by 'Land of 10,000 Lakes'

In order to move forward, we need to define positioning opportunities for the state based on the key elements of appeal as well as the opportunities to enhance state perceptions. Specifically, the range of positioning options developed should address: state's natural appeal (lakes/rivers), outdoor lifestyle, fun and excitement, wholesome quality of life and personality, and Minnesota's vibrant and up-to-date culture.

Biking Initiative: The second bike summit was held in Mankato in November, with over 150 attendees. Partners in the biking promotion include EMT, MnDOT, DNR, Health, National Park Service, Park & Trails and the Bike Alliance. The group is working together to get more people on more bikes, more often in Minnesota. Because of these partners, we have $225,000 in seed money for a broad marketing campaign. Continue to look for partners and sponsors in areas such as health care providers/insurers, trail construction and bike product areas. The launch of the campaign is scheduled for May 2012. EMT is currently working to develop the website, which will include linear routes. EMT site will provide links to many mapping options. The bike group is meeting December 7 to confirm direction.
Comments from the Council include:

This is a lot of time and money for a single activity
How much of an influence is biking to travelers? What is the ROI?
Are bikers spending money?
The bicycle tourist tends to be older, prefers upscale accommodations and spends money
NiceRide saw over 200,000 users last year
Mountain biking is now a high school sport
90% of bikers drive a car to their destination and bring their bike
Communities see travelers who are cyclists one day and tourists the next day
Competitive bike racing is expanding and growing
Is there an opportunity for a "Biking Opener"
Biking is an example of how a budget increase could help us reach out
Trails are multi use. They provide different activities in different seasons

2012 Strategic Plan: The Strategic Plan was developed with input provided by the Council and EMT staff. Overall, the plan is a two-year plan, but will be reviewed in another year. A motion to accept the 2012 Strategic Plan as presented was introduced by Cynthya Porter and seconded by Bill Deef. All members in attendance voted to approve the Plan as presented.

2012 Marketing Preview:
Proposed Media Plan
Media plans for Winter 2011/2012 include the "Spin to Win" sweepstakes. This will create lead generation, as well as increase website traffic. For the first time, this promotion will be promoted via Facebook. It will also be promoted on www.exploreminnesota.com, and through e-mails from the Pioneer Press and Star Tribune. Eight prizes will be awarded. The goal is to produce 15,000 – 20,000 entries during the promotion, which will run January 9 – February 5. Will most likely do this the "Spin to Win" sweepstakes again in the Spring, with the goal to produce closer to 30,000 entries.

Plans are underway for radio advertising. For this promotion, EMT is looking to do a second verse to the popular "More to Explore in Minnesota/Joe Mauer" commercial.

The co-op program continues as well, with three of the programs sold out. Opportunities remain on the additional programs.

Web and Mobile Updates
The EMT website just completed its' first year of existence. The web is supported by ad sales on the web. We see 2.5 million visitors to the site each year. Phase II projects, which include the Meet in Minnesota site, the Sports Marketing site, and the data sharing widget are all underway. Also working on linear listings project, which is a tool that would allow users to find activities/attractions/events/lodging to do along the way of the trails.

The mobile app continues to develop. The traffic on this has increased three-fold from December 2009 to November 2011. The mobile app will focus on active living and is scheduled to be released this month. A full launch is scheduled for spring.

Explorer
EMT currently partners with the Star Tribune on the production and distribution of the Explorer. Will continue the Spring/Summer 2012 edition. Reevaluating future editions. Due to the cost, EMT is interested in sending out an RFP.

Comments from the Council:

Explorer is a great tool for seasons, but once it is printed, it is out of date
Produce online, on EMT site
EMT could do Explorer on their own
Circulation of Star Tribune is 12th in the country

Grant Program Update: In 2011, EMT awarded $679,245.27 in grants. Due to budget cuts and restructuring of the grants program, EMT awarded $328,842.51 in 2012. EMT had budgeted $300,000 for the program, but increased its contribution by over $28,000 in order to process all requests. Previously, recipients could request up to $10,000. The cap is now at $4,000. Even with the lower cap, requests are still coming in from both small and large organizations. The Grants Task Force will meet again in March to review the program.

Tourism Conference Update: The 2012 Tourism Conference will be held January 24-25 at the Kahler Grand Hotel in Rochester. Council members will be asked to assist with introduction of speakers.

An International and Group Evaluation Session will be held on January 23 in Rochester. Council members are encouraged to participate in that session. Bonnie Carlson, Bill Deef, Brad Jones, Doug Killian and Mark Ronnei will participate.

Explore Minnesota Tourism Council: The following Council members terms will expire in January: Fred Bobich, Chuck Dougherty, Nancy Hanson, Brad Jones, Mark Novotny, Ted Seifert, Kathy Silverthorn, Charles Skinner, Sam Thompson and John Valliere. Council members can submit their application online at www.sos.state.mn.us. Members remain on the Council until they submit their resignation or their successor is appointed by the Governor.

Council members who have not yet submitted their signed Ethics Statement should do so as soon as possible.

Proposed 2012 Council Dates:
Friday, March 9
Wednesday, June 13
Tuesday, September 11
Tuesday, December 11