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Home My WebLink About2/6/2008 - STAFF REPORTS - 2.M. FPALMSA o R,y U n h Y Cq(/FOR�,PR CITY COUNCIL STAFF REPORT DATE: February 6, 2008 CONSENT AGENDA SUBJECT: City Contribution to CVA Air Service Development Initiative FROM: David H. Ready, City Manager BY: DEPARTMENT OF AVIATION SUMMARY Last calendar year the CVA requested $60,000 from Palm Springs and other Coachella Valley Cities for the funding of an Air Service Development Campaign, A similar marketing plan is scheduled for this calendar year 2008. This action would approve and provide $50,000 in funding for the City of Palm Springs share this year. RECOMMENDATION: Approve $50,000 to the Palm Springs Desert Resorts Convention and Visitors Authority for the purpose of air service and tourism marketing. STAFF ANALYSIS The Palm Springs International Airport is the centerpiece for air transportation in and out of the Coachella Valley. This promotional program is specifically designed to work in direct cooperation with the airlines that presently serve the airport, and the purpose is to help stimulate more passenger activity and tourism. In addition to the direct benefit to the airport and tourism industry, the program sends a very positive message to the airlines that this community is willing to partnership with them, especially during such difficult times within the industry, and work creatively to improve business. As of the time this report was prepared, CVA indicated that all of the cities but one (Desert Hot Springs) had either already taken action of financial support, or have committed and expect to take formal action. The CVA financial input to the program will be $150,000. The attachment provides an overview of the 2007 program. The 2008 program is intended to be very similar and its refinement will occur as soon as the financial commitments are provided by the cities. ITEM NO. City Council Staff Report February 6, 2008 -- Page 2 CVA Airport Advertising FISCAL IMPACT: The total $50,000 in funds is available in airport account 415-6002-45520. Thomas No an, Executive Director, Airport David H. Ready, City Manager Attachment— CVA Program QQQQQ� 2007 SPOT MARKET MEDIA ANALYSIS MARKET MEDIA TOTAL TOTAL TOTAL TOTAL $ CPM REACH INVESTMENT ADDED VALUE . IN-MARKET PORTLAND KINK-FM 1,954,650 $21,600 $30,000 $51,600 $11 KUPL-FM 9,375,000 S18,000 S122,500 $140,500 $2 Portland Oregonian 100.000 $23,077 $23,077 $231 Ultimate Magazine 387,000 $5,085 $5,085 $13 Portland Monthly 330,400 $6,752 $6,752 $20 Oregonian Travel Brochures 964,105 $968 $968 $1 13,111,155 $75,482 $152,500 $227,982 $6 SEATTLE KRWM-FM 8,808,000 $30,003 $65,000 $95,003 $3 KMPS-FM 4,995,450 S36,000 $108,840 $144,840 $7 Seattle Times 100,000 $23,077 $23.077 $231 Seattle Magazine 306,000 $10,520 $10,520 $34 Pacific Northwest Magazine 7,000,000 $25,109 $25,109 $4 Pacific Northwest Golfer 300,000 S3,878 $3,878 $13 21,509,450 $128,586 $173,840 $302,427 $6 CHICAGO WKSC-FM 4,453,440 $33,600 S43,000 $76,600 $8 WLIT-FM 6,747,300 $42,000 $45,000 $87,000 $6 Chicago Magazine 820,936 S13,566 $13,566 $17 Chicago Tribune Magazine 4,805,331 $14,091 S14,091 $3 Chicago Social Magazine 457,500 $5,354 $17,410 $23,764 $14 17,284,507 $109,611 $105,410 $215,021 $6 SAN FRANCISCO KOIT-FM / KMAX-FM 4,012,800 $40,000 $105,800 $145,800 $10 KYLD-FM 4,903,500 $39,000 $135,375 $174,375 $8 San Francisco Chronicle 125,000 528,846 $28,846 $231 San Francisco Chronicle 450,000 8,537 $8,537 $19 San Francisco Magazine 800,000 $14,544 $14,544 $18 7x7 Magazine 350,000 $11,550 S11,550 S32 SF Weekly 1,000,000 S7,930 $3,451 $11,381 $8 11,651,300 $150,407 $244,626 $395,033 S13 TOTAL1 63,556,412 $464,086 $676,376 7$1,140,463 $7 Total Roach is determined as follows. Radio Net Reach of total spots (paid & promotional) x Frequency , Print= Circulation x 2.5 Readers Per Copy 4 Recommend adding Full pages in 12 issues of Just Out Magazine in Portland with co-op p g P 9 g p partners Recommend adding Full pages in 6 issues of the Bay Area Reporter In San Francisco with co-op partners C c4i PALM SPRINGS DESERT RESORT COMMUNITIES CVA 2007 SPOT MARKET/ AIR SERVICE CAMPAIGN - PALM SPRINGS Long Term Objective: To grow air service to the destination Strategy: Develop a cooperative partnership between the cities, airport, and CVA Description: This experience-driven campaign was designed to attract tourists seeking the perfect getaway package, which was achieved through a spotlight focus on three main themes: • Girlfriend's Getaway • Romantic Getaway • Unlimited Play Golf Getaway Through the use of print, broadcast advertising, websites, and electronic mail, we penetrated the following carefully selected markets, which amongst other criteria, offer direct flights from our airline partners to PSP: • Portland (Alaska Airlines) • San Francisco (Alaska Airlines) • Seattle (Alaska Airlines) • Chicago (American Airlines) Media exposure began in March 2007 and continued through September 2007. Along with pre- recorded spots, radio stations featured "Palm Springs Desert Resorts Getaway Packages" as prizes for on-air, special event, and online contests. Each station heavily promoted these contests on their highly trafficked websites. Each print publication supplemented the campaign with website banner ads and in some cases included advertorials as added-value- Creative was submitted to publications based on their primary audience and geographic location The overall goal of our advertising was to entice consumers to purchase vacation packages on American Airlines Vacations and Alaska Air Vacations. All advertisements directed consumers to splash pages on each of the airline's websites where they were able to purchase vacation packages to the destination. Co-op: CVA contribution. $200,000 City Co-op: $350,000 Alaska Airlines Newspaper Insert Co-op: $10,000 Total Co-op: $560,000 Expenses: Media: Chicago, Portland, San Francisco, and Seattle Investment ,$389,097 Reach: 63,231,412 Added Value: $676,376 Total Value: $1,065,473 GPM: $6 Support: CMG Newspaper Insert Alaska Air Co-op: $75,000 Twin Advertising: $40,000 Edelman PR: $56,000 Total Expense: $560,097 ROI: Our campaign is currently being measured by airline statistics from American Airlines Vacations, Alaska Air Vacations, and Palm Springs International Airport (PSP). The campaign has proven to be effective as all eight cities have come together and are successfully reaching our goal of increasing air service to the destination. To begin to see the full return on this project, it may take several years. Currently, we are already beginning to see positive results from our air carriers. Airline feedback is positive, and they would like to see this program continue since the YOY demand for travel to the destination is increasing. Air Service Progress: July 1, 2007 Horizon Air, Alaska Airline's sister company, introduced non-stop air service between Seattle and PSP November 4, 2007 - April 6, 2008 Horizon Air will offer new non-stop air service between San Jose and PSP November 4, 2007 - April 6, 2008 Horizon Air will add non-stop air service between Portland, Ore. and PSP to supplement Alaska Airline's seasonal flight between the two cities. November 4, 2007 — May 17, 2007 WestJet will be adding 17 weekly departures from PSP. This is an increase of 5 weekly departures from last winter. 000035 Alaska Airlines From January 1 through September 30, Alaska Airlines has transported 30,505 more people over last year. Vacations hotel room nights are up 5%, which is a huge improvement since the first half of the year was down by 23% from last year. Passenger forecasts on vacations packages are up 45% for October through December. Overall, we have increased the desire for people to travel to Palm Springs and stay longer (average of 4.05 nights). As of 9/30/2007 Passenger Counts: 333,253 YOY Increase: +9% (30,505 passengers) Room Nights Booked: • Prior to the start of this promotion there were 299 room nights booked, which was down 23% from last year. • As of 9-30-07, we have booked 1015 room nights, which is up 5% from last year. • Room nights are expected to increase for the months of September through December. Vacations Booking: • October— December bookings are up 45% YOY (205 in 2007 v. 141 in 2006) Best Selling Packages: • #1 Hyatt Grand Champion • #2 Desert Springs, A JW Marriott • #3 Wyndham Palm Springs Statistics: • 45% of business to PSP is through alaskaair.com • 55% of business to PSP is through call centers • Average passengers per booking: 2.5 • Average length of stay: 4,05 nights • Highest booked departure cities to PSP • #1: Seattle • 92: Portland • #3- Vancouver Airline Support: • www.alaskaair.com/pspescapes • Splash page announcing and describing promotion • Link on homepage or website, which directs viewers to Palm Springs area splash page • Direct link for viewers to go to Palm Springs area splash page • Exposure on Insider Newsletter, which is e-mailed to 1,000,000 frequent flyer card holders • Exposure in June Travel Agent Newsletter, which is e-mailed to 10,000 travel agents • Co-op support by purchasing back panel of 8 panel newspaper insert to be distributed in Seattle, San Francisco and Portland 00003E • Inclusion in Bank of America (Alaska Airlines Credit Card) statement mailed out to 1.8 million card holders • 10% direct consumer discount for passengers who book online • Alaska Air provided the CVA with 48 promotional tickets for radio giveaways 000037