June 18, 2020 1 THE TOURISM ZONE In May of 2007, 10 Communities - PowerPoint PPT Presentation

Door County Tourism Zone 2019 Annual Meeting Report June 18, 2020 1

THE TOURISM ZONE… In May of 2007, 10 Communities formed a Tourism Zone according to WI State Statute 66.0615. By the end of 2008, all 19 communities were a part of the Door County Tourism Zone. WHY AND WHEN …In 2007 the Door County Tourism Zone Commission was established via grass roots efforts by a group of concerned citizens called "Door County Peninsula Strategic Marketing Coalition“. They fundraised and volunteered their time to raise money for a market study. This idea didn’t originate with local government officials; it began with the very people who make their livelihood in the tourism and hospitality industry in Door County. WHAT DID THE MARKET STUDY SHOW? Door County needed new revenue sources to create and implement effective marketing to stop losing tourism market share. Membership dues simply weren’t enough to effectuate a modern marketing program. For Door County to remain a sought-after destination, the only option was to generate money for a broad and unified marketing campaign. TOURISM WORKS FOR US: HOW IS MARKETING PAID FOR? ROOM TAX revenue provides the mechanism that ensures the ongoing funding for the marketing of Door County. In the competitive marketplace where travelers have many options, Destination Marketing Funds allow Door County to be marketed and represented. Prior to 2007, Door County’s marketing entity, DDC, had marketed Door County with a marketing budget of less than $200,000. 2

ABOUT ROOM TAX… ALL MUNICIPALITIES HAVE A 5.5% LOCAL MUNICIPAL ROOM TAX ROOM TAX IS DIVIDED THREE WAYS: 30% of Room Tax Collections are Door County Door County distributed back to the municipality in Tourism Zone Member Commission which they were collected. These Municipalities 4% 30% funds can be spent for any use deemed necessary by that community’s municipal body. 66% of Room Tax Collections are distributed to Destination Door County for marketing. These funds are spent on items which under state statute qualify, such as marketing, promotion, and staff expenses. 4% is retained by the Door County Tourism Zone for expenses to cover the cost of tax collection, distribution Destination and enforcement. All Commissioners Door County are volunteers. The Tourism Zone has 66% one employee. 3

THE TOURISM ZONE “DCTZC” AND DESTINATION DOOR COUNTY “DDC” PARTNERSHIP Receives 66% of room tax collected Distributes 30% of room tax for funding as the designated collected back to the municipality DOOR COUNTY TOURISM ZONE marketing entity for Door County. in which it was collected DESTINATION DOOR COUNTY DDC distributes 11% of the 66% to Distributes 66% of room tax the Strategic Community collected to Destination Door Partnership Program. County, the designated marketing entity for Door County. All remaining room tax revenues are 4% is retained by the DCTZC for used to market Door County to operations. increase interest in visitor-ship and generating overnight stays. The DDC develops and executes The DCTZC is audited annually by their Annual Marketing plan and an outside municipal accounting budget. firm. The DCTZC is responsible for The DDC hires and evaluates their vendors permitting, collections, distribution and enforcement of local room tax ordinances. 4

Room Tax Revenue 2007-19 $6,000,000.00 $5,139,717 $4,892,212 $5,000,000.00 $4,459,019 $4,660,647 $4,130,828 $3,058,288 $3,226,124 $3,289,439 $3,492,318 $3,643,839 $3,818,505 $4,000,000.00 $3,000,000.00 $2,635,603 $2,362,655 $2,000,000.00 $1,000,000.00 $0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 At year-end 2019, for the period of 2007-2019 the Tourism Zone has collected $48.8 million in room tax. For the same period, the Tourism Zone distributed: $32.2 million to Destination Door County. • $14.6 million to member municipalities. • Because of the compliance and collections efforts of the Tourism Zone and the marketing efforts of Destination Door County (DDC), tourism continues to grow in Door County. 5

ECONOMIC IMPACT: 2009-2019 Room Tax Collections 2009-2019 grew $2,088,005 or 68.42% Door County Tourism Zone Commission Room Tax Collection Numbers 2009-2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Growth % Change Room Tax Collections $3,051,712 $3,233,733 $3,270,684 $3,500,714 $3,644,013 $3,815,722 $4,130,827 $4,459,019 $4,660,677 $4,892,212 $5,139,717 $2,088,005 68.42% * lates included Available Rooms 1,209,378 1,215,559 1,198,604 1,209,559 1,203,063 1,213,890 1,232,712 1,249,681 1,273,109 1,279,692 1,300,090 90,712 7.50% Filled Rooms 442,111 463,591 463,861 479,562 486,977 508,272 532,798 553,470 560,968 555,735 561,515 119,404 27.01% Room Occupancy 36.56% 38.14% 38.70% 39.65% 40.48% 41.87% 43.22% 44.29% 44.06% 43.43% 43.19% 6.63% 18.13% ADR $124.00 $127.00 $130.00 $134.00 $137.00 $136.00 $142.00 $149.00 $153.00 $162.00 $169.00 $45.00 36.29% Total Room Revenues $55,013,656.03 $59,105,965.32 $60,228,436.31 $64,216,442.00 $66,825,167.00 $69,169,622.00 $75,876,813.00 $82,467,213.00 $85,632,987.00 $89,826,889.00 $94,659,439.86 $39,645,783.83 72.07% * lates not included 30% to Muni $915,514.00 $970,120.00 $981,205.00 $1,050,216.00 $1,093,205.00 $1,144,716.00 $1,239,248.00 $1,337,706.00 $1,398,203.00 $1,467,664.00 $1,541,915.00 $626,401.00 68.42% Distribution to the DCVB * original marketing budget $2,014,130.00 $2,134,264.00 $2,158,652.00 $2,310,470.00 $2,405,048.00 $2,518,376.00 $2,726,346.00 $2,942,953.00 $3,076,047.00 $3,228,860.00 $3,392,213.00 $1,378,083.00 68.42% in 2007 was $250,000 In 2007 the Door County Tourism Zone formed and implemented a 5.5% room tax. 2009 was the first full year of room tax collections when all 19 municipalities were a part of the Door County Tourism Zone. As a result, 2009 is used as the baseline year for comparisons. 6

2019 – METRICS YEAR END REVIEW 2019 Room Tax Collections ▪ 2019 Room Tax Collections were $5,139,717, up 5.06% over 2018 collections. Average Daily Rate ▪ The ADR increased from $162 in 2018 to $169 in 2019. ▪ A $7 or 4.3% increase. • ▪ 2019 occupied room nights rose to 561,515 from 555,735 in 2018. ▪ 5,780 more nights occupied in 2019 or, an increase of 1.04% Occupied Room Nights: • 2019 available room nights rose to 1,300,090 from 1,279,692 in 2018. • 20,398 increase in available room nights or 1.59% increase. Available Nights • 2018 Footnote: 2018 will serve as a benchmark year. A local reservation software company made accurate reporting enhancements to their room tax report which impacted nights rented and available nights for 2018. • The 2019 occupancy rate was 43.19% compared to 43.43% in 2018. Occupancy Rate • -.55% decrease • At year end 2019, there was $3,312.76 in unpaid tax, fees and penalties. Unpaid tax, fees Unpaid Tax, Fees & Penalties and penalties were .06% of 2019 room tax collections: $5,139,717. 7

2019 - MUNICIPAL IMPACT 30% to Municipality Municipality 2019 Share Rank 2018 City of Sturgeon Bay $ 675,399 13.14% 2 $ 202,620 $ 646,494 Town of Baileys Harbor $ 392,061 7.63% 7 $ 117,618 $ 370,552 Town of Brussels $ - 0.00% 18 $ - $ - Town of Clay Banks $ 4,342 0.08% 16 $ 1,303 $ 6,009 Town of Egg Harbor $ 468,388 9.11% 5 $ 140,516 $ 441,745 Town of Forestville $ 618 0.01% 17 $ 185 $ 390 Town of Gardner $ 40,218 0.78% 14 $ 12,065 $ 36,483 Town of Gibraltar $ 767,236 14.93% 1 $ 230,171 $ 733,021 Town of Jacksonport $ 104,089 2.03% 11 $ 31,227 $ 96,810 Town of Liberty Grove $ 355,937 6.93% 8 $ 106,781 $ 356,367 Town of Nasewaupee $ 118,357 2.30% 10 $ 35,507 $ 104,257 Town of Sevastopol $ 339,650 6.61% 9 $ 101,895 $ 334,449 Town of Sturgeon Bay $ 42,718 0.83% 13 $ 12,815 $ 37,806 Town of Union $ 5,756 0.11% 15 $ 1,727 $ 3,902 Town of Washington $ 92,509 1.80% 12 $ 27,753 $ 84,055 Village of Egg Harbor $ 456,360 8.88% 6 $ 136,908 $ 428,686 Village of Ephraim $ 621,376 12.09% 4 $ 186,413 $ 603,597 Village of Forestville $ - 0.00% 19 $ - $ - Village of Sister Bay $ 654,702 12.74% 3 $ 196,411 $ 607,588 TOTALS $ 5,139,716 100.00% $ 1,541,915 $ 4,892,211 8 * Municipal Impact from the 2019 Tourism Zone audit.

2019 REVENUE BY PROPERTY TYPE & PERCENT OF THE TOTAL Other Home $340,747.08 Hotel $21,749,895.95 0% $20,829,341.67 23% 22% B&B $2,615,428.31 3% Condo $6,482,394.57 7% Resort Inn $38,381,106.24 $4,260,526.42 41% 4% 2019 Total Room Revenues: $ 94,659,440.24 9

2019 AVAILABLE NIGHTS BY PROPERTY TYPE & PERCENT OF THE TOTAL Home Other 238,004 9,019 18% Hotel 1% B&B 319,615 33,826 24% 3% Condo 87,113 7% Inn 60,769 5% Resort 551,744 42% 2019 Total Available Room Nights: 1,300,090 10

2019 OCCUPIED NIGHTS BY PROPERTY TYPE & PERCENT OF THE TOTAL Other Home 3,049 88,971 B&B 1% 16% Hotel 12,766 165,002 2% 29% Condo 38,197 7% Inn 27,437 5% Resort 226,093 40% 2019 Total Occupied Room Nights: 561,515 11