'It's All About the Money'

'It's All About the Money'

ACVA seeks additional funds to do more comprehensive marketing.

Officials of the Alexandria Convention and Visitors Association on Feb. 8 asked the City Council for $364,786 more next year on top of its current budget of $1.6 million.

"We are asking council to take into consideration our mission to promote the entire city," said Jo Anne Mitchell, president and CEO, ACVA. "It all comes down to this in the very end."

ACVA's budget request for FY 2006 totals $2 million. That includes the $125,000 that was authorized late in their present operating budget for the Holiday Promotion Campaign that was symbolized by the Scotty dog "Alex."

That $125,000 was given to ACVA by city government in lieu of the free holiday parking that was initiated in 2001 following the 9/11 terrorist attacks that crippled tourism nationwide. Free parking has been approved each holiday season since then.

"We left it up to ACVA whether they wanted to continue free parking or have the $125,000 for promotion. We could not do both," said Mark Jinks, assistant city manager, Fiscal and Financial Affairs, when the money was approved.

In 2004 ACVA had an operating budget of $1.6 million not including the $125,000 promotion addition. This budget request is an estimated increase of $364,786 over their present fiscal blueprint. It does include the $125,000.

"The option is to keep the $125,000 free from the ACVA budget when it is approved during this budget approval cycle and consider it later. But, that does not allow for long-term planning in order to better organize and develop the holiday promotion program," Jinks said.

"If council were to decide to reinstate the free parking later in the year, that would amount to a $250,000 increase to the city," he said. Most of the estimated $125,000 income to the city comes from overtime parking fines handed out during the holiday period, Jinks and former city manager Philip Sunderland verified last year.

FREE PARKING meters and city garages account for only a limited portion of the total revenue realized during the period in question, according to city calculations. The free parking is only in effect after 5 p.m. on weeknights and on Saturdays during the holiday shopping season. Meter parking is free on Sundays throughout the year.

Merchant opinions as to the benefits of free parking versus the holiday promotion package were mixed in a non-scientific survey following the holiday shopping season. However, many viewed the free parking as a double benefit.

"It makes us better able to compete with the malls where parking is free. And, our customers are not angered by getting a parking ticket while shopping which then makes them decide to shop at the malls rather than risk another ticket," several merchants said when questioned.

Mary Ann Russell, chair, ACVA, disagreed with the latter assessment by some merchants. "There are two venues people go to today for their holiday shopping. The internet or some place special. I believe people are willing to pay for parking to gain the ambiance of shopping in a place like Old Town," she said.

"I agree with including the $125,000 promotion money in the budget. If we are going to keep the holiday promotion campaign we are going to need the money and the time to plan for it," she said.

ACVA'S TREASURER Hudson Riehle views the ACVA budget as a critical linchpin in Alexandria's overall fiscal well being. "After being a resident of Alexandria for over 10 years I have come to realize just how important tourism is to the city's economy," he said.

"Tourism is very competitive throughout this region. It is very labor intensive and it has a significant employment impact. Plus, our tourists have a great profile. ACVA has excelled in marketing Alexandria nationwide," Riehle said.

"This budget truly is an investment in both the community and the labor market. The attacks of 9/11 emphasized the importance of tourism to this community," he said.

"When we look at how competitive tourism is today, parking becomes a pivotal issue. We have to know who the tourist is and who is coming to the city at what times. Parking is a critical component of that analysis," Riehle said.

MOST VISITORS have similar objectives. They are coming for the "historic ambiance, unique shopping and relaxed dining" and proximity to the nation's capital, according to ACVA research.

"A large percentage of people who visit from out-of-town stay with friends and/or relatives. Those friends and relatives are our ambassadors," Mitchell said.

As with any budgetary analysis the bottom line is "Return on Investment" or ROI. Is the money spent being invested in the proper categories to produce a reasonable return on that investment?

In ACVA's presentation, ROI was based only on hotel taxes which flow to the city coffers. It did not take into consideration visitors staying with friends and relatives or day tourists.

In 2005 the room tax was $1 per room night per room. That produced $908,730. The profit to the city was just over $448,000, making the ROI 25 percent.

In 2006 that same final result is projected by ACVA to be $318,735 or 16 percent based on a tax revenue of $954,167 at $1 per night per room. The difference is caused by the increase in ACVA's budget from $1.6 in 2005, to $2 million in 2006.

HOWEVER, as Mitchell pointed out, "This is only the hotel tax category. It does not take into account all the other tourism benefits to the city such as shopping, dining, transit rides, parking and many other aspects."

"And, the hotel tax is based on out-of-town visitors, it does not consider the regional visitors and that is where our local promotion is aimed. All neighborhoods can benefit from our regional promotion," she said.

"We haven't been getting the increases necessary to get the whole city marketing done properly. If we get the increase we can do a lot more in terms of both print and electronic ads that reach potential regional visitors," Mitchell said.

"This is why we want the $125,000 included in the budget at the outset. That way we can do better planning and be more effective. Last year it came very late. The free parking only benefits Old Town. The holiday promotion program benefits the whole city," she said.

In summarizing her pitch for additional funds Mitchell's presentation emphasized, "Council can:

* State clear support of ACVA's data driven marketing program and reinforce ACVA's role as a marketing agency for the city

* Fund ACVA adequately to include neighborhood promotions

* Encourage and reward cooperation and team work from all civic and business organizations."

If this is done, Mitchell said, "ACVA can:

* "Improve communications with stakeholders.

* "Develop research data demonstrating the uniqueness of commercial neighborhoods while marketing "One Alexandria."

* "Work with business organizations in developing and implementing local initiatives."

For fiscal 2004 the total economic impact of tourism for Alexandria was $485,207,397 based on income from lodging, meals, public transportation, general retail, and admission/recreation, according to ACVA calculations. As Mitchell's presentation concluded, "It's all about the money."