Successful Performance Measures How Can We Achieve Them?

Successful Performance MeasuresSuccessful Performance Measures

How Can We Achieve Them?How Can We Achieve Them?

Smith Travel Research

* Hotel Industry Performance Tracking - STAR

- Occupancy- Average Rate- Revenue Per Available Room- Market Share

* Competitive Benchmarking

Smith Travel Research

* Data Collection

- Rooms Available- Rooms Sold - Room Revenue

* Monthly & Daily Reporting

U. S. Monthly Star Sample

Total Census 40K 4.1MM

20K 2.6MM Star Sample

* Over 60% of U.S. Rooms Reported

Hotels Rooms

STR Segmentation

177 U.S. Markets- MSA//County

573 U.S. Tracts- Zip Code/County


Rich Carollo,Rich Carollo,Director Research, CCTBDirector Research, CCTB

IACVB Foundation IACVB Foundation Research CommitteeResearch Committee Established in 1999

1999 Information Needs Assessment Survey

1999 Software Survey

1999 Visitor Profile Project

2000 Compensation Survey

2001 CVB Organization and Financial Profile

Convention Income Survey Methodology

2001 Research Activities Survey

Needs Assessment SurveyNeeds Assessment Survey

Visitor Counts

Economic Impact

Conversion Rate

AccountabilitySTANDARDIZATIONSTANDARDIZATION

Standardization ChallengesStandardization Challenges Visitor/Delegate Counts

50, 100 mile or other definition? City, County, DMA or other?

Impact/Expenditures Model type? Avg. Spending Method

Attendance x exp. Peak x avg. stay x exp. Attendance(day and night) x exp. Exhibitors x exp.

Performance Measures (Sales Divisions ROI)

Successful Performance Measures

Kerri KapichVP Marketing

San Diego CVB IACVB Annual Convention

July 17, 2001

San Diego Convention& Visitors Bureau

Founded in 1954 Mission

– To ensure success of San Diego’s convention and visitor industry for the benefit of the greater San Diego community and its visitors

Total operating budget = $16.2 million– 89% funded by Local Government– 11% funded by Members and Other

Tourism Infrastructure

460 Hotel/Motels - 108 convention/conference

Over 6,500 Restaurants San Diego Convention Center Corporation 4 Major Attractions - Sea World, San

Diego Zoo, Wild Animal Park, LEGOLAND 92 Golf courses Rich arts and culture scene - 90

museums/historic sites and monuments, 125 performing arts organizations, over 300 festivals and events

San Diego Tourism

$5.2 billion economic impact 26.5 million visitors annually

– 15.1 million overnight Primarily Leisure Destination

– 85% Leisure– 8% Meetings/Conventions– 5% Commercial/Business

Performance MeasuresThe Challenges

Multitude of Stakeholders = Multitude of Measurements– What’s in it for me?– Local government differs from

members’ needs Lack of Industry Standards

– terminology– methodology

Not selling widgets

Where We Are

Invest in Research– 6% of budget allocated to department

and contracts– foundation for strategic planning– essential to measure success

Audit of all reporting systems Building a better tomorrow

Key Performance Measures

Visitor Industry Statistics– Health of industry

Program Analysis– Measure effectiveness of specific

campaigns– Market Share

Marketing Return on Investment

Industry Performance

Overnight Visitors Visitor Spending Hotel Room Nights Hotel Occupancy Rate Hotel ADR Airport Arrivals Attraction Attendance Convention/Meeting Attendance

Program Effectiveness

Sales Measurements– Leads– Room Nights

Advertising Measurements– Pre- and post-awareness studies– Image perception studies– Conversion studies - inquiries

Market Reports– Market share and competitive set

Return on Investment

Partnered with the State of California

Hired D.K.Shifflet– year-long study assessing total

marketing impact on the leisure travel market

– measured those who inquired and those who don’t

– determined awareness, attitudes, interest and intent shifts caused by marketing programs

ROI Study - Key Findings

Budget issues– Low share of voice - messages are

received favorably but difficult to stay top of mind

We move the meter in some markets better than others

Branding is working– Consumer perceptions are changing– Travel experience is delivering on

promise

Key Findings cont.

Better origin market analysis data– Valuation tools beyond volume

• Avg. Los Angeles Trip Expenditure = $309• Avg. Denver Trip Expenditure = $1,471

Insights into consumer motivation and behavior

The Bottom Line

For every $1 we spend on marketing San Diego, we generate $54 in return

In spot markets, we increase our ROI to $77

We’re Not There Yet

There is still a gap– Industry performance and marketing

ROI don’t address other stakeholders’ needs

Reporting audit conclusions– Drowning in data– Fragmented– Requires coordination of financial,

research, IT, marketing, sales, membership

The Future Vision

Centralized database Centralized reporting through

Research Department Customized reports and analysis

for members, local government and employees

Visitor Relationship Management - maximize ROI

From Beans to Bucks to Clout:

Jogging the Winding Path toward Accountability

Ed McWilliams, Ph.D.VP Destinations

D.K. Shifflet & Associates Ltd

“ Setting the Standard”

Beans Versus Budgets

Principle 1:

More Beans = More Budget ?

D.K. Shifflet & Associates Ltd

“Setting the Standard”

Counting the Beans How many sales Leads/calls?

How many convention delegates?

How many delegate room nights?

What are Occupancy Rates?

How many articles written?

How many Column Inches of PR generated?

How many consumer impressions?

How many people converted?

D.K. Shifflet & Associates Ltd“ Setting the Standard”

Counting the Bucks

Visitor Spending

Delegate Spending

Room Night Sales

Economic Impact

D.K. Shifflet & Associates Ltd‘Setting the Standard”

Accountability = Connecting the Dots

Cause versus Effect

Programs versus Impacts

Return versus Investment

D.K. Shifflet & Associates Ltd“Setting the Standard”

Performance Based Budgeting

Goals

Objectives = Budget $ , FTEs

Strategies D.K. Shifflet & Associates Ltd“Setting the Standard”

Linking Activities, Beans and Bucks

Program Measures: A few Definitions


Input ->

->

->

->

Output

Outcome Impact

Efficiency


Input Measures: Budget and Staff

Output Measures: Program/staff Activity.

For example: # of sales calls, # of consumer impressions generated, # of inquiries fulfilled.



Outcome Measures: Measures the results from programs.

For example: Room Nights generated by convention delegates, travelers generated in response to advertising, etc.



Impact Measures: Translation of program results (outcomes) into Bucks, or other tangible measures. e.g.

Total Spending by Visitors Influenced by Advertising, $ value of Convention Room Nights sold, Total Spending of Convention Delegates D.K. Shifflet & Associates Ltd




Input $

->

->

BEANS=“Activity Stuff”

Impacts$

BEANS=“Outcome Stuff”


Efficiency Measures: Estimate cost per unit generated by a program. For Example.

Cost per consumer inquiry,

cost per consumer converted,

cost per convention delegate, D.K. Shifflet & Associates Ltd“Setting the Standard”


Ultimate Efficiency Measure: Return on Investment

ROI: dollars returned per dollar invested

Ideal to measure each program (allows like comparisons across programs).


Common Accountability Research: Conversion Study

Strengths: Ideal for consumer Marketing budgets under $1 million.

Measure differences across target markets. Aides marketing/media decisions.

Good overall consumer marketing accountability

Limitations: Miss those who saw or heard Ads and traveled,

but never inquired Usually a small percentage of actual visitors Often not measured for specific marketsD.K. Shifflet & Associates Ltd


Audience Audience PenetrationPenetration

Audience – 100%Aware - 24%Confirmed Aware 13%Traveled – 3%Influenced – 2%Inquired - 1%


TravelerTravelerPenetrationPenetration

Travelers – 100%Aware – 62%Confirmed Aware 50%Influenced – 34%Inquired – 11%


Using Efficiency Measuresfor Mgmt Decisions:

Conversion Rate 42%

Cost Per Conversion= #of travelers/ Budget$

For Example: $12

Market A: CPC= $10

Market B: CPC= S 8

Market C: CPC= $15



Advertising Example 1:

Market A: CPC= $10 ROI = $ 25

Market B: CPC= $ 8 ROI = $ 10.

Market C: CPC= $15 ROI = $ 35.



Program Output Outcome Impacts ROI

Budget Convention Sales

Sales Leads

# Room Nights

$ Value of Delegates

Impact/Budget


Cost per Visitor by Market

3.44

1.79

3.433.12

A B C D


$184.00

$241.00

$171.00$189.00 $177.00

Mkt A Mkt B Mkt C Mkt D Mkt E

Marketing Return on Investment by Market


DKS&A “Advertising Impact Monitor”Answers Your Fundamental Advertising Questions

1. How is consumer awareness, interest, intent, and travel behavior changing in response to advertising?

2. What is the ROI of TV advertising in spot markets?

3. Is television worth the premium over print?

4. How much does it cost to draw a customer from Market A versus Market B?

5. What is the Return on Investment for Market A versus Market B?D.K. Shifflet & Associates Ltd


Measurement Strategies and Costs

Golden Rules:

1) Leverage accountability costs into Investments for strategic information.

2) Always invest research $ in proportion to your spending. Big programs deserve more research.

3) Be brutally honest. Remember all goals are not quantifiable.

4) Be prepared to change.


Measurement Strategies

Next Steps:

1) IACVB – Set agenda to Establish Industry Definitions

2) IACVB – Develop standard accountability prinicpals

3) IACVB: Publish, promote, educate & advocate for use of standards.


From Beans to Bucks to Clout:

Jogging the Winding Path toward Accountability



How Can We Achieve Them?How Can We Achieve Them?

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Successful Performance Measures How Can We Achieve Them?