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City Seeks Marketing Firm

The City of Morro Bay is out for bids for a new marketing firm, but not because the old firm has done anything wrong.

“The purpose of this request,” reads a request for proposals released by the City Tourism Director, “is to seek and retain a qualified marketing and/or public relations agency to continue developing the Morro Bay brand and promote Morro Bay as a premiere destination for individuals and groups on California’s beautiful Central Coast. The results of these efforts will benefit Morro Bay’s assessed lodging businesses, the City of Morro Bay, Morro Bay sales tax businesses, plus help cultivate and grow competitions and annual events within our city.”

Mental Marketing is the current PR contractor and is at least the fourth firm the City has used in the past 10 years or so. Previous firms include Barnett-Cox, Verdin Marketing and Tom Jones Advertising, as well as a couple of years when the former non-profit Tourism Bureau, a subsidiary of the Tourism Business Improvement District or TBID, handled things in-house.

The RFQ is for a 2-year contract, from 2018-20, according to Jennifer Little, the City’s tourism director. “This is not a reflection on Mental Marketing or their abilities,” Little said, “but is being done for proper fiduciary responsibility.”

Whoever gets the new, 2-year contract will have to work with a new logo and brand — “Put Life on Coast,” which was developed by consultants working on the City’s economic development plans.

The slogan was approved by the City Council, despite some confusion expressed by citizens over the vagueness of the new slogan, and the logo being simply a variation on the previous logo, changing elements around but still very similar to what the City has used for many years.

The slogan will replace “Discover Your Better Nature,” which the City copyrighted at the request of the TBID. It had been used for several years, but was dropped by the TBID and its business arm, the Tourism Bureau, for “Discover Morro Bay.”

All that changed about 2-years ago, when the City dissolved the Tourism Bureau and took in-house the management of the City’s promotions and in turn its image, hiring Little to lead that effort, and placing a newly formed Tourism Department under the Deputy City Manager, a position that currently sits unfilled.

City Manager, Scott Collins said “I am still evaluating the operation/administrative needs of the City organization; so no decision to move forward on the Deputy City Manager at this time. In the meantime, I am overseeing the Tourism Department.”

In the RFP, the marketing budget — culled from the City’s 2017-18 Fiscal Year budget — is listed at $330,000, and “including planning, meetings, execution and reporting.” Bidders are asked to “create a complete budget for the comprehensive marketing campaign and a fee schedule,” however, the budget doesn’t include “co-op’s with VisitCA, SLOCAL and CCTC” which come out of a different budget. The TBID assessments produce more than $800,000 a year, with the remainder paying for ad buys and City staff.

The Public Relations Budget is listed as $80,000, “including planning, meetings, execution and reporting.”

Also along the PR lines, Morro Bay landed a coup when a photograph by Cayucos fine art photographer, Danna Dykstra-Coy, was picked for the cover of the new “California Central Coast Visitors Map.”

Called the “most used road map in California,” some 225,000 of the free maps are printed and distributed at all California Welcome Centers, and Visitor’s Centers up and down the Coast.

Dykstra-Coy’s photo is of the Dunes Street pier with the blue bay waters and Morro Rock looming in the background. The map will be distributed May 1.

Morro Bay’s TBID boundary is defined by the City Limits. It is funded through a 3% per night tax on room stays at hotels, motels, inns and B&Bs. As an assessment district, lodging property owners vote annually whether to continue with the district. Its goals are:

• Increase overall occupancy and hotel/motel revenues, especially during mid-week and shoulder season;

• Extend the number of average hotel/motel room nights beyond the current average of 1.5;

• Bring exposure to Morro Bay as a viable destination for individuals and groups;

• Positively impact transient occupancy tax (TOT) for the City of Morro Bay;

• Create opportunities to positively impact sales tax businesses and drive economic development in
the City of Morro Bay; and,

• Assist with the development and growth of competitions and events that attract overnight
guests.

TOT or bed taxes, which the City currently charges at 10% tacked onto the cost of a room night, are the second largest tax revenue source for the City of Morro Bay behind property taxes (sales taxes are third).

According to tax figures released by the TBID, motel receipts from July 2016 to June 2017 topped $26.7 million, producing some $2.67M in TOT, with 916 rooms for an average occupancy rate of about 64% for the year. (Occupancy rates vary widely from a high of 84% in July to 44% in January. The 64% figure used here was arrived at by adding together each month’s rate over the year and dividing by 12.)

The average daily rate (ADR) for Morro Bay motels just for October was $127 in 2017, compared to $122 in 2016. As further comparison, the October ADR in Pismo Beach was $118.99, SLO $103.31, Paso Robles $103.68 and Cambria $125.08.

Trailer-RV parks reported total revenue of $2.3M and produced some $226,000. Vacation rentals, of which the City has a maximum limit of 250 that can legally operate in town, reported revenues of $4.2M and paid about $422,000. The total TOT receipts for 2016-17 were $3.3M and the TBID produced some $802,000.

Lodging businesses also collect 1% of a room night cost (for a total Morro Bay marketing tax of 4%) and remit that to a Tourism Marketing District or TMD that is countywide and focuses on marketing the area as a whole. Total TMD revenues from Morro Bay were $332,000 for FY 2016-17.

But with Hwy 1 through Big Sur now closed for a full year, due to landslides last winter and spring, one might expect to see a drop in motel revenues, but that’s not the case. And occupancy rates, though pretty flat over the past three years, are within a few percentage points, and gross receipts haven’t dropped much either.

Thus far in 2017-18, from July to October, motels listed $11.9M in receipts with some $1.19M in TOT, which is nearly the same as the numbers from the year before.

RV parks list $943,000 and $94,000 in taxes, with vacation rentals coming in at $2.1M and $214,000. The TMD has been paid $151,000 and the TBID collected some $360,000 from last July-October.

BN MB on map cover

By Neil Farrell

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