July 21, 2024
Vail is considering a restructuring of its economic development department to increase, grow and strategically align its marketing, tourism and business development efforts.
Chris Dillmann/Vail Daily archive

In a town driven largely by tourism, Vail is looking to reorganize how it runs its economic development and marketing efforts.

“The VLMD (Vail Local Marketing District) has been around since 1999 and we’ve gone through a ton of changes along the way,” said Mia Vlaar, the town’s economic development director.

Now, the town is looking to change its structure and “transform the work we do in a really strategic and intentional and aligned ‘Destination Marketing Organization,’” Vlaar added.

The Vail Town Council discussed transitioning to this new “Destination Marketing Organization” structure at its Tuesday, July 2, meeting. The new structure was proposed based on an organizational review conducted by SMG Consulting.

“As the industry dynamics have changed and the demands on the organization have increased, the organizational structure has remained the same, creating challenges to the organization’s expectations regarding current and future needs from the tourism industry, community, and town,” reads the executive summary of the consultant’s 25-page report.

It’s something Vlaar said “all our counterparts in other resorts have in place to do the tourism and marketing function that we do, along with visitor experience — so, welcome centers and that type of thing — and some type of business development to ensure the mix of what we have and what we do in Vail is best for the community and the guest.”

In changing structure, the report identifies that the new marketing organization could increase efficiency and competitiveness, maximize efforts and better meet community and stewardship needs.

How Vail’s economic development structure works now

A screenshot of the presentation made to Vail Town Council on Tuesday, July 2 showing the current reporting and organizational structure for its economic development department, which then reports to the town manager and Town Council.
Courtesy Photo

Currently, marketing, economic development and tourism efforts are coordinated between the Vail Local Marketing District and the town’s economic development department.

The Vail Town Council also sits as the Vail Local Marketing District board, approving its annual operating plan and budget. However, it is the Vail Local Marketing District Advisory Council that manages the operating plan and budget. Advisory council members are appointed by the Town Council and comprised of local industry experts. The town’s economic development department reports to the deputy town manager, the town manager, and subsequently, the Town Council.

Under the economic development director are various departments including marketing and communications, special events, welcome centers and business development. These are both internally and externally staffed.

The marketing district is funded through a 1.4% marketing and promotions tax — charged on overnight stays under 30 days in Vail — as well as the town’s general fund. Its annual budget has historically been around $9 million. However, Vlaar said this has gradually increased with expenditures since 2020. Last month, the district’s 2024 budget was increased to $12 million.

How the marketing district came to be and evolved

When Vail voters passed this 1.4% marketing and promotions tax in 1999, it created the town’s marketing district.

“The idea was to provide a specific marketing effort for summer … We really didn’t do anything in summer, we had very low occupancies in summer and it was really designed to bring that summer marketing into place,” Vlaar said.

Management of the marketing district passed from the Vail Valley partnership to the town in 2006. In 2007, the district partnered with Vail Resorts to create “Vail.com” and direct its marketing efforts — with the town driving summer efforts and the corporation driving winter marketing.

“We started to realize over time with the evolution of Vail Resorts that that wasn’t really enough anymore, we really needed a presence for the entire community on a year-round basis,” Vlaar said.

“Over time, everything evolved and it became clear we needed to do a better job on our own,” she later added.

So, in 2020, recognizing this need for more year-round marketing efforts, the marketing district and town created its own identity with DiscoverVail.com.

“Vail Resorts was really focused on the sales of its Epic Pass and we were focused on creating loyalty to our community and to our destination. So, it was time for change,” Vlaar said, adding that they had “full support of Vail Resorts at that time.”

The marketing district has always maintained its partnership with the corporation, with Vail Resorts executives sitting on the advisory council as well as continued collaboration on events and more.

This evolution of the district and organization happened “organically” over time, but it has also led to operational inefficiencies and unintended complexity, Vlaar reported.

Reorganizing into a “Destination Marketing Organization” is the next logical evolution.

What a Destination Marketing Organization will fix

Becoming a Destination Marketing Organization would combine all the efforts of the economic development department more thoughtfully and strategically rather than the organic progression that has occurred, Vlaar added.

Carl Ribaudo, with SMG Consulting, told the Vail Town Council that in addition to providing better efficiency, clarity and direction, it would improve decision-making and Vail’s competitiveness with other destinations as well as help the town grow its efforts in the future.

Similar to the economic development department, the Destination Marketing Organization would be tasked with bringing guests to Vail, overseeing guest experience and supporting local business development.

A screenshot of the presentation made to Vail Town Council on Tuesday, July 2 showing the proposed reporting and organizational structure as a new Destination Marketing Organization.
Courtesy Photo

Structurally and logistically, this would mean reorganizing how things are currently run, primarily creating a more strategic connection with the Vail Local Marketing District Advisory Council and the economic development department. Very little would shift with roles and responsibilities, but the new structure would add flexibility for the department to evolve as it evaluates needs in the future, Vlaar said.

As part of this new structure, it is proposed that the town would eliminate its Committee on Special Events and create a new committee for community input. The idea, Ribaudo said would be to have a group that meets based on the need to provide input on everything under Destination Vail, not just special events.

Speaking the theory into action, Ribaudo said the short-term would include formalizing the name change — from the economic development department to Discover Vail: Tourism and Economic Development — moving toward a new reporting structure, maintaining current special events, programs and activities as well as creating a new strategic plan for the organization.

With the Town Council supportive of moving to this structure, it’s expected that town staff will be back with a clearer picture of what restructuring and reorganizing will look like including what ordinances are required to do so.

Increasing (and expanding) marketing funding

While a new strategic plan will help drive the longer-range vision for marketing, tourism and business development efforts in Vail, the town may also have to make funding decisions for the new organization.

In the SMG report sent to the Town Council, one potential consideration offered is to “increase the tourism promotion dollars resulting from lodging tax collections and reduce the amount of funding from the Town of Vail general fund.”

“This shift over time will create a closer alignment between lodging tax collections and their intended purpose for marketing and promotion. At the same time, retaining shifting general fund dollars (traditionally allocated to special events) back to the general fund will increase the funds available for community quality-of-life investments and illustrate how tourism delivers more significant benefits to the community,” it adds.

However, the Town Council also discussed another potential use for this tax revenue based on a Colorado bill passed in 2022. This bill expanded what revenue from marketing and promotion taxes could be spent on.

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“There’s lots of opportunities,” said Town Attorney Matt Mire. “It really expanded the use of the funds so we could make a lot of things fit.”

In 2022, after the bill passed, Vail’s marketing district and council reaffirmed that the town’s 1.4% tax should remain slated for its marketing and promotions budget. However, on Tuesday, Council member Sam Biszantz suggested that taking another look at this tax — and possibly asking voters to increase it — could be “the ticket” to funding capital projects in the civic area and other town needs.

Vlaar commented that taking another look is “a possibility for sure.”


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