The Chamber Claims Responsibility

To the Editor: 

The Miami Beach Chamber of Commerce is responsible for the creation of the “Save Jobs & Lower Taxes” Political Action Committee.  The PAC is funded through contributions that start at $1.00.  The contributors are diverse – their livelihoods, genders, races, religions and ethnic backgrounds; they are woven into the fabric that makes Miami Beach.  Simply put, the contributors are united in their beliefs that tourism is the lifeline to their quality of life, indeed, their basic existence

The PAC was created to educate and enlighten the public, through print, radio, and cable television ads, about the 2-year renewal of the Miami Beach’s participation in the Interlocal Partnership (City of Miami & Miami-Dade County) with the Greater Miami Convention & Visitor Bureau.  The Miami Beach City Commission is scheduled to vote on the issue May 8th.  The Chamber is involved in this issue because it represents a community of business and residential interests, and its by-laws and mission statement mandate involvement in issues that are beneficial to our community.

The approximate 34 business leaders and residents who comprise the Chambers’ Board of Governors debated the issue for 90 minutes, and unanimously passed a resolution that incorporates a win-win compromise.  The resolution calls for the inter-local partners to seek and gain expertise by retaining a nationally recognized consultant to evaluate, over the next two years, the GMCVB, Interlocal Partners and the City’s performance and tourism promotion business model; and, during that time, preserve the sales and promotion of conventions and tourism.  This allows our elected officials and administration to exercise prudent fiscal responsibility, without risking the most important economic engine of Miami Beach and the region.

Any effort to dilute the funding or purpose of the Partnership at this time is counterproductive to the effort that sells Miami Beach as a destination for conventions, business and leisure travelers.  Moreover, on close review, the idea of a straw ballot or public referendum on this issue is inconsistent with prior actions, and works against the purpose of electing officials to lead on multi faceted issues such as this. The Chamber calls on our elected officials to lead their constituency and decide the issue of the GMCVB.  

What can the Chamber do for you today? 

Michael Milberg
Chairman of the Board
Miami Beach Chamber of Commerce

Goodbye GMCVB,  Hello PR Agency

Re: Opposition to Renewal of Contract with Greater Miami Convention and Visitor’s Bureau 

Dear SunPost: 

This letter is in support of Mayor David Dermer’s opposition to a renewal of the city’s contract with the Greater Miami Convention and Visitor’s Bureau.

While the Mayor’s opposition has focused on the fact that the contract with the Bureau, which has been in place for over fifteen years, has never been put out to bid, and should be, there are other important reasons as well that should not be overlooked.

The Bureau is a private agency that contracts with the City of Miami Beach to provide advertising and promotional services for our convention and tourism needs.  However, the Bureau does not exclusively, or even separately, promote the interests of Miami Beach or South Beach.  Instead, the Bureau promotes all of Miami-Dade County, and does so as “Greater Miami and the Beaches”. 

To many of us, this is a “mixed-message” of competing interests that inherently represents a conflict of interest for the Bureau and dilutes their effectiveness with respect to the tourism needs of Miami Beach and South Beach.  It also ignores the fact that Miami Beach and South Beach are the real “attractions” to tourists, and from a marketing standpoint, should be the “destination” that is featured. 

This issue of which destination should be featured, or promoted, is one of the major issues at the heart of the controversy over the Bureau. 

Who should be promoted?  Should it be Miami?  Greater Miami?  Greater Miami and the Beaches?  Or Miami Beach and South Beach?  And which is best for us?

 It’s no secret that the vast majority of our hotel, restaurant, and nightclub members, as well as our mayor, feel that it is Miami Beach and South Beach that should be promoted as the destination, and I suspect that many others on Miami Beach may feel the same way.

 The mediocre quality of the Bureau’s advertising and PR has also been a longstanding issue of concern with our members, and there were numerous complaints from others made during the marketing and branding meetings of the recent Tourism Task Force, as well as during meetings of the Nightlife Task Force regarding this.  Comments such as “not cutting edge”, “dull”, “boring”, and “not good enough for Miami Beach” were often heard.  Clearly better advertising and PR is called for.

 Lets look at some of the financial issues:

Over the last ten years the Bureau has received about one hundred and thirty million dollars in public funding, primarily from Miami-Dade County and Miami Beach.  During the last five years alone (1996 to 2000) this public funding has averaged about fifteen million dollars a year, with Miami Beach contributing about five million dollars each year from the Resort Taxes collected by our hotels, restaurants, nightclubs and bars. 

Of the fifteen million dollars the Bureau receives each year, only about five million actually goes into advertising; and not to advertise Miami Beach, but to advertise “greater Miami”.  The other two-thirds of the money the Bureau receives from Miami-Dade County and Miami Beach goes to pay the Bureau’s overhead.  This means that of the five million dollars Miami Beach gives the Bureau each year, only about one third of it, or one million six hundred thousand dollars, is used for advertising.  That’s not much bang for our buck.

Considering that only one third of our money is going to advertise all of “greater Miami”, including Miami Beach, and two thirds is going to pay Bureau overhead, many on Miami Beach feel that we would be better served by keeping all of our money here, and using it to exclusively promote tourism for Miami Beach and South Beach, such as the mayor is recommending.  This is what Key West did a decade ago, and their success has been legendary.

Another major issue is our seasonal economy.  Each year for the last seven years, regardless of annual increases in business, our hotels continue to experience a severe drop in revenue from winter to summer of 40 %.  Our restaurants also experience a severe winter to summer drop in revenue of 30 % while our nightclubs experience a drop of 24 %.  Note: our winter season is only four months long, which leaves us with eight months of depressed revenue.

 This seasonal drop in business is a major economic problem for our industry and our community.  However, it is one that I believe can be solved by proper advertising and promotion.  We have great weather year round, but unfortunately the Bureau has never promoted us as a year round destination. 

To me, this failure to address our need for year round business is the single most compelling reason for not renewing the Bureau’s contract.  By keeping our money here, and following the example of Key West, we have the opportunity to hire our own advertising and PR firms and to promote ourselves as a year round tourist destination.  If we do this, we can build a strong year round economy for South Beach and Miami Beach, which will benefit everyone. 

 There is also another issue, that of promoting conventions to fill our Miami Beach Convention Center.  Under the current contract, the Bureau also provides convention development services to the city, which we cannot afford to be without. Because of the lead time needed to develop major convention bookings, I believe that our convention development needs could remain with the Bureau, say at least for the next two years, and a reasonable budget could be provided to them for convention development, say perhaps of up to one million dollars a year. 

As large hotels are the primary beneficiaries of convention bookings, perhaps they should pay a commission to the Bureau on the rooms booked for conventions, such as they already do with travel agents.  These commissions could be used to supplement the Bureau’s convention development budget, without imposing a burden on Miami Beach taxpayers, or taking away from our leisure travel advertising dollars.

(Note: leisure travel is 85 % of our visitor mix; business travel, including convention business, is only 15 %).

 In making these proposals, it is not our purpose to diminish our prospects for convention business, nor I am sure is it the mayor’s.  It is, however, our intention to improve our prospects for leisure travel and year-round tourism; which many of us believe can only be done by hiring our own ad agency and PR firm.  We also believe that by making the Bureau more directly accountable for convention bookings, we can also improve our convention business.

There is one remaining issue, the issue of whether or not Miami Beach should contribute to the on-going promotion of “greater Miami” by continuing to give some money to the Bureau for that purpose.  I believe that such a contribution may be needed for “good will” reasons.  How much to give will need to be discussed.

 In closing, let me summarize our recommendations to the city:

First, do not renew the contract with the Bureau, but instead allow us to hire our own high quality ad agency and PR firms to promote Miami Beach and South Beach as a year-round tourist destination.

Second, continue to use the Bureau to promote the Miami Beach Convention Center and to develop its long-range convention bookings.

 Third, continue to make some contribution to the Bureau for the overall marketing of “greater Miami”.

 I believe that by hiring our own ad agency and PR firm to develop our leisure travel business, and continuing to fund the Bureau for convention development, plus contributing to them for the promotion of greater Miami, that we can achieve a balanced approach to our tourism needs that makes the best use of our resort tax dollars and gives us the best chance for success as a year-round tourism destination.  I think that this is the kind of change the mayor has in mind, and that we can all get behind.

As the mayor says “it’s time to put the interests of Miami Beach first”.

The mayor is right; it’s time for a change. 

Respectfully submitted,

David Kelsey
President of the South Beach Hotel and Restaurant Association

Mr. Ex Points Out A Mathematical Error