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COMMISSION

AGENDA MEMORANDUM

Item No.

ACTION ITEM

Date of Meeting

January 8, 2019

DATE: December 13, 2018

TO: Stephen P. Metruck, Executive Director

FROM: Dave McFadden, Managing Director, Economic Development Division

Ron Peck, Director, Tourism Development Department

SUBJECT: Tourism CAT III Joint Marketing Agreement with Visit Seattle

Total contract request:

$600,000

ACTION REQUESTED

Request Commission authorization for the Executive Director to execute a joint marketing

agreement with Visit Seattle, a non-profit agency, to promote international tourism to Seattle

and Washington state in China, Japan, Korea, France, Germany, Australia/New Zealand, and the

United Kingdom/Ireland for one year with three additional one year options at the rate of

$150,000 per year for a total not to exceed $600,000 and that the commission determine a

competitive process is not appropriate or cost effective and exempt this contract from a

competitive process consistent with RCW 53.19.020.

EXECUTIVE SUMMARY

Prior to 2011, Visit Seattle, the Port of Seattle and the Washington State Office of Tourism

worked in partnership to promote our destination. When the state tourism office closed in

2011, Visit Seattle and the Port committed to further collaboration to promote tourism to

Seattle and Washington State in key international markets. During the previous eight years,

Visit Seattle was the only agency responsible for competitively marketing Seattle and King

County as a destination in selected research based international countries with visitor growth

potential. This contract will support and provide continuity for the Port’s international tourism

program which began over 33 years ago.

Most recently, staff conducted market research and confirmed Visit Seattle continues to be the

only agency with the funding and capability to market promotion services to the Port. At this

time, no other destination marketing organization (DMO) has the staffing, breadth of members

or scope that will allow us to work in partnership to promote international tourists to this area.

Other DMOs are relatively small and are focused on promoting visitors to their local area but do

not have the budget or staff to support overseas tourism efforts. It is the only organization

that has the funds and capability to provide international tourism marketing, sales and

promotion services in concert with the Port. Visit Seattle provides unique skills and knowledge

required by this agreement such as knowledge of international markets, which complements

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and augments that which the Port possesses. The Port executed a sole source waiver (October

14, 2015) for a previous scope of services similar to this request.

Both organizations have initiated projects that have engaged airlines, fellow destination

marketing organizations (DMO’s), lodging, restaurants and attractions around the state who

have contributed substantially to the programs. In fact, the organizations combined in-kind

contributions will exceed $1 million in 2018. This level of involvement from colleagues across

the state demonstrates considerable support for both the Port of Seattle’s and Visit Seattle’s

international tourism promotional efforts.

Beginning January 1, 2019, Visit Seattle will market and promote Seattle and Washington State

in the United Kingdom (UK) and Ireland. Black Diamond, a company that provides

representation services for several US destinations in the UK and Ireland, will serve as Visit

Seattle’s agency of record. This program will be in addition to existing Visit Seattle efforts in

China, Japan, South Korea, Germany, France, and Australia/New Zealand, where their

international tourism team works with in-market representation agencies based in each

country.

The Port of Seattle’s Tourism Development team will remain active (including cruise-focused

representation) in the UK and selected overseas markets that have been identified as having

continued potential for cruise and stay travel to Washington state and cruising to Alaska. Our

efforts will focus on increasing the number of international cruise passengers and developing

pre and post cruise extension programs. In 2019, the Port of Seattle expects to welcome 1.2

million cruise passengers traveling between Seattle and Alaska with international travelers

representing 10% of the market.

The agreement will incorporate a cooperative arrangement and commitment to efficient and

effective collaboration. The Port of Seattle is committed to encouraging international cruise

travelers to lengthen their stay and explore our destination as well as working in a collaborative

manner with Visit Seattle to effectively and efficiently promote and increase overall

international visitation and expenditures in the Pacific Northwest.

JUSTIFICATION

In alignment with Century Agenda Strategy 2: Advance this region as leading tourism

destination and business gateway.

Objectives:

6. Make Seattle-Tacoma International Airport the west coast “Gateway of Choice for

international travel.

7. Double the number of international flights and destinations.

The agreement and project is in alignment with the POS Regional Initiative to:

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 Make Washington a preferred destination for international travelers from countries

which we have direct flights.

Scope of Work

A. Strategy and Communications

The Port and Visit Seattle agree to work cooperatively and jointly to market Seattle and

Washington State as a destination for international travelers. The Port and Visit Seattle

agree to work and coordinate efforts in order to achieve maximum possible benefits from

the respective resources invested in this tourism promotion program. The entities are

collectively referred to as the "Partnership."

Visit Seattle and the Port will conduct annual and mid-year strategy meetings to discuss

marketing initiatives, special projects and outbound travel plans. Meetings will be held on

mutually agreeable dates.

Primary contacts from each partner organization will establish a transparent process of

communication and collaboration. Briefing meetings will be held monthly to ensure all

potential collaborative actions are addressed.

Visit Seattle will provide monthly executive summaries and marketing activity reports for

Japan, China, Korea, Germany, France, Australia/New Zealand and UK/Ireland.

B. Overseas Representation

Visit Seattle will manage and execute activities as it relates to the following markets: Japan,

China, Korea, Germany, France and Australia/New Zealand and UK/Ireland. The 2019

objectives will be to increase generated media coverage a minimum of five percent, and

increase the tour products offered in the markets by a minimum of five percent. Visit

Seattle will interview, hire and manage the in-market representatives for Japan, China,

Korea, Germany, France and Australia/New Zealand and UK/Ireland. This includes full

payment of in-market rep fees. All communication and collaboration between these in-

market reps and destination is led by Visit Seattle.

The Port will have the ability to utilize representation firms in key markets (Japan, China,

Korea, Germany, France and Australia/New Zealand) for additional efforts such as

tradeshows and in-market projects as they determine, at their own expense and with prior

consultation with Visit Seattle.

C. Inbound/Outbound Activity

Visit Seattle will maintain the inbound hosting and outbound travel calendar which will be

shared real-time with the Port. Specific itineraries developed for inbound familiarization

trips from all markets will available on a shared folder.

The Port has the opportunity to join Visit Seattle familiarization trips as desired with prior

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notice and Visit Seattle has the opportunity to join Port of Seattle familiarization trips as

desired with prior notice.

The Port will serve as the lead partner in Alaska cruises from Seattle to Alaska, cruise and

stay focused initiatives and all cruise-related inbound familiarization trips from our target

markets.

The Port and Visit Seattle logos will be included in outbound sales PowerPoint presentations

and communications with mutually agreeable content. Both logos also will be placed on all

inbound familiarization trip itineraries.

D. Trade Show Participation

Visit Seattle will serve as administrative manager for selected partnership supported

international and domestic tradeshows and sales trips or missions, which could include but

are not limited to WTM. The Port will serve as administrative manager for Cruise 360. Each

partner will pay for their own travel expenses.

It is agreed that the following specific projects will be included in the 2019 Scope of Work:

 Collaboration and participation in the Aer Lingus / Ireland Travel Trade Road Show in

February 2019. The intent of the program will be to educate, inform and raise the

awareness to the Irish travel trade and media about:

 Seattle/Washington state as great destinations

 Seattle to Alaska cruising

 Cruise and Stay opportunities in the PNW

 Promotion and features / benefits of Aer Lingus direct air service

 Develop and place ads in travel trade publications and/or online mediums in China to

accomplish the following:

o Educate and inform China travel trade and travel media about:

 Seattle/Washington state as great destinations

 Seattle to Alaska cruising

 Cruise and Stay opportunities in the PNW

 Promotion of direct China – Seattle air service

 Develop and place ads in travel trade publications and/or online mediums in Australia to

accomplish the following:

o Educate and inform Australia travel trade and travel media about:

 Seattle/Washington state as great destinations

 Seattle to Alaska cruising

 Cruise and Stay opportunities in the PNW

 Work collaboratively to ensure that the China Travel Summit in September 2019 is

successful in increasing tourism travel from China to Seattle and the Pacific Northwest.

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o Port of Seattle to be identified as a co-sponsor

ALTERNATIVES AND IMPLICATIONS CONSIDERED

Alternative 1) -Do not propose an agreement with Visit Seattle.

Pros:

• Reduces specific budget request by up to $150,000 a year, which could be used for other

types of tourism promotion.

Cons:

• The PNW, Washington and Seattle recognized as a “hot” destination in the international

tourism marketplace. Not promoting and marketing Seattle will do harm to the destination’s

momentum and ability to increase the number and economic value of the international

travelers.

• It would eliminate the possibility of leveraging the good will and successful promotions

over the past few years with Visit Seattle, erode the support of tour operators selling the

PNW and limit consumer awareness for our destination.

• It would erode the Port’s leading role as a tourism advocate and economic asset for our

region.

Alternative 2) - Request Authorization for a continued Visit Seattle / Port of Seattle

international tourism agreement for up to four years at an estimated cost not to exceed

$600,000

Pros:

• This new agreement will reinforce the Port of Seattle’s commitment to increasing the

economic value and numbers of international travelers experiencing Seattle and Washington

State in concert with Visit Seattle.

• This agreement will maintain and grow the momentum in these markets and provide

funding for targeted promotions, media familiarization programs and trade familiarization

programs. It will provide a platform for pro-active planning to grow international visitation

to Seattle and Washington State.

This is the recommended alternative.

FINANCIAL IMPLICATIONS

Cost Estimate/Authorization Summary

Capital

Expense

Total

COST ESTIMATE

Original estimate

$600,000

AUTHORIZATION

Previous authorizations

Current request for authorization

Total authorizations, including this request

COMMISSION AGENDA – Action Item No. 6c

Meeting Date: January 8, 2019

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Remaining amount to be authorized

Annual Budget Status and Source of Funds

Annual budget request is for $150,000. The source of funds is the King County tax levy.

Financial Analysis and Summary

Project cost for analysis

Business Unit (BU)

EDD

Effect on business performance

(NOI after depreciation)

IRR/NPV (if relevant)

CPE Impact

ATTACHMENTS TO THIS BRIEFING

None

PREVIOUS COMMISSION ACTIONS OR BRIEFINGS

November 10, 2015 – ACTION:

The commission gave authorization for the Chief Executive Officer to execute a contract with

Visit Seattle to promote tourism travel to Seattle and Washington State, for a cost not to

exceed $640,000 over four years, including a one year base and three one-year options.