California Travel and Tourism Commission
Executive Committee
April 26, 2011
Sacramento, CA
Roll Call/Call to Order/Approval of Agenda/Approval of Minutes
Vice Chair Rusty Gregory, Mammoth Mountain Resorts, called the
meeting to order at 9:25 a.m. Roll was taken.
Those present were: Vice Chair Gregory; Vice Chair Mike Gallagher,
CityPASS, Inc.; CFO Kathy Turner, Enterprise Holdings; Commissioner
Cody Plott, Pebble Beach Corporation; Commissioner Mark Liberman,
LA INC. The Los Angeles Convention and Visitors Bureau; Commissioner
Joe D’Alessandro, San Francisco Travel Association; Doug Campbell,
Weintraub, Genshlea and Chediak; Shawn Kent, Weintrab Genshlea and
Chediak; CEO Caroline Beteta, CTTC; Vice President of Operations &
Industry Relations Karin Fish, CTTC; Matthew Sabbatini, CTTC; and
Amber Luiz, CTTC.
Motion by Commissioner Turner to approve the agenda. Second by
Commissioner Plott. Motion unanimously approved.
Motion by Vice Chair Gallagher to approve the February 2, 2011,
meeting minutes. Second by CFO Turner. Motion unanimously
approved.
Opening Remarks
Vice Chair Gregory welcomed the Committee to Sacramento and to the
beginning of the two-day Commission Meeting and California Tourism
Outlook Forum event. He reiterated the Vice Chair Platform established
when he assumed the position in January 2010, reminding the
Committee that the job of CTTC was to do for the industry what they
cannot do for themselves – and that the upcoming Outlook Forum
would be a great opportunity to reach the industry. Vice Chair Gregory
provided brief comments on business at Mammoth Mountain, saying
that he had seen business spend increase significantly above the
previous year and was significantly above 2008; however, in a weather-
dependent business like Mammoth Mountain, while snow volume is up,
the amount of visitors they saw was not as many as expected. Vice
Chair Gregory asked committee members to report out on their
respective businesses.
Commissioner Plott spoke about the upcoming Swallows Golf
Tournament and the Pebble Beach Food and Wine Festival. He said it
was shaping up to be one of the busiest weeks of the year. Additionally,
he said production and occupancy were both up at the resort.
Vice Chair Gallagher said that his business focused on leisure and long-
term travel, and that business continues to grow, especially in the online
arena. While CityPASSes can be purchased day-of, statistics show that
travelers want to buy their passes ahead of time – 26% of sales are
advance commitments. He stated that CityPASS had added new staff to
fulfill online needs.
Commissioner D’Alessandro announced that San Francisco had ended
last year at 80% occupancy (which is about as high as San Francisco
can go), and that they expect the rate to continue to go up. In the first
quarter of 2011, San Francisco was number four in occupancy of the top
markets at an average of $170 per night, with numbers back to what
they were in 2008. He gave an update on Pow Wow and announced
that exhibit space was sold out, and buyer numbers are up 17% over
2010. Lastly, Commissioner D’Alessandro spoke about the new lift being
added to the San Francisco Airport – flights from both Lufstansa and
Air France – which is an increase of 30%.
CFO Turner spoke about Enterprise’s recent purchase of Budget and
Avis, and that thanks to the new acquisitions, Enterprise Holdings had
its biggest month yet. Additionally, she spoke about the new efforts
being made in marketing and advertising campaigns. Lastly, CFO Turner
discussed the bills up for vote in the legislature that would have an
impact on the rental car industry.
Commissioner Liberman announced that L.A. had just added a new
Business Improvement District (BID), and that they would begin
collecting an extra $10 to $12 million in July. As for room occupancy
rates in Los Angeles, they saw a positive increase in the first quarter,
which could be attributed to recent activities such as the NBA All-Star
Game. Lastly, Commissioner Liberman announced new lift being added
by Asian airlines.
CEO Report
CEO Beteta gave the CEO report. She gave an overview of the schedule
of events and speakers for the upcoming California Travel Outlook
Forum, and announced expectations for 330 participants in the
conference and over 600 RSVPs to the Partners in Hospitality and
Tourism Legislative Reception. CEO Beteta gave the committee an
update on national issues, beginning with the Corporation for Travel
Promotion (CTP) current organizational priorities and meetings. She
said most of the focus was around the visa waiver issue and the search
for a CEO for CTP. Additionally, there had been significant attention
from the White House and Capitol Hill recently, which should serve as a
point of encouragement for the travel industry. From a California
standpoint, CEO Beteta said that no Business, Transportation and
Housing (BTH) Agency Secretary had been appointed yet, and that she
had recently spent time in the Governor’s office mediating an issue
between AEG and CHP regarding the Amgen Tour of California.
CEO Beteta spoke about the progress being made on the business plan
and her intention for it to be the pathway toward a successful
referendum in 2013. For this, she said, CTTC hired a public affairs firm,
Perry Communications, that would be an advocate for CTTC and help to
educate the industry and legislature on the importance of travel.
Financial Report
CFO Turner gave the financial report, touching on the Commission’s
assets and liabilities as of February 28, 2011, and 2010, cash and
investments and assessment and co-op receivables, which significantly
decreased. She took the committee through the statement of activities,
which included marketing program expenses that increased $4.8 million
over previous year.
Motion by Commissioner D’Alessandro to approve the financial
statements as of February 28, 2011. Second by Vice Chair Gallagher.
Motion unanimously approved.
CFO Turner gave a report on the Audit Committee recommendation to
continue to work with RINA accountancy corporation on the upcoming
audit. RINA was chosen by the Audit Committee out of four competitive
bids. The Audit Committee felt that because they were familiar with
CTTC, signing another contract with them would save time and staff
resources in the long run.
Motion by Commissioner Plott to approve the recommendation by the
Audit Committee to award RINA the audit contract for fiscal year 2011-
12. Second by Commissioner Liberman. Motion unanimously approved.
CFO Turner reviewed the operational costs from increased
infrastructure since February, announcing a reduction in the actual
spending of the operations budget by over $500,000 in three years – a
6% reduction from the approved budget. CEO Beteta requested
approval from the Executive Committee to add additional staff salaries
to the budget to compensate for a growing program, specifically in
marketing, media and online. Commissioner Plott asked about the
percentage of benefits versus salaries and asked that there be a change
in reporting on operations to include staff benefits. He said that CTTC
should take the position of being proactive and tracking benefits versus
salaries.
Motion by Commissioner D’Alessandro to approve the 2011-12
Operations budget. Second by Vice Chair Gallagher. Motion
unanimously approved.
Matthew Sabbatini asked the Committee to consider a foreign exchange
policy that would allow staff to purchase foreign currency on a month-
to-month basis to save money on exchange rates and better map to
approved budgets that are based on U.S. currency. The current policy is
to exchange currency at the time of payment, not before, when rates
might be lower.
Motion by Commissioner Liberman to approve a foreign exchange
policy that allows CTTC to buy foreign currency as needed. Second by
Commissioner Plott. Motion not unanimously approved. Vice Chair
Gregory asked the Committee to wait until July to approve the policy,
after staff had time to track the monetary difference between the
current policy and the new policy. He also asked that Sabbatini meet
separately with members of the Committee to discuss further.
Sabbatini updated the committee on the potential CTTC office move
and the negotiated $387,905 Matt please verify this number is correct
security deposit required by the management of the new building,
which would cover tenant improvements should the 2013 referendum
not pass. CTTC has been given the option of either putting the cash
deposit down in a separate bank account, accessible by the new
landlord, but managed by CTTC, or submitting a letter of credit. Staff
recommends putting the cash deposit down in order to earn interest.
Commissioner Plott explained that a letter of credit might be more
beneficial, as the points lost on the credit score would be minimal, and
CTTC would be able to retain the cash in the bank should an emergency
happen.
Motion by Vice Chair Gallagher to enter into a lease agreement and
submit a letter of credit in lieu of a cash deposit. Second by
Commissioner D’Alessandro. Motion unanimously approved.
Public Comment
Vice Chair Gregory asked for public comment. There was none.
Adjournment
The meeting was adjourned at 10:45 a.m. for a closed session to discuss
legal issues. CFO Turner and Amber Luiz left the room.