PA Dutch CVB Member Briefing

1. PA Dutch CVB Member Briefing September 29, 2011 A special thanks to our sponsors: and to Rock Ford Plantation for hosting this meeting

2. Debbie Stremmel Allegra Print & Imaging -Annual Reception Sponsor-

3. Today’s Agenda • Peer-to-Peer Presentation:“Creating a Winning Guest Relations Program!” • Impact of Hotel Tax on Convention Center & CVB Reviewed • State of the Industry • Holiday Marketing Plan

4. Peer-to-Peer Presentation: Creating a Winning Guest Relations Program!

5. Steve BallietGeneral ManagerHershey's Chocolate World, Hershey

6. Elwood MartinPresidentShady Maple Smorgasbord

7. Stephen SikkingManaging Partner Sales & Marketing, Best Western PREMIER Eden Resort & Suites andCo-General Partner, Fulton Steamboat Inn

8. Impact of Hotel Tax on Convention Center & CVB Reviewed

10. Difference between Convention Center revenues and expenses is to be made up by LCCCA’s portion of room tax. Lancaster County has a 5% levy: Used for tourism mktg. CVB receives 100%

11. The bottom line: it’s successful! • PA Dutch CVB sales team has marketed & sold the Convention Center since 2007 • Ongoing strategizing with partners • LCCCA • Penn Square Partners • Interstate Hotels & Resorts • Many successes despite lack of presale

12. The Debt PictureCan we afford to lose this revenue stream? • State funding also zeroed out • Partners working together to forestall this loss of revenue • Loss of $$s would limit marketing efforts

13. How are we addressing this challenge? • Since 2007 have added to fund balance • Meeting with Wells Fargo • Cut costs: • Nonperforming programs cut • Department budgets trimmed • Incumbent advertising agency released • Positions eliminated • Existing wages curtailed

14. How are we addressing this challenge? • Created new programs for new revenue • $1,100,000 in Media Co-ops • Completely offset state grant loss • Enabled us to increase total media buy from $790,000 in 2006 to $2.6 million+ in 2011, and add D.C. and Baltimore markets in 2009. • Added sports and corporate sales positions • Met with Wells Fargo • $250,000 website upgrade + app to be unveiled shortly

15. Hotel Tax Performance • Notion that the hotel tax is "not performing" is a misnomer • Based on bond consultants’ original financial projections • Economic meltdown of 2008-09 was an unforeseen threat • 2009 hotel tax performance was abysmal, but 2010 was strong. • Continuing economic uncertainty + troubling weather in 2011 Still, the tax has performed much better than in similar destinations: • Branson’s occupancy and room revenue is down 6.4% and 8.9% respectively • Williamsburg is experiencing similar declines with YTD occupancy down 5.4% and revenue down 5.5%. • Even the shore points in MD and NJ are flat versus last year.

16. The degree of revenue required to pay off the Convention Center property debt is related to the future performance of the hotel tax.

17. The more hotel tax we generate, the more resources we can deploy toward our overall marketing effort.

18. State of the Industry

19. Nationally… • Economists are warning of the risk of renewed recession • Slowing GDP growth • Dismal job and payroll numbers • Constrained Spending • U.S. consumers increased spending in quick service restaurants during Q2 2011, but otherwise reduced their dining spend compared to Q2 2010. • Overall entertainment spending also decreased, including a 5.3% drop in spending on theme parks 4.7% on performing arts and cinemas. • Economy is now expected to expand just 1.7 percent this year and 2.4 percent in 2012 However… • Declining earnings • Low consumer confidence

20. Despite the gloomy outlook… • Consumer spending jumped 0.5% in July from the prior month and 2.3 percent over July 2010, led by automobile purchases • Hotel industry's ongoing recovery appears undeterred • Leisure travel continues to recover slowly • 56% of U.S. adults expect to take at least one leisure trip between late July and January 2012, up 3% from last July. • International travel to the U.S. during June was up 9% as compared with June 2010 • Spending (January- June) increased 12% percent over last year.

21. Lancaster County… • Lancaster County’s hotel industry continues to grow albeit at a slightly slower pace than last year • Year-to-date occupancy is up 7% compared to 2010 (54.3% vs. 50.7%) • Average daily rate (ADR) is virtually flat at $91.76 (ADR in 2008 was $93.03) • Room supply growth has stopped with very few net rooms being added since 2009 • Room demand has increased 6.4% with almost 57,000 more room nights generated • Revenue is up 6.1% vs. last year compared to 8.5% from 2009 to 2010

22. Holiday Marketing Plan

23. A Lancaster County Halloween • Many attractions still operating in September and October • We must maximize all revenue opportunities to help mitigate a soft season • Establish another off season brand similar to the Lancaster County Christmas

24. October 4 CouponClipper.com • consumer e-blast: • Northern NJ 6,900 • Philadelphia 25,500 • Baltimore 6,800 • Northern VA 8,600 • Total: 47,800

26. A Lancaster County Christmas • Continue to build upon this shoulder season brand that we established last year • “The Gift of Lights at Elizabeth Farms” will be a centerpiece attraction that we will promote heavily • Let us know about your events – or others’ -- so that we can build product density

30. Tactics • Halloween • Use of TV, October 10-30, with a focus on attractions that are scary as well as family based… presented separately • Christmas • Use of TV in November and December with a focus on shopping and attractions • Both campaigns will… • Include an investment of approximately $115,000 in electronic media to continue the brand building effort • Continue use of :90 spots (LCOs) as well as :30 spots • Invite media co-ops with 50/50 funding • Focus on the HLLY & Philadelphia markets for a four week flight • Be supported by e-tools as well as PR and social media vehicles to ensure an effective campaign

31. Thank you for attending and THANK YOU for your membership!