Item 12

Tourism & Events Department 7506 E Indian School Rd Scottsdale, AZ 85251 480-312-7177 www.ScottsdaleAz.gov

To: David Scholefield, Chairperson Tourism Development Commission

From: Steve Geiogamah, Tourism Development Manager

Date: April 19, 2016

Subject: 2017 Off-Road Expo Event Funding Proposal

The 2017 Off Road Expo Event Funding proposal is attached for your review. City staff has evaluated the proposal to identify the potential benefits of the proposal to the City and the local tourism industry.

The two day March off road expo will take place at WestWorld and will feature 325 off-road exhibitors. The 17th year expo is held annually in October in Pomona California and attracts 69,000 attendees. The event will also include additional off-road ancillary experiences.

Proposal The proposal listing the uses for the $75,000 investment is attached. Additional information and the Artigue Consultant review is also included in the packet.

Funding Availability & Potential Options This is the first year the event has requested event development funds. There are currently bed tax event support funds available in the FY2015/16 bed tax budget for new event development. Pending TDC discussion, the following are options for consideration:

1) Recommend new event development funding for all or part of the requested amount of $75,000. 2) Direct staff to further evaluate the event’s potential, event development partnership opportunities and the resulting return on investment for potential event funding for FY2016/2017. 3) Take no action or additional event evaluation.

Alternatively, if there are additional questions or information needed for further consideration, staff will proceed accordingly.

Item 12a

2017 OFF-ROAD EXPO Economic and Media Summary Report

Event Overview

The Off-Road Expo (ORE) is planning to produce a multi-dimensional expo that brings together a wide collection of off-road companies, parts and accessories, equipment, gear materials and industry experts for two days in Scottsdale, March 18 and 19, 2017 at Westworld. This Expo is in its 17th year and is expanding after being held for many years at the Pomona Fair Grounds. From off-road racing to rock crawling, trail riding and sand sports to motorcycles and ATVs, camping and adventure travel, the ORE provides the opportunity for outdoor and off-road enthusiasts to lean from experts and from one another. More than 300 exhibitors and tens of thousands of attendees have previously participated in this high-energy expo event.

Historically, the Off-Road Expo audience attracts a passionate group of active and “adventurous” consumers who want to learn and further engage in their outdoor hobby. Half of past ORE attendees are 25-44 with average household income of $153,000. One-third says they are planning to spend more than $500 at the next ORE expo.

As there was not a lot of background information in the ORE proposal, answers to the following questions will be necessary in knowing how much – or if – funding should be granted.

Pertinent Questions

1. Who are the principals behind the ORE property and what other special events (if any) do they produce? A corporate website or collateral materials would help in our research and understanding. 2. ORE organizers estimate that 5,000 are expected to attend the Scottsdale Expo, based on data from the Pomona Expo but that may be unrealistic given that the California attendance was built up over 15+ years 3. Which feeder cities are most likely to provide the core visitors to the Expo and will there be marketing efforts targeted into those cities? 4. Who are the other event sponsors and what will be their contribution to the event; cash and/or in-kind? 5. As “Stay n’ Play” packages are mentioned in their proposal, what do these look like and which Scottsdale partnering hotels are participating? 6. The proposal indicates that marketing for the March ’17 Expos will begin a year out but there is no mention (or plan) of what is underway. The TDC should have the opportunity

Item 12a Off-Road Expo Analysis Page Three

to review the comprehensive marketing plan as they are making their decsion to fund this special event. 7. Related, there is mention of 24 million media impressions and 67,500 “media pieces” (not certain what that means) that will bring Scottsdale national media attention but there is no detail of how that audience reach will be accomplished. In other words, what are the media channels? 8. Is there a philanthropic component to the event with a local charity receiving monies? 9. Finally, how would the City of Scottsdale’s funding be utilized, specifically? 10. Are media relations and the publicity campaign being handled by the event organizers or an outside PR firm?

General Assumptions

 This Expo will appeal primarily to a niche audience that is made up of people who have either participated in off-roading activities, or have family or friends that do  From what has been shared in the event proposal, most all of the exposure for Scottsdale will come web marketing (through a dedicated micro site), database marketing and B2B cultivation  Other additional and strategic marketing efforts will be necessary to attract out-of-market attendees (visitors), such as paid media and ongoing PR efforts  The EXPO dates fall right in the middle of Spring Training when rooms are in demand and sometimes less available to other visitors  Of those expected to attend, only a small minority will likely be from outside Maricopa County  Not all of the attendees will stay in Scottsdale hotels as some will opt for Phoenix lodging or stay with friends, underscored by the fact that the organizers are only predicting 900 total room nights

Economic Impact

While there are other, non-quantitative criteria for determining the benefits of supporting the Off Road Expo, direct and indirect economic impact is certainly one important factor.

The promoters have predicted $4, 155,000 in direct and indirect economic impact, based largely on 5,000 visitors spending a total of $250 while in the Valley and then using a economic multiplier of three (3). This computation is questionable at best as the number of visitors is likely too high and yet the daily spend may be too low ($250 over 2 or 3 days!). A more realistic predictor of the economic impact for this first-year event would be to look at what happened in Pomona in the first year or two of attendance and spending. Item 12a Off-Road Expo Analysis Page Three

Media Impact

Unlike many of the special events (e.g. – Schwab Cup) that take place at Westworld, there will be no television broadcast of the Off Road Expo. Therefore the event will not “reach “the non- attending consumer that, through their exposure to Scottsdale, may one day turn into a visitor. Said differently, there will be no “postcards” sent from the Scottsdale to cold-weather cities around the country. This is of no fault of the promoters as expos, in and of themselves, do not provide for TV viewership.

Hopefully, there will be some local pre-event and in-event media coverage that brings residents from other parts of the Valley to Scottsdale to attend the Expo and then maybe enjoy a meal or shopping while there.

Summary

As with most first-year special events, it is difficult to predict what their exact economic and media impact will be. However, there are other factors that help in measuring the value to Scottsdale, namely the six economic and cultural “drivers” that have been established by the Scottsdale CVB. Unfortunately, the ORE only hits one of them and that is Sports and Recreation (they claim the Western category but in our opinion this is not a western event in the way that the definition was originally intended).

All that said, there is some benefit to the City of Scottsdale for hosting such an event. Namely, the “introduction” of the city to hundreds/thousands of new visitors that may return or tell a friend. Weekend news coverage and online post coverage may also become a good promotional tool for the Scottsdale CVB.

In summary, there are many questions about how this visiting expo event will positively impact Scottsdale tourism, including whether or not the organizers will actually meet the 2-to-1 marketing expenditure condition to promote the event and its host city.

Therefore, it is recommended that the City of Scottsdale’s Tourism Development Council consider funding the Off Road Expo at a level less than what was requested.

Respectfully submitted: The Artigue Agency LLC

Item 12b

The Off­Road Expo New Event Development Funding Program

1. Identify the name, date, location of your event and host hotel if applicable along with the proposed sponsorship request.

The Off­Road Expo (ORE) Saturday, March 18 and 19, 2017 WestWorld of Scottsdale Requesting a $75,000 Funding Program

2. Describe the event, participants, attendees and how you will provide qualitative and quantitative information regarding event attendees and participants.

The Off­Road Expo (ORE) offers the greatest collection of off­road companies, parts, equipment, gear and experts ever assembled in America. Entering its 17th year in 2016, the ORE held in Pomona, ​ ​ California each October continues to grow. From off­road racing to rock crawling, trail riding to sand sports, to motorcycles and ATVs, to camping and adventure travel, the ORE provides the unique opportunity to meet and learn from the most knowledgeable experts in the off­road industry. The off­road nation comes together at the ORE with more than 325 exhibitors and 69,000 attendees each year.

The ORE audience represents the most passionate group of enthusiasts in the off­roading industry. They are an active and adventurous market whose passions are inspired by the outdoors and the thrill of off­roading. Attendee Demographics: ● Average Household Income: $153,000 ● Ages 25­44: 47% ● Married: 45% ● Plan to spend over $500 at the expo: 34% ● Own at least one off­road vehicle: 97% ● Own an ATV or UTV: 37% ● Own a 4­wheel drive truck: 36% Item 12b

3. Include all levels of sponsorships in your proposal including the level you are requesting for the City of Scottsdale. ​

The ORE offers a handful of basic sponsorship packages to vendors looking to connect with their targeted audience through experiential marketing. All other sponsorship packages are customized to meet the individual needs or requests of the partner. We see the city of Scottsdale as being one of our primary partners and title sponsor. The city of Scottsdale will be included in all marketing and outreach messaging (included but not limited to): national and local TV/radio interviews and promotions, press conferences, the ORE website, e­mail campaigns, social media promotions and print advertising. Our request for $75,000 will be be recouped in the outlined national platform of media exposure, our partnerships with vendors and local tourism boards and CVBs, and our thousands of enthusiast attendees who will return to visit and partake in off­roading activities in the Scottsdale area.

4. Describe how the event will contribute to the Scottsdale CVB branding efforts as well as provide exposure nationally, internationally and/or outside Maricopa County for Scottsdale’s attractiveness as a destination to our target upscale resort visitor.

The ORE’s marketing campaign and PR campaign garners in excess of 24 million media impressions and 67,500 media pieces and insertions. With Scottsdale as our primary partner and local and national exposure emphasizing that the event is being held in Scottsdale, we believe we can greatly increase the propensity to travel to your area.

5. Describe how the event will stimulate the fundamental decision to travel and visit Scottsdale and generate room nights as well as enhance the length of stay.

Our ORE marketing campaign begins one year before the event and runs through the event and the duration of that year. Because the ORE is an off­roading event it attracts thousands of enthusiasts from around the state and neighboring states. These enthusiasts are likely to return and partake in outdoor activities in Scottsdale as the city offers an ideal environment for such hobbies. The ORE also entices B2C companies to exhibit at the Item 12b

event and experience all Scottsdale has to offer. In addition to leveraging our databases of off­roading enthusiasts and strong relationships with B2C companies we would like to create a microsite on our website that highlights some of the key tourist attractions in Scottsdale. With this microsite we would like to offer the City of Scottsdale display space at the Expo to promote local tourist attractions specific to off­road enthusiasts and offer discounts, etc. to attendees.

6. Outline how evidence of room nights in Scottsdale hotels as a result of the event will be provided.

The ORE along with our exhibitors and attendees secured room nights at several of the partnered and preferred hotels around the WestWorld Conference Center in 2017 at the Scottsdale Off­Road Expo. We will ​ ​ require each hotel to report number of room nights associated with the Expo within 30 days following the event. That reporting will be available to the City of Scottsdale as well.

7. Events eligible for consideration should fit one or more of these drivers in order to be considered: Art and Culture, Culinary, Golf, Sports and Recreation and Western.

The ORE falls under both the Sports and Recreation and Western categories. With a vast majority of the country's best off­roading destinations out west the ORE seeks the best location to host this annual event. Falling in line with the Scottsdale CVB’s mission to “stay and play,” the ORE will attract thousands of outdoor enthusiasts to follow suit. With an array of activities in Scottsdale’s Sonoran Desert from off­roading by Jeep or ATV to exploring the high­tech way with a night­vision Hummer tour the ORE attendees will be encouraged to lengthen their visit in Scottsdale.

8. Include a detailed itemized list of what sponsorship benefits the City of Scottsdale will be receiving as part of the sponsorship package. Please include impression values, quantity, distribution methods.

Attached is our media recap of the 2015 event in Pomona, California. Our media campaign is extensive and begins one year prior to the event. The Item 12b

media campaign for the Scottsdale Off Road Expo will be as or more extensive than the Pamona, CA campaign.

9. Approved funds are based on dollar­for­dollar match. For example, if the total cost of marketing expenditures is $60,000 the request for City funds would be $30,000, with the balance of $30,000 to be paid by the event.

In past years we have spent in excess of $150,000 to market the ORE across advertising, promotions, creative, promotional materials, radio remotes, and national magazine and website ads. We will to match and exceed the $150,000 investment for the ORE in Scottsdale.

10.Provide economic study or economic impact results of the event and estimated impact on Scottsdale.

From our research at the Pomona, CA Off Road Expo we have come up with the following economic impact numbers. We fully expect these numbers to be similar at the Scottsdale Event. Impact Number of room nights: 900 Average room night rate: $ 150 $135,000 Number of out of town guest: 5,000 Average spend per guest: $ 250 $1,250,000 Total initial out of town dollars to the market $1,385,000 Multiplier (times 3) $4,155,000 economic impact for first year

11.Events would have the opportunity to participate in this program for a maximum of three years. After three years of funding supports, events would have the opportunity to participate in other city event funding programs.

We would request to participate in this program for the three years allotted.

Item 12b

The Off­Road Expo Public Relations Report October 2015

Lucas Oil Off­Road Expo: Total Media Impressions­ 21,910,039+

Broadcast: ∙ KTLA ran two clips on the Lucas Oil Off­Road Expo as a feature for “Gayle on the Go,” mentioning the ​ ​ ​ ​ ​ ORE as a top event to do in the greater LA Area over the weekend. (Value of segment 1: $8,436.89; Value of segment 2: $18,276.79) ∙ KSWD The Sound LA had “Chick on the Street’s” Katie Thompson out to the event for a feature on the ​ ​ ​ Off­Road Expo for Mark in the Morning’s show. Print: ∙ The Whittier Daily News, The SGV Tribune and The Pasadena Star News ran the Off­Road Expo as a top ​ ​ ​ ​ ​ 10 things to do in the LA Area for the weekend of October 3­4. ∙ The LA Daily News, The Daily Breeze, The Daily Bulletin and The Sun featured the Off­Road Expo and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ the celebrity drivers who were in attendance at the event. Online: ∙ KSWD The Sound LA had “Chick on the Street’s” Katie Thompson out to the event for a feature on the ​ ​ ​ ​ Off­Road Expo. ∙ KTLA ran two clips on the Lucas Oil Off­Road Expo as a feature for “Gayle on the Go,” mentioning the ​ ​ ​ ​ ​ ORE as a top event to do in the greater LA Area over the weekend. ∙ Whittier Daily News, LA Daily News, and The Sun ran a feature on the Off­Road Expo, mentioning the ​ ​ ​ ​ ​ ​ ​ ​ Lucas Oil drivers who would be in attendance at the show. ∙ Examiner.com ran a feature on the Off­Road Expo highlighting the celebrities who were in attendance at ​ ​ ​ ​ the SCORE pavilion to do meet­and­greets. ∙ The Whittier Daily News, The SGV Tribune and The Pasadena Star News ran the Off­Road Expo as a top ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10 things to do in the LA Area for the weekend of October 3­4. ∙ The Off­Road News Wire ran two pieces on the Off­Road Expo this past weekend at FAIRPLEX in ​ ​ ​ ​ ​ Pomona. ∙ Off­Road.com ran five pieces on the Off­Road Expo this past weekend at FAIRPLEX, highlighting the ​ ​ ​ SCORE Baja desert events coming up in 2016. ∙ Bangshift.com ran two pieces on the Off­Road Expo this past weekend at FAIRPLEX. ​ ​ ​ ​ Item 12b

∙ KFI­AM, KLOS, KROQ, KKGO and KFROG listed the Lucas Oil Off­Road Expo as an event for the ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ weekend of October 3­4 in Pomona. ∙ Four Wheeler Network ran three pieces on the Off­Road Expo this past weekend at FAIRPLEX in ​ ​ ​ Pomona. ∙ Malakye.com ran two pieces on the Off­Road Expo this past weekend at FAIRPLEX in Pomona. ​ ​ ​ ∙ Race­Dezert.com ran two pieces on the Off­Road Expo this past weekend at FAIRPLEX in Pomona, ​ ​ ​ highlighting the SCORE Baja desert events coming up in 2016.