Tourism Marketing Working Group
Objective and Process
Mayor Roger Reinert established the Tourism Marketing Working Group to develop a Request for Proposal (RFP) for Tourism Marketing and make strategic recommendations for the future of Destination Marketing in Duluth. The primary objective is to ensure the selected marketing plan aligns with the city’s broader economic and tourism goals, integrating both the needs of the tourism industry and the City of Duluth's economic objectives. Members of the Tourism Marketing Working Group may also participate in the selection process for the Tourism Marketing RFP, ensuring a comprehensive and informed decision-making process.
The Tourism Marketing Working Group began meeting in April of 2024 with a September 2024 target date to conclude the findings and begin the RFP process.
The Tourism Marketing Working Group conducted research and engaged in discussions with key city officials and tourism stakeholders to inform the development of the future recommendations. The key primary partners involved in these discussions included:
- Roger Reinert, Mayor - City of Duluth
- Tricia Hobbs, Senior Economic Developer - City of Duluth
- Patti Stalvig, Purchasing Agent - City of Duluth
- Jessica Fralich, City Attorney - City of Duluth
- Dan Hartman, Executive Director - Duluth Entertainment and Convention Center
- Daniele Villa, President of Sales & Operations - Visit Duluth
The Working Group hosted a series of listening sessions to gather feedback from industry partners and the general public. These sessions were designed to ensure a diverse range of perspectives and ideas were considered in shaping the city’s tourism marketing efforts. Three in-person sessions were held at Lake Superior Zoo, Lake Superior Railroad Museum and Glensheen Mansion. An additional virtual session was provided via Microsoft Teams, allowing for broader participation and input from those unable to attend in person. The sessions allowed stakeholders to express their perspectives, ideas, and concerns, contributing valuable insights to the city's tourism marketing strategy.
By following this thorough and inclusive process, the Tourism Marketing Working Group aims to craft a future-focused marketing strategy that will effectively promote Duluth and support its economic growth.
Tourism Marketing Working Group Report and Recommendations
Executive Summary
The Tourism Tax Working Group recommends the selection of a firm to provide destination marketing services for a two-year term, under the oversight of Visit Duluth (VISD). This interim marketing contract will focus on key areas crucial to maintaining and enhancing Duluth's appeal as a tourist destination. The structure and focus of this contract will serve as a transitional bridge between the existing destination marketing model and the recommended operational framework.
The development of a long-term destination marketing model will be guided by the results of a governance study, which is designed to align with the strategic goals set forth in a Destination Development Plan. Development of this strategic plan will be led by the successful RFP agency, and is essential in shaping Duluth's tourism landscape.
The Tourism Tax Working Group also recommends a 10-year Operating Agreement between the City of Duluth and the Destination Management Organization (DMO), ensuring continuity and stability as these new initiatives are implemented.
This report underscores the importance of carefully selecting a marketing firm that can effectively manage the transitional period while setting the stage for the future growth and success of Duluth as a premier travel destination.
Current Destination Management Organization (DMO) Contracts Overview
The City of Duluth's current tourism marketing efforts are managed through contracts with two entities: Belmont Partners and Visit Duluth. Both organizations have three-year contracts that are set to expire in December 2024. These contracts are crucial components of the city's strategy to attract visitors and promote tourism.
Belmont Partners has been allocated $1.8 million in tourism tax revenue annually. They are responsible for targeting specific areas of tourism, including Leisure Travel, Art, Culture, Historic Features, Events, and the Convention Center. Bellmont Partners work focuses on broadening Duluth's appeal across these key sectors.
Visit Duluth has received $650,000 in tourism tax revenue annually. They are primarily tasked with Meeting and Convention Sales along with establishing and managing the visitor center. Visit Duluth’s efforts are crucial in driving business tourism and securing conventions that bring significant economic impact to the city.
This dual-contract arrangement ensures that Duluth's tourism marketing is comprehensive, covering both leisure and business travel sectors. As these contracts approach their end, we recommend the City transition to a new model that will be informed by a strategic plan and grounded in industry best practices.
The oversight and management of Duluth's tourism contracts are structured to ensure alignment with the City's broader strategic vision and effective execution of tourism initiatives. The roles and responsibilities below are distributed across echelons of the City's Administration and the Visit Duluth Board of Directors. This structure was put into place three years ago at the start of the current contract terms.
Current Structure
Mayor and Administration: The Mayor and Administration hold ultimate oversight of all tourism contracts. They are responsible for ensuring the contracts align with the City's vision for tourism and economic development.
The Mayor and Administration provide work direction to the Senior Economic Developer via the Director of Planning and Economic Development to ensure their strategic vision is consistently reflected in the day-to-day management of these contracts.
Director of Planning and Economic Development: The Director provides strategic oversight of the Senior Economic Developer position.
While the Senior Economic Developer manages the tourism contracts, the Director oversees all other aspects of the Senior Economic Developer's responsibilities, ensuring a balanced approach to economic development.
Senior Economic Developer: The Senior Economic Developer is responsible for the day-to-day management of the existing tourism contracts.
This role includes reviewing and approving requests related to the contracts and providing staff support as needed.
Visit Duluth Board of Directors: The Visit Duluth Board of Directors provides oversight of Visit Duluth’s operational direction, governance, and strategy.
The Board ensures Visit Duluth's activities align with the broader goals set by the city and effectively contribute to Duluth's tourism strategy.
This structured approach to contract oversight ensures Duluth's tourism marketing efforts are managed efficiently and align with the City's overall economic and tourism development goals.
Working Group Findings
The contracts are funded through Tourism Tax revenue collections. Tourism Tax revenues are authorized for allocation in Section 3, “Revenues received from the taxes authorized by section 1, subdivision 2, and section 2 shall be used to pay for activities conducted by the city or by other organizations that promote tourism in the City of Duluth”. This statutory provision ensures that tourism tax revenue is reinvested directly into initiatives that support and grow the local tourism industry, ultimately benefiting the city's economy and cultural vitality. These recommendations are intended to align with the allocation of tourism tax in accordance with the state statute.
Historically, a portion of Tourism Tax funding has been allocated to the General Fund to account for City tourism-related expenses.
Duluth’s current tourism marketing model has several key strengths that contribute to its effectiveness in promoting the city as a destination:
Strengths: Duluth has successfully refreshed its tourism brand, enhancing the city's appeal to a broader audience. This updated positioning aligns with current market trends and visitor preferences, making the city more competitive as a leisure destination.
- The contracted marketing firm has generated significant earned media opportunities, providing Duluth with valuable exposure at little to no cost. This media coverage enhances Duluth's visibility and reputation, attracting more visitors.
- The model allows for seamless integration between the City’s tourism efforts and internal City departments such as Parks, Finance, and Engineering. This integration ensures tourism initiatives are well-coordinated with City operations, leading to more efficient and effective outcomes.
- The current model promotes strong coordination and cohesion between marketing efforts (led by Belmont Partners) and sales initiatives (handled by Visit Duluth). This synergy ensures the City’s messaging is consistent and efforts to attract both leisure and business travelers are aligned, maximizing the overall impact on tourism.
- These strengths underscore the importance of maintaining and building upon these elements in future tourism strategies.
Challenges: The Tourism Marketing Working Group has also identified several significant challenges and gaps in services under the current tourism marketing contract structure. These challenges highlight areas where improvements are needed to optimize Duluth’s tourism strategy:
- Absence of a Destination Master Plan: There is no unifying Destination Master Plan bringing together all aspects of Duluth's tourism industry under one vision for the future. The lack of a comprehensive plan leads to fragmented efforts and missed opportunities for synergy across different sectors of the industry.
- Lack of Funding for Marketing of Meeting and Convention Sales: Visit Duluth, responsible for Meeting and Convention Sales, faces challenges due to insufficient funding for marketing these areas. This limitation affects the City’s ability to attract and secure high-impact events and conventions.
- Unclear Contract Oversight: The current oversight structure is not well-defined with day-to-day management and oversight handled by a single City of Duluth employee. This lack of clarity can lead to inefficiencies and potential misalignment of strategic objectives.
- Lack of Funding for a Destination Visitor Guide: There is no dedicated funding for producing a comprehensive Visitor Guide, which limits the City's ability to provide essential information to potential visitors in a professional and attractive format.
- Insufficient Funding for a Full-Service Visitor Center: The City lacks adequate funding to support a full-service Visitor Center, which is crucial for providing on-the-ground assistance and information to tourists.
- Limited Staffing for Meeting and Convention Sales (Visit Duluth): Visit Duluth's ability to effectively market and sell Duluth as a meeting and convention destination is hindered by limited staffing. This reduces the potential to attract large-scale events.
- Revenue Generating Opportunities: Visit Duluth lacks sufficient revenue-generating opportunities, such as advertising revenue, enhanced listings, and co-op marketing. This limits the organization’s financial flexibility and ability to reinvest in marketing initiatives.
- Limited Destination Sports Marketing: There is a gap in marketing Duluth as a destination for sports events, which could attract a significant and diverse visitor base. This is an underdeveloped area that presents opportunities for growth.
- Insufficient Sales Incentives and Bid Fees: Visit Duluth lacks the necessary sales incentives and bid fees to effectively compete for future meetings, conventions, and sports contracts. This puts Duluth at a disadvantage when bidding against other cities.
- Need for Centralized Communication and Collaboration: There is a need for improved communication and collaboration between various attractions and events in Duluth. A centralized approach could enhance the coordination of marketing efforts and visitor experiences.
- Access to Marketing Funds for Community Organizations and Events: Community organizations and events currently have limited access to marketing funds, which restricts their ability to promote local attractions and contribute to the overall tourism strategy.
Addressing these challenges is crucial for enhancing Duluth's tourism efforts and ensuring the city can fully capitalize on its potential as a leading destination.
Options Considered by the Working Group
The Tourism Marketing Working Group analyzed several oversight options for the management of Duluth’s tourism marketing contracts, considering industry best practices and standards. Each alternative presents distinct advantages and challenges, which are summarized below:
Alternative 1: City of Duluth
Direct Oversight by: Communications and Marketing Officer, City of Duluth
Duration: Full term of contract
Pros: Provides direct control and oversight by city administration, ensuring coordination and cohesion between marketing and sales efforts.
Clearly defined responsibilities and expectations in the contracts, with opportunities for mixed funding sources.
Integration within City Hall allows for alignment with broader city objectives and easier coordination with other city departments.
Cons: Places a significant burden on a single staff person, potentially leaving other important tourism-related responsibilities unattended.
Susceptible to shifts in focus and direction due to changes in city leadership, particularly in the absence of a Destination Master Plan.
Alternative 2: Destination Management Organization (DMO) Under Duluth Entertainment Convention Center Model (DECC)
Direct Oversight by: DECC President/CEO or Other
Duration: Full term of contract
Pros: Aligns sales and marketing efforts by eliminating duplication between Visit Duluth and DECC teams.
Offers a more centralized and possibly streamlined approach to tourism management.
Cons: Requires a change in enabling legislation by the State Legislature, as the DECC is a State Authority, not owned by the City of Duluth.
The DECC model is an industry outlier and not the industry standard, which may pose challenges in terms of adapting the model to Duluth's specific needs.
Alternative 3: Destination Management Organization (DMO)
Direct Oversight by: Organization President/CEO or Other
Duration: Full term of contract
Pros: Reflects a best practice within the tourism industry, as it has been the historical model in Duluth.
Governance by a volunteer DMO Board of Directors, which includes community members, stakeholders, industry leaders, and city administration, ensures diverse representation.
Fosters synergy between marketing plans and sales efforts, providing a cohesive approach to destination management.
Cons: Risk of becoming siloed without an enhanced governance and communication plan.
Success is heavily dependent on the amount of funding available from Tourism Tax allocations.
A short-term contract with the DMO could lead to disruptions in marketing and sales efforts, reducing the effectiveness of long-term strategies.
Alternative 4: Community Oversight Board
Direct Oversight by: Community Oversight Board
Duration: Full term of contract
Pros: Reduces the workload for City Staff by shifting oversight to an independent body.
Allows for diversification of perspectives, as the oversight is provided by a board that may include various community representatives.
Cons: Lacks support from City Administration, making it potentially disconnected from broader city goals.
Susceptible to influence by political appointees, particularly with changes in city administration.
Potential lack of expertise among board members could limit the sophistication and effectiveness of oversight compared to a professional organization with trained staff.
Each oversight model offers unique strengths and challenges. The selection of an appropriate model will depend on the City of Duluth’s priorities, including the desired level of control, the need for professional expertise, and the importance of community representation. The Working Group's recommendations considered these factors in alignment with Duluth's long-term tourism and economic goals.
Tourism Marketing Working Group Recommendations
The Tourism Marketing Working Group has outlined a comprehensive set of recommendations for the future of destination marketing in Duluth. These recommendations are designed to ensure the city’s tourism marketing efforts are effective, innovative, and aligned with Duluth’s broader economic and community goals.
Selection of a Marketing Firm
A marketing firm will be selected to provide destination marketing services for Duluth. A two-year contract will be awarded through a Request for Proposal (RFP) process, with the contract commencing on January 1, 2025. The City of Duluth Administration will form a selection committee to select the City’s marketing firm for the two-year contract period.
The Visit Duluth President/CEO and their Board of Directors, with the assistance of a transition team, will oversee the two-year marketing contract starting January 1, 2025. This oversight structure will ensure the contract is managed effectively and it aligns with the strategic goals of the City.
The primary objective of the contract is to expand tourism travel by generating increased awareness and demand for Duluth as a travel destination. The marketing strategies should be innovative and focused on driving economic benefits for the community. The campaign should holistically capture all aspects of the Duluth travel experience, including art, culture, history, events, conferences and conventions, sports, outdoor recreation, and the natural environment.
Campaign marketing metrics should be aligned with the goals and objectives outlined in the contract and applied across all channels within the comprehensive marketing plan.
As the Destination Management Organization (DMO), Visit Duluth will oversee metrics to guide and measure the success of the two-year marketing contract. These KPIs will be critical in assessing the effectiveness of the marketing strategies and ensuring they contribute to Duluth’s economic growth.
We recommend an allocation of $120,000-$170,000 from the 2024 tourism tax budget to fund a national search, hiring, and onboarding of the DMO President/CEO by January 1, 2025. This ensures a smooth transition and placement of an effective leader to oversee the marketing efforts.
The recommendations of the Tourism Marketing Working Group are designed to ensure Duluth's destination marketing efforts are well-coordinated, innovative, and effective in promoting the city. By selecting a qualified marketing firm, establishing clear oversight and performance metrics, and providing adequate funding for a smooth leadership transition, the city will be well-positioned to achieve its tourism and economic goals over the next two years.
Destination Management Organization Financial and Operating Agreements
Establish a sustainable and effective Destination Management model that enhances Duluth’s position as a premier travel destination, aligns with the city’s economic goals, and ensures continuity in destination marketing and sales oversight.
Establish a three-year funding agreement between the City of Duluth and Visit Duluth to serve as the City’s DMO, and to provide primary oversight of the marketing contract. This agreement will ensure Visit Duluth has the resources to manage and execute tourism marketing and management strategies effectively.
Establish a ten-year Operating Agreement with the DMO and City to ensure continuity in destination marketing, sales and oversight. The agreement will support long-term planning and strategic initiatives, providing stability and alignment with city goals.
Destination Master Plan
Develop a comprehensive long-term development plan that provides a strategic vision for tourism growth, ensuring tourism benefits the community sustainably. The plan will outline strategies for sustainable tourism development and promotion. The City of Duluth and DMO will jointly commission the Destination Master Plan. The plan should be completed within the two-year marketing contract period. The process will include forming a Steering Committee to manage the process and determine public engagement strategies. We recommend funds be allocated for the Destination Master Plan in the 2025 budget, and be allocated from tourism tax revenue.
Transition Oversight Committee
This Oversight Committee will support the transition from the current model to the new model and oversee the development of the Destination Master Plan. Appointed by the Mayor of Duluth, including members from various tourism sectors and at-large committee members. This committee may also include members from the Tourism Marketing Working Group. The committee will dissolve once its purpose is fulfilled and the transition to the new model is complete.
The revamped Destination Management Model provides a structured approach to enhancing Duluth’s tourism efforts. By selecting a marketing firm, entering into significant financial and operational agreements with Visit Duluth, commissioning a Destination Master Plan, and forming a Transition Oversight Committee, the city will ensure a strategic, sustainable, and community-focused approach to tourism management and promotion. This model aims to drive economic growth, improve tourism experiences, and support the long-term development of Duluth as a premier travel destination.
Fiscal Impact and Recommended Funding
The implementation of the revamped Destination Management Model involves significant financial considerations for both the marketing contract and destination management funding. The recommended funding includes:
Tourism Marketing Two-Year Contract
2025 Recommended Funding: Minimum $3,000,000
Funding to cover marketing for Leisure, Meeting and Convention Sales as well as execution and distribution of a destination Visitor Guide.
2026 Recommended Funding: Minimum $3,090,000
Increase of 3% over 2025, reflecting either a 3% increase or the Consumer Price Index (CPI), whichever is greater.
Destination Management Three-Year Funding Contract
2025 Recommended Funding: Minimum $2,300,000
2026 and 2027 Recommended Funding: Minimum $2,369,000
Increase of at least 3% over 2025 and 2026 funding for 2027 reflecting either a 3% increase or CPI, whichever is greater.
These figures account for essential activities such as marketing efforts, visitor guide distribution, destination center operations, and strategic planning. The incremental increase for 2026 and 2027 ensures that the budget adjusts for inflation and growth, supporting continued effectiveness and sustainability in Duluth’s tourism and destination management initiatives.
Submitted August 20, 2024, by Tourism Marketing Working Group
Lydia DeGrood, maurices
Haley Headstrom, Lake Superior Zoo
Lindsay Kern, Kern and Kompany
Mark Mahla, Grandma’s Restaurant
Shari Marshik, Upper Midwest Film Office
Josh Miller, Lake Superior Railroad Museum
Karen Pionk, Sheraton Duluth Hotel
Anna Tanski, independent consultant
Terese Tomanek, Duluth City Council
Brandon VanWaeyenberghe, formerly - Duluth Superior Symphony Orchestra
Jason Vincent, Boat Club, Vanilla Bean & JayBee Travel
Tom Werner, Duluth International Airport