The City has been contracting with the Greater Miami Convention and Visitor's Bureau (GMCVB) since 1984 for the purpose of promoting the Miami Beach Convention Center (MBCC) and Miami Beach as a destination.

The GMCVB has historically been primarily responsible for marketing, pursuing and securing MBCC sales. Together with the MBCC management (Spectra and Centerplate), GMCVB is responsible for pursuing booking large and long lead business, with Spectra typically focusing on shorter term business.

GMCVB also engages in Destination Marketing - local, national and international marketing - of Miami Beach in an effort to promote tourism. The goal of MBCC and Miami Beach destination marketing is to secure hotel room nights in the City, and to further enhance the City's tourism economy.

In 1984, the City, Miami-Dade County, the City of Miami, and the Village of Bal Harbour, entered into an Interlocal Agreement with the GMCVB to perform tourism and convention sales and promotion functions. The GMCVB is predominately funded by the Municipal Resort Tax.  The GMCVB budget percentage representation is approximately 50% Miami-Dade County Resort Tax (including the City of Miami and the Village of Bal Harbour), 24% Miami-Dade County Hotel, Food and Beverage Tax, 21% Miami Beach Resort Tax, and 5% from member fees and marketing partnerships. 

On July 7, 1999, the Mayor and Commission adopted Resolution No. 99-23237 approving an agreement with the GMCVB for an initial term commencing on October 1, 1999 and ending on September 30, 2002 with one, two (2) year renewal option, at the City's discretion.

On December 8, 2004, the City Commission adopted Resolution No. 2004-25767, which approved an agreement with the GMCVB for five (5) years from October 1, 2004 - September 30, 2009.

On July 7, 2009, the Finance and Citywide Projects Committee directed the Administration to negotiate a new five (5) year agreement with the GMCVB.

On September 24, 2009, the City Commission adopted Resolution No. 2009-27217 approving a new five (5) year agreement commencing on October 1, 2009 and ending on September 30, 2014.

The 2009 agreement included static goals and the fee earned by the GMCVB was not tied to performance. Prior to the expiration of the 2009 agreement, the City changed the overall direction of the GMCVB contract to a performance-based agreement from a fee for services approach. This direction focused on the achievement of key metrics and the overall measurable success of GMCVB in their contractual relationship with the City. The City therein established a base fee and created an incentive fee to be paid based on the overall achievement of agree-upon annual performance goals.

On September 10, 2014, the City Commission adopted Resolution No. 2014-28745, which accepted the recommendation of the Finance and Citywide Projects Committee to extend the 2009 agreement to September 30, 2014.

The City then renegotiated an incentive-based agreement that established a base fee and an incentive fee to be paid based on the overall achievement of annual performance goals. The funding to the GMCVB remained $5,366,000 and the City hired an owner's representative.

On October 21, 2015, the City Commission adopted Resolution No. 2015-29192, authorized a five (5) year agreement with GMCVB commencing retroactively from October 1, 2015 and ending on September 30, 2020 (the "Agreement").

As the initial term of the Agreement expired on September 30, 2020 and the City was navigating through an unchartered COVID-19 environment, with unknown stakeholder impact, and unmeasurable reputation effect of our destination, the Administration recommended an extension of the Agreement.

On July 29, 2020, the Administration recommended, and the City Commission adopted Resolution No.  2020-31338 which authorized Amendment No. 1 to the Agreement and provided for a one (1) year extension of the initial term of the Agreement with GMCVB, to September 30, 2021; amended the base fee to 10.5% of the 2% Municipal Resort Tax collection generated from the sale of hotel rooms, food and beverage, and alcohol throughout the City of Miami Beach; and directed GMCVB to contribute $75,000 to finance and collaborate with the City, on the execution of a branding identity consulting project.

Due to the ongoing impact of COVID-19 on the City of Miami Beach's tourism and hospitality industry, as well as our ability to attract and retain quality conferences, events and meetings in the MBCC, the Administration recommends it is in the best interest of the City to negotiate a new Agreement with the GMCVB. The new agreement should include terms and conditions that reflect the current and future essential destination marketing requirements and needs for the promotion of Miami Beach individually, the Miami Beach Convention Center, the Miami Beach hotel group sales, and Miami Beach as part of the Greater Miami community.

The Administration is confident that renewing the agreement with the GMCVB, with the revised financial terms, enhanced tracking, reporting and performance measurement metrics – including, but not limited to the promotion and marketing of a fully operational convention center, and the carve out of funds specifically for direct destination marketing of the City of Miami Beach separate and apart from the Greater Miami municipal collective is in the best interest of the City, and will allow the City to respond to COVID-19 budget impacts, strategically plan and execute an effective renewal and transformation.

The new Agreement enhances on the terms of the previous agreement and provides for more creativity, technology and collaborative synergy amongst the City, GMCVB and other tourism stakeholders (e.g., Miami Beach Convention Visitor’s Authority, etc.). The agreement will be divided into three areas of performance: (1) Promotion and Sales of the Miami Beach Convention Center & Campus, (2) Promotion and Destination Marketing of the City of Miami Beach; and (3) leadership membership in the GMCVB administration and operations of the promotion and marketing of the Greater Miami community as a destination and economic driver.

PREVIOUS FINANCIAL STRUCTURE

CURRENT FINANCIAL STRUCTURE – PURSUANT TO AMENDMENT NO. 1:

PROPOSED FINANCIAL STRUCTURE 2022 - 2026

Base Fee is calculated as 10% of the Miami Beach Resort Tax (less collection fee of 4%)

o   50% of the Base Fee paid to the GMCVB should be allocated specifically for MBCC and City of Miami Beach

o   50% of Base Fee paid to the GMCVB should be allocated for Greater Miami Inclusion (which also includes destination promotion, marketing and sales of MBCC, City of Miami Beach hotels, restaurants, events and retail.

An Incentive Fee of up to $2 million will be calculated on the ability to achieve performance objectives; the incentive is prorated beginning with 85% up to 100%. Using a scale where 85% of metrics met will receive 85% of incentive fee.  The total incentive will be tied to two separate criteria.

$1 Million of the incentive will be measured by percentage of the goals achieved established through goal setting as described below.

• Miami Beach Convention Center (MBCC) city-wide convention bookings – 50%
•  Miami Beach Hotel In-House bookings - 25%
•  Miami Beach Hotel Leisure bookings - 20%
•  Miami Beach Hotel Room Rate/Resort and F&B tax growth – 5%

$1 Million of the incentive will be measured by percentage of the goals achieved established through goal setting as described below.

• City of Miami Beach Direst Destination Marketing
•  Measurable Direct Inclusion in Greater Miami Destination Marketing
• Research/Reputation Management/ Awards/ Economic Development/Advocacy

Proposed Performance Metrics will be measured on a scale where 100% achievement indicates satisfactory performance of the following measures:

• Economic impact;
• meeting or exceeding annual goals and projections; and
• original and innovative programming

The Administration recommends the term of the new agreement be for five (5) years.

Upon the completion of a new contract, the GMCVB has agreed to direct their public relations agency, VMLY&R (a top-ranked agency), to begin a full market analysis and rebrand of the City of Miami Beach.   

Preliminary discussions with marketing and advertising industry professionals have shown that the cost to outsource the destination marketing for Miami Beach – separate and apart from the sales of the Miami Beach Convention Center – could cost a significantly higher price than we are paying the GMCVB. Agency fees, including retainers, advertisement purchasing, creative fees, travel expenses, and PR events, could total millions annually.   

The Administration is confident that renewing an agreement with GMCVB, with the new financial terms, and explicit and focused performance metrics and deliverables, including, but not limited to, enhanced attention to the promotion and marketing of the City of Miami Beach as a destination of choice, is in the best interest of the City. Additionally, the Administration recommends that a 5 year term will allow the City to respond to existing COVID-19 budget impact and strategically plan and execute an effective recovery and measurable growth of Miami Beach as an international destination.