Privatizing the city department charged with attracting tourism—an industry second only to government in Santa Fe—has been on the discussion radar for years, if not decades.
Randy Randall, the new executive director of the Convention and Visitors Bureau and the first major appointee by the administration of Mayor Javier Gonzales, acknowledges that the thought of some sort of contract management of the agency might be worth fleshing out. But he contends that it’s nothing on his immediate agenda.
“I know that the mayor and the city manager both feel it’s not something that should happen at this immediate time,” Randall, who started his job this week, tells SFR.
Santa Fe’s tourism economy, which helps pay for city services with the sales taxes it collects, has been suffering since the recession. Paul Margetson, the general manager of Hotel Santa Fe and chair of the Convention and Visitors Bureau task force in Gonzales’ transition team, says the tourism industry is at roughly 83 percent of what it was before the recession hit in 2007 and 2008.
“We ain’t broke, but we’re not doing that well,” Margetson says. “It’s challenging. Group business hasn’t come back to the levels we were at.”
And in recent years, the Convention and Visitors Bureau has had to worry about more than filling hotel beds. The agency, which operates on a roughly $2.5 million yearly budget made from hotel lodging taxes and the city’s general fund, is tasked with two main functions: luring tourists to the City Different and operating the Santa Fe Community Convention Center.
"We ain’t broke, but we’re not doing that well."
Critics, however, say the two jobs shouldn’t necessarily come together, and a scathing report three years ago led many to blame the agency’s troubles mainly on its government-run structure. In 2011, the city contracted with Radcliffe Co. to study the agency’s performance. The report concluded the CVB wasn’t employing enough destination-marketing professionals, was booking events that produced too little revenue and was charging unrealistically high rental rates for the convention center, among other bad findings.
Since then, the city cut seven positions within the CVB and created new sales jobs designed specifically to market the city for tourism. Randall, however, wasn’t familiar with the 2011 report when SFR asked him about it.
While Randall is more tight-lipped about the idea of privatization, Santa Fe Chamber of Commerce Executive Director Simon Brackley says he’s long been in favor of establishing a nonprofit to oversee attracting tourists. The city would stay in charge of the day-to-day tasks of running the convention center. In his ideal setup, the City Council would appoint city representatives, county commissioners and local members of the hotel, art gallery and museum industries, among others, to oversee the nonprofit.
The Albuquerque Convention and Visitors Bureau operates very similarly to the way Brackley envisions. But Dale Lockett, president and CEO of Albuquerque’s CVB, doesn’t discredit Santa Fe’s structure. Lockett says in his experience, both models have worked.
Like Santa Fe, San Antonio’s tourism industry ranks as one of the highest revenue generators for the city. San Antonio’s CVB is also run by city government. Lockett worked there from 2000 to 2004 and says the structure succeeded because each city department—from parks to police to fire—strove to be on the same page when the city was jockeying to attract large events to town.
It also helped that San Antonio’s CVB was able to exclude itself from regulations that other city departments were beholden to, namely entertaining clients with alcohol.
“You have to provide a different set of playing rules for that organization to operate under,” Lockett says.
Because it’s partially separate from city government, Albuquerque’s CVB doesn’t always have to worry about such red tape.
But comparing the success of Santa Fe’s and Albuquerque’s CVBs, however, is not a simple task. Over the past half decade, for example, the occupancy rate for hotels in Santa Fe and Albuquerque remained pretty consistent with each other. In 2008, hotel occupancy rates for both cities hovered around 60 percent; last year, both cities reported an average hotel occupancy rate in the upper 50th percentile.
Miguel Chavez, who has dealt with city tourism from the lens of a city councilor for 12 years and now a country commissioner, is opposed to any idea of privatizing the CVB.
“I think the city has too much at stake and [has] invested too much,” he says, mentioning the $65 million that went into building the convention center.
Instead, Chavez says the CVB should focus on promoting the authentic aspects of Santa Fe, like its local artists and craftsmen, rather than “traveling and trying to entice people from China and Korea and Japan.”
Another problem he sees is how the city and the county are not in line, but rather in competition with each other, over tourists. The city is protective of its own tourism, Chavez says, because it has most of the region’s hotels and bed and breakfasts.
“There seems to be that separation that can be counterproductive,” he says. “I don’t know what it would take to change that.”
Randall, at least, comes to the job with a background that most of the people on Santa Fe’s governing body lack—experience in the city’s large hospitality industry. For 10 years, Randall served as general manager of the Eldorado Hotel. (He’s also a former board chair of the Santa Fe Chamber.)
He’s also local, having lived in Santa Fe for 20 years. Jim Luttjohann, who resigned as CVB executive director last week after two years on the job, came to Santa Fe after heading a similar office in Ventura, California. (At the time, Luttjohann was a part-time Santa Fe resident.)
Randall, for his part, says he’ll work on building relationships with the county and the state tourism office. He adds he’ll be spending the next few weeks identifying the agency’s long-term goals. He’s already suggested that the CVB isn’t getting enough money earmarked in its marketing budget.
“We really need to give more focus to promoting specific attributes of the city,” he says. “We need to increase the amount of group business that comes to the city.