ANNUAL REPORT

Board of Directors Leonard Kaiser, Chairman Owner, Kaiser Realty

Bill Brett, Vice Chairman Owner, Brett/Robinson

Pedro Mandoki, Secretary/Treasurer Owner, Mandoki Hospitality, Inc.

David Bodenhamer

Owner, Young’s Suncoast

Robert Craft

Mayor, Gulf Shores

Ben Fairey

Charter Boat Captain

Sheila Hodges

Owner, Meyer Vacation Rentals

Tony Kennon

Mayor, Orange Beach

Mac McAleer

Owner, Homeport Marina

Frank Reed

Owner, Reed Real Estate

Mark Stillings

Director of Golf, Kiva Dunes

Barbara Walters

General Manager, Island House Hotel

Contents From our President................................ 1 Awards & Honors................................... 2 Hospitality & Information...................... 3 Special Projects & Nature Tourism....... 4 Advertising............................................. 5 Internet................................................... 6 Public Relations...................................... 7 Group Sales............................................ 8 Sports Commission............................... 9 Financial Statement............................. 10

OUR MISSION

To market the Alabama Gulf Coast as a year-round destination, thus enhancing the economy and quality of life for all residents.

Dear Industry Partners, Before closing the book on 2012 and the second consecutive record breaking tourism year along the Alabama Gulf Coast, one must first understand how this success was achieved. Our devoted and driven staff at Gulf Shores & Orange Beach Tourism continued to push the boundaries in new and innovative ways to effectively remind those who love our beaches why they should return in addition to introducing our sugar-white sand to new potential guests. Through partnership of this team with industry partners and local governments, our area saw the accommodations, restaurants, and attractions fill week after week with guests eager to explore our coast. With a 15.5% increase over 2011, our tourism industry continued to welcome each guest not as a number but with Southern hospitality. Remembering how much we have overcome in recent years and how far we have exceeded expectations makes this year one for the record books.

Herbert J. Malone, Jr. President/CEO

NUMBER OF GUESTS VISITOR SPENDING TRAVEL RELATED JOBS WAGES & SALARIES

5.3million $ 2.9billion 45,000 $ billion 1 1

Awards and Honors

LODGING RENTALS IN 2012:

$1.5 Billion Market Share

The Weather Channel’s Facebook fans voted the Gulf Shores and Orange Beach area as the best kid-friendly beach National Resources Defense Council named two local beaches to its list of top 12 five-star vacation beach destinations for water quality Southern Living ranked Orange Beach in its list of 10 best weekend getaways

11.9%

2%

17.3%

24.4%

24.7%

Coastal Living named West Beach in Gulf Shores as one of the 21 best beaches

19.8%

Southern Living listed the area among its list of 55 Memorable Road Trips Trailer Life (RV magazine) placed the Gulf State Park on its list of 10 Beach Camping Hotspots

BALDWIN Gulf Shores Orange Beach $377 M

ESCAMBIA Pensacola $182 M

SANTA ROSA Navarre $30 M

Budget Travel named the area to its list of 23 American Beaches You Want to be on Right Now USA Today’s article “Just for Summer: 51 Great American Beaches” included the Alabama Gulf Coast

ACCOMMODATIONS INVENTORY

MainStreet.com ranked Orange Beach’s Sailaway Charters to its list of the 10 Best Lake and River Cruises in the US

LODGING RENTALS

TRIPinfo.com’s Resource Atlas and Handbook named the Gulf State Park Pier to its list of the top 36 piers in the USA Budget Travel ranked Orange Beach to its list of America’s 10 Best Winter Beach Retreats ConventionSouth readers included Gulf Shores & Orange Beach Tourism as one of the Alabama winners in the 2012 Readers’ Choice Awards Gulf Shores ranked as one of the top 10 travel destinations searched on Yahoo! Travel and was thus named to the list of America’s Most Popular Attractions in 2012

RETAIL SALES

OKALOOSA Fort Walton Destin $264 M

WALTON Sandestin Seaside $372 M

BAY Panama City $302 M

16,312 $ 343million $ 674million

The 2012 Vacation Guide for Gulf Shores & Orange Beach Tourism won Folio Magazine’s Silver Award for the best use of photography in publications with distribution between 100,000 and 200,000

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Hospitality and Information

TOTAL H&I INQUIRIES

The CVB’s hospitality staff greeted more than 138,593 visitors in the Gulf Shores and Orange Beach Welcome Centers, directing them to attractions, restaurants and area businesses.

TOTAL PHONE CALLS

139,109 17,473

The Call Center fulfilled 135,593 requests for the Alabama Gulf Coast Vacation Guide, and handled the daily flood of phone calls, emails and request for information via live chat.

Gulf Shores Welcome Center visitors

69, 638

Top 10 states: Alabama, Tennessee, Michigan, Missouri, Illinois, Mississippi, Louisiana, Kentucky, Indiana, Wisconsin

Orange Beach Welcome Center visitors

68,955

Top 10 states: Alabama, Tennessee, Missouri, Michigan, Illinois, Mississippi, Louisiana, Kentucky, Indiana, Arkansas

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Special Projects and Nature Tourism Supporting our industry partners, the CVB again hosted the annual Tourism Summit and 2012 Digital Marketing Summit. In addition, we continued to promote Five Star Southern Hospitality training and served on both the Coastal Christmas events committee and Leadership Baldwin County steering committee. The CVB holds a seat on the board of directors of the newly formed Alabama Gulf Coast Reef and Restoration foundation, aimed at improving the northern Gulf’s ecosystems through the use of artificial reefs. The group is aiming to launch a project in 2013. We continued the Nature Tourism initiative with the Mississippi-Alabama Sea Grant, implementing programs for fishing charter and nature tour providers. To promote Alabama’s Coastal Connection National Scenic Byway, we worked with byway partners to host press trips for travel writer associations and individuals, and served on the state byways committee. Additionally, we continued promotion of the Share the Beach sea turtle volunteer program and assisted in updating the Mobile Bay National Estuary program’s coastal conservation plan. 4

Advertising

TOTAL INQUIRIES

Print and radio advertising played a significant role in our 2012 advertising efforts. Each campaign was targeted to specific PRIZM clusters in prime markets, resulting in 134,309 inquiries, up from 131,445 inquires in 2011.

COST PER INQUIRY

Additional funds provided by BP afforded the opportunity to expand our planned advertising efforts and continuation of some existing campaigns. The Grand Ole Opry Tuesday night intermission show sponsorship, introduced in 2011, was continued from January through July. In addition, we continued our display advertising efforts in March and April in the Atlanta and Dallas airports. A 26-week campaign was launched in the Baton Rouge Advocate to promote spring and summer family travel, SEC BeachFest, Shrimp Festival and the Songwriters Festival. New co-op opportunities included ads in America’s Best Vacations, Better Homes & Gardens, Compass Spring Travel Planner and Texas Monthly. Through our association with the Southeast Tourism Society, inserts were included in newspapers in several key markets, resulting in 7,447 inquiries at a low CPI of $1.42. Several event grant holders benefited from inclusion in our leisure advertising efforts.

134,309 $3.07

What have you been missing?

For Mom, itʼs been kicking off her stilettos and kicking back in flip-flops.

For Amelia, itʼs been searching for seashells. And as for Caroline, well, sheʼs really missed getting the chance to perfect her little leaning sandcastles.

But Dad has missed it all. The turquoise water, the sugar-white shore and together time with his very best and most beautiful girls.

If you havenʼt been to Alabamaʼs beautiful beaches lately, youʼve been

missing a lot, too. The easy, breezy pace. The sumptuous seafood fare.

The endless family-friendly activities. The good news is, you donʼt have to miss another minute. The quick-drive paradise that transports you worlds away is still here. Just waiting for you.

Donʼt miss the perfect chance to plan the escape youʼve longed for. Call toll-free 1-800-949-7303 or visit www.GulfShores.com now.

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Internet The Interactive Marketing division of the Communications Department spent 2012 managing a variety of programs and activities. All relevant statistics saw notable increases. Our activities included traditional online advertising programs, e-newsletter sponsorships, sliding billboards on sites across the Southeast, increased targeting on mobile sites and devices, integrated buys on sites such as Pandora, and cooperative marketing programs for our Industry Partners. As a result of our marketing efforts in 2012, there were 2.2 million visits to www.gulfshores.com and www.orangebeach.com, an increase of 3.23% over 2011. Visits to the mobile site, grew by 68.3% with 509,885 visits. Our social media activities continue to grow, adding new channels to the program such as Pinterest and Instagram. YouTube Views 1,379,159 Facebook Fans 107,288 Facebook Impressions 60,850,517 Twitter Followers (AL Beaches) 12,573 Twitter Followers (Specials) 1,658 Pinterest Followers 222 Instragram Followers 351 App Downloads 9,656

WEBSITE VISITS MOBILE SITE VISITS

2.2million 509,885 Up 68.3%

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2012

Public Relations Focused on our core mission of securing positive editorial coverage in core markets, several group press trips highlighting key message points were planned and implemented with our two public relations agencies, Geiger and Associates and the Beenders Walker Group.





EDITORIAL COVERAGE

48 Magazine 69 Newspaper 3 Other 1 Radio 28 Television mentions 193 Web-based publications

Total 342

Fulfilling a bid secured by the public relations efforts in 2011, the area also welcomed the prestigious Society of American Travel Writers’ Annual Board Meeting in April. In addition to a productive meeting, these attendees also experienced the destination during the meeting and during pre- and post-meeting tours of the area. Securing publicity of the inaugural SEC BeachFest began months earlier and included multiple interviews at the conference’s annual Media Days event in addition to assisting the on-site media during the August beachside event. Finally at the most basic but effective level, the public relations efforts focused on developing new and maintaining existing relationships with travel media at various conferences and during other communications in addition to serving as a reliable source during the development of articles. 7

Group Sales Gulf Shores & Orange Beach never quite experienced the meeting planning lows experienced in 2012 by similar beach destinations. The precarious state of the economy forced many meeting planners to reduce and downsize meetings, causing them to rely more than ever on local expertise and collaborative relationships. The long-term goodwill with their meeting planners fostered by the Gulf Shores & Orange Beach Tourism Sales Team directly contributed to their ongoing success and to a rise in the number of room nights. During the year, the Sales Team hosted the prestigious Louisiana Society of Association Executives and Mississippi Society of Association Executives Joint Annual Conference, bringing 205 attendees and 73 association executives and meeting professionals to the area.

GROUPS HOSTED ROOM NIGHTS

Caribe hi-top displays (Bailey)

211 55,178 8

Sports Commission Continuing our efforts to increase exposure to Gulf Shores and Orange Beach, the Sports Commission represented the area at five key sports trade shows: the NASC Annual Education Symposium, Connect Marketplace, the SPORTS Institute, the TEAMS Annual Sports Conference and the USSSA Annual Convention. In addition, the Sports Commission hosted eight sports event planners on visits to tour our destination and facilities.

SPORTING EVENTS ROOM NIGHTS DIRECT SPENDING

88 64,076 $22.4 M

Each of our Sports Commission social media channels saw increases in engagement. Most notably, our Flikr account saw an increase of 469% and YouTube views increased by 308%. Our Sports Shorts newsletter was delivered to nearly 100 sports event planners and our website recorded 69,460 visits. Targeting sports event planners, print ads were placed in several trade publications and additional media coverage included 19 print and web articles, 12 press releases and 2 nationally televised events. The Sports Commission staff brought to the area 16 new events in 2012 and delivered 11,584 welcome bags to athletes and guests. 9

Financial Statement

Operating Income & Expense Statement for All Funds for 2012 REVENUE

FY2012 % OF ACTUAL ACTUAL

Lodging Tax Revenue $6,397,589 59.69% Golf Association Co-op $230,000 2.15% State & Federal Grants $41,596 0.39% BP Grants $3,459,980 32.28% Tourism Summit Sponsorships $11,500 0.11% Sports Commission Membership Investment $20,000 0.19% Sports Commission Sponsorships - Cash $267,161 2.49% Sports Commission Sponsorships - In-Kind $219,487 2.05% Other Revenue $43,557 0.41% Interest Income $27,509 0.26% Total Revenue $10,718,379 100.00%

EXPENSE (CONT.)

Operational Expense Building Repair & Maintenance Computer Equipment/Maintenance Dues & Subscriptions Equipment Lease & Rental Equipment Repair & Maintenance Insurance Licenses & Taxes Local Meetings Professional Development Professional Services Rent - Gulf Shores Office Supplies FY2012 % OF EXPENSE ACTUAL ACTUAL Utilities Personnel Expense Miscellaneous Debt Service Salaries, Taxes, Benefits $1,943,769 19.45% Total Personnel Expenses $1,943,769 19.45% Debt Service - Interest Total Operational Expenses Direct Promotional Expense Advertising $2,378,564 23.80% Total All Expense Emergency Advertising $3,875 0.04% BP Grant Expense $3,459,980 34.62% Net Revenue Over Expense Event Grants/Sports Commission Grants $485,760 4.86% Convention Services $37,196 0.37% Familiarization/Site Tours $20,350 0.20% Fulfillment $28,952 0.29% Phone $107,521 1.08% Postage $215,286 2.15% Internet $37,420 0.37% Promotions/Promotional Materials $175,530 1.76% Travel & Trade Shows $16,076 0.16% Travel & Entertainment $79,598 0.80% Research $144,316 1.44% Sports Commission On-site Marketing Trailer $2,765 0.03% Bad Debts $1,875 0.02% Total Direct Promotional Expenses $7,195,064 71.98%

FY2012 % OF ACTUAL ACTUAL

$59,070 $186,096 $29,559 $21,719 $39,208 $88,838 $374 $33,436 $28,005 $36,554 $20,444 $32,842 $50,193 $2,031 $107,433 $120,823 $856,625

0.59% 1.86% 0.30% 0.22% 0.39% 0.89% 0.00% 0.33% 0.28% 0.37% 0.20% 0.33% 0.50% 0.02% 1.07% 1.21% 8.57%

$9,995,458 100.00% $722,921

6.74%

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Gulf Shores & Orange Beach Tourism PO Drawer 457, Gulf Shores AL 36547 GulfShores.com . OrangeBeach.com Gulf Shores Welcome Center 3150 Gulf Shores Parkway 251-968-7511 Orange Beach Welcome Center 23685 Perdido Beach Boulevard 251-974-1510