FY 2021/22 QUARTERLY REPORT – 3rd Quarter Ended March 31, 2022 April 25, 2022
Santa Clara Convention Center FY 2021/22 3rd Quarter Report Page 1 of 15
Table of Contents
3rd Quarter Highlights ................................................................................................... 2 Strategic Highlights ................................................................................................... 2 Financial Highlights ................................................................................................... 2 Event Highlights ......................................................................................................... 2 Operational Highlights .............................................................................................. 3 Other Noteworthy Highlights .................................................................................... 4 Financial Summary ....................................................................................................... 5 Financial Results ....................................................................................................... 5 Income Statement ...................................................................................................... 6 Event Statistics .......................................................................................................... 7 Event Revenue ........................................................................................................... 7 Partners ...................................................................................................................... 8 Key Performance Indicators (KPIs) ........................................................................... 10 Forecast ....................................................................................................................... 11 FY 2021/22 Capital Improvement Projects (CIP) Budget .......................................... 12 Community Involvement ............................................................................................. 14
Santa Clara Convention Center is strategically located in the heart of Silicon Valley, a prime location for conventions, trade shows and exhibitions. The Santa Clara Convention Center is minutes from hotels, restaurants, Levi’s Stadium, California’s Great America Theme Park, and many of the largest and most influential technology companies in the world, with easy access to freeways and Norman Y.
Mineta San Jose International Airport and only 45 miles south of San Francisco. The Convention Center features 100,000 square feet of exhibit space, a 22,400 square foot ballroom, 31 breakout rooms and a 607-seat theater and attracts over 350,000 visitors annually. The facility is an integral economic component of Santa Clara, generating economic benefits through attendee direct and indirect spending and sustaining over 500 local jobs.
For more information, visit www.santaclaraconventioncenter.com.
Santa Clara Convention Center FY 2021/22 3rd Quarter Report Page 2 of 15
3rd Quarter Highlights
This quarterly report covers fiscal operation of the Santa Clara Convention Center for the 3rd quarter ended March 31, 2022. This report is unaudited and, therefore, subject to change.
36,309
Total Attendance
46 Total Events
$1,318,218
Total Revenue
Strategic Highlights
Spectra continues to be actively involved with the City and its consultant, Jones Lang LaSalle (JLL) on the development of a new Destination Marketing Organization (DMO) for Santa Clara. Spectra and its partners from Levy, Smart City and Encore continued utilizing the interim booking policy and prospecting new business focused on bringing high impact events to the destination. Sales efforts were aligned with Spectra, Levy and the DMO’s overlapping key performance indicators (KPI’s). Capital projects were also a focus in Q3 including finalizing upgrades to lobby flooring and repurposing space to provide more convenient food and beverage service by Levy. Spectra continued to phase in and out employees. Employee totals varied from 10 to 17 based on event load and projected revenue generation. All employees were brought back in accordance with California’s Rehiring and Retention Law.
Financial Highlights
In Q3, the COVID variant - Omicron - continued to have an impact on the building.
Gross revenue January through March was $1,318,218 representing 48.26% of the overall budget for revenue. Conversely, expenses totaled $1,401,425, 53.90% of the budgeted expenses for the quarter, resulting in an overall loss of $83,207 for Q3.
Event Highlights
Forty-six events took place during the third quarter; 24 less than the budgeted number of 70. Twenty-three events canceled or rescheduled due to concerns regarding the Omicron variant in Q3. In January, the Center hosted two Northern California Volleyball Association events, one for boys and one for girls, attendance was nearly 8,000 over the 6-days of competition. In February, the SCCC had its largest event of the year cancel due to COVID, however the Center did host the 30th Annual California Association of Community Managers event. The theme for 2022 was “Cheers! To 30-
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years”. In March, International Data Corporation (IDC) Directions returned to Santa Clara with their in-person event focused on thriving in today’s digital-first world.
Operational Highlights
As mentioned above, 46 events took place in the third quarter. Ten in January, 16 in February, and 20 in March.
The General Manager (GM) monitored and defined the requirement of staffing levels based on business quantity and projected revenue generation. Therefore, employee enrollment varied from 10 to 17 throughout the quarter. o Staffing levels are discussed with the Contract Administrator on a bi-weekly basis.
o All employees continued to be provided with a return-to-work orientation. outlining the facilities new COVID protocols and procedures. o The GM attended multiple meetings with Lotus Marketing, the marketing firm representing Discover Santa ClaraTM, Spectra and Levy. Topics discussed and reviewed included: photography, website upgrades, branding verbiage, and brand strategy guide.
In March, the GM worked with the Operations team to conduct further assessments of the HVAC systems within the facility.
Spectra, Levy, the DMO, the City and JLL continued holding bi-monthly sales meetings to further develop the long-term sales strategy for the Center. The strategy defines goals and responsibilities of Spectra, Levy and the DMO as all partners strive to optimize the building’s business and revenues over future years. An updated Sales & Marketing campaign was the focus of several meetings during the quarter.
California Association of
Community Managers –
Cheers! To 30-Years
IDC Directions
Thriving in Today’s Digital-First World
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Other Noteworthy Highlights
In Q3, Spectra’s merger with Oak View Group (OVG) continued to evolve. In February, Oak View Group announced that moving forward, its Venue Management department would be known as OVG360.
In March, the GM attended a meeting on Spectra/Oak View Group updating its vaccination policy:
o Oak View Group decided to terminate its vaccination requirement eliminating the need to be fully vaccinated in order to work for the company. o GM shared this update with its partners at Encore AV, Smart City, Levy, and the Hyatt.
The Center and its partners continued to monitor the updated health orders issued by the California Department of Public Health and how they may impact upcoming events.
The GM held multiple interviews with applicants for a vacant Event Manager position. An offer was extended and excepted by the chosen candidate. Start date is scheduled for mid-April.
In February, the GM attended the OVG Leadership Conference in Los Angeles.
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Financial Summary
Financial Results
The Convention Center continued hosting events in the third quarter. Revenues were impacted by cancelations and postponements due to the Omicron variant. This included cancelation of the facility’s largest budgeted event in February. Spectra and its partners did generate $1,318,218 in gross revenue during the quarter. Spectra/Oak View made best efforts to react to the unplanned cancelations and worked diligently to monitor expenditures in an effort to control losses.
Financial Summary – 3rd Quarter ended March 31, 2022
Projected in Budget Actual Difference
Gross Revenue $2,731,735 $1,318,218 ($1,413,517)
Total Expense 2,599,936 1,401,425 1,198,511
Net Income $131,799 ($83,207) ($215,006)
Total expenses for the quarter were $1,401,425, or $1,198,511 less than the budgeted amount of $2,599,936. There was $27,205 of other revenue recognized in Q3 primarily from cancelation fees.
The year-to-date expenses were $3,685,314 and year-to-date net loss was $405,049.
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Income Statement
PERIOD TO DATE -3rd Quarter YEAR TO DATE -Ended 3.31.2022 Budget Actual Budget Variance Budget Actual Budget Variance # of Events 70 46
(24) 127 83 (44)
# of Event Days 0 76
76 - 171 171
Annual Attendance 158,490 36,309 (122,181) 195,290 67,096 (128,194)
Event Revenue Rental $532,110 $520,966 ($11,144) $1,140,750 $1,073,060 ($67,690) Services $18,750 $72,980 $54,230 $88,200 $97,008 $8,808 IT/Telecom $212,000 $60,714 ($151,286) $397,500 $366,655 ($30,845) Food & Beverage $1,563,775 $375,659 ($1,188,116) $2,868,352 $1,078,117 ($1,790,235) Audio Visual $71,500 $128,291 $ 56,791 $135,300 $274,804 $139,504 Electrical $318,312 $132,403 ($185,909) $749,212 $284,649 ($464,563) Total Event Revenue $2,716,447 $1,291,013 $(1,425,434) $5,379,314 $3,174,293 ($2,205,021)
Event Expenses
Services - $52 ($52) - $52 ($52) IT/Telecom $156,880 $41,286 $115,594 $294,150 $253,835 $40,315 Food & Beverage $1,239,513 $438,283 $801,230 $2,513,510 $1,169,804 $1,343,706 Audio Visual $53,625 $100,407 ($46,782) $101,475 $209,979 ($108,504) Electrical $213,269 $95,764 $117,505 $501,972 $202,326 $299,646 Total Event Expenses $1,663,287 $675,792 $987,495 3,411,107 1,835,996 1,575,111
Net Event Income (Loss) $1,053,160 $615,221 ($437,939) $1,968,207 $1,338,297 ($629,910)
Other Revenue $15,288 $27,205 $11,917 $45,864 $105,972 $60,108
Total Revenue $1,068,448 $642,426 ($426,022) $2,014,071 $1,444,269 ($569,802)
Indirect Expenses
Executive $77,286 $52,436 $24,850 $254,858 $223,027 $31,831 Marketing 54,027 46,243 7,784 174,537 104,580 69,957 Finance 58,425 52,870 5,555 186,649 165,708 20,941 Event Services 88,282 97,738 (9,456) 277,281 185,285 91,996 Operations 358,383 117,123 241,260 1,134,147 573,398 560,749 Overhead $300,246 $359,223 ($58,977) $900,738 $597,320 $303,418 Transition Costs - - - - - - Total Indirect Expenses $936,649 $725,633 $211,016 $2,928,210 $1,849,318 $1,078,891
Net Operating Income $131,799 ($83,207) ($215,006) ($914,139) ($405,049) $509,089
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Event Statistics
There were 46 events scheduled in Q3 with $1,291,013 in revenue and $675,792 in expenses. ‘Conventions’ and ‘Sporting Events’ generated the largest amount of revenue in the quarter.
Event Revenue
Event Net Revenue – 3rd Quarter ended March 31, 2022
Event Types Gross Revenue Cost of Sales Net Revenue
Banquets $26,140 $23,023 $3,117
Meetings 139,973 28,711 111,262
Consumer Shows 8,037 611 7,426
Trade Shows 239,276 174,792 64,484
Conventions 394,535 282,049 112,486
Special Events 94,817 30,467 64,350
Miscellaneous Events - - -
Sporting Events 388,235 136,139 252,096
Totals $1,291,013 $675,792 $615,221
This quarter, there was a net loss of $83,207. The loss was the result multiple cancellations due to the Omicron variant. Event expenses of $675,792 were a combination of Levy’s labor and indirect expenses as well as expense generated by Encore and Smart City to provide services for contracted events. Year-to-date, the Center’s net income is a negative $405,049.
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Partners
Partner Revenue – 3rd Quarter ended March 31, 2022
Partner Gross Revenue Cost of Sales Net Revenue
Levy Restaurants $375,659 $438,283 ($62,624)
Smart City (IT services) 60,714 41,286 19,428
ENCORE-AV (AV services) 128,291 100,407 27,884
Electrical 132,403 95,764 36,639
Totals $697,067 $675,740 21,327
Partner revenue for Q3 was $697,067. The cost of sales was $675,740 for a net profit of $21,327. Year-to-date, net partner revenue is showing a $168,281 profit versus budget.
Indirect Expenses
Total indirect expenses were $725,633 for the quarter.
Departments Expense Description Indirect Cost
Executive Senior personnel $52,436
Marketing Sales and marketing related 46,243
Finance Finance and Human Resources 52,870
Events Staffing to manage events 97,738
Operations Engineering, building services, security, and all other related expenses to operate the building
117,123
Overhead Non-departmental expenses 359,223
Totals $725,633
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Other Activities
Both Spectra and Levy continued to review staffing levels and expenditures in an effort to mitigate financial losses to the City. Indirect expenses for Q3 were $211,016 under budget primarily due to overhead expenditures.
Working in conjunction with Levy, the DMO, the City and JLL, the sales team reconfirmed their prospect goals for FY 2021/22. Spectra’s goal for the year is to average 204 active business prospects throughout the fiscal year. As of the end of the third quarter, Spectra’s sales team is actively working 170 sales prospects. Applying the goals of the booking strategy, Spectra has put an emphasis on prospecting and generating leads for Priority 3 business. Spectra is aiming to convert 20% of those prospects into tentative1 business. Of those tentative events, Spectra will work to reach a conversion ratio of 20% into definite2 business throughout the fiscal year. Due to COVID, eleven Priority 3 pieces of business have canceled or postponed for this fiscal year. The partners and sales team continue to discuss and identify ideas or concepts that will differentiate the Santa Clara Convention Center from its competitors.
In the third quarter, the GM continued service as the Treasurer for the DMO, reviewing and updating the financials for Discover Santa ClaraTM as well as generating a rolling forecast. GM also updated the proposal template for the DMO sales staff and continued assisting in the oversight of the sales team.
1 A tentative is defined as having dates held and/or proposals issued to the client. 2 A definite is realized when a client signs its Use License Agreement for an event at Convention Center.
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Key Performance Indicators (KPIs)
Gross revenue for Q3 was $1,318,218, while net income was a loss of $83,207 for the quarter. Through the third quarter the event mix shows the Convention Center has hosted 44% of its targeted P3’s, 17% of its P4 goal and 46% of its P5 mark. Prospecting numbers remain strong as the Sales Manager continues to focus on bringing new business to the facility. Monthly results of the KPI’s for Q3 are included below.
Performance Measures2021/22 TargetYTD Results January February March NOTES$8,352,205 $3,280,265 $359,586 $479,711 $478,922 2. Net Income($646,267) ($405,047)($95,639) ($74,887) ($33,831)6,605 7,2731,871 463 1,1714. Economic Impact$8,980,044 TBDTBD TBD TBD85% -- - - Reported at year-end1% -0% 0% 0%1 -0 0 01% -0% 0% 0%2 -0 0 08% 44%25% 31% 44%16 70 1 220% 17%14% 14% 17%42 72 0 171% 46%25% 35% 46%150 698 15 177. Community Benefit1 00 0 050% -- - - Reported at year-end20% -- - - Reported at year-end204 202192 182 170 Average for the year of P3, P4, P5Number of P5 EventsNumber of collaborative, community-based events hosted at the Center Percent of Center employees that volunteer in the communityPercent of small, local and M/WBE businesses/vendors8. Number of Prospects (active) (non-cumulative)Percent of P3 EventsNumber of P3 EventsPercent of P4 EventsNumber of P4 EventsPercent of P5 Events6. Event Mix at the Convention Center (consumed)Percent of P1 EventsNumber of P1 EventsPercent of P2 EventsNumber of P2 EventsSpectra Venue Management – Santa Clara Convention Center1. Convention Center Gross Revenue3. Number of Room Nights Consumed5. Customer Service Survey Results (overall satisfaction)
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Forecast
The Center operated at a loss of $405,049 through Q3 as a result of canceled or rescheduled events. For the remainder of FY 2021/22, revenues are projected at a $119,375 profit resulting in an overall loss of $285,674 for the fiscal year. If these projections hold, the Center will exceed its budgeted loss of $646,267 by $360,593.
However, this number is fluid and will continue to fluctuate based on the on-going challenges due to any new COVID-19 variants and the impact of California’s mandate for indoor mega events which is expected to be lifted in April 2022.
SANTA CLARA CONVENTION CENTER
ROLLING FORECAST
FY2021/2022
ACTUAL YTD FORECAST TOTAL ORIGINAL July - Mar Apr - June PROJECTION BUDGET VARIANCE FY 2022 FY 2022 FYE 6/30/22 FYE 6/30/22
# OF EVENTS 83 79 162 211
(49)
DIRECT EVENT INCOME $1,282,836 $1,182,087 $2,464,923 $ 2,144,697 $320,226
ANCILLARY INCOME
55,461
322,728
378,189
1,012,652
(634,463)
TOTAL EVENT
INCOME
1,338,297
1,504,815
2,843,112
3,157,349
(314,236)
OTHER INCOME
105,972
-
105,972
61,150
44,822
EXECUTIVE
223,027
83,342
306,369
332,143
25,774
MARKETING
165,708
75,236
240,944
245,052
4,108
FINANCE
185,285
91,762
277,047
365,547
88,500
EVENTS OPERATIONS
104,580
94,860
199,440
228,558
29,118
OPERATIONS
573,398
591,133
1,164,531
1,492,492
327,961
OVERHEAD
597,320
449,107
1,046,427
1,200,974
154,547
INDIRECT EXPENSES
1,849,318
1,385,440
3,234,758
3,864,766
630,008
OPERATING NET
INCOME (LOSS)
(405,049)
119,375
(285,674)
(646,267)
360,593
NET INCOME (LOSS) $(405,049) $119,375 $(285,674) $(646,267) $360,593
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FY 2021/22 Capital Improvement Projects (CIP) Budget
CIP Project Updates
Flooring/Painting projects
Repairs and updates on the polished concrete project in the main lobby continued in Q3. There is still one area that needs attention, and it will be completed when the event load permits. Final payment for the polished concrete is being withheld until all areas of concern are resolved. Final payment for the carpeting was invoiced and paid to the contractor. Painting of the main lobby elevator was completed in Q3. A change order for additional painting of the lower lobby was issued and work was completed.
The wall panels were recovered and installed in the meeting rooms and the final invoice was received and paid.
The installation of the corner guards is completed, and final payment has been issued.
The installation of the wall bases was completed, and final payment was made.
Kitchen & Digital Signage projects
Spectra continued conversation with its third-party project manager for the Kitchen & Digital Signage projects.
New documents were issued to the project manager for the Digital Signage package and the RFP is expected to be released in Q4.
Work continues on the Kitchen and Tech Café/Stand B RFBs which are expected to be released in late Q4.
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CIP Project Budget
Levy continues to contribute investments funds as needed for the improvement projects related to the food and beverage operational and service areas.
Proj. # Project Name Phase CITY/SPECTRAREVISED BUDGETLEVY TOTAL BUDGET YTD Exp.Balance001Convention Center HVAC Study- $ - $ - $ - $ - $ - 002Convention Center HVAC - Duct Work- $ - $ - $ - $ - $ - 003 Convention Center HVAC - BMS System UpgradeCompleted FY 2019/20 $ 20,450 $ - $ 20,450 $ 20,450 $ - 004Convention Center HVAC Portable A/C UnitsCompleted FY 2020/21 $ 75,350 $ - $ 75,350 $ 75,350 $ - 005Convention Center Security SystemCompleted FY 2021/22 $ 177,381 $ - $ 177,381 $ 89,575 $ 87,806 006 Convention Center Lobby Roof (Glass Pyramids) Assessment and RepairCompleted FY 2021/22 $ 480,787 $ - $ 480,787 $ 479,300 $ 1,487 007 Convention Center Building Envelope Repair - Terrace Building Front- $ - $ - $ - $ - $ - 008 Convention Center Interior Digital Signage and Display SystemImplementa tion $ 855,386 $ - $ 855,386 $ 43,039 $ 812,347 009Convention Center Interior PaintImplementa tion $ 694,994 $ - $ 694,994 $ 577,192 $ 117,802 010Convention Center Door Replacements- $ - $ - $ - $ - $ - 011Convention Center Facility Lighting Project- $ - $ - $ - $ - $ - 012Convention Center Riding Vacuum PurchaseCompleted FY 2019/20 $ 31,238 $ - $ 31,238 $ 31,238 $ - 013Convention Center Carpet ReplacementImplementa tion $ 1,628,720 $ 241,856 $ 1,870,576 $ 1,417,371 $ 453,205 014Balance - Contingency- $ 145,694 $ - $ 145,694 $ - $ 145,694 015Kitchen/Tech Café/Stand BPending $ - $ 1,757,065 $ 1,757,065 $ 37,903 $ 1,719,162 TOTAL $ 4,110,000 $ 1,998,921 $ 6,108,921 $ 2,771,418 $ 3,337,503
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Community Involvement
GM met with representatives from Cardinal Robotics. A local company based in Palo Alto, who discussed new technology being produced locally which can provide state-of-the-art UV cleaning and vacuuming options in robotic form. These robots are being used throughout the world in large venues, such as airports and hospitals.
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Santa Clara Convention Center
5001 Great America Parkway
Santa Clara, CA 95054
Tel: (408) 748-7000
www.santaclaraconventioncenter.com
General Manager: Kelly Carr