FY 2021/22 QUARTERLY REPORT – 4th Quarter Ended June 30, 2022 July 25, 2022
Santa Clara Convention Center FY 2021/22 4th Quarter Report Page 1 of 16
Table of Contents
Strategic Highlights ................................................................................................... 2 Financial Highlights ................................................................................................... 2 Event Highlights ......................................................................................................... 2 Operational Highlights .............................................................................................. 4 Other Noteworthy Highlights .................................................................................... 4 Financial Summary ....................................................................................................... 5 Financial Results ....................................................................................................... 5 Income Statement ...................................................................................................... 6 Event Statistics .......................................................................................................... 7 Event Revenue ........................................................................................................... 7 Partners ...................................................................................................................... 8 Indirect Expenses ...................................................................................................... 8 Other Activities .............................................................................................................. 9 Key Performance Indicators (KPIs) ........................................................................... 10 KPI Summary ............................................................................................................ 11 Forecast ....................................................................................................................... 12 FY 2021/22 Capital Improvement Projects (CIP) Budget .......................................... 13 Community Involvement ............................................................................................. 15
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 4th Quarter Report Page 2 of 16
4th Quarter Highlights
This quarterly report covers fiscal operations of the Santa Clara Convention Center for the fourth quarter ended June 30, 2022. This report is unaudited and, therefore, subject to change.
67,532
Total Attendance
79 Total Events
$5,235,546
Total Revenue
Strategic Highlights
Oak View Group (OVG) continues to be actively involved with the City and its consultant, Jones Lang LaSalle (JLL) on the continued development of the Silicon Valley/Santa Clara DMO, Inc dba Discover Santa Clara
TM. In Q4, the OVG General
Manager participated in the interview processes for the Administrative Services Manager and Chief Executive Officer positions.
OVG 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 OVG, Levy and the DMO’s overlapping key performance indicators (KPI’s). In spite of on-going cancelations due to concerns of COVID-19, business levels returned to pre-pandemic levels in Q4.
OVG continued to phase in and out employees. Employee totals varied from 17 to 21 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 Q4, business began to return to normal as there were significantly fewer cancelations due to the pandemic. Gross revenue April through June was $5,235,546 representing
62.68% of the overall budget for revenue. Conversely, expenses totaled $3,663,895, 137.78% of the budgeted expenses for the quarter, resulting in an overall profit of $1,571,651 for Q4.
Event Highlights
Seventy-nine events took place during the fourth quarter, five less than the budgeted number of 84. Twenty-four events canceled or rescheduled citing concerns with COVID- 19 or reduced registration numbers. In April, the Center hosted DesignCon, North
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America’s largest chip, board, and systems event. In May, the Center hosted Embedded Vision 2022 which was a four-day event that provided the latest insights into practical Visual Artificial Intelligence (AI). June was by far the busiest month of the entire fiscal year. Highlights included:
• Augmented World Expo (AWE), an event focused on AI and other types of virtual reality;
• Cadence CDN Live, a gathering of developers and industry experts who discuss new design concepts for silicon and operating systems;
• TSMC North America, TSMC, the world’s largest producers of semiconductors, hosted this event to unveil some new technology; and
• the Precision Medical World Conference (PMWC) that featured nearly 400 speakers including the CEO of Pfizer.
April - Design Con
May - Embedded Vision 2022
Augmented World Expo (AWE)
Cadence CDN Live
TSMC North America
PMWC 2023
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Operational Highlights
As mentioned above, 79 events took place in the fourth quarter. Eighteen in April, 34 in May, and 27 in June.
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 17 to 21 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. The GM provided the City Manager a tour of the Convention Center. GM met with the City Finance Department to provide information on expenses and backup for the Federal Medical Station that operated in the Convention Center from March-May 2020.
OVG, 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 OVG, Levy and the DMO as all partners strive to optimize the building’s business and revenues over future years. An updated Sales & Marketing Plan was completed in the quarter and was reviewed by the DMO Board of Directors and approved for use.
Other Noteworthy Highlights
In Q4, OVG hosted a site tour and held several virtual meetings with Freeman, one of the nation’s top event decorators, to discuss and strategize on new and creative floor plans for the facility. These floor plans will be utilized by the Sales & Event teams to provide clients innovative event options.
The GM met with the planners of the Silicon Valley Auto Show to discuss rescheduling its event for February 2023.
The Center and its partners continued to require staff to wear face coverings during events for the safety of the staff and attendees.
The GM held multiple interviews with applicants for a vacant Sales/Event Administrative Assistant position. An offer was extended and accepted by the chosen candidate who started in mid-May.
OVG helped transition Discover Santa ClaraTM’s marketing company to “We the Creative” and its accounting company to Arightco.
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Financial Summary
Financial Results
For the first time since reopening in October of 2021, Convention Center bookings were not heavily impacted by COVID-19 and continued with upward momentum throughout the quarter. While some events still canceled or postponed, a majority moved forward.
Throughout the quarter, OVG saw continued growth in event attendance numbers. As a result, OVG and its partners generated $5,235,546 in gross revenue during the quarter exceeding the budgeted amount by $2,308,519. Net income for Q4 was $1,571,651 or $1,303,779 more than the budgeted amount of $267,872.
Financial Summary – 4th Quarter Ended June 30, 2022
Projected in Budge Actual Difference
Gross Revenue $2,927,027 $5,235,546 $2,308,519
Total Expense 2,659,155 3,663,895 (1,004,740)
Net Income $267,872 $1,571,651 $1,303,779
Total expenses for the quarter were $3,663,895 or $1,004,740 more than the budgeted amount of $2,659,155. This was due to the increase in events hosted in the fourth quarter which led to higher overhead and operational expenses. There was $292,562 of other revenue recognized in Q4 primarily from cancelation fees.
The year-to-date expenses were $7,349,208, a year-to-date variance of $1,649,264 versus budgeted expenses.
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Income Statement
SANTA CLARA CONVENTION CENTER
QUARTERLY GROSS INCOME STATEMENT
For the Twelve Months Ending June 30, 2020
QUARTER 4 TO DATE YEAR TO DATE
BUDGET ACTUAL VARIANCE BUDGET ACTUAL VARIANCE
Number of Events 84 79 (5)
211 162 (49)
Number of Event Days - 170 170
- 341 341
Attendance 48,600 67,532 18,932
243,890 134,628 (109,262)
Event Revenue
Rental 708,925 995,269 286,344
1,849,675 2,068,329 218,654
Services 23,900 77,586 53,686
112,100 174,594 62,494
IT/Telecom 306,045 476,083 170,038
703,545 842,738 139,193
Food & Beverage 1,548,571 2,066,220 517,649
4,416,923 3,144,338 (1,272,585)
Electrical 240,000 756,793 516,793
989,212 1,041,441 52,229
Audio Visual 84,300 571,033 486,733
219,600 845,837 626,237
Total Event Revenue 2,911,741 4,942,984 2,031,243
8,291,055 8,117,277 (173,778)
Event Expenses
Services - 3,052 (3,052)
- 3,105 (3,105)
IT/Telecom 226,473 323,736 (97,263)
520,623 577,571 (56,948)
Food & Beverage 1,272,101 1,199,867 72,234
3,785,611 2,369,670 1,415,941
Electrical 160,800 531,715 (370,915)
662,772 734,041 (71,269)
Audio Visual 63,225 444,974 (381,749)
164,700 654,953 (490,253)
Total Event Expenses 1,722,599 2,503,344 (780,745)
5,133,706 4,339,340 794,366
Net Event Income (Loss) 1,189,142 2,439,640 1,250,498
3,157,349 3,777,937 620,588
Other Revenue 15,286 292,562 277,276
61,150 398,533 337,383
Total Revenue 1,204,428 2,732,202 1,527,774
3,218,499 4,176,470 957,971
Indirect Expenses
Executive 77,285 82,565 (5,280)
332,143 305,592 26,551
Finance 58,403 57,970 433
245,052 223,678 21,374
Event Services 88,266 103,557 (15,291)
365,547 288,842 76,705
Sales/Marketing 54,021 67,318 (13,297)
228,558 171,897 56,661
Operations 358,345 554,797 (196,452)
1,492,492 1,128,195 364,297
Overhead 300,236 294,344 5,892
1,200,974 891,664 309,310
Total Indirect Expenses 936,556 1,160,551 (223,995)
3,864,766 3,009,868 854,898
Net Operating Income 267,872 1,571,651 1,303,779
(646,267) 1,166,602 1,812,869
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Event Statistics
There were 79 events scheduled in Q4 with $4,942,984 in revenue and $2,503,344 in expenses. ‘Conventions’ and ‘Meetings’ generated the largest amount of revenue in the quarter.
Event Revenue
Event Net Revenue – 4th Quarter Ended June 30, 2022
Event Types Gross Revenue Cost of Sales Net Revenue
Banquets $502,170 $272,361 $229,809
Meetings 921,097 393,410 527,687
Consumer Shows 124,207 42,093 82,114
Trade Shows 62,463 15,147 47,316
Conventions 2,891,925 1,648,881 1,243,044
Special Events 387,724 126,745 260,979
Miscellaneous Events - - -
Sporting Events 53,398 4,707 48,691
Totals $4,942,984 $2,503,344 $2,439,640
This quarter, there was a variance of $2,439,640. The increase was the result of fewer cancellations due to COVID and increased attendance. Event expenses of $2,503,344 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 profit of $1,166,602.
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Partners
Partner Revenue – 4th Quarter Ended June 30, 2022
Partner Gross
Revenue
Cost of
Sales
Net
Revenue
Levy Restaurants $2,066,220 $1,199,867 $866,353
Smart City (IT services) 476,083 323,736 152,347
ENCORE-AV (AV services) 571,033 444,974 126,059
Electrical 756,793 531,715 225,078
Totals $3,870,129 $2,500,292 1,369,837
Partner revenue for Q4 was $3,870,129. The cost of sales was $2,500,292 for a net profit of $1,369,837. Year-to-date, net partner revenue is showing a $1,538,119 profit versus budget.
Indirect Expenses
Total indirect expenses were $1,160,551 for the quarter.
Departments Expense Description Indirect
Cost
Executive Senior personnel $82,565
Marketing Sales and marketing related 67,318
Finance Finance and Human Resources 57,970
Events Staffing to manage events 103,557
Operations
Engineering, building services, security, and
all other related expenses to operate the
building
554,797
Overhead Non-departmental expenses 294,344
Transition Costs Costs related to the transition to OVG - Totals $1,160,551
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Other Activities
OVG renewed and finalized updated agreements with AT&T and Verizon for the on-site digital antenna systems (DAS) located at the Center. The agreements will generate an estimated $39,000 in annual revenue for rental and utilities.
Working in conjunction with Levy, the DMO, the City and JLL, the sales team reconfirmed its prospect goals for FY 2021/22. OVG’s goal for the year is to average 204 active business prospects throughout the fiscal year. As of the end of the fourth quarter, OVG’s sales team is actively working 240 sales prospects. Applying the goals of the booking strategy, OVG has put an emphasis on prospecting and generating leads for Priority 3 business. OVG is aiming to convert 20% of those prospects into tentative1 business. Of those tentative events, OVG will work to reach a conversion ratio of 20% into definite2 business throughout the 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 fourth quarter, the GM and sales staff continued to develop new sales and marketing materials to drive sales for the destination. A new sales deck was completed with the assistance of the DMO’s new marketing firm, We the Creative. The GM continued assisting in the oversight of the DMO 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.
Hassle-free planning? Audience engagement?
Inspired details? Magical moments?
What does a truly
next-level event look
like to you?
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Key Performance Indicators (KPIs)
Gross revenue was $5,235,546 and net income was $1,571,651 for Q4. Through the fourth quarter, the event mix shows the Convention Center hosted 87.5% of its targeted P3’s, 35.7% of its P4 goal and 88.6% of its P5 mark. Prospecting numbers remain strong as the Sales Manager continues to focus on bringing new business to the facility.
KPI Q4 and YTD results are reported below.
Performance Measures
2021/22
Target
2021/22
Actual
$8,352,205 $8,515,809
2. Net Income ($646,267) $1,166,604
6,605 16,249
4. Economic Impact $8,980,044 $32,089,813
85% 90%
1% 0%
1 0
1% 0%
2 0
8% 9%
16 14
20% 9%
42 15
71% 82%
150 133
Total Events 211 162
7. Community Benefit
1 0
50% 0%
20% 11%
204 240
5. Customer Service Survey Results (overall satisfaction)
3. Number of Room Nights Consumed
1. Convention Center Gross Revenue
OVG Venue Management – Santa Clara Convention Center
8. Number of Prospects (active) (non-cumulative)
Percent of Center employees that volunteer in the community Percent of small, local and M/WBE businesses/vendors
Number of collaborative, community-based events hosted at the Center Percent of P5 Events
Number of P5 Events
6. Event Mix at the Convention Center (consumed)
Percent of P1 Events
Number of P1 Events
Percent of P4 Events
Number of P4 Events
Percent of P3 Events
Number of P3 Events
Percent of P2 Events
Number of P2 Events
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KPI Summary
1. Convention Center Gross Revenue – FY 2021/22 had some challenges due to lingering COVID impact. Group activity was impacted well into the third quarter and the beginning of this quarter. Convention as well as Christmas party planners were altering their scheduling well into January 2022. The bright spot was that the business volumes in the fourth quarter exceeded the original projections by a wide margin. The final outcome exceeded the original goals due to the increase of meetings or social events as noted. Barring anything unexpected, it is anticipated these upward trends will continue.
2. Net Income – As a result of what is noted above, the commensurate net income results also exceeded the annual goal. OVG diligently focused on maintaining fiscal controls and managing expenses throughout the year. This included innovative approaches to achieving improved labor efficiency, managing expenses and inventories within effective purchasing practices.
3. Room Nights Consumed – Achieving the goals for rooms that have been occupied in the past fiscal year is a collaborative effort with OVG, Levy and Discover Santa Clara
TM. The team has made great strides in the approach to secure business for the Convention Center that drives overnight stays into Santa Clara TID Hotels while generating significant revenue. The groups that are characterized as smaller (P3, P4, and P5) are a focus of OVG. These events delivered more overnight stays than were initially forecasted. The joint sales and marketing efforts will continue to increase in the upcoming fiscal year.
4. Economic Impact – The total economic impact of Convention Center Events in the Fiscal Year was $32,089,813. The original projections for Economic Impact were conservative and took into account the uncertainty that was prevalent in June of 2021. A nationally recognized platform is used to calculate economic impact for all events that convene at the Convention Center. The platform uses nationally accepted spending models that are adjusted for costs that will be incurred in Santa Clara. As the year unfolded, and actual numbers for spending were inputted into the platform, the reported direct spending was $23,108,769 higher than the original projections of $8,980,044. Two representative factors were the very robust actual attendance at conferences due to a heightened desire of meeting and convention attendees to resume face to face meetings. This factor also contributed to higher levels of spending at the convention center by conference organizers.
5. Customer Service Survey Results – The newly developed and completed customer service platform has provided valuable insight in assessing successes and opportunities in the service areas. The past Fiscal Year has served as a pilot year with focus on finalizing the survey and driving client response rate. OVG received an average a 90% positive rating in the area of overall satisfaction. OVG will continue to use this helpful tool to keep in close contact with customers and understanding their experience.
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6. Event Mix – Event Mix focuses on the type and quality of events at the Convention Center as opposed to strictly focusing on the quantity of events. The highlights of last year’s results were that in spite of eight P3 cancelations in the fiscal year, OVG still managed to book 14 P3 events. The area of focus for the upcoming fiscal year is how the key partners (Levy, OVG and Discover Santa Clara TM) can use the current
prospecting and market development efforts to increase success with securing the large events (P1’s and P2’s). Smaller events also have an impact on overall performance, and OVG is pleased to secure 173 of these events last fiscal year.
OVG has proved standards for returning inquiry call within hours of receiving them.
7. Community Benefit – The past Fiscal Year provided an opportunity to strategize on future community-based events. While there were none of these events this year, plans are underway on how to impact the Santa Clara community in FY 2022/23.
Ideas have included holiday events, open houses and partnering with the Santa Clara non-profit community. As the city and region returns to normalcy, OVG is exploring volunteer opportunities for the management team. OVG will also focus on utilizing small, local and M/WBE as suppliers and partners in our business. OVG is pleased to report that 11% of overall purchasing went to these valuable businesses and OVG plans to further and expand these relationships in FY 2022/23.
8. Prospects – There was a focus on naming new business for the Convention Center in support of driving higher quality events in the future. The sales team dedicated time to this throughout the year and OVG currently has 240 active prospects. This exceeded the annual goal.
Forecast
Financials for FY 2021/22 are complete. The forecast for FY 2022/23 will be issued in the first quarter report.
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FY 2021/22 Capital Improvement Projects (CIP) Budget
CIP Project Updates
Emergency HVAC project
• Two of the three chillers that service the Convention Center were repaired in June. Chiller #2 suffered an oil pump failure, and the oil pump was replaced.
Chiller #3, which is original building equipment, needed some internal parts replaced.
• Three of the four air conditioning units that provide cooling in the Mission City Ballroom were repaired. The building management system (BMS) that controls the temperature and timing was not communicating with three of the units and it was determined that the controller boards in roof top units 1, 2 & 4 had failed.
The boards were replaced and reconfigured to the BMS.
Main Lobby Marketplace project
• As part of Levy’s on-going strategy to activate public space at the Convention Center, OVG and Levy worked collaboratively to repurpose the former UPS Store into the Vintage Valley Marketplace. The space was renovated to create a “Grab and Go” retail location for event attendees. The space has been operational and open during events at the Center.
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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/SPECTRA
REVISED BUDGET
LEVY TOTAL BUDGET YTD Exp. Balance
001 Convention Center HVAC Study - $ - $ - $ - $ - $ - 002 Convention Center HVAC - Duct Work - $ - $ - $ - $ - $ - 003 Convention Center HVAC - BMS System Upgrade Compl eted FY 2019/20 $ 20,450 $ - $ 20,450 $ 20,450 $ - 004 Convention Center HVAC Portable A/C Units Compl eted FY 2020/21 $ 75,350 $ - $ 75,350 $ 75,350 $ - 005 Convention Center Security System Compl eted FY 2021/22 $ 177,381 $ - $ 177,381 $ 172,831 $ 4,550 006 Convention Center Lobby Roof (Glass Pyramids)
Assessment and Repair
Compl eted 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 System
Implementation $ 855,386 $ - $ 855,386 $ 43,039 $ 812,347 009 Convention Center Interior Paint Compl eted FY 2021/22 $ 694,994 $ - $ 694,994 $ 648,052 $ 46,942 010 Convention Center Door Replacements - $ - $ - $ - $ - $ - 011 Convention Center Facility Lighting Project - $ - $ - $ - $ - $ - 012 Convention Center Riding Vacuum Purchase Compl eted FY 2019/20 $ 31,238 $ - $ 31,238 $ 31,238 $ - 013 Convention Center Carpet Replacement Compl eted FY 2021/22 $ 1,628,720 $ 241,856 $ 1,870,576 $ 1,417,371 $ 453,205 014 Balance - Contingency - $ 145,694 $ - $ 145,694 $ - $ 145,694 015 Kitchen/Tech Café/Stand B Pending $ - $ 1,757,065 $ 1,757,065 $ 214,901 $ 1,542,164 TOTAL $ 4,110,000 $ 1,998,921 $ 6,108,921 $ 3,102,532 $ 3,006,389
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Community Involvement
OVG GM and Senior Sales Manager
attended and judged the Academy of
Travel and Tourism event at Milpitas
High School.
OVG GM attended the bi-annual
meeting of the Extended
Opportunity Programs and Services
(EOPS) advisory committee
meeting in May.
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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