FY 2022/23 QUARTERLY REPORT – 1st Quarter Ended September 30, 2022 October 25, 2022
Santa Clara Convention Center FY 2022/23 1st Quarter Report Page 1 of 15
Table of Contents
Strategic Highlights ................................................................................................... 2 Financial Highlights ................................................................................................... 2 Event Highlights ......................................................................................................... 3 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 Forecast ....................................................................................................................... 11 FY 2022/23 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 2022/23 1st Quarter Report Page 2 of 15
1st Quarter Highlights
This quarterly report covers fiscal operations of the Santa Clara Convention Center for the first quarter ended September 30, 2022. This report is unaudited and, therefore, subject to change.
46,065
Total Attendance
51 Total Events
$2,757,861
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 development of the Silicon Valley/Santa Clara DMO, Inc dba Discover Santa Clara
®. The OVG General Manager participated in
the interview and onboarding processes for a Chief Executive Officer, Administrative Services Manager and Convention Sales Manager.
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 (KPIs). There continues to be challenges with bookings as the recent economic slowdown and fears of a new COVID-19 variant has led some clients to cancel their events or impacted overall attendance of those groups hosting conventions or trade shows.
OVG continued to phase in and out employees. Employee totals varied from 21 to 25 based on event load and projected revenue generation. All employees were brought back in accordance with California’s Rehiring and Retention Law.
Financial Highlights
The first quarter is typically slow; however, due to rescheduling the cancelations or postponements of events from the previous fiscal year, the quarter was more active than usual. Gross revenue July through September was $2,757,861 representing 129.93% of the overall budget for revenue. Conversely, expenses totaled $2,405,344,
85.02% of the budgeted expenses for the quarter, resulting in an overall profit of $352,517 for Q1.
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Event Highlights
Fifty-one events took place during the quarter, 14 less than the budgeted number of 65.
Four events rescheduled their dates in Q1, two events canceled citing concerns with COVID-19, six canceled for reduced registration numbers or other reasons. A total of 14 clients did not move forward with their proposal.
In July, the Center hosted the 36th annual US Futsal National Championship with over 3,000 attendees. In August, the Flash Memory Summit (FMS) returned to the Center for the first time since 2019. FMS is one of the largest shows highlighting digital storage technologies. Flash Memory had a much larger than anticipated attendance that drove higher revenues for the event. September was highlighted by the Northern California Facilities Expo returning for its 41
st annual show. This conference attracts a diverse
audience of facilities managers, maintenance managers, and energy managers from a wide variety of industries including food processing, government, healthcare, manufacturing, education, wineries, utilities, and others.
36th Annual US Futsal National Championships
35th Annual Flash Memory Summit
41st Annual Northern California Facilities Expo
Santa Clara Convention Center FY 2022/23 1st Quarter Report Page 4 of 15
Operational Highlights
As mentioned above, 51 events took place in the first quarter. Twelve in July, 16 in August, and 23 in September.
The General Manager (GM) continued to monitor event load and scheduled staffing levels based on business quantity and projected revenue generation. Therefore, employee levels varied from 21 to 25 throughout the quarter. The GM began contract negotiations with the Teamsters, Local 853 on a new two- year Collective Bargaining Agreement.
GM reorganized the Convention Center Safety Committee and reimplemented the practice of monthly trainings and meetings to prepare staff for on-site emergencies. 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.
Other Noteworthy Highlights
In Q1, OVG hosted 35 site tours for potential future events at the Convention Center. OVG & Levy continued to hold virtual meetings with Freeman, one of the nation’s top event decorators, to discuss and strategize on the creation of new and innovative floor plans for the facility. These floor plans/drawing are being shared with the Sales & Event teams to provide clients with creative event options. The OVG GM and Director of Events interviewed multiple candidates for the vacant Event Manager position. The job was offered to an applicant, who accepted, and the start date for the employee is the beginning of October. The OVG GM/Treasurer for Discover Santa Clara ® (DSC) hosted multiple interview meetings with candidates for the DSC CEO position in the first quarter. The OVG GM/Treasurer for DSC hosted multiple interview meetings with candidates for the DSC Convention Sales Manager (CSM) position in the first quarter. An offer to a candidate was extended and the CSM started work at the end of Q1.
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Financial Summary
Financial Results
Prior to the pandemic, the first quarter tended to be the slowest of the fiscal year and while revenues were slow in July, business accelerated in August and September.
August and September saw the return of several clients for the first time in three years and these events led to higher food and beverage and audio-visual commissions. As a result, OVG and its partners generated $2,757,861
in gross revenue during the quarter
exceeding the budgeted amount by $635,263. Net income for Q1 was $352,517 or $1,058,981 more than the budgeted loss of $706,464.
Financial Summary – 1st Quarter Ended September 30, 2022 Projected in Budget Actual Difference
Gross Revenue $2,122,598 $2,757,861 $635,263 Total Expense 2,829,062 2,405,344 423,718 Net Income ($706,464) $352,517 $1,058,981
Total expenses for the quarter were $2,405,344 or $423,718 less than the budgeted amount of $2,829,062. There was $193,178 of other revenue recognized in Q1 primarily from cancelation fees.
The year-to-date expenses were $2,405,344, a year-to-date variance of $423,718 versus budgeted expenses.
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Income Statement
SANTA CLARA CONVENTION CENTER
QUARTERLY GROSS INCOME STATEMENT
For the Three Months Ending September 30, 2022
QUARTER 1 TO DATE YEAR TO DATE
BUDGET ACTUAL VARIANCE BUDGET ACTUAL VARIANCE
Number of Events 65 51 (14) 65 51 (14) Number of Event Days 145 109 (36) 145 109 (36) Attendance 40,000 46,065 6,065 40,000 46,065 6,065
Event Revenue
Rental
$510,430
$583,587 $73,157
$510,430
$583,587 $73,157
Services 25,600 70,763 45,163 25,600 70,763 45,163 IT/Telecom 294,900 213,771 (81,129) 294,900 213,771 (81,129) Food & Beverage 1,014,930 1,174,360 159,430 1,014,930 1,174,360 159,430 Electrical 83,500 132,875 49,375 83,500 132,875 49,375 Audio Visual 175,000 389,327 214,327 175,000 389,327 214,327 Total Event Revenue 2,104,360 2,564,683 460,323 2,104,360 2,564,683 460,323
Event Expenses
Services - 12,931 (12,931) - 12,931 (12,931) IT/Telecom 218,226 145,364 72,862 218,226 145,364 72,862 Food & Beverage 1,014,085 879,448 134,637 1,014,085 879,448 134,637 Electrical 62.625 270,237 (152,987) 62.625 270,237 (152,987) Audio Visual 117,250 105,766 (43,141) 117,250 105,766 (43,141) Total Event Expenses 1,412,186 1,413,746 (1,560) 1,412,186 1,413,746 (1,560)
Net Event Income (Loss) 692,174 1,150,937 458,763 692,174 1,150,937 458,763
Other Revenue 18,238 193,178 174,940 18,238 193,178 174,940
Total Net Event Income and Other
Revenue 710,412 1,344,115 633,703 710,412 1,344,115 633,703
Indirect Expenses
Executive 90,596 72,044 18,552 90,596 72,044 18,552 Finance 90,447 66,119 24,328 90,447 66,119 24,328 Event Services 103,121 93,246 9,875 103,121 93,246 9,875 Sales/Marketing 95,865 63,680 32,185 95,865 63,680 32,185 Operations 683,583 450,216 233,367 683,583 450,216 233,367 Overhead 353,264 246,293 106,971 353,264 246,293 106,971 Transition Costs
Total Indirect Expenses 1,416,876 991,598 425,278 1,416,876 991,598 425,278
Net Operating Income (706,464) 352,517 1,058,981 (706,464) 352,517 1,058,981
Other Income/(Expense)
Net Income
$(706,464)
$352,517 $1,058,981
$(706,464)
$352,517 $1,058,981
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Event Statistics
There were 51 events scheduled in Q1 with $2,564,683 in revenue and $1,413,746 in expenses. ‘Conventions’ and ‘Banquets’ generated the largest amount of revenue in the quarter.
Event Revenue
Event Net Revenue – 1
st Quarter Ended September 30, 2022
Event Types Gross Revenue Cost of Sales Net Revenue
Banquets $596,707 $351,355 $245,352
Meetings 242,191 91,236 150,955
Consumer Shows 66,610 48,037 18,573
Trade Shows 323,184 163,989 159,195
Conventions 969,228 549,250 419,978
Special Events 310,019 184,461 125,558
Miscellaneous Events - - -
Sporting Events 56,744 25,418 31,326
Totals $2,564,683 $1,413,746 $1,150,937
This quarter, there was a profit of $1,150,937. Revenues generated were higher than anticipated due to increased rental, food & beverage and audio-visual activity. Event expenses were slightly over budget due to the increase in event revenue for the quarter.
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Partners
Partner Revenue – 1st Quarter Ended September 30, 2022
Partner Gross
Revenue
Cost of
Sales
Net
Revenue
Levy Restaurants $1,174,360 $879,488 $294,872
Smart City (IT services) 213,771 145,364 68,407
ENCORE-AV (AV services) 132,875 105,766 27,109
Electrical 389,327 270,237 119,090
Totals $1,910,333 $1,400,855 $509,478
Partner revenue for Q1 was $1,910,333. The cost of sales was $1,400,855 for a net profit of $509,478.
Indirect Expenses
Total indirect expenses were $991,598 for the quarter.
Departments Expense Description Indirect
Cost
Executive Senior personnel $72,044
Marketing Sales and marketing related 63,680
Finance Finance and Human Resources 66,119
Events Staffing to manage events 93,246
Operations
Engineering, building services, security, and
all other related expenses to operate the
building
450,216
Overhead Non-departmental expenses 246,293
Transition Costs Costs related to the transition to OVG - Totals $991,598
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Other Activities
OVG reviewed and finalized an agreement with Swyft Companies to obtain a new CVS Pharmacy and iStore vending machines for the lobby of the Convention Center. There is no cost to the Center for these machines and the facility is able to earn 8% of gross revenues from the sales of products.
Working in conjunction with Levy, the DMO, the City and JLL, the sales team reconfirmed its prospect goals for FY 2022/23 OVG’s goal for the year is to average 204 active business prospects throughout the fiscal year. At of the end of the first quarter, OVG’s sales team is actively working 244 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 tentative 1 business. Of those tentative events, OVG will work to reach a conversion rate 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 first quarter, the GM and sales staff continued to develop new sales and marketing materials to drive sales for the destination. A new brochure and email templates were unveiled and reviewed with the DMO’s marketing firm, We the Creative.
The GM continued assisting in the oversight of the DMO sales team, which hired a new sales manager in the quarter.
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 was $2,757,861 and net income was $352,517 for Q1. Through the first quarter, the event mix shows the Convention Center hosted four of its targeted P3’s, eight of its P4 goal and 39 of its P5 mark. Prospecting numbers remain strong as the Sales Manager continues to focus on bringing new business to the facility. KPI Q1 and YTD results are reported below.
Performance Measures
2022/23
Target YTD NOTES
$13,603,635 $2,757,861
2. Net Income ($217,715) $352,517
14,755 5,323
4. Economic Impact $17,234,704 $9,619,423
85% Reported at year-end
1% 0.00%
3 0
2% 0.00%
6 0
6% 7.84%
24 4
18% 15.69%
67 8
73% 76.47%
274 39
Total Events 374 51
7. Community Benefit
2 0
60% 0% Reported at year-end
20% 0% Reported at year-end
220 249 Average for the year of P3, P4, P5
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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Forecast
The Center operated at a profit of $352,517 through Q1 as a result of rescheduled events. For the remainder of FY 2022/23, revenues are projected at a $587,697 loss resulting in an overall loss of $235,180 for the fiscal year. If these projections hold, the Center will miss its budgeted loss of $217,715 by $17,465. However, this number is fluid and will continue to fluctuate based on new business being booked within the year for the year.
SANTA CLARA CONVENTION CENTER
ROLLING FORECAST
FY 2022/2023
ACTUAL YTD FORECAST TOTAL ORIGINAL
July - Sep Oct - June PROJECTION BUDGET VARIANCE FY 2023 FY 2023 FYE 6/30/23 FYE 6/30/23
# OF EVENTS 51 138 189 374 (185)
DIRECT EVENT INCOME $ 709,825 $ 2,578,284 $ 3,288,109 $ 3,519,063 $ (230,954) ANCILLARY INCOME 441,112 1,224,611 $ 1,665,723 1,693,161 $ (27,438) NET EVENT INCOME 1,150,937 3,802,895 $ 4,953,832 5,212,224 $ (258,392)
OTHER INCOME 193,178 15,000 $ 208,178 72,950 $ 135,228
EXECUTIVE 72,044 257,154 $ 329,198 339,385 10,187 MARKETING 66,119 261,416 $ 327,535 346,281 18,746 FINANCE 93,246 326,361 $ 419,607 429,193 9,586 EVENTS OPERATIONS 63,680 272,876 $ 336,556 359,017 22,461 OPERATIONS 450,216 2,125,756 $ 2,575,972 2,615,956 39,984 OVERHEAD 246,293 1,162,029 $ 1,408,322 1,413,057 4,735
INDIRECT EXPENSES 991,598 4,405,592 $ 5,397,190 5,502,889 105,699
OPERATING NET INCOME (LOSS) 352,517 (587,697) $ (235,180) (217,715) $ (17,465)
NET INCOME (LOSS) $ 352,517 $ (587,697) $ (235,180) $ (217,715) $ (17,465)
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FY 2022/23 Capital Improvement Projects (CIP) Budget
CIP Project Updates
• OVG engaged Idibri to begin the process of a design-build for the digital signage package project.
• OVG and Levy met with 6th Dimension, OVG’s project management partner, to discuss the strategy for moving forward on the kitchen renovation projects and the Stand B/Connect Café projects.
• OVG management met with Partition Specialties, Inc. to discuss on-going challenges with the Grand Ballroom air wall system. Preventative maintenance on the air walls has been scheduled for Q2.
Main Lobby Marketplace project
• New signage and an awning were added to the space to complete the project.
The marketplace continues to be operational and open during specific events at the Center.
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.
Santa Clara Convention Center FY 2022/23 1st Quarter Report Page 13 of 15
Proj. # Project Name Phase CITY/SPECTRA
REV ISED BUDGET
L EV Y TOTAL BUDGET YTD E xp. Balance
001 Convention Center HVAC Study - $ - $ - $ - $ - $ - 002 Convention Center HVAC - Duct Work - $ - $ - $ - $ - $ - 003 Convention Center HVAC - BMS System Completed FY 2019/20 $ 20,450 $ - $ 20,450 $ 20,450 $ - 004 Convention Center HVAC Portable A/C Units Completed FY 2020/21 $ 75,350 $ - $ 75,350 $ 75,350 $ - 005 Convention Center Security System Completed FY 2021/22 $ 177,381 $ - $ 177,381 $ 172,831 $ 4,550 006 Convention Center Lobby Roof (Glass
Pyramids) Assessment and R epair
Completed FY 2021/22 $ 480,787 $ - $ 480,787 $ 479,300 $ 1,487 007 Convention Center Building E nvelope Repair
- Terrace Building Front
- $ - $ - $ - $ - $ - 008 Convention Center Interior Digital Signage
and Display System
Planning $ 855,386 $ - $ 855,386 $ 43,039 $ 812,347 009 Convention Center Interior Paint Completed 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 Completed FY 2019/20 $ 31,238 $ - $ 31,238 $ 31,238 $ - 013 Convention Center Carpet Replacement Completed FY 2021/22 $ 1,628,720 $ 241,856 $ 1,870,576 $ 1,751,725 $ 118,851 014 Balance - Contingency - $ 145,694 $ - $ 145,694 $ - $ 145,694 015 Kitchen/Tech Café/Stand B Planning $ - $ 1,757,065 $ 1,757,065 $ 214,901 $ 1,542,164 TOTAL $ 4,110,000 $ 1,998,921 $ 6,108,921 $ 3,436,886 $ 2,672,035
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Community Involvement
The OVG team met to discuss and strategize its Community Involvement plan for FY 2022/23. Throughout the year OVG intends be involved in the following community activities:
• Volunteer for the Academy of Travel & Tourism program at Milpitas High School as mentors and judges - A small learning community focusing on Hospitality, Tourism and Recreation in partnership with local businesses. Teachers integrate class subjects and projects.
• Volunteer Board Member for the Extended Opportunity Programs and Services program at Mission College - EOPS is a state-funded, services-oriented program.
It combines financial assistance with support services designed to inform, recruit, admit, and academically motivate low-income and educationally disadvantaged full-time students to pursue a college education.
• Volunteer at local animal shelters and SPCA organizations – Working primarily with Bay Area German Shepherd Rescue, helping with fostering of animals, etc.
• Adopt-a-Family from the Bill Wilson Center for the holidays – Continuing the SCCC’s commitment to adopting a local family in need for the holidays
• Creek Trail clean up behind the Convention Center – The SCCC team will volunteer to pick up trash along the Creek Trail behind the Convention Center from Tasman to Great America Parkway.
• Host a holiday Community event – In partnership with Levy, OVG will host a holiday event for the general public in early December.
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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