BUSINESS PLAN: Conventions, Meetings & Events Attraction (LCC)
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1 BUSINESS PLAN: Conventions, Meetings & Events Attraction (LCC) How does this service contribute to the results identified in the City of London Strategic Plan? A strong economy A vibrant and diverse community A green and growing City A sustainable infrastructure A caring community The London Convention Centre is a multi-purpose convention facility incorporated in 1993 and owned by the City of London. The LCC is managed by the London Convention Centre Corporation which is governed by a Board of Directors appointed by Municipal Council. The London Convention Centre identifies, solicits, contracts and hosts, conventions, conferences, multi-day meetings, one-day meetings, food and beverage events, tradeshows and other speciality events generating economic impact for the community. The LCC brings the world to London and in doing so builds a stronger community. The hosting of conferences and events brings new people with new dollars to the community which drives the economy. The LCC supports a strong London economy. Between 2008 and 2012, the total direct economic spend from the LCC and LCC hosted events was $92 million. Much of this economic spend is driven by non-resident convention delegates who directly spend on average $301 per day visiting London. While the direct spend in hotels, restaurants and for travel is the most readily measurable value, the greatest value of meetings, conventions and exhibitions on a community is the contribution they make to business development, professional and knowledge sharing and enhancements to social and cultural experiences. The LCC adds vibrancy to London by supporting local business and providing access to professional development and special events for London and area residents which also strengthens London s regional reputation. The LCC supports a caring community hosting numerous fundraising events for local charities and not-for-profit groups. Many of these organizations brag of hosting the largest event of their type in Canada because of the size and quality of experience at the London Convention Centre. Valuable funds are raised annually at events supporting the community. The LCC is a cultural supporter hosting cultural events in partnership with diverse community groups. The LCC supports London s efforts to strengthen regional s cooperation working with many regional associations to host their annual conferences. Through events and conferences hosted at the LCC, new partnerships are forged with key corporations, institutions and community partners. Finally, the operational management of the LCC is efficient and effective generating an operational surplus for the past 6 years. City funding along with surplus operational funds is annually invested in the capital reserve to maintain and enhance this City owned asset. Page 81
2 Name the main activities done to provide this service: Name The Activities Done To Provide This Service How Much Did We Do? (optional) Is The City Mandated To Provide This Service? Can The Level Of Service Be Changed? 1. Attracting conventions and events No Yes 2. Hosting conventions and events No Yes 3. Facility Management No Yes 4. Parking No Yes What is the current state of this service? The London Convention Centre Corporation is governed by a local board appointed by Municipal Council under the City of London Act, 1992 (Chapter Pr49, Statutes of Ontario, 1992) and Municipal Act of The convention marketplace in Ontario is extremely competitive. The LCC, a 20 year old facility, competes regularly with Windsor and Hamilton convention facilities but most often with large convention hotels in Toronto including the Doubletree at Pearson Airport, Sheraton Centre and Westin Harbour Front in Downtown Toronto. In 2012, the new Ottawa Convention Centre re-opened and in 2012 the Scotiabank Centre in Niagara Falls entered the market. Additionally, Chatham opened a new facility in 2011 with a focus on regional groups. Between 2007 and 2011, 560,000 square feet of new exhibit, meeting and ballroom space was added to ten venues in Ontario according to HLT Advisory Inc. Both Hamilton and London are mature convention markets, with limited growth potential in the number of future events, according to HLT Advisory Inc. According to HVS Asset Management & Strategic Advisory Services generally, all hotels go through some level of renovation every five to seven years to update physical aspects of the asset in order to remain competitive. Between 2007 and 2012, the LCC invested annually $400,000 to $1.2 million in capital improvements to remain competitive. For the past six years the LCC has operated with a year-end surplus which has been contributed to the capital reserve held by the City of London. Annually the LCC has received $600,000 from the City for capital improvements. Page 82
3 While ongoing annual capital investments has helped to maintain the 20 year old LCC in good repair, this investment has not allowed the LCC to keep up with new builds entering the marketplace and the millions spent on facility expansions and enhancements. 20,000,000 18,000,000 16,000,000 14,000,000 12,000,000 Dollars 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 London Convention Centre Economic Impact City of London Investment Return on Investment (Economic Impact) Years The London Convention Centre is currently seeking accreditation by the International Association of Congress Centres for AIPC Quality Standards ( a quality standards process driven accreditation. Result of the submission is expected by year-end Page 83
4 What is the future direction of this service? Strategic Objectives: 1. LCC experience is a Downtown London Experience as a smaller convention centre located in Ontario s Southwest, in a very competitive industry, the LCC has the ability to differentiate by offering a high touch, high value, boutique convention experience. The LCC culture of innovative ownership is not easily replicated and will continue to help differentiate the LCC. 2. Bring the World to London The LCC Convention Ambassador program is key to future successes. As London struggles in the category of destination appeal it is imperative that local ambassadors invite their peer groups to their hometown to meet. Many London organizations compete on the world stage and many Londoners are members of Provincial, National and International organizations. The LCC needs strong partnerships with these organizations to invite and bring the world to London. 3. LCC is a world class facility The convention industry is very competitive especially in Ontario with new facilities and expanded facilities all competing for groups and business events. Capital investment keeps the facilities fresh and competitive. To compete effectively, the LCC must remain current. Renovation of the 1 st floor including enhancements to the King Street entrance and park area is required while planning for future enhancements. 4. LCC is a connector adding vibrancy to London & the region Local and regional partnerships are required for continued growth. Through partnerships, new events can be attracted or created adding to the vibrancy of Downtown London. What do you plan to do? 2014 Continue to build on and enhance the LCC Culture of Innovative Ownership Build on the boutique service delivery with big city options and rural hospitality Bring the World to London with a focus on National conventions through new partnerships and local convention ambassadors Grow the summer and shoulder period with new community offerings Add to the LCC experience with a more community connected facility reflected in the physical property Introduce room naming opportunities to raise organizational profiles and generate capital funds Reflect the geographic location in all food and beverage purchases Page 84
5 Create more flexible, marketable space converting the theatre to a flat surface function room and updating all other 1 st floor boardrooms and offices creating more flexible event space, improve sound proofing portable partitions between salons and update the décor throughout the facility ($6-7 million) Enhance King Street park and LCC entrance creating more welcoming, functional outdoor signature event space (TBA) Capital funds are required to achieve a full 1 st floor refurbishing. The LCC currently has $1M identified for this project. As the LCC operates in a very competitive industry the above are required to remain competitive and provide more useable space. The proposed renovations do not increase capacity but make the LCC more sellable and the space more flexible for varying event set ups. The goal is for any operational surplus to be directed towards the LCC Capital Reserve held by the City of London for future enhancements. Key Performance Indicators Description of measure # of conventions, conferences & multi-day meetings hosted How Much? ** Operational surplus achieved $154,000 $0 $30,000 $0 $100,000 $100,000 $100,000 How Well? 3. Total Direct economic impact of LCC $18.6 m $15 m $19 m $15 m $20 m $22 m $25 m 4. Guest survey score 71.6% 75% 75% 75% 75% 75% 75% Is Anyone Better Off? 5. Increase in City Funding 0% 0% 0% 0% 0% 0% 0% 6. Full-Time Equivalent (FTE) ** assuming 1 st floor renovations take place in 2015 Page 85
6 London Convention Centre Summary of Submitted 2014 Budget ($000's) Revised Budget Draft Budget Increase / (Decrease) Over Previous Year Service Expense Non Tax Net Property Tax Supported Expense Non Tax Net Property Tax Supported Expense Non Tax Net Property Tax Supported Prop. Tax Supported (%) London Convention Centre 5,791 (5,191) 600 5,697 (5,097) 600 (94) % Total to Maintain Existing Service Level 5,791 (5,191) 600 5,697 (5,097) 600 (94) % Service Adjustments Submitted % 2014 LONDON CONVENTION CENTRE AS SUBMITTED % Note: All figures are subject to rounding Budget Highlights: $ 000 % Maintaining Existing Service: The 2014 budget continues to focus on convention, conferences and multi-day business driving economic benefit for the City of London. The events industry in Canada remains cautiously optimistic about the economy and the future of conventions, meetings and events. A stabilizing economy continues to assist the industry and current forecasts show an overall increase in business levels with the majority of marketplaces. While the rebound is not as quick as many would like, conservative increases in business levels are being forecasted for 2013 and % Increase/ (Decrease) over prior year budget 0 0.0% Page 86
7 London Convention Centre 2014 Budget As Submitted ($000's) Explanation of Adjustments 2014 Maintain Revised Service Requested Actual Existing Budget Adjustments Budget Service Increase/ (Decrease) Over 2013 Object Expenditures $ % Personnel Costs 2,449 2,638 (46) 2,592 (46) (1.7%) Other Expenses 2,360 2,553 (76) 2,477 (76) (3.0%) Building Reserve Fund % Total Expenditures 5,563 5,791 (94) 0 5,697 (94) (1.6%) Events (4,049) (4,305) 171 (4,134) 171 (4.0%) Parking (419) (440) (25) (465) (25) 5.7% Other (145) (112) (38) (150) (38) 33.9% Technical (350) (334) (14) (348) (14) 4.2% Sub-total - Non Property Tax (4,963) (5,191) 94 0 (5,097) 94 (1.8%) Net Budget % Additional Information / Commentary with respect to 2014 Draft Budget Maintaining Existing Service Levels (Flow through from prior years, inflation, contractual obligations, efficiencies) Base (flow through from prior years, inflation, contractual obligations, efficiencies). The 2014 revenue budget is based on historical data, industry trends, confirmed bookings and known opportunities. The LCC PACE Report provides a snap shot on current and future forecasts. The 2014 Food, Beverage and Rental revenue budget represents a 1.7% decrease from 2013 budget but a 7.2% increase over the 2013 forecast Budget Parking revenue is a 5.7% increase over the 2013 budget. In September 2013, the monthly parking was increased to $113 and daily remained at $10. Technical has been increased by 4.2% to reflect the increase in AV commission experienced when we changed in-house providers. AVW Telav s agreement is based on a % of revenue versus a flat rate. Budgeted expenses are either a percent of revenue, fixed as in salaries or have been zero based. Page 87
8 Budget Forecast Non-Property Tax (5,191) (5,097) (5,268) (5,561) (5,746) (5,949) (758) Property Tax Supported (Net Budget) Increase / (Decrease) Over Prior Year Increase / (Decrease) Over Prior Year % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Annual average increase: 0.0% Staffing Full-Time Equivalents # Increase / (Decrease) Over Previous Year Full-Time Employees # Increase / (Decrease) Over Previous Year Additional Information / Commentary: We are anticipating a 0% funding increase from the City of London. London Convention Centre Budget Forecast & Staffing ($000's) to Revised Requested Projected Forecast Forecast Forecast Forecast Object Budget Budget Increase Expenditures 5,791 5,697 5,868 6,161 6,346 6, Page 88
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