Feasibility Analysis of the Proposed Branson Downtown Exhibition and Convention Center

Transcription

1 Feasibility Analysis of the Proposed Branson Downtown Exhibition and Convention Center Presented to the City of Branson February 13, 2003

2 February 13, 2003 Mr. Terry Dody City Administrator City of Branson 110 West Maddux Branson, Missouri Dear Mr. Dody: We have completed the feasibility study of the proposed Branson Exhibition and Convention Center ( Center ) as part of the proposed Branson downtown/lakefront redevelopment. The attached report presents our research, analysis and findings and is intended to assist the City of Branson ( City ) in future project planning. All findings and recommendations presented as a part of this study reflect the analysis of primary and secondary information, including information provided by the City. Information provided by third parities has not been audited or verified, unless otherwise noted and is assumed to be correct. As any projected information provided as a part of this study is based on various trends and assumptions, there will be differences between the information presented and actual results because events and circumstances frequently do not occur as expected and those differences may be material. As the analyses provided as a part of this study have taken place significantly prior to any future facility development, CSL makes no representation or warranty as to the accuracy or completeness of the findings contained within any of our analyses, including any estimates, and shall have no liability for any representations (expressed or implied) contained in, or for any omissions from, such information. Findings and recommendations made by CSL are based on the scope of services agreed to under contract with the City. CSL cannot be held responsible for any future marketing efforts and/or other management actions on which the future performance of the facility will depend. This report has been prepared for the internal use of the City, and should Conventions, Sports & Leisure International 3021 Harbor Lane, Suite 210 Minneapolis, MN Telephone Facsimile

3 Mr. Terry Dody Page 2 of 2 not be relied on by any other party. This report, its findings or references to CSL may not be included or reproduced in any public offering statement or other financing document. We sincerely appreciate the assistance and cooperation we have been provided in the completion of this report and would be pleased to be of further assistance in the interpretation and application of our findings. Very truly yours, CSL International

4 Table of Contents Executive Summary I. Introduction...1 II. Local Branson Market and Industry Conditions Analysis...5 III. Competitive and Comparable Facilities Analysis...31 IV. Market Survey Analysis...70 V. Building Program and Event Levels Analysis VI. Financial Operations Analysis VII. Economic and Fiscal Impacts Analysis VIII. Preliminary Cost/Benefit Assessment Appendix A: Summary of Potential User Survey Data Appendix B: Key Market, Financial and Economic Assumptions Table of Contents

5 Feasibility Analysis of the Proposed Downtown Branson Exhibition & Convention Center - Executive Summary - This summary highlights the key findings of the feasibility analysis of the proposed downtown Branson Exhibition and Convention Center ( Center ). Conventions, Sports and Leisure International ( CSL ) was engaged by the City of Branson ( City ) to conduct a feasibility analysis of the proposed Center. The full report should be reviewed in its entirety to gain an understanding of the study methods, limitations and implications. Appendix A and B, provided at the conclusion of the report, provide additional detail surrounding market survey data and key market, financial and economic assumptions utilized for this analysis. This summary is presented in the following sections: Study background, methods and purpose Local market conditions and industry conditions Competitive and comparable facilities Market survey research Building program and event levels Financial operations Economic and fiscal impacts Preliminary cost/benefit assessment Study Background, Methods and Purpose The study s primary focus relates to the evaluation of the market demand for the proposed Center derived from convention, tradeshow, public show and other key event sectors and to estimate associated financial and economic impacts. Key study components include the analysis of existing local market conditions, competitive/comparable facilities and communities, industry conditions, potential user interviews, building program, event levels, financial operations and economic and fiscal impacts. Specifically, the study process consisted of 365 individual interviews, including the following: o 30 Branson community leaders and local residents; o 275 national, regional and state event planners; o 30 competitive/comparable facility managers; and o 30 competitive/comparable community convention & visitors bureaus representatives. Executive Summary Page ES-1

6 The overall purpose of this study is to evaluate the feasibility of the proposed Center. Oftentimes, conclusions as to project feasibility can be assessed in various ways, including: o Market feasibility the ability of the Center to attract and support levels of event activity and facility utilization that are consistent with or in excess of industry standards. o Financial feasibility the ability of the Center to break-even or generate an operating profit focusing only on direct Center-related operating revenues and expenses. o Economic spending the ability of the Center to generate new spending activity in the local community (i.e., direct and indirect spending that is attributable to out-of-town Center attendees/exhibitors that would not otherwise occur in the local area). o Tax generation the ability of the Center to generate new tax revenue for the local area (i.e., tax revenue resulting from direct, indirect and induced spending that is attributable to out-of-town Center attendees/exhibitors that would not otherwise occur in the local area). o Cost/benefits/return on investment the ability of the Center to generate new revenues (i.e., from taxes, operating income and ancillary Centerrelated revenues, etc.) in excess of quantifiable Center-related costs (i.e., construction costs, operating costs, marketing costs, etc.). When evaluating the feasibility of a convention center, communities throughout the country have differed in the specific criterion that best reflects the definition of feasible for their community. For instance, one community may focus more on the ability of the project to generate new economic spending, taxes and jobs for local residents, rather than the actual return on investment to build, operate and market the facility, while another community may require that the project be operationally self-supportive (i.e., generate an annual financial operating profit). While each of these measurements of feasibility are addressed in this study effort, based on discussion with City officials, the cost/benefit aspect of the proposed Branson project comprised a primary focus of this analysis. As will be discussed, the City is contemplating a large mixed-use revitalization/redevelopment project in Branson s downtown and lakefront area (often referred to as Branson Landing ). The proposed convention center would represent one of many components of such a project. While the operation and ultimate success of many of the components of the envisioned redevelopment will likely be interdependent (i.e., mutually benefiting from each other s presence), this analysis focuses solely on the operations, costs, benefits and issues associated with the convention center itself. For example, new spending that could occur in a revitalized downtown/lakefront by new visitors not associated with convention center events is not considered nor quantified. Executive Summary Page ES-2

7 The proposed downtown Center is envisioned to comprise a key component of much larger downtown/lakefront revitalization. The City has defined a downtown/lakefront district ( District ) where much of this redevelopment effort is envisioned to occur. Other developments in the District may include: o one or more hotel properties; o one or more high-profile retail anchors; o restaurants and other secondary retail; o residential and commercial units; o public areas and pedestrian lakefront frontage; o public and contracted parking; o transportation and roadway improvements; and o other miscellaneous improvements. Due to various uncertainties surrounding the ultimate materialization of the key components of the overall envisioned development, three different development scenarios have been utilized as a basis for the analysis of the proposed convention center: o Scenario A Envisioned District Revitalization Project: 1) A headquarters hotel with 250 or more rooms is located adjacent or nearby the convention center 2) At least two of the three key large retail/entertainment anchors envisioned for the District are secured (i.e., sporting/outdoors retailer, aquarium, etc.) 3) Other District redevelopment/revitalization occurs largely as envisioned (i.e., roadway improvements, secondary retail, restaurants, etc.) o Scenario B Envisioned Project Without Hotel: 1) No headquarters hotel is developed to support the Center 2) At least two of the three key large retail/entertainment anchors envisioned for the District are secured (i.e., sporting/outdoors retailer, aquarium, etc.) 3) Other District redevelopment/revitalization occurs largely as envisioned (i.e., roadway improvements, secondary retail, restaurants, etc.) Executive Summary Page ES-3

8 o Scenario C Limited Development Without Hotel: 1) No headquarters hotel is developed to support the Center 2) No large retail/entertainment anchors are secured for the District 3) Limited other development/revitalization projects materialize in District, other than modest land/infrastructure improvements around the Center In general, a convention facility incorporated as part of the proposed District redevelopment/revitalization would represent a fairly unique product in the convention industry. As envisioned under Scenario A, a certain level of synergy would likely exist with the convention facility and other District components. From a broad perspective, it is hoped that the convention center and overall revitalized District would have several effects, including assisting in: (1) diversifying the community s visitor base, (2) expanding the overall visitor base, (3) directly and indirectly affecting the revitalization of the downtown area, (4) providing resources for the community and enhancing quality of life, and (5) helping reposition Branson s regional, national and international image. Local Market Conditions and Industry Conditions A community s hospitality infrastructure in terms of hotels, restaurants, entertainment and other such factors contributes heavily to the potential success of a convention center. Strengths of the local Branson market as they relate to a potential convention center include its: (1) brand name recognition, (2) existing visitor infrastructure and amenities, (3) music/entertainment/attractions, (4) central location in the country, (5) low cost of goods and services, (6) familyfriendly ambience, and (7) natural attractions. Some weaknesses of Branson as they relate to supporting a convention center and functioning as a convention destination include: (1) the community s lack of direct proximity to a major commercial airport, (2) the accessibility and expense of air travel from Springfield, (3) the size of Branson s resident population and corporate base, (4) certain perception issues with some national/regional event planners, and (5) parking and traffic issues in the downtown Branson area. While the population of Branson itself is relatively low, the regional area within driving distance represents a fairly substantial potential event attendee base. Specifically, approximately 1.2 million residents live within 75 miles of Branson, 4.2 million within 150 miles and 20.0 million within 300 miles. Over the past decade, substantial change has occurred in the conventions, tradeshows and meetings industry. Communities throughout the country have invested significantly in convention centers and convention/visitor infrastructure Executive Summary Page ES-4

9 as a mechanism to attract new visitors and their associated spending to their communities. National economic conditions over the past three years (and associated travel industry contraction, subsequently exacerbated by the events of September 11, 2001 and ongoing international events) have negatively impacted the convention and tradeshow industry as well as many convention markets throughout the country. However, many economical and drive-in destinations have not seen as dramatic effects. Given the characteristics of the Branson community (i.e., centrally-located, economical, family-oriented and regionally-focused), these effects are expected to remain limited. Competitive and Comparable Facilities As a part of this analysis, 19 competitive facilities were identified and facility characteristics and operational data as well as community information was obtained and comparatively evaluated. The following exhibit presents a summary of sellable square footage offered at the competitive facilities (designated by their host communities) reviewed under this analysis. Each of these facilities will likely compete to varying degrees (within certain event markets) with a potential Branson Center. Summary of Total Sellable Space (in Square Feet) Competitive Facilities St. Louis, MO Kansas City, MO (1) Wichita, KS Memphis, TN Oklahoma City, OK Tulsa, OK Little Rock, AR Kansas City, MO (2) Hot Springs, AR Overland Park, KS Springfield, MO Lake of the Ozarks, MO (3) Springfield, IL Kansas City, MO (4) Lake of the Ozarks, MO (5) Ft. Smith, AR Pine Bluff, AR Branson, MO West Plains, MO 230, , , , , , ,600 98,500 95,000 78,400 62,000 54,700 51,400 44,700 39,300 39,200 37, , ,800 Exhibit Mtg/Ballroom/Multipurpose 0 200, , , ,000 (1) Bartle Hall Convention Center (4) Kansas City Market Exhibition Center (2) Crown Center (5) The Lodge of Four Seasons (3) Tan-Tar-A Resort1 Source: Interviews with Facility Management, 2003 Executive Summary Page ES-5

10 Some of the largest facilities (America s Center in St. Louis and Bartle Hall in Kansas City) will likely pose minimal competition with the proposed Branson facility; however, certain potential larger events that could use a Branson facility could also be accommodated in a portion of these larger facilities (or large hotel meeting facilities). Facilities in Little Rock, Tulsa, Hot Springs and Oklahoma City largely represent primary competitors for regional events, while the planned facility in Springfield and secondary convention facilities in Kansas City/Overland Park will likely represent primary competitors with a new Branson Center for state events. Southwest Missouri presently does not offer a large convention/exhibition center to host state, regional and national events. Springfield (MO) is progressing with developing a 95,000-square foot exhibition center. This facility is expected to compete with a new Branson Center for certain events; however, the level of competition may be modest and, in fact, both communities could potentially benefit from the presence of each other s facilities in certain ways. Specifically: 1) The planned Springfield exhibition facility is estimated to incorporate approximately 50,000 square feet of contiguous, prime exhibit space (40,000 to 45,000 additional square feet of exhibit space will be situated non-contiguously and will represent non-prime space with lower ceilings and columns). As will be subsequently discussed, the market supportable facility program for a new Branson facility approximates up to 80,000 square feet of contiguous exhibit/multipurpose space. This difference in contiguous space allows the Branson facility to target a portion of the market that the planned Springfield facility will not be able to accommodate. 2) Typically, the appeal and characteristics of a destination is the first aspect considered by event planners when selecting sites, followed by the ability of the respective convention facility and related hotel inventory to accommodate their event(s). As such, when considering the characteristics of the destination, the Springfield and Branson markets represent two very distinct products: Springfield represents a typical small metropolitan community, while Branson is a niche, entertainment-focused tourist destination. 3) Due to the lack of large facilities in southwest Missouri, the addition of two facilities to the area provides new choices for regional and certain national event planners (some of which might otherwise select destinations in Arkansas or Oklahoma). These new choices, in turn, are expected to increase the ability of Missouri to attract out-of-state events, thereby increasing the new economic benefit to Missouri. 4) In certain respects, the two centers could benefit each other s communities. For example, a certain portion of attendees of regional/national events held in a new Branson Center will arrive to the area via Springfield s airport. A portion of new economic activity Executive Summary Page ES-6

11 will occur in Springfield as a result (i.e., increased airline passenger traffic, airport car rental, meal expenditures, etc.). Likewise, a portion of attendees of certain Springfield events could travel the short drive to visit Branson and its attractions for a day-trip or over a weekend preceding or following their event. The following exhibit presents a summary of sellable square footage offered at the 15 comparable facilities analyzed for this analysis: Summary of Total Sellable Space (in Square Feet) Comparable Facilities Knoxville, TN West Palm Beach, FL Chattanooga, TN Savannah, GA Myrtle Beach, SC Ontario, CA Ocean City, MD Wildwood, NJ Palm Springs, CA Kenner, LA Covington, KY Gatlinburg, TN St. George, UT Greeley, CO Lafayette, IN 33, , , , , , , ,600 93,100 89,400 87,200 85,000 83,400 63,600 Exhibit 61,500 Mtg/Ballroom/Multipurpose 0 50, , , , ,000 Source: Interviews with Facility Management, 2003 Each of these comparable convention center facilities was selected due to similarities with one or more aspects of the proposed Branson Center and/or Branson community. For instance, Gatlinburg and Ocean City are two communities that possess low permanent resident population bases and are tourism-driven communities. It should be noted that some of these facilities, particularly the centers in Gatlinburg and Chattanooga, might also represent potential competitors to a new Branson facility. Market Survey Research To form a basis for the market analysis, detailed surveys were completed with meeting planners representing several key event segments that could utilize a potential Branson convention center. Individual telephone interviews were conducted with representatives of the following key national, regional and state event segment groups: associations, SMERF (social, military, educational, Executive Summary Page ES-7

12 religious and fraternal) organizations, public/consumer shows, corporations and tradeshows. Market surveys with potential national, regional and state rotating events indicate varying levels of interest in a new Branson Center. The following exhibit presents a summary of the surveys conducted and their associated interest levels in rotating an event to Branson: Summary of Rotating Event Survey Groups and Interest Levels National and Regional Groups State Assoc. SMERF Corp/TS Groups Completed Interviews Estimated Population 1, Interest Levels: Definitely Use 1.1% 9.4% 0.0% 14.3% Likely Use 4.4% 12.5% 3.7% 28.6% Possibly Use 29.7% 43.8% 40.7% 4.8% Not Likely Use 64.8% 34.4% 55.6% 52.4% Positive Response 35.2% 65.6% 44.4% 47.6% Specifically, national/regional/state SMERF groups and state associations expressed a strong interest in the Branson product, while national/regional associations, corporations and tradeshow organizers expressed more moderate interest. In general, for small to medium sized communities, positive response percentages higher than 50 percent for national and regional groups (i.e., SMERF for Branson) are considered particularly favorable. Further, surveys reveal that 96 percent of national and regional groups (94 percent of the SMERF segment) have not held an event in Branson in the past. This represents a significant un-captured market base for Branson. In addition to the surveys indicated above, interviews were conducted with a select group of state and regional public/consumer show producers to ascertain interest in relocating and/or creating one or more shows for a new Branson Center. Overall, interest was mixed; however, it is important to note that inferring demand levels from surveys of potential public/consumer show events is typically difficult as most shows of this nature, produced in small to mid-sized event facilities, are created by individuals or organizations with ties to the local area. Rather, event data obtained from the competitive/comparable facilities analysis with consideration of the local market is typically more useful in evaluating public/consumer show event demand levels. Executive Summary Page ES-8

13 Other than interest levels, a variety of additional information was obtained from survey respondents (detailed within the full report and Appendix A). This information was instrumental in the development of key market, financial and economic impact estimates and assumptions used in the subsequent analysis steps. Information obtained from survey respondents included, but was not limited to the following: o Space requirements (exhibit, meeting, ballroom, fixed seating, etc.); o Hotel requirements; o Transportation/airport issues; o Attendance and length of event; o Seasonality data; o Perceptions and opinions regarding the Branson area; o Reasons for an interest or lack of interest in rotating to Branson; and o Other such quantitative and qualitative information. Building Program and Event Levels Following the analysis of market survey data, an analysis was conducted to estimate a market supportable facility program for the proposed Center. The following exhibit presents a summary of key market supportable facility components for a new Branson Center and the associated levels of national, regional and state demand that such space would be able to accommodate. Summary of Market Supportable Facility Program And Market Demand Capture Percentages Market Percentage of Market Captured Supportable Natl/Reg Natl/Reg Natl/Reg State Program Assoc. SMERF Corp/TS Groups Exhibit Space 60,000 88% 94% 82% 100% Ballroom/Multipurpose 20,000 89% 78% 88% 100% Meeting Space 7,500 80% 90% 90% 100% Executive Summary Page ES-9

14 As shown in the previous exhibit, the estimated market supportable facility program for a new Branson convention center approximates 60,000 square feet of prime exhibit space, 20,000 square feet of ballroom/multipurpose space and 7,500 square feet of in-facility breakout meeting space. This program would allow Branson to accommodate a majority of its national/regional/state market demand. The market capture analysis assumes that certain events will have the ability to either utilize the Center s ballroom/multipurpose space and/or the expected meeting and banquet space incorporated within the attached/proximate headquarters hotel property to fulfill total breakout space requirements. Additional meeting space incorporated into the Center itself (beyond the 7,500 square feet) could assist in fully accommodating breakout space requirements and give the Center greater flexibility in hosting concurrent events. In recent years, ballroom space has become a very important component of convention facilities. Such space is often utilized for many other types of functions beyond traditional food functions, including general assemblies, spillover exhibition space, breakout meetings and other such functions. To accommodate the widest variety of events and to increase the functionality of the proposed Center, it is suggested that the ballroom be developed as a very flexible, multipurpose area and be configured at one end of the exhibit hall. This would allow for the ability to create a contiguous area of approximately 80,000 square feet to accommodate certain events requiring more than 60,000 square feet of exhibit space (as well as concurrent events when subdivided). In addition, it is expected that the integration of retractable seating in one or more of the interior walls of the exhibit or multipurpose space could assist in accommodating the fixed seating requirements of certain events (particularly those events that traditionally have frequent seated and assembly functions, such as many SMERF groups). Based on the various analyses conducted, the exhibit on the following page summarizes the estimated level of potential event activity for a Branson convention center (in a stabilized year of operations, assumed to occur by the fifth year of operation) under the market supportable facility program noted above. As previously mentioned, three scenarios were developed to consider varying degrees of materialized development in the District proximate to the Center. Executive Summary Page ES-10

15 Summary of Estimated Event Levels for the Proposed Branson Convention Center By Scenario (Stabilized Year of Operations) Scenario A Scenario B Scenario C Envisioned Project Limited Lakefront without Development Project Hotel w/o Hotel Conventions/Tradeshows Public/Consumer Shows Meetings/Banquets Other Events Total As shown above, under Scenario A (representing the envisioned downtown/lakefront redevelopment project with an adjacent headquarters hotel, key retail/entertainment anchors and other development), it is estimated that a new Branson Center will accommodate 177 events. Convention and tradeshow events are estimated to primarily reflect regional and state SMERF and association events, with some attraction of niche national events. The estimated meeting and banquet events represent small, non-exhibit space using events (with an average attendance of 150). Other events include miscellaneous events such as festivals, spectator events, and other such events. Under Scenario B (full District development without a headquarters hotel), event levels are estimated to be lower, reflecting a lower capture of traditional conventions and tradeshows, but higher levels of public/consumer shows. As much of Branson s anticipated market reflects drive-in attendance, the negative impact of not having a proximate headquarters hotel property is lessened, however still significant. Under Scenario C (limited District redevelopment and no headquarters hotel), the synergy (in terms of attracting events) generated by the entertainment/retail/visitor industry components proposed for the District is not present. Most events estimated for the facility will likely consist of public/consumer shows, drive-in state groups, meetings and banquets and other events. Executive Summary Page ES-11

16 A detailed review of event levels at competitive and comparable facilities was also instrumental in developing event estimates for the proposed Branson Center. The following exhibit presents a comparative summary of recent year event levels at select competitive/comparable facilities reviewed. Comparative Summary of Recent Year Event Levels Select Competitive and Comparable Facilities Source: Analysis of facility data and other industry sources, 2002 and Public/ Conventions/ Consumer Meetings/ Other Tradeshows Shows Banquets Events Total Chattanooga Convention Center N. Kentucky Convention Center Hot Springs Convention Center Statehouse Convention Center West Plains Center Branson CC - Scenario A Branson CC - Scenario B Roland E. Powell Convention Center Prairie Capital Convention Center Reno Convention Center Overland Park Convention Center Gatlinburg Convention Center Branson CC - Scenario C Tulsa Convention Center Fort Smith Convention Center Porter County Expo Dixie Center Average - Excluding Branson It should also be noted that the Overland Park Convention Center s event levels represent booked public and private events for 2003 and it is likely that actual event levels will be slightly higher than indicated. As shown in the exhibit, a proposed Branson Center is estimated to generate annual event levels consistent with the average facility reviewed. Most of the facilities generating higher total event levels do so by accommodating higher levels of smaller events such as meetings and banquets. A lower level of meetings and banquets is estimated for a Branson facility due to: (1) existing facilities in the local market (i.e., Chateau on the Lake, Radisson, etc.) that are capable of hosting these events and (2) the smaller population and corporate base in the Branson area. Further, as management of the proposed Branson facility is expected to be bid to an experienced private management firm, given typical Executive Summary Page ES-12

17 industry channels and affiliations, it is expected that the facility will be positioned to compete effectively within the public/spectator event markets. Financial Operations Based on market, program and event analysis findings, an analysis of the estimated financial operating characteristics of the proposed Branson Center was conducted. The analysis only considers revenues and expenses generated through the operation of the convention facility itself, and does not consider other potential ancillary income that may be related to the Center (such as incremental tax revenue, parking income, admissions surcharges, interest income, etc.), nor does it consider other non-operating costs such as construction costs or convention marketing. These non-operating income and cost issues will be discussed later in this summary. The exhibit below presents the estimated financial operating results for the proposed Branson convention center under the three scenarios developed. Estimated Financial Operating Results for a New Branson Convention Center By Scenario (in a Stabilized Year of Operations, in 2003 Dollars) Scenario A Scenario B Scenario C Operating Revenues Rental $868,000 $764,000 $587,000 Food & Beverage (net) 1,438,000 1,205, ,000 Contract Services/Other 400, , ,000 $2,706,000 $2,319,000 $1,823,000 Operating Expenses Salaries/Benefits $1,700,000 $1,600,000 $1,500,000 Utilities 343, , ,000 Repair & Maintenance 109, ,000 94,000 General & Administrative 92,000 83,000 73,000 Insurance 187, , ,000 Materials & Supplies 87,000 78,000 70,000 Professional Fees 70,000 65,000 60,000 Management Fee (1) 500, , ,000 Other 148, , ,000 $3,236,000 $3,022,000 $2,807,000 Net Operating Deficit ($530,000) ($703,000) ($984,000) Note: Figures do not include parking revenue, other income or convention center marketing costs. (1) Assumed fee, other figures reflect certain efficiencies/revenue enhancement generated by private management. Executive Summary Page ES-13

18 As shown in the previous exhibit, excluding ancillary, non-operating revenues and expenses, it is estimated that a Branson Center will generate an operating deficit before debt service (in a stabilized year of operation, assumed to occur at the fifth year) under each of the three scenarios evaluated, ranging from a loss of $530,000 to $984,000. This type of convention center operating loss is consistent with comparable convention centers throughout the country. Based on the discussions with City officials, it is assumed that the proposed Center will be managed by an experienced convention center private management firm. While charging a fee in exchange for management services, private management could potentially provide several important benefits, including: o Expediting the start-up process and period, through staff assembly and expertise in marketing and operations of similar facilities. o Experience and efficiencies associated with event marketing, including the funneling of specific one-time and recurring industry events (i.e., spectator/public) to the facility. o Contract-based incentives and similar facility experience with limiting and reducing various ongoing operating expenses. Economic and Fiscal Impacts The annual operations of a convention center provide significant benefits to an area. The impact of a convention center is maximized when out-of-town attendees spend money in a community while attending a facility event. This spending by out-of-town attendees represents new money to the community hosting the event. This new money then creates multiplier effects as the initial spending is circulated throughout the local economy. The effects of attracting event attendees to the Branson area impact numerous industries and enhance economic activity throughout the community. Primary visitor industries, including hotels, restaurants, retail establishments, local transportation and related industries can benefit directly from a new Center. Indirect effects can benefit various support industries including wholesale, distribution, manufacturing and other industries. The exhibit on the following page has been prepared to summarize estimated annual economic impacts associated with the operation of the new Center that are considered new to the Branson area and new to the state of Missouri and are attributable to the operation of the new Center. Executive Summary Page ES-14

19 Estimated Annual New Economic Impacts Associated With the Operation of a New Branson Convention Center By Scenario (in a Stabilized Year of Operation, Presented in 2003 Dollars) New to Branson Area: Scenario A Scenario B Scenario C New Spending Activity: Direct Spending $53,200,000 $44,900,000 $35,000,000 Indirect/Induced Spending $25,200,000 $21,200,000 $16,600,000 Total Economic Output $78,400,000 $66,100,000 $51,600,000 New City-captured Taxes (1): Tourism Tax $1,250,000 $1,040,000 $810,000 Sales/Restaurant Tax $2,610,000 $2,220,000 $1,490,000 Tax Revenues $3,860,000 $3,260,000 $2,300,000 New to Missouri: New Spending Activity: Direct Spending $18,400,000 $15,300,000 $12,100,000 Indirect/Induced Spending $8,800,000 $7,300,000 $5,700,000 Total Economic Output $27,200,000 $22,600,000 $17,800,000 (1) Each scenario assumes State TIF project designation and includes TIF State and County sales tax incremen Potential new impacts on property taxes and other municipal tax/fee revenue are not reflected. As shown, in 2003 dollars and in a stabilized year (assumed fifth year), the operation of a new Branson convention center is estimated to generate between $78.4 million and $51.6 million of new economic activity (direct, indirect and induced spending) for the Branson area annually, depending on the scenario. Further, it is estimated that the Center will generate between $27.2 million and $17.8 million annually in new economic activity for the state of Missouri, depending on the scenario. This represents estimated spending that is new to Missouri. These spending figures represent new spending in the Branson area and new spending in the state (i.e., spending by out-of-town convention center event attendees that the community wouldn t benefit from without the presence of the convention facility itself). Displaced spending (spending that may have occurred somewhere else in the community) was not included in direct, indirect and induced spending estimates. As an example of displaced spending, if a person visits Branson as a transient tourist and, while in Branson, that person elects to attend a public show at the convention center (such as an antique show), much if not most of the spending by that individual at the show presumably would have taken place in Branson regardless. Executive Summary Page ES-15

20 As the proposed Branson Center is envisioned to be funded under the State s Municipal Tax Increment Financing (TIF) Program, estimates were also developed with respect to the amount of new City-captured tax revenue generated as a result of convention center attendee spending. Taxes considered in the analysis included the City s 1.5 percent sales tax, 4.0 percent City tourism tax (hotels and entertainment), and the City s 0.5 percent restaurant tax. In addition, of spending estimated to occur within the TIF District, it has been assumed the City will also capture 50 percent of the County s 1.5 percent sales tax, 50 percent of the State s 3.0 percent General Fund sales tax, and 1.0 percent from a new transportation sales tax. Taxable spending within the TIF District that is not considered new to the Branson area (i.e., assumed displaced spending from within the community) was also included in this tax revenue estimate to reflect the new increment of tax revenue that will be generated for the City as a result of the TIF designation (i.e., captured incremental revenue from the State and County portions of sales tax). It is important to reiterate that the economic spending and associated tax revenues estimated herein only represent new spending and new City of Branson tax dollars generated by convention center attendees. As envisioned, the revitalized District will attract other visitors and spending to the downtown/lakefront area that is not associated with attendees of Center events. This new District spending associated with individuals not attending convention center events has not been evaluated through this analysis. In addition to quantifiable benefits, certain potential benefits of the new Center cannot be quantifiably estimated; however, these benefits could be substantial in scope. These benefits tend to be wide ranging and can include: o spin-off developments (i.e., hotel, restaurant, and retail development near the Center); o community marketing and economic development (i.e., exposure of the community to individuals and corporate/entertainment representatives from a broad cross-section of geographical areas and industries); o community use (through hosting local events); o new employment opportunities for local residents; o strengthening of local housing market; and o other intangibles such as: quality of life aspects community reputation and image new advertising opportunities for local businesses. Executive Summary Page ES-16

21 Preliminary Cost/Benefit Assessment One method of determining convention center feasibility involves comparing total costs associated with the facility with the total new revenue generated through its operation. While the operation of the envisioned overall downtown/lakefront redevelopment project and the proposed convention center will be interrelated in many respects, an analysis was performed isolating only the estimated and assumed costs and benefits associated with the convention center itself. The estimated tax revenues generated by the Center that are captured by the City (assuming a State TIF designation for the District) as previously discussed represent the primary component of new Center revenues (i.e., benefits). Beyond the estimated financial operating costs associated with the convention center (i.e., annual financial operating deficit), key assumptions have been made with respect to other Center-related costs. These assumptions are based on discussions with the City and industry experience. Further analysis (i.e., architectural master planning, design and construction cost analysis, parking, etc.) will be required to refine these non-operating assumptions. Key expense assumptions utilized include: o Based on assumptions provided by the City, a hard and soft Center construction cost assumption of $35 million and a land cost of $6 million (representing a prorated portion of a larger contemplated plot that is required to accommodate the convention center) was utilized. Using these assumptions, an annual debt service payment was estimated based on a term of 30 years and an interest rate of 5.5 percent. o Net income from a City-owned parking structure or surface lots near the Center has been assumed. Based on City-provided assumptions, 900 parking spaces have been assumed for this analysis (that would be available to Center attendees) at an average daily rate of $5.00 per car per day for convention center events. The net parking income associated only with an assumed portion of Center event attendees requiring parking has been estimated. These assumptions should be revised as District project planning is furthered. o A new convention center will also require additional expenditures for marketing purposes, beyond existing tourism marketing expenditures by the Branson Area Chamber/Convention and Visitors Bureau. Marketing efforts are especially critical during the construction period and initial years of convention center operations. Based on a review of comparable community marketing budgets, the average community expends (typically through respective convention and visitors bureaus) approximately $900,000 annually for convention center marketing (including personnel). This amount is assumed for purposes of this analysis; however, certain Executive Summary Page ES-17

22 efficiencies with existing Branson Chamber/CVB personnel and marketing operations may be possible and should be pursued. The following exhibit presents a summary of the preliminary cost/benefit analysis (presented in terms of annual costs and benefits in a stabilized year, in 2003 dollars) performed for the proposed Branson convention center under the three scenarios: Summary of Preliminary Cost/Benefit Analysis Associated With the Proposed Branson Convention Center (Figures Annualized, in 2003 Dollars) Scenario A Scenario B Scenario C New Branson Area Tax Revenues (1) $3,860,000 $3,260,000 $2,300,000 Assumed Annual Costs: Convention Center Construction/Land (2) ($2,821,000) ($2,821,000) ($2,821,000) Convention Center Operations (530,000) (703,000) (984,000) Conv. Ctr.-Related Parking Income (3) 500, , ,000 Convention Center Marketing (900,000) (900,000) (900,000) ($3,751,000) ($3,974,000) ($4,330,000) New Tax Revenues Less Costs: $109,000 ($714,000) ($2,030,000) (1) Represents new tax revenue captured by the City of Branson associated with convention center attendee spending. Does not include other potential new spending in the downtown/lakefront District. Only considers sales, tourism and restaurant taxes. Does not consider potential impacts on property taxes or other potential new City revenues. (2) Based on City-provided assumptions. Annual debt service for convention center assumes construction costs of $35 million, land purchase cost of $6 million (assumed prorated portion of larger plot that is required to accommodate convention center), term of 30 years and interest rate of 5.5%. (3) Convention attendee-related net parking revenue for an assumed City-owned 900 parking spaces. As shown, under Scenario A and based on the estimates and assumptions utilized, the proposed Branson convention center is preliminarily estimated to generate a nominal level of new revenues in excess of total expenses. Under Scenarios B and C, total expenses are estimated to exceed new revenues. As previously indicated, this type of cost / benefit assessment is useful in preliminarily evaluating the net benefits of the proposed Branson convention center. Further planning and study is suggested to refine this analysis. In addition, due to the interrelated nature of the convention center with other envisioned District components (i.e., hotels, anchor and ancillary retail, restaurants, commercial, residential, etc.), it will be beneficial to evaluate the net costs and benefits of all District components in a similar manner. Executive Summary Page ES-18

23 Conclusions Based on the Branson downtown/lakefront convention center feasibility analysis conducted, the following conclusions have been developed: o Demand levels indicate the convention center is market supportable. A market supportable facility program has been outlined that is estimated to result in facility utilization that is comparable to other similar regional and national facilities. o Other downtown lakefront components are critical to the success of the convention center, creating synergy. The creation of a new, vibrant entertainment/mixed use district on the lakefront with visitor amenities (i.e., restaurants, retail and entertainment) is expected to assist in creating a more attractive destination for convention center events and attendees. o Additional expenditures for convention center and community marketing will be important to initial and long-term viability of the proposed Center. o Other non-convention center-related activity will be important to overall economic success of the downtown/lakefront District. The convention center is envisioned to be one of many important components of the redeveloped District. Within the context of the estimated five to eight million annual visitors to Branson, the ability of the redeveloped District to attract a portion of these visitors as well as new visitors to Branson will be critical in the overall success of the District project. o The proposed convention center would be expected to act as an important catalyst for new activity and economic development (notably specific private development, including a headquarters hotel and ancillary retail and restaurants) in a revitalized District and would generate new economic impacts for Branson, the state of Missouri and the surrounding region. Executive Summary Page ES-19

24 I. Introduction Conventions, Sports and Leisure International ( CSL ) was engaged by the City of Branson ( City ) to conduct a feasibility analysis of the proposed downtown Branson Exhibition and Convention Center ( Center ). The study s primary focus relates to the evaluation of the market demand for the proposed Center derived from convention, tradeshow, public show and other key event sectors and to estimate associated financial and economic impacts. This report highlights the key findings of the various analyses performed. This report addresses the following areas as they relate to the proposed Center: Study background, methods and purpose Local market conditions and industry conditions Competitive and comparable facilities Market survey research Building program and event levels Financial operations Economic and fiscal impacts Preliminary cost/benefit assessment Additional information regarding survey research data and key market, financial and economic assumptions utilized for this analysis is presented in Appendix A and B, provided at the conclusion of this report text. Study Background, Methods and Purpose Key study components include the analysis of existing local market conditions, competitive/comparable facilities and communities, industry conditions, potential user interviews, building program, event levels, financial operations and economic and fiscal impacts. Specifically, the study process consisted of 365 individual interviews, including the following: 30 Branson community leaders and local residents; 275 national, regional and state event planners; 30 competitive/comparable facility managers; and 30 competitive/comparable community convention & visitors bureaus representatives. Introduction Page 1

25 The overall purpose of this study is to evaluate the feasibility of the proposed Center. Oftentimes, conclusions as to project feasibility can be assessed in various ways, including: Market feasibility the ability of the Center to attract and support levels of event activity and facility utilization that are consistent with or in excess of industry standards. Financial feasibility the ability of the Center to break-even or generate an operating profit focusing only on direct Center-related operating revenues and expenses. Economic spending the ability of the Center to generate new spending activity in the local community (i.e., direct and indirect spending that is attributable to out-of-town Center attendees/exhibitors that would not otherwise occur in the local area). Tax generation the ability of the Center to generate new tax revenue for the local area (i.e., tax revenue resulting from direct, indirect and induced spending that is attributable to out-of-town Center attendees/exhibitors that would not otherwise occur in the local area). Cost/benefits/return on investment the ability of the Center to generate new revenues (i.e., from taxes, operating income and ancillary Center-related revenues, etc.) in excess of quantifiable Center-related costs (i.e., construction costs, operating costs, marketing costs, etc.). When evaluating the feasibility of a convention center, communities throughout the country have differed in the specific criterion that best reflects the definition of feasible for their community. For instance, one community may focus more on the ability of the project to generate new economic spending, taxes and jobs for local residents, rather than the actual return on investment to build, operate and market the facility, while another community may require that the project be operationally self-supportive (i.e., generate an annual financial operating profit). While each of these measurements of feasibility are addressed in this study effort, based on discussion with City officials, the cost/benefit aspect of the proposed Branson project comprised a primary focus of this analysis. As will be discussed, the City is contemplating a large mixed-use revitalization/redevelopment project in Branson s downtown and lakefront area (often referred to as Branson Landing ). The proposed convention center would represent one of many components of such a project. While the operation and ultimate success of many of the components of the envisioned redevelopment will likely be interdependent (i.e., mutually benefiting from each other s presence), this analysis focuses solely on the operations, costs, benefits and issues associated with the convention center itself. For Introduction Page 2

26 example, new spending that could occur in a revitalized downtown/lakefront by new visitors not associated with convention center events is not considered nor quantified. The proposed downtown Center is envisioned to comprise a key component of much larger downtown/lakefront revitalization. The City has defined a downtown/lakefront district ( District ) where much of this redevelopment effort is envisioned to occur. Other developments in the District may include: one or more hotel properties; one or more high-profile retail anchors; restaurants and other secondary retail; residential and commercial units; public areas and pedestrian lakefront frontage; public and contracted parking; transportation and roadway improvements; and other miscellaneous improvements. Due to various uncertainties surrounding the ultimate materialization of the key components of the overall envisioned development, three different development scenarios have been utilized as a basis for the analysis of the proposed convention center: Scenario A Envisioned District Revitalization Project: 1) A headquarters hotel with 250 or more rooms is located adjacent or nearby the convention center 2) At least two of the three key large retail/entertainment anchors envisioned for the District are secured (i.e., sporting/outdoors retailer, aquarium, etc.) 3) Other District redevelopment/revitalization occurs largely as envisioned (i.e., roadway improvements, secondary retail, restaurants, etc.) Scenario B Envisioned Project Without Hotel: 1) No headquarters hotel is developed to support the Center 2) At least two of the three key large retail/entertainment anchors envisioned for the District are secured (i.e., sporting/outdoors retailer, aquarium, etc.) 3) Other District redevelopment/revitalization occurs largely as envisioned (i.e., roadway improvements, secondary retail, restaurants, etc.) Introduction Page 3

27 Scenario C Limited Development Without Hotel: 1) No headquarters hotel is developed to support the Center 2) No large retail/entertainment anchors are secured for the District 3) Limited other development/revitalization projects materialize in District, other than modest land/infrastructure improvements around the Center In general, a convention facility incorporated as part of the proposed District redevelopment/revitalization would represent a fairly unique product in the convention industry. As envisioned under Scenario A, a certain level of synergy would likely exist with the convention facility and other District components. From a broad perspective, it is hoped that the convention center and overall revitalized District would have several effects, including assisting in: (1) diversifying the community s visitor base, (2) expanding the overall visitor base, (3) directly and indirectly affecting the revitalization of the downtown area, (4) providing resources for the community and enhancing quality of life, and (5) helping reposition Branson s regional, national and international image. Introduction Page 4

28 II. Local Branson Market and Industry Conditions Analysis A community s socioeconomic attributes and hospitality infrastructure, in terms of hotels, restaurants, entertainment and other such factors, can contribute significantly to the potential success of a convention facility. Further, the market success of a convention center can be partially attributed to the characteristics of the conventions, tradeshows, exhibitions and conferences industry as a whole. CSL conducted an analysis of these local market and industry attributes as they relate to the Branson market area and a potential Branson Center. Local Market Conditions The strength of the local market, in terms of its socioeconomic attributes, can provide an indication as to the ability of a community to accommodate large numbers of public show, tradeshow, convention, and other event attendees. Likewise, the existing and planned hospitality infrastructure, including existing local event facilities, can provide indications of the ability of the Branson area and a potential convention center to attract and support events and attendees. Local Market Attractions and Resources While the demographic attributes of a destination typically provides indications as to its ability to accommodate large numbers of convention center attendees, the Branson community is unique with respect to its high level of tourism relative to its population base. Specifically, it is estimated that Branson attracts between four and eight million visitors per year (more than half who represent overnight visitors). This massive influx of non-residents occurs in a community with a very small resident population base, approximately 6,000 in the city of Branson and 42,000 in Taney County. Branson s existing visitation is driven by the wide variety of unique entertainment options and attractions (man-made and natural) offered by the community. The community is home to a critical mass of entertainment theaters and regularly performing, well-known entertainers. Specifically, Branson offers 49 music theaters, incorporating approximately 59,000 theater seats. These shows, along with supporting businesses such as restaurants, retail shops, hotels, tours, and other unique attractions, have helped establish Branson s tourist destination reputation. Local Branson Market and Industry Conditions Analysis Page 5

29 Specific unique attractions, events and community resources in Branson include: Stone Hill Winery Hollywood Wax Museum Shepherd of the Hills Fish Homestead/Hatchery Silver Dollar City Branson Scenic Railway White Water Park Ride the Ducks Andy Williams Moon River Theater Golf Shopping Fishing Boating The Branson/Lakes Area Chamber of Commerce/Convention & Visitors Bureau has been working to continue the development of the community in several respects, including tourism, quality of life/environmental and economic diversity. In terms of tourism, the Chamber has increased visitation through various means. Efforts have been made to market to niche markets, such as students, and to create festivals and other events (i.e., Branson Area Festival of Lights, Branson Fest, etc.). The Chamber is also attracting businesses and industries that are compatible with the local area. Existing Event Facilities and Hotels The number of competitive event facilities in the local market is an important consideration with respect to the overall viability of potential center development. As will be shown, there are few event facilities in the Branson area that have the ability to accommodate conventions, conferences, tradeshows, public shows and corporate event activity. In addition, the hospitality infrastructure is often an important determinant in the selection of a convention facility and destination. Background information concerning existing Branson event facilities and hotels is provided on the following pages. There are numerous other hotel facilities not mentioned herein that offer event space, although most offer less than 10,000 square feet of total sellable space. Local Branson Market and Industry Conditions Analysis Page 6

30 Chateau on the Lake The Chateau on the Lake is located several miles from downtown Branson and the attractions of Highway 76. The 301-room, upscale full service hotel offers a scenic view and approximately 39,000 square feet of meeting and banquet space. The Chateau is currently the Branson area s largest convention/meeting facility. The event space can accommodate groups up to approximately 3,000 people. The largest contiguous hall in the facility is the Great Hall ballroom, offering nearly 32,000 square feet of sub-divisible space. The ballroom possesses an upscale finish and is carpeted. Breakout meeting rooms are also incorporated. The ballroom and meeting facilities have hosted a variety of events types, including corporate banquets, wedding receptions, association conferences/conventions, SMERF (social, military, educational, religious, fraternal) events, and other private functions. While the ballroom has accommodated exhibit functions, most usage is derived from food functions, general assemblies, conferences, seminars, meetings, and other such functions. State/regional corporate events consist of the largest segment of event activity, followed by state/regional associations and SMERF groups. While the Chateau on the Lake incorporates a fairly significant amount of sellable square footage, the nature of the space does not make it optimally suitable for many types of exhibitions, tradeshows and conventions. As most groups that host small to mid-sized conferences and meetings tend to prefer to utilize hotel meeting facilities or conference facilities (i.e., with sleeping rooms and event space under one roof) rather than large stand-alone convention/exhibition facilities, it is anticipated that the Chateau on the Lake will continue to accommodate the large majority of its present event demand under a situation where a new Branson convention/exhibition center is developed. Lodge of the Ozarks Located on Highway 76, the Lodge of the Ozarks offers 190 sleeping rooms and approximately 11,000 square feet of meeting and ballroom space that can accommodate groups of up to 500. The facility is within walking distance of six major theaters, as well as factory outlet shopping. The largest contiguous room in the facility approximates 4,700 square feet. Local Branson Market and Industry Conditions Analysis Page 7

31 Big Cedar Lodge Located south of Branson, the 247-room Big Cedar Lodge incorporates approximately 11,000 square feet of total meeting space throughout six rooms. In addition, the hotel offers a Jack Nicklaus Signature Golf Course, a spa, marina and stables. Radisson Hotel Branson The Radisson Hotel Branson is one of the largest hotels in the Branson area. The hotel is located near the Highway 76 attractions and offers impressive views of the Ozarks. The 10-story hotel offers approximately 500 sleeping rooms and 8,000 square feet of meeting space spread throughout five rooms. Exhibit II-1 provides a summary of the largest hotel properties (i.e., offering 200 or more rooms) in Branson. Exhibit II-1 Primary Branson Hotel Properties Hotel Property Rooms Radisson Hotel Branson 500 Days Inn 424 Howard Johnson 344 Grand Country Inn 319 Chateau on the Lake 301 Settle Inn 298 Ramada Inn 296 Branson Inn 276 Big Cedar Lodge 247 Point Royale Properties 240 Dogwood Inn 220 Quality Inn 214 Branson Towers 210 Honeysuckle Inn 210 Grand Plaza Hotel 200 Sunterra Fall Creek 200 Source: City of Branson. It is estimated that the Branson area possesses a total of approximately 18,600 hotel rooms. Over the past couple of decades, much of Branson s hotel package has grown to reflect the area s strongest visitation markets (i.e., economically-minded drive-in and motor coach tourists, families, etc.), resulting in a large number of midrange and economical, limited service properties. However, Branson does also offer several premium, full-service properties such as the Chateau on the Lake and the Radisson, Local Branson Market and Industry Conditions Analysis Page 8

32 completing a broad spectrum of hotel offerings in the area. In addition, one or more new convention-quality hotel properties are anticipated to be developed as part of the convention center and downtown/lakefront redevelopment project. Key Branson Area Strengths and Weaknesses Based on the analysis performed and with regard to local market conditions, key strengths and weaknesses of Branson, as they relate to attracting conventions, tradeshows and other events, are summarized below. Strengths: Brand Name Recognition Millions of tourists visit Branson each year and the community and its marquee entertainment focus and products are already known throughout the country, as well as the world. Existing Visitor Infrastructure and Amenities - Branson possesses a variety of hotels, restaurants and entertainment options to uniquely cater to a tourism-based economy. Specifically, the area possesses approximately 20,000 hotel rooms and 30,000 restaurant seats through more than 350 restaurants. Music/Entertainment/Attractions - The Branson area offers a number of dinner theaters, live music, theme parks, museums, shops and more to entertain its many visitors. Specifically, Branson offers in excess 50,000 theater seats through dozens of venues. Proximity to Driving Population and Central U.S. Location - While the population of Branson itself is relatively low, the regional area within driving distance represents a fairly substantial potential event attendee base. Specifically, approximately 1.2 million residents live within 75 miles of Branson, 4.2 million within 150 miles and 20.0 million within 300 miles. In addition, Branson is located centrally to a number of Midwestern cities, such as Kansas City, St. Louis, Chicago, Memphis, Nashville, Dallas and Denver. The city is touted as being within a day s drive of half the country s population. With limitations in its existing air service, the ability of Branson to attract drive-in convention and event business will be critical. Low Cost of Goods and Services - Compared to a number of other convention destinations, the relative costs for goods and services in Branson are low. This also ties in well with certain groups who are already more inclined to drive to an event destination (i.e., social and religious groups, etc.). Family-Friendly Ambience - Branson has established itself as a family-friendly destination, offering both adult and children s activities through various attractions, theater productions, shopping malls, lake and other outdoor recreational activities. Local Branson Market and Industry Conditions Analysis Page 9

33 Natural Attractions - The Branson area is situated in southern Missouri in the midst of the Ozark Mountains. The area provides for numerous outdoor activities, including golf, mountain biking, fishing, boating, snow sports, hiking and more. Often, this aspect of the Branson area is not well-known by individuals who have not previously visited the area. Marketing efforts could potentially benefit from highlighting this aspect as well as others. Weaknesses: Proximity to Major Airport The forty-five-minute to one-hour drive time from the Springfield/Branson airport could be viewed negatively by certain convention, trade and corporate meeting planners when considering Branson as an event destination. While the drive-time to airports in certain large metropolitan cities can be similar, event planners generally tend to expect shorter commuting distances when considering smaller destinations. However, this type of negative perception is less likely to be significant with other types of groups, such as those comprising the SMERF (social, military, educational, religious, fraternal) segment. Air Accessibility and Expense The Springfield/Branson Regional airport presently serves six cities with direct air service, an amount considerably less than many convention destinations. In addition, air travel costs from many U.S. metropolitan areas to Springfield are high. In the longer-term, the proposed Patch airport in Branson could be beneficial in offering a closer alternative as well as potentially expanding the overall air alternatives for the local region. Size of the Local Community Branson s resident population is very small, reflecting the unique nature of the community. For most communities, this tends to be a substantial disadvantage as the amount of hotel rooms and other community amenities are often correlated with the size of the community. However, given Branson s substantial tourism base, the primary negative factor associated with the size of the community relates to its ability to draw local residents and corporations as users and attendees of center events. Perception Issues with National Planners Given Branson s unique product and certain tourist markets that it has very successfully catered to over the past couple of decades, Branson has established a well-known reputation nationally and internationally. Much of this reputation has been shaped by a long history of marketing efforts, media coverage and word-of-mouth. As will be discussed in a subsequent chapter, some national meeting planners have negative perceptions with respect to the attractiveness of Branson as a destination for their primary convention event. On the other hand, other meeting planners (including many with firsthand knowledge of the area) have indicated positive perceptions about the community as a destination. If a convention facility is developed in Branson, a targeted marketing effort will be necessary to showcase the area s Local Branson Market and Industry Conditions Analysis Page 10

34 characteristics, amenities and resources as they specifically apply to convention and meeting events and their delegates. Parking and Traffic Issues Parking and traffic issues are concerns in many convention destinations. During peak tourism seasons, Branson s roadways and parking facilities can become very congested. If a convention center is developed as part of the proposed downtown/lakefront District revitalization, traffic and parking concerns should be addressed as important components of the overall project with this in mind. Further, traffic and parking issues could be greatly exacerbated in the downtown/lakefront District area given (1) the anticipated gravitation of visitors to the District area upon completion, (2) the anticipated high reliance on convention center drive-in business, as well as (3) the possibility of a situation where a headquarters hotel is not operational during the convention center s initial years. Industry Conditions Analysis As previously indicated, the market success of a convention facility can be partially attributed to the characteristics of convention, tradeshow, public show and conference event industries themselves. In order to assess the current and future strength of key event markets that could hold potential for a new Branson convention center, it is important to begin with an evaluation of these industries nationwide. Types of Events and Facilities In order to present summary background and definition information corresponding to the conventions, tradeshows, exhibitions and meetings industry, the following information was prepared. The public assembly event industry is diverse and dynamic, consisting of a wide variety of events, many of which focus around a collection or gathering of individuals for the purpose of entertainment/recreation and/or face-to-face communication and the transmission of ideas/information. Typical industry event segments include: Conventions and Tradeshows Events traditionally held by professional associations of international, national, regional, state or local scope. Many of these groups tend to hold annual events that rotate among various destinations within a particular region. Large corporations also hold tradeshows and conventions. Public/Consumer Shows Consumer events open to the general public such as home, boat, sports, craft and related shows. The events tend to be exhibitfocused and, in most cases, largely draw attendees from the local market area. However, given the characteristics of the community, it is expected that a new Local Branson Market and Industry Conditions Analysis Page 11

35 Branson Center could attract a higher number of out-of-town public show attendees than other communities, a portion of which will visit the area for the primary purpose of attending the event. Corporate Meetings Meetings held by local area companies such as training, seminars, banquets, retreats, holiday parties, board meetings and lectures. Most of the attendees tend to reside in the local market area. These events tend to generate high year-round usage in meeting facilities. SMERF (social, military, educational, religious, fraternal) Events include reunion-type meetings of groups and members, educational conferences and other such events. These events tend to be more sensitive to cost aspects than association and corporate groups. Given the specific nature of the Branson destination and its entertainment and visitor infrastructure, it is expected that SMERF events could represent important potential for a new Center. Service Club Meetings Events include functions hosted by local service clubs (such as Rotary, Shriners, and Elks) intended to share information, generate interest and spur membership. Private Banquets & Receptions Other private events including wedding receptions and anniversary/birthday parties. Most of these events and functions are small enough to be hosted in existing local facilities such as hotels, banquet halls, dinner theaters and other conference facilities. Sporting Events Ticketed and non-ticketed athletic-related spectator events. These events typically require multipurpose flat floor space in addition to plenary seating. Typical events include high school and collegiate basketball, volleyball, wrestling, indoor soccer and other such events. Other Spectator Events Other public events such as concerts, family shows, and speaking engagements. Such events generally require plenary seating, as well as a stage and sound equipment. Recreational Activities Includes numerous other local indoor activities where the facility is rented for recreational and leisure purposes. Activity typically requires multipurpose flat floor space and in some cases limited temporary seating. Local Branson Market and Industry Conditions Analysis Page 12

36 A variety of types of public assembly facilities exist in communities across the country that accommodate some or all of these types of events. Certain events tend to possess very specific facility and community requirements. Exhibit II-2, presented below, illustrates differences in the physical characteristics and event profiles of traditional event facilities. Exhibit II-2 Typical Public Assembly Facility Characteristics Convention Conference Expo Community/Civic Spectator Center Center Center Center Arena Type of Space Exhibit, Meeting, Ballroom Meeting, Ballroom Exhibit, Limited Meeting Multipurpose Space Spectator Seating, Flat Floor Space Typical Events Conventions, Trade Shows, Meetings, Banquet, Public Shows Conferences, Meetings, Banquets Public Shows, Trade Shows, Miscellaneous Local Meetings & Banquets, Recreation, Other Events Spectator and Other Events Typical Ancillary Characteristics Economic Impact Generating Ability Adjacent Headquarters Hotel Adjacent Hea dquarters Hotel Parking, Accessibility, Visibility Parking, Accessibility, Visibility Parking, Accessibility, Visibility High Moderate Limited to Moderate Limited to Moderate Limited to Moderate Convention centers, under the traditional model, typically incorporate exhibit, meeting and ballroom space. Typically located in medium to large-sized cities, convention centers tend to focus on attracting out-of-town economic impactgenerating events such as conventions and tradeshows. As such, it is usually imperative that convention-quality hotel inventory is located in close proximity to the center. Convention centers also tend to host a large number of secondary events such as corporate meetings, public shows, and banquets. Conference centers tend to represent smaller facilities than convention centers, usually possessing both flexible and dedicated meeting space in addition to banquet space. Most traditional conference centers do not incorporate prime exhibit space. Most centers focus on accommodating local and non-local corporate meetings/conferences in addition to other local event activity such as private receptions and banquets. Many conference centers are situated within hotel facilities. Conference centers are often broken into several categories related to their type/focus: executive, corporate, resort and college/university. Local Branson Market and Industry Conditions Analysis Page 13

37 Expo centers, or exposition centers, traditionally consist of large exhibit-focused structures possessing little or no breakout meeting and banquet space. Expo facilities tend to be lower cost facilities (per gross square foot) than convention and conference centers. Most of the events accommodated by traditional expo centers are local in nature and include events such as public/consumer shows, festivals and other large flat floor space using events. Community/civic centers tend to vary widely in terms of their physical and operational characteristics. Many centers offer multipurpose space that can accommodate a wide variety of event types. The large majority of event activity represents events and attendees from the local area and, as such, adjacent/nearby hotel inventory does not tend to be a primary concern for most events. Communities tend to develop these types of facilities for the good and benefit of the local community rather than for economic impact generating purposes. Spectator arenas are plenary seating venues that primarily accommodate spectator events such as sporting events, concerts, family shows and circuses. Some spectator venues have the capability to configure the arena floor and/or retract some or all of its seating areas to accommodate certain types of flat floor events such as graduations, public shows, and recreation activities. In a number of small to mid-sized communities across the country, successful assembly facilities have been developed that are multipurpose in nature, integrating a number of the characteristics of one or more of the facilities described above. As a result, these facilities are able to accommodate the widest variety of events thereby maximizing their event utilization. Convention and Tradeshow Industry Growth Conventions and tradeshows are events that are traditionally held by professional associations of international, national, regional, state or local scope. Large corporations are increasingly also hosting tradeshows and conventions in cities throughout the country. Many of these groups tend to hold annual events that rotate among various destinations within a particular region. Most conventions tend to incorporate exhibits along with general session, meeting, seminar and/or training activities. Tradeshows tend to be exhibit-focused events that may or may not include breakout meetings, general sessions and other smaller activities. In recent years, however, the characteristics of conventions and tradeshows have largely converged so that the two terms are often used interchangeably. Local Branson Market and Industry Conditions Analysis Page 14

38 The square footage, number of exhibitors and attendance levels of the convention and tradeshow market had continually grown since 1984, with the exception of a brief twoyear period in the early 1990s. The industry leveled off in 1990 and 1991 due to a combination of the nationwide economic recession and the Gulf War. By 1992, this decline reversed itself, with growth rates reaching mid-1980s levels. More recently, impacts related to the overall condition of the economy and the events of September 11 th have had a significant effect on the industry. Exhibit II-3 below summarizes trade show industry growth since 1984 with 1983 representing the base year of the index. Exhibit II-3 Tradeshow Industry Growth Net Square Feet Exhibiting Companies Attendance 200 Growth Index 1983=100 Base Year Source: Tradeshow Week. Between the years 2000 and 2001, all three measures of industry performance (square feet of space use, exhibiting companies and attendance) declined. This is the first time since records of this type have been kept that all three industry measures experienced a decline. This data indicates the impact of recent events and conditions on the industry, and highlights the need to consider such data when planning new facility development. Local Branson Market and Industry Conditions Analysis Page 15

39 The Professional Convention Management Association (PCMA) conducts an annual survey of event planners regarding the current and projected future condition of their events. A component of this analysis is summarized in Exhibit II-4. Specifically, changes to attendance levels at annual meetings have been assessed between the years 2001 and 2003 (separated into two groups those events held between January and September 11 th of each year and those held after September 11 th ). Exhibit II-4 Historic/Anticipated Attendance Growth of Association Events % 1% (proj.) 0.4% -1% -3% -1.3% -2.7% -1.4% -2.1% -5% -7% -9% -11% -9.4% Events held between January and September Events held between September and December Source: Convene, As noted above, event planners surveyed in 2001 indicated a drop in attendance of 1.3 percent over 2000 for events held prior to September 11 th (a minimal change, largely reflecting a worsening national economy and the continued growth of non-association corporate events) and 9.4 percent for events held after September 11 th (an immediate impact associated with travel concerns following September 11 th ). In 2002, events held prior to September 11 th experienced an attendance drop of 2.7 percent over the previous year, while events held after September 11 th grew marginally at 0.4 percent, likely due to a recovery from the significant drop during the previous year s events. Projections for 2003 (reflecting industry sentiment at the time of survey [2002]) indicate a modest attendance drop of between 1.4 and 2.1 percent. Local Branson Market and Industry Conditions Analysis Page 16

40 Tradeshow Week recently conducted a survey of 159 exhibit managers in the U.S. and Canada who participate in planning shows covering a wide spectrum of industries. One of the findings of this survey relates to the attitudes of exhibitors toward the convention/tradeshow event as a marketing medium. This data is summarized in Exhibit II-5. Exhibit II-5 Since Last Year, Attitude of Exhibitors Toward Tradeshows as a Marketing Medium % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 86% 78% 68% No Change/More Positive % 22% 14% More Negative Source: Tradeshow Week, As indicated in the exhibit, the percentage of the exhibit managers who have a negative opinion as to the company s attitude towards tradeshows has increased in each of the past three years, reaching 31 percent in the 2002 survey. Combined, this data is further indication of the cumulative effect of a slowing of the economy and world events on the conference, convention and tradeshow industry. In October of 2002, CSL International completed a telephone survey of over 250 planners of large and small conventions, conferences and tradeshows held throughout North America. The survey sample was taken from the Meetings Industry Network (MINT) database maintained by the International Association of Convention and Visitors Bureaus. Local Branson Market and Industry Conditions Analysis Page 17

41 As part of this research, several questions were asked relative to the future characteristics of industry events. One area of focus was on the expected change in exhibit space needs for the events planned. Exhibit II-6 Expected Change in Exhibit Space Needs National Events Significant Increase 7% Slight Increase 28% Constant 43% Slight Decrease 8% Significant Decrease 4% Don't Know 10% 0% 10% 20% 30% 40% 50% Source: CSL International national rotating event survey, As outlined in the exhibit, 35 percent of the respondents project significant or slight increases in exhibit space needs over the next five years. In surveys conducted prior to September 11 th, 2001, 65 percent of event planners surveyed expected a significant or slight increase over the next five years. Current survey results indicate that twelve percent see significant or slight decreases in space needs. The corresponding percentage prior to September 11 th was three. Surveys prior to September 11 th, 2001 indicted that 32 percent of event planners expected a constant level of space use. Current survey results indicate that 43 percent do not anticipate changes to exhibit space needs. Taken together, this data indicates that from the meeting planners perspective, the exhibit space required to accommodate future event needs will increase, however the optimism for future increases has been tempered over the past several years. It is important to note that any such future increases would take place in an environment of recent significant reductions to space use in many event sectors. Future growth over the next several years will serve to move the industry to a pre-2001 level, after which continued growth may take place. Such growth is subject to events and circumstances that cannot be foreseen. Local Branson Market and Industry Conditions Analysis Page 18

42 In addition to exhibit space needs, projected changes in the attendance at planned events was researched. Exhibit II-7 summarizes event planner opinions as to future increases or decreases to attendance levels. Exhibit II-7 Expected Change in Event Attendance National Events Significant Increase 11% Slight Increase 38% Constant 31% Slight Decrease 11% Significant Decrease 3% Don't Know 6% 0% 10% 20% 30% 40% 50% Source: CSL International national rotating event survey, As outlined in the exhibit, 11 percent of the planners surveyed expect significant increases to attendance levels, with 38 percent perceiving slight attendance increases over the next five years. Eleven percent project slight decreases, with three percent anticipating significant decreases in attendance levels. Thirty-one percent anticipate no change to attendance levels. Local Branson Market and Industry Conditions Analysis Page 19

43 Associations and corporations typically plan numerous events over the course of a year. Event planners were asked whether the number of these events are expected to change over the next several years. Results are outlined below in Exhibit II-8. Exhibit II-8 Expected Change in Number of Events National Events Increase 20% Constant 66% Decrease 10% Don't Know 4% 0% 10% 20% 30% 40% 50% 60% 70% Source: CSL International national rotating event survey, As outlined above, 20 percent of the planners surveyed expect increases in the number of events their organization plans, with 10 percent projecting decreases over the next five years. Sixty-six percent foresee no change. This data provides some indication that the overall number of events in the industry will increase. Within the industry, there has been an increase in the number of events planned by corporations. In many cases, a corporation will shift event spending to its own produced events and away from simply attending existing association events or other events. As part of our research, event planners were asked whether or not the increase in corporateproduced events has impacted exhibitor base and the demand for space at their event. Local Branson Market and Industry Conditions Analysis Page 20

44 Exhibit II-9 Expected Impact of Corporate Events on Exhibitor Base and Exhibit Space Use Significant Increase 4% Slight Increase 11% Constant 63% Slight Decrease 12% Significant Decrease 10% 0% 10% 20% 30% 40% 50% 60% 70% Source: CSL International national rotating event survey, As outlined in the exhibit above, 15 percent of the planners see some type of benefit from the increase in corporate event activity, perhaps as a result of the ability of corporate events to expand overall interest in a technology or industry. However, 22 percent of the planners surveyed project decreases in exhibitor base and space use as a result of increased corporate sponsored events. Taken together, this data indicates a potential industry-wide decrease in exhibitor base and space use at currently established convention, conference and tradeshow events. Overall, however, these types of effects are generally not seen nor expected with SMERF events (where attendees are typically not affiliated with corporations, but rather pay their own expenses). The industry trend research summarized in the preceding set of exhibits highlights the resiliency of the industry overall. Current impressions as to the space use, attendance and number of events are generally optimistic. Factors Anticipated to Impact Future Industry Growth In September 2002, the Center for Exhibition Industry Research (CEIR) published a situation analysis written by Douglas Ducate, the director of CEIR. The analysis addressed The Exhibition Industry in the United States A Look to the Future. Local Branson Market and Industry Conditions Analysis Page 21

45 The premise of the article is that the addition of new facilities in the industry will lead to additional industry growth, not simply lower center occupancy percentages. Reasons for this position as outlined in the CEIR article include: The convention and tradeshow is the only opportunity to benefit from face-to-face contact with representatives (customers) within an entire industry. The concept of reaching a broad set of current and potential customers within an entire industry over a three to five day period at one location is a marketing opportunity that can not be replicated with any other event, technology or sales effort. The exhibit component of an event is the most cost-effective way to bring products to market. Product launches, market testing, marketing of existing products can all take place at an event. Associations are the backbone of the convention, conference and tradeshow industry. Based on CEIR data, there are over 147,000 associations in the U.S. today, and these organizations are growing. It is not uncommon for over 50 percent of an association s annual revenue to be derived from its annual convention. Therefore, it becomes critical that the association work extensively to maintain the viability, value and credibility of the annual event. The private sector is very active in the convention and tradeshow industry. Many of the most successful events in cutting edge industries have been developed and grown by private sector operators. The reason for this is straightforward; profit. The ability to generate significant returns from a successful show will continue to provide the incentive to the private sector to innovate in terms of creating and growing new shows. There are more horizontal mega-exhibitions than at any time in the industry. These mega-events are often unable to address the specific needs of every industry sub-sector or geographic region. As a result, smaller multiple events are often created of a more vertical or regional nature to support the larger show. Technology impacts the industry in many ways. A vast number of technology, and non-technology products for that matter, will be introduced every year. An impact of technology that is central to future industry growth relates to the ability of a convention/tradeshow to introduce new products to a selected customer base in a highly effective manner. In essence, as long as society innovates, the convention/tradeshow is needed to market the innovations. The health care industry represents the largest single source of convention/tradeshows. These events are the best, if not the only, means for a manufacturer to introduce equipment, pharmaceutical or related products. According to CEIR, only 38 percent of the 11,094 exhibitions being held today are located in convention centers. There is therefore a significant source of future center demand as smaller events eventually consider relocating to larger venues such as the convention center. Local Branson Market and Industry Conditions Analysis Page 22

46 The insights put forth by Mr. Ducate and CEIR reflect the core essence of the continued viability of the convention and tradeshow industry, and help to answer the question - does the convention and tradeshow industry have a role in the future economy. It is difficult to make a case against the convention/tradeshow as the most effective means of delivering product, service and innovation to very focused and targeted markets. CEIR also references a November 2001 ebrain market research study. Findings of this study indicate that: Thirty-two percent of corporations surveyed place greater value on attending exhibitions than before September 11 th, Exhibitions rank higher in importance than all other business travel. Sixty-six percent are more likely to go on a business trip if it includes a relevant exhibition. The implication of this and other similar research is that the convention/tradeshow remains a very viable if not the most viable means to market, educate and network. Characteristics of the SMERF Industry As will be discussed further in a subsequent chapter, SMERF (social, military, educational, religious, fraternal) events are estimated to represent key potential users of the proposed Branson convention center. SMERF events include reunion-type meetings of groups and members, educational conferences and other such events for which the attendees pay the majority of the costs to attend the event. The SMERF market consists of a very broad and diverse event segment. One of the more organized SMERF segments is the reunions market. The National Reunion Registry presently maintains a database of more than 6,000 individual groups throughout the country that regularly host military reunions alone. Despite the diversity of the SMERF market, there tends to be various characteristics that are generally associated with SMERF groups and events. Some of these characteristics include the following: SMERF groups tend to be price sensitive. Where association event attendees typically incur expenses during the course of the event that are paid for or ultimately reimbursed by their employers, SMERF event attendance tends to be non-corporate related. As such, attendees often incur costs out-of-pocket on a personal level. Local Branson Market and Industry Conditions Analysis Page 23

47 Partially due to their price sensitivity and the nature of their activities, SMERF groups tend to be less demanding with regard to quality and amenity levels offered at host event facilities. In general, relative to professional associations, SMERF groups tend to hold less exhibit-oriented events. This is also reflected in the fact that SMERF groups tend to generate a much higher percentage of their group s total revenues from items other than exhibit sales (relative to professional associations), relying more heavily on revenue from such items as event registration and sponsorships/grants. Some types of SMERF groups, such as educational and religious gatherings, tend to have greater needs for seating, either plenary or flat-floor. In many cases, such seating requirements can be accommodated using large areas of an exhibit hall. Industry trends indicate that certain components of the SMERF market, such as social and educational groups, are showing signs of modest growth, while other segments such as military groups have been declining in terms of number of members and total events held nationwide. The majority of SMERF event attendees typically originate from out-of-town, representing new economic impact for a community. It is anticipated that the SMERF market segment will be an important generator of event demand at a potential Branson convention facility. Given the characteristics of the local community and its reputation, resources and amenities, it is estimated that the proposed center could attract event levels consistent with or in excess of other comparable centers from this market segment. Exhibit II-10 displays a SMERF market breakdown, outlining the number of events hosted by event type, as assembled by a recent survey of subscribers to Association Meetings Magazine. Exhibit II-10 SMERF Market Breakdown Number of Events Educational 2,402 Fraternal, Ethnic, Military 369 Social, Hobby, Sport 600 Religious 3,500 Government/Civic 847 Total 7,718 Note: Figures only represent a portion of the total market (i.e., SMERF subscribers to Association Meetings Magazine). Source: Association Meetings Magazine Local Branson Market and Industry Conditions Analysis Page 24

48 As shown on the previous page, the number of religious events far surpasses any of the identified event types, accounting for approximately 45 percent of events represented as part of this study. Educational groups, another large potential market for a Branson facility, represent approximately 31 percent of the identified population. Fraternal, ethnic and military functions make up nearly five percent of all events, the smallest of the five segments. Each year, the Religious Conference Management Association (RCMA) conducts a survey of its more than 3,000 members in effort to broadly access the overall market. In 2001, more than 16 million people attended religious meetings held by RCMA organizations. This compares to just 4.4 million in Exhibits II-11 through II-13 on the following pages present selected survey results. Exhibit II-11 outlines the number of religious meetings held, by event type, for survey respondents for 2000 and Exhibit II-11 Religious Meeting Summary Convention/Conference 3,706 3,813 Board 2,259 2,388 Committee/Seminar 5,949 6,020 Retreat 1,506 1,596 Other 1,120 1,126 Total 14,540 14,943 Note: Figures only represent a portion of the total market (i.e., SMERF subscribers to Association Meetings Magazine). Source: Association Meetings Magazine As shown, the total number of religious meetings held (among members) in 2001 was 14,943, an increase of more than 500 (or nearly three percent) from 2000 levels. Committee meetings and seminars make up a significant portion of those meetings, with more than 6,000 taking place in Conventions and conferences ranked second in 2001, with more than 3,800 such functions taking place. Camps and retreats continue to gain in popularity among members as well. Local Branson Market and Industry Conditions Analysis Page 25

49 Exhibit II-12 provides a summary of the number of sleeping rooms required by religious meetings for Exhibit II-12 Religious Meetings Number of Sleeping Rooms Required ,000-1,500 1,500-2,000 2,000-3,000 3,000-4,000 4,000-5,000 5,000+ 4% 3% 2% 1% 3% 6% 10% 11% 12% 14% 16% 17% 0% 5% 10% 15% 20% Source: Religious Conference Management Association Survey, 2001 As shown, approximately 17 percent of those surveyed require between 100 and 200 hotel rooms for the peak night of their event(s). Groups requiring between 300 and 500 rooms ranked a close second, at approximately 16 percent. Just one percent of those interviewed require between 4,000 and 5,000 rooms, while three percent utilize in excess of 5,000 rooms. The combined six percent that utilize 3,000 or more rooms comprise a very significant piece of business. Representing approximately 900 meetings, and averaging at least four days in length, this seemingly small percentage translates into more than 12 million room nights. Local Branson Market and Industry Conditions Analysis Page 26

50 Exhibit II-13 summarizes the locations of various religious events hosted by RCMA members in Exhibit II-13 Religious Meetings - Where Meetings are Held (2001) Southeast 16% Outside U.S. 8% South Central 11% Northeast 13% Midwest 17% Throughout U.S. 22% Western 13% Source: Religious Conference Management Association Survey, 2001 As shown, the Midwest holds the most religious meetings, by region, accounting for approximately 17 percent of the total. The Southeast region, close behind, hosted approximately 16 percent of all religious meetings, while Western and Northeastern states each hosted 13 percent, followed by the South Central United States, at 11 percent. Approximately eight percent of survey respondents hold their event(s) outside of the United States. Reunions represent a significant, year-round component of SMERF activity for a number of both public and private facilities. In effort to better understand this diverse market, Exhibit II-14, presented on the following page, summarizes results of a recent Reunion Network survey regarding favorite reunion destination markets nationwide. The top five preferred U.S. destinations are listed along with selected other communities for reference. As shown in the exhibit, Branson/Springfield was ranked as the fourth highest destination among reunion event planners in the country. This reinforces the belief that the reunion and other SMERF markets could hold significant potential for a new Branson convention center. Local Branson Market and Industry Conditions Analysis Page 27

51 Exhibit II-14 Reunions Favorite Destinations ( ) Rank Market 1 San Diego, CA 2 Norfolk/Virginia Beach, VA 3 San Antonio, TX 4 Branson/Springfield, MO 5 Las Vegas, NV 11 Cincinnati, OH 25 Chicago, IL 31 Indianapolis, IN 44 Denver, CO 46 Milwaukee, WI 51 Atlanta, GA 61 Columbus, OH Note: Rankings represent the entire metro statistical area for each market. Source: The Reunion Network, 2002 Public / Consumer Show Industry Characteristics Public shows (or consumer shows) tend to be large exhibit-focused events open to the public where exhibitors showcase products and services associated with certain industries or themes. Examples include events such as home, boat, sports, antique, craft and related shows. Typically, events are annual and fixed in a specific community, drawing the majority of attendees from the local market area. However, as previously mentioned, the very high level of tourism relative to permanent population in the Branson area indicates that visitors to the area will provide a substantial potential attendee base for events such as public shows. Space requirements often include large amounts of flat floor exhibit space. Typical public shows range from between two to five show days. In 2001, Tradeshow Week surveyed a large sample of public show producers throughout the country in order to understand the characteristics of the industry and to evaluate anticipated future growth. Public shows tend to address a wide variety of consumer industries, with no specific industry dominating the majority of shows. Exhibit II-15 on the following page presents the industries catered by public shows. Local Branson Market and Industry Conditions Analysis Page 28

52 Exhibit II-15 Public Show Industry Focus Other 26% Home and Garden 26% RVs/Sport Vehicles 14% Automotive/ Motorcycles 15% Boats/Marine 19% Source: Tradeshow Week, As shown in the exhibit, approximately 26 percent of public shows focus on the home and garden industry. Excluding the Other (miscellaneous) category, boat/marine shows are the second highest focus of public shows. Overall, the average public show utilizes approximately 200,000 net square feet of exhibit space, has approximately 573 exhibiting companies and draws 60,000 attendees over the duration of the event. These averages are influenced by a number of very large events held in some of the largest markets in the U.S. Public shows in smaller communities throughout the country tend to be much smaller, with some utilizing as few as 10,000 to 20,000 net square feet of exhibit space. Public show producers were asked about the future growth of their event in terms of three categories: net square feet, exhibiting companies and attendees. As presented in Exhibit II-16, the anticipated growth of the three categories by 2005 ranges from 17 to 27 percent. These numbers reflect responses made prior to the events of September 11, 2001 and the continued stagnancy of the U.S. economy. However, given the fact that the majority of public show attendees represent drive-in attendees from the local/regional area, it is estimated that these growth figures largely remain valid. Exhibit II-16 Projected Growth of Public Shows 2001 Total Increase 2000 (projected) by 2005 Net Square Feet 5% 6% 24% Exhibiting Companies 2% 5% 17% Attendees 7% 8% 27% Source: Tradeshow Week, Local Branson Market and Industry Conditions Analysis Page 29

53 Conclusions Over the past decade, substantial change has occurred in the conventions, tradeshows and meetings industry. Communities throughout the country have invested significantly in convention centers and convention/visitor infrastructure as a mechanism to attract new visitors and their associated spending to their communities. National economic conditions over the past three years (and associated travel industry contraction, subsequently exacerbated by the events of September 11, 2001 and ongoing international events) have negatively impacted the convention and tradeshow industry as well as many convention markets throughout the country. However, many economical and drive-in destinations have not seen as dramatic effects. Given the characteristics of the Branson community (i.e., centrally-located, economical, family-oriented and regionally-focused), these effects are expected to remain limited. Further, a variety of industry indicators point to long-term stability and growth in the convention and tradeshow industry. A review of event segments within the convention, tradeshow and conference industry indicates that the characteristics of the Branson community match well with the characteristics and requirements of SMERF groups for a host destination for major events. The results of interviews of planners of events that could potentially utilize a new Branson convention center (including SMERF, association, corporate/tradeshow, and public show) are presented in a subsequent chapter. Local Branson Market and Industry Conditions Analysis Page 30

54 III. Competitive and Comparable Facilities Analysis This chapter provides a review of the various physical characteristics and resources of competitive facilities and communities, as well as communities that are comparable in some way to Branson. This data is useful in understanding how other markets are performing within current industry conditions, the level of space and hotel room inventory offered by competitors and other such characteristics. The specific factors reviewed within this chapter include the following: Exhibit space Meeting space Ballroom space Total sellable space Regional demographics Hotel room availability Hotel room tax rates Based on industry data and discussions with facility and CVB representatives, the exhibit below presents the 19 facilities throughout the region that were identified as potential competitive facilities and 15 facilities identified as comparable to that of a potential Branson convention center. In particular, the competitive facilities represent venues that are expected to compete to varying degrees (within certain event markets) with a potential Branson Center. Competitive and Comparable Facilities and Markets Competitive/Regional Facilities and Markets Comparable Facilities and Markets America's Center St. Louis, MO Chattanooga Convention Center Chattanooga, TN Bartle Hall Convention Center Kansas City, MO Cumberland Place Exhibition Center Layafette, IN Century II Convention Center Wichita, KS Dixie Center St. George, UT Chateau on the Lake Branson, MO Gatlinburg Convention Center Gatlinburg, TN Cox Convention Center Oklahoma City, OK Island Grove Community Building Greeley, CO Crown Center Kansas City, MO Knoxville Convention Center Knoxville, TN Fort Smith Convention Center Ft. Smith, AR Myrtle Beach Convention Center Myrtle Beach, SC Hot Springs Convention Center Hot Springs, AR Northern Kentucky Convention Center Covington, KY Kansas City Market Exhibition Center Kansas City, MO Ontario Convention Center Ontario, CA Memphis/Cook Convention Center Memphis, TN Palm Beach Convention Center West Palm Beach, FL Overland Park Convention Center Overland Park, KS Palm Springs Convention Center Palm Springs, CA Pine Bluff Convention Center Pine Bluff, AR Pontchartrain Convention Center Kenner, LA Prairie Capital Convention Center Springfield, IL Roland E. Powell Convention Center Ocean City, MD Springfield Expo Center Springfield, MO Savannah Int'l. Trade & Convention Center Savannah, GA Statehouse Convention Center Little Rock, AR Wildwoods Convention Center Wildwoods, NJ Tan-Tar-A Resort Lake of the Ozarks, MO The Lodge of Four Seasons Lake of the Ozarks, MO Tulsa Convention Center Tulsa, OK West Plains Civic Center West Plains, MO Competitive and Comparble Facilities Analysis Page 31

55 Competitive Facilities The following paragraphs present detailed summaries of each of the identified facilities. Conclusions with respect to the competitive facility analysis findings (including certain ramifications on a potential Branson Center) are presented at the end of this section. America s Center Located in St. Louis, Missouri, America's Center is a multi-purpose facility, featuring in excess of 664,000 square feet of total sellable space, approximately 502,000 square feet of which is contiguous, prime exhibit space. Also incorporated are a three-level Lecture Hall (with 1,411 seats), a 28,000-square foot Grand Ballroom and an Executive Conference Center. The center often hosts large events, including trade and public shows, conventions, conferences, meetings, symposiums, banquets, parties and other special events. The adjacent 70,000-seat Edward Jones Dome stadium offers approximately 162,300 square feet of exhibit space and is home to the NFL St. Louis Rams. Bartle Hall Convention Center Spread over eight city blocks in downtown Kansas City, the Convention Center includes H. Roe Bartle Hall (with nearly 400,000 square feet of column-free space and 29 meeting rooms), the Conference Center (with up to 19 additional breakout meeting rooms, and 24,000-square-foot ballroom) and the 10,700-seat Municipal Auditorium Arena. All meeting rooms are hotel-quality, with carpeting, soundabsorbing acoustic panels, adjustable lighting, individual temperature controls and simultaneous taping. The complex is currently considering an expansion plan that would include the addition of dedicated ballroom space and many updates to various building aesthetics. Century II Convention Center Located in Wichita, Kansas, the Century II Convention Center incorporates approximately 213,000 square feet of total sellable space. A total of four contiguous exhibit halls combine for more than 190,000 square feet of prime space. Up to 19 breakout meeting rooms are provided; however, no dedicated ballroom space is offered. Home of the Wichita Symphony, the Wichita Grand Opera, Music Theater of Wichita and other fine-art performing companies, Century II features two concert halls, of 2,178 and 648-seat configurations. The center is connected to the 303-room Wichita Hyatt Hotel. Competitive and Comparable Facilities Analysis Page 32

56 Chateau on the Lake The Chateau on the Lake is located several miles from downtown Branson and the attractions of Highway 76. The 301-room, upscale full service hotel offers a scenic view and approximately 39,000 square feet of meeting and banquet space. The Chateau is currently the Branson area s largest convention facility. The event space can accommodate groups up to approximately 3,000 people. The largest contiguous space in the facility is the Great Hall ballroom, offering nearly 32,000 square feet. Additional information is provided in the previous chapter of this report. Cox Convention Center Located in Oklahoma City, Oklahoma the facility originally opened in 1972 and now provided nearly 154,000 square feet of total sellable space. A recent $63.1 million expansion and renovation project was completed in The new meeting and ballroom space (totaling approximately 50,000 square feet) is managed by the adjacent Westin Hotel, while exhibit and arena space (approximately 100,000 square feet) is managed by SMG. The venue was recently officially renamed the Cox Business Services Convention Center in exchange for the technology upgrades, advertising and cash totaling $1.7 million over the next several years. Crown Center Located in Kansas City, Missouri, the recently remodeled Crown Center includes two private hotel properties (the Hyatt Regency and the Westin) offering sellable event space. Specifically, the complex provides approximately 116,000 square feet of total space, including more than 47,000 square feet of exhibit space, approximately 35,000 square feet of meeting space and in excess of 33,000 square feet of dedicated ballroom space. Combined, the hotels provide 1,450 guestrooms. The center hosts events of all types and sizes, from small corporate meetings to mid-sized conventions and tradeshows. Ft. Smith Convention Center Located in Ft. Smith, Arkansas, the modern center was constructed in The $40 million facility offers approximately 44,700 square feet of total sellable space. The facility is attached to a 252-room Holiday Inn, which serves as the headquarters hotel. The center incorporates nearly 30,000 square feet of exhibit space, a 10,000-square foot ballroom and 5,000 square feet of sub-divisible Competitive and Comparable Facilities Analysis Page 33

57 meeting space. The center is expected to play host to state and regional conventions and tradeshows, public shows, conferences and meetings. Hot Springs Convention Center Located in Hot Springs, Arkansas, the Hot Springs Convention Center includes four exhibit halls containing approximately 76,000 square feet of clear-span exhibit space. The center also incorporates 14 meeting rooms, which provide an additional 14,000 square feet of space. There is also a dedicated ballroom, which offers 16,500 square feet of space. Although the center originally opened in 1998, the center is currently expanding, with completion scheduled for late The 200-room Austin Hotel (formerly the Hilton) is situated adjacent to the Center. The Austin Hotel also incorporates a 4,500-square foot ballroom and 2,900 square feet of break out meeting space. Additional hotel development is also being considered. The tourism focus of the Hot Springs region, along with its relatively small resident population and novel convention center are similar to that of Branson. Kansas City Market Exhibition Center Located ten miles east of downtown Kansas City, the Kansas City Market Exhibition Center is part of the Kansas City Park Place Hotel. The 329-room property also provides more than 54,000 square feet of total sellable space. Specifically, the Exhibit Hall s 40,000 square feet of clear span space accommodates approximately ' X 10' booths. Free on-site parking is provided for 2,000 cars. A variety of available room configurations often suit meetings, banquets, weddings, private parties, exhibitions, conventions, tradeshows and more. Memphis Cook Convention Center Located in Memphis, Tennessee, the venue was originally completed in The center completed an extensive expansion project in The $92 million project added approximately 80,000 square feet of new exhibit and meeting space. The expansion added a 28,000-square foot ballroom, a 35,000-square foot special exhibit hall, five additional meeting rooms and a 2,100-seat multi-purpose performing arts center. Additionally, the existing convention center underwent renovation to all rest rooms, added various ADA requirements. The center primarily hosts association, corporate and public show events. Competitive and Comparable Facilities Analysis Page 34

58 Overland Park Convention Center Located in Overland Park, Kansas, the new convention center (completed in 2002) includes nearly 100,000 square feet of sellable event space. Specific space offerings include an exhibition hall of 58,500 square feet, a 25,000-square foot ballroom and meeting room space totaling over 15,000 square feet. The facility also includes a 412-space enclosed parking garage. The new 412-room Sheraton Overland Park Hotel serves as the center s headquarters hotel. Additionally, the hotel provides 12 meeting rooms and the 10,800-square-foot Cottonwood Ballroom. The facility has approximately 134 events booked for 2003 and is likely not inclusive of many smaller events yet to book the center. Pine Bluff Convention Center Located in Pine Bluff, Arkansas, the Pine Bluff Convention Center provides nearly 40,000 square feet of total sellable space. The Pine Bluff Convention Center Arena is often home to concerts, exhibitions, rodeos, tradeshows, sporting events, banquets, dances, meetings, fashion shows, exhibits, receptions, pageants and luncheons, banquets, meetings, dances, wrestling matches, circuses, motorcross, truck and tractor pulls and television productions. Prairie Capital Convention Center Located in Springfield, Illinois, the center offers a total of approximately 62,000 sellable square feet. Space offerings include a 41,000-square foot column-free exhibit hall and 11 meeting rooms (divisible into 17), which provide a total of 21,000 square feet. All of the center s meeting rooms have specially designed walls to be used as projection screens. The facility offers no dedicated ballroom space. The 330-room Renaissance Springfield Hotel is connected to the facility, serving as its headquarters hotel. Springfield Expo Center The City of Springfield, Missouri is currently engaged in the construction/redevelopment of a new Expo Center facility as part of a downtown development project (which includes plans for new 7,500-seat arena and 8,000- seat baseball stadium facilities). Upon completion, the facility will include between 90,000 and 95,000 square feet of event space, approximately 50,000 square feet of which is contiguous, prime space offering 30-foot ceilings. The remaining space (approximately 40,000 square feet) offers 12-foot ceilings and a significant number of columns. A 977-spot parking deck is currently being Competitive and Comparable Facilities Analysis Page 35

59 constructed adjacent to the Expo Center site. The facility will primarily seek to bring state and regional association business to the market. Additional discussion of issues surrounding the potential competitive impacts of the Springfield Expo Center will be subsequently discussed. Statehouse Convention Center Located in Little Rock, Arkansas, the center was originally built in 1982 and expanded and renovated in 1999 at a cost of $20 million. The center offers approximately 82,000 square feet of exhibit space, 15,000 square feet of meeting space and 20,000 square feet of ballroom space. Centrally located, the center hosts a number of state and regional association events. The Peabody Little Rock Hotel connects to the center. In addition, there are several quality hotels located in and near the center offering additional meeting and exhibit space. A multi-tier 650 space parking garage is located adjacent to the center is, in addition to several hundred more spaces found within a few blocks. Tan-Tar-A Resort Located in Lake of the Ozarks, Missouri, the property offers 930 rooms. Known as the area s largest hotel property, the resort offers approximately 80,000 square feet of total sellable space, consisting of ballroom space and breakout meeting rooms. The hotel s largest contiguous space a large, sub-divisible ballroom comprising approximately 30,000 square feet of space, is able to accommodate groups of up to 2,700 people. The Lodge of Four Seasons Located in Lake of the Ozarks, Missouri, the property recently underwent an expansion and now offers in excess of 50,000 square feet of exhibit, banquet and meeting space. The new 20,000-square foot stand-alone exhibit hall was completed in early The hotel also features three golf courses and approximately 400 total guestrooms. Examples of typical events hosted include reunions, meetings, retreats, conventions, weddings, private parties, banquets and more. Competitive and Comparable Facilities Analysis Page 36

60 Tulsa Convention Center Located in Tulsa, Oklahoma, the center originally opened in The facility incorporates approximately 136,600 square feet of total sellable space. Attached to the facility is a 9,000-seat arena. The facility offers 14 oversized loading docks, making for convenient load in/out processes. The center is currently considering a potential expansion and renovation project. Attached to the center via skywalk, the 417-room DoubleTree Hotel property provides approximately 13,500 square feet of sellable event space and serves as the facility s headquarters hotel. The West Plains Civic Center Conveniently located between several major markets in West Plains, Missouri, the center offers approximately 37,000 total sellable square feet, in addition to a pool, fitness room and theater. The facility hosts approximately 200 events per annum, comprised of a variety of event types, such as conventions, tradeshows, concerts, public shows, sporting events, banquets and meetings. Exhibit Space There are two types of exhibit space offered at the facilities reviewed: prime space and gross space. Prime space refers to the dedicated exhibition area that is column-free or with minimal columns, has high ceilings, utility grids and other such amenities. Gross space refers to the total area that can be used for exhibits, and includes surrounding areas such as lobbies, meeting space, ballrooms and other such space. Exhibit III-1 on the following page presents a comparison of total prime exhibit space offered at the competitive facilities reviewed. Competitive and Comparable Facilities Analysis Page 37

61 Exhibit III-1 Comparison of Prime Exhibit Space Competitive Facilities St. Louis, MO Kansas City, MO (1) Wichita, KS Memphis, TN Tulsa, OK Oklahoma City, OK Springfield, MO Little Rock, AR Hot Springs, AR Overland Park, KS Kansas City, MO (2) Kansas City, MO (3) Springfield, IL West Plains, MO Ft. Smith, AR Pine Bluff, AR Lake of the Ozarks, MO (4) Lake of the Ozarks, MO (5) Branson, MO , , , ,000 95,000 82,300 76,000 58,500 47,300 42,000 41,000 30,000 29,500 23,000 20, , ,000 Average = 104, , , , , ,000 Square Feet (1) Bartle Hall Convention Center (2) Crown Center (3) Kansas City Market Exhibition Center (4) The Lodge of Four Seasons (5) Tan-Tar-A Resort Source: Interviews with facility management, As presented in the exhibit, St. Louis s America s Center incorporates the largest amount of prime exhibit space amongst the competitive facilities, with more than half a million square feet. Two of the privately owned facilities reviewed (Tan-Tar-A Resort and Chateau on the Lake) provide no dedicated exhibit space, often utilizing ballroom space, when necessary, to fulfill such event space demands. The average amount of exhibit space offered at the reviewed facilities is approximately 105,000 square feet. Meeting/Ballroom Space Sufficient modern meeting and ballroom space is very important in attracting and accommodating events in the convention, conference and meetings industry. Event organizers see it as an important factor in their selection of host cities. Meeting space is typically highly flexible (sub-divisible) with high-end acoustics, event technology and separate service corridor access. Ballroom space in state-of-the-industry convention centers tends to provide a larger contiguous open area, higher ceilings (20 to 25 feet as opposed to 12 to 15 feet for meeting space) and a slightly higher level of finish, including such items as a chandelier and a higher grade of carpeting and wall finish. Exhibit III-2 compares the square feet of meeting space offered at the competitive facilities. Competitive and Comparable Facilities Analysis Page 38

62 Exhibit III-2 Comparison of Meeting Space Competitive Facilities St. Louis, MO Kansas City, MO (1) Memphis, TN Lake of the Ozarks, MO (2) Kansas City, MO (3) Tulsa, OK Oklahom a C ity, OK Wichita, KS Springfield, IL Overland Park, KS Little Rock, AR Hot Springs, AR Lake of the Ozarks, MO (4) Kansas City, MO (5) Branson, MO West Plains, MO Ft. Sm ith, AR Pine Bluff, AR Springfield, MO 45,900 40,700 35,200 34,000 28,600 22,500 21,000 15,000 14,700 14,100 13,200 12,700 7,500 7,000 5,200 1, , ,100 Average = 29, ,000 80, , ,000 (1) Bartle Hall Convention Center (2) Tan-Tar-A Resort (3) Crown Center Square Feet (4) The Lodge of Four Seasons (5) Kansas City Market Exhibition Center Source: Interviews with facility management, As shown, the level of meeting space is broadly distributed among the centers, ranging from a high of approximately 134,100 square feet at St. Louis s America s Center, to a building program incorporating no dedicated meeting space at the planned Springfield Expo Center. An average of nearly 29,000 square feet of such space is provided among the 19 competitive venues reviewed. Ballroom space is an important characteristic that event planners also often review when selecting a potential facility. Planners have increasingly placed a premium on such space in their selection of host cities. In general, traditional ballroom space is desirable in that it tends to keep event delegates in the convention center during food function periods. In addition, ballroom space is very useful for general sessions, large presentations and other such functions. Further, adjacent hotel ballrooms may be occupied with unrelated events that may prevent their use by convention center events. Development of dedicated, stateof-the-art ballroom space has taken place in many recently-built centers, while many older centers do not offer dedicated ballroom space, thus positioning themselves at a competitive disadvantage. Competitive and Comparable Facilities Analysis Page 39

63 Exhibit III-3 compares the square footage of center ballroom space offered among the competitive facility set. Exhibit III-3 Comparison of Ballroom Space - Competitive Facilities Lake of the Ozarks, MO (1) Kansas City, MO (2) Branson, MO St. Louis, MO Memphis, TN Oklahom a C ity, OK Overland Park, KS Kansas City, MO (3) Little Rock, AR Lake of the Ozarks, MO (4) Hot Springs, AR Pine Bluff, AR Ft. Sm ith, AR West Plains, MO Tulsa, OK Springfield, MO Springfield, IL Kansas City, MO (5) Wichita, KS ,700 33,600 31,700 28,000 27,400 25,000 25,000 23,900 20,000 18,200 16,500 14,400 10,000 Average = 16,400 (1) Tan-Tar-A Resort (2) Crown Center (3) Bartle Hall Convention Center 0 10,000 20,000 30,000 40,000 Square Feet (4) The Lodge of Four Seasons (5) Kansas City Market Exhibition Center Source: Interviews with facility management, In terms of amount of ballroom space offered, Tan-Tar-A Resort, in Lake of the Ozarks, Missouri offers the most such space, at approximately 37,700 square feet. Nearly onethird of the competitive set does not currently provide dedicated ballroom space. Of the reviewed facilities, approximately 16,400 square feet is offered on average. However, among facilities offering ballroom space, an average of nearly 24,000 square feet is provided. As will be stated in the subsequent market demand analysis chapter, many national, regional, state and other groups require a ballroom at least once during the course of their event. As such, a building program for a potential Branson center lacking of a significant inventory of dedicated ballroom space translates to a definite competitive disadvantage. Competitive and Comparable Facilities Analysis Page 40

64 Total Sellable Space Exhibit III-4 details the rankings of the competitive facilities set analyzed in terms of total sellable space (which includes exhibition, meeting and ballroom space). Exhibit III-4 Comparison of Total Sellable Space - Competitive Facilities St. Louis, MO Kansas City, MO (1) Memphis, TN Wichita, KS Oklahom a C ity, OK Tulsa, OK Little Rock, AR Kansas City, MO (2) Hot Springs, AR Overland Park, KS Springfield, MO Lake of the Ozarks, MO (3) Springfield, IL Kansas City, MO (4) Lake of the Ozarks, MO (5) Ft. Sm ith, AR Pine Bluff, AR Branson, MO West Plains, MO 230, , , , , , ,600 98,500 95,000 78,400 62,000 54,700 51,400 44,700 39,300 39,200 37, , ,800 Average = 149, , , ,000 Square Feet (1) Bartle Hall Convention Center (2) Crown Center (3) Tan-Tar-A Resort (4) Kansas City Market Exhibition Center (5) The Lodge of Four Seasons Source: Interviews with facility management, As outlined above, the amount of total sellable space offered at the competitive facilities reviewed varies widely, averaging nearly 150,000 square feet. The largest facility, in terms of total sellable space, is St. Louis s America s Center, with approximately 664,000 total sellable square feet (excluding arena flat floor space). The West Plains Civic Center offers the least total sellable space, at approximately 37,000 square feet. Regional Demographics The socioeconomic and general demographic profile of the Branson market will likely have an impact on the overall success of a potential Center, as a portion of facility users will likely originate from Branson and the surrounding area. Public shows, corporate meetings, service club functions, private banquets and other miscellaneous private meetings typically derive the majority of attendees from the local area. Competitive and Comparable Facilities Analysis Page 41

65 For purposes of this analysis, information was collected from industry periodicals, our existing database, the City of Branson, the Convention and Visitors Bureau, Chamber of Commerce and other sources. A variety of socioeconomic characteristics have been reviewed. The Metropolitan Statistical Area (MSA) used in this analysis is defined as a geographical area with a significant population nucleus, along with any adjacent communities that have a high degree of economic and social integration with that nucleus meeting certain quantitative population thresholds. This information was obtained from various industry sources and is based on the most recent revisions announced by the federal government s Office of Management and Budget. The selected socioeconomic statistics were compiled based on data provided by Sales and Marketing Management, who regularly publishes demographic estimates utilizing U.S. Census data. Exhibit III-5 presents a summary of the MSA populations of the competitive markets reviewed. In the case that an MSA population figure was not available for a given market, the population of the county in which the community lies was used in its stead. Exhibit III-5 Comparison of Metro Statistical Area (MSA) Population Competitive Markets St. Louis, MO Kansas City/Overland Park, MO Memphis, TN Oklahom a C ity, OK Tulsa, OK Little Rock, AR Wichita, KS Springfield, MO Ft. Sm ith, AR Springfield, IL * Hot Springs, AR Pine Bluff, AR * Lake of the Ozarks, MO (1) * Branson, MO * W est Plains, MO 1,148,500 1,095, , , , , , ,300 89,600 83,300 82,500 41,700 37,800 1,798,500 2,606, ,000 1,000,000 1,500,000 2,000,000 2,500,000 Note: Metropolitan Statistical Area (MSA) measurements were used for those markets with defined MSA s. (1) Figures for Lake of the Ozarks include Camden, Miller and Morgan Counties * Indicates figure for the county in which the city/community lies. Source: Sales and Marketing Management, Competitive and Comparable Facilities Analysis Page 42

66 As shown on the previous page, in terms of population, St. Louis again ranks first of the 19 competitive markets analyzed, with an MSA population of more than 2.6 million. The average population of the markets reviewed is approximately 643,000. The county in which West Plains, Missouri lies ranks last, with a population of just than 37,800 people. This compares to the population of Branson, at approximately 41,700, (in Taney County as Branson does not have a defined MSA), ranking second from the bottom of all communities reviewed. Exhibit III-6 presents a summary of the ratio of MSA populations to the amount of prime exhibit space offered for each of the competitive markets reviewed. Again, in the case that an MSA population figure was not available for a given market, the population of the county in which the community lies was used in its stead. Exhibit III-6 Comparison of Metro Statistical Area (MSA) Population to Exhibit Space Ratio Competitive Markets Kansas City, MO (1) Kansas City, MO (2) Oklahom a C ity, OK Tulsa, OK Memphis, TN Little Rock, AR Ft. Sm ith, AR St. Louis, MO Springfield, IL Kansas City, MO (3) * Lake of the Ozarks, MO (4) Pine Bluff, AR Springfield, MO Wichita, KS Overland Park, KS * W est Plains, MO Hot Springs, AR * Lake of the Ozarks, MO (5) * Branson, MO Average = (1) Kansas City Market Exhibition Center (2) Crown Center (3) Bartle Hal (4) The Lodge of Four Seasons Square Feet (5) Tan-Tar-A Resort * Indicates figure for the county in which the city/community lies. Sources: Interviews with facility management, Sales and Marketing Management Competitive and Comparable Facilities Analysis Page 43

67 As shown, in terms of an MSA population to exhibit space ratio, Kansas City s Market Exhibition Center ranks first among the 19 competitive markets/venues analyzed, at approximately 42.8 persons per square foot of exhibit space. The average ratio among markets reviewed is approximately 7.9. Two facilities, Branson s Chateau on the Lake and Tan-Tar-A Resort (in Lake of the Ozarks, Missouri), offer no such space and thus posses a ratio of zero. However, the unique nature of the Branson market and its substantial tourism base present an entirely different dynamic to the consideration of this data. Beyond Branson s resident population, it is possible that individuals and groups visiting the area could represent attendees of certain convention center functions (i.e., public shows, such as arts, crafts, antiques and auto shows, as well as spectator events such as concerts and family shows). These convention center attendees would be viewed differently from typical convention, conference, and tradeshow event attendees, in that these individuals chose to attend a public event at the center while in Branson for other reasons, but did not travel to Branson for the specific purpose of attending the event itself. Branson s existing visitation base of approximately eight million visitors per year represents a significant base to potentially draw attendees for certain events. Oftentimes, a more practical method of measuring population bases from which to draw event attendees is to analyze population concentrations within a specific radius of the facility/host community. Exhibit III-7 on the following page presents a map of the Branson area with rings depicting 75, 150 and 300-mile radii of Branson for population proximity identification purposes. In general, the 75-mile radius ring represents the primary geographic sphere of target population, while the 150-mile ring reflects a secondary population base. The 300-mile radius (including both greater Kansas City and St. Louis) generally represents the furthest extent of practical driving distance in terms of sole-purpose event attendance draw. In addition, many exhibition and other event facilities with the capability of hosting public shows and other local events are located in metropolitan areas captured under the two larger geographic rings, thereby lessening the ability to draw from these larger areas for public events such as public/consumer shows and spectator events. Competitive and Comparable Facilities Analysis Page 44

68 Exhibit III-7 Population Proximity to Branson Branson Exhibits III-8 through III-10 on the following pages present comparisons of the proximity of population to the selected competitive facilities reviewed on 75, 150 and 300-mile radii, respectively. Competitive and Comparable Facilities Analysis Page 45