Conventions drive tax revenues contributing to a higher quality of life in San Diego. Revenues & Expenses. Medical Conventions.

Transcription

1 Conventions drive tax revenues contributing to a higher quality of life in San Diego Conventions are vital to San Diego's economy. Last year events held at the San Diego Convention Center contributed $1.4 billion in regional economic impact, provided $20.6 million in tax revenues to help pay for city services and supported 12,500 jobs for San Diegans. Read more Our Mission To generate significant economic benefits for the greater San Diego region by hosting international and national conventions and trade shows in our world-class facility. How we fulfull our mission Revenues & Expenses Medical Conventions TOT Revenue LEED Certification

2 PERFORMANCE FY11 HIGHLIGHTS FY11 REVENUES & EXPENSES A year of exceptional performance FY 2011 was a pivotal one on many levels as the challenges of the global economic downturn continued to persist. The San Diego Convention Center, in spite of this, exceeded expectations and marked its third straight year of growth in nearly all performance metrics used to quantify our success. The economic impact generated by more than 220 events soared to one of our best showings in our history, $1.4 billion. This was in addition to the 12,500 local jobs already connected to events in our building. We also continued to dominate the industry s highly-competitive healthcare market delivering our second highest producing year for economic impact and direct attendee spending in this market segment, as well as the highest number of hotel room nights ever sold. And on the green front, our environmental leadership earned our building LEED Silver Certification from the United States Green Building Council for our commitment to sustainability and conservation of the earth s natural resources. We invite you to review our FY11 Annual Report to read more about the San Diego Convention Center and our contributions to the region. FY11 Economic Benefits Summary (This reflects FY11 results from July 1, 2010, through June 30, 2011.)

3 PERFORMANCE FY11 HIGHLIGHTS FY11 REVENUES & EXPENSES OPERATING REVENUES Ancillary Services $10,627,718 Rental $9,327,664 Food & Beverage $7,486,416 City of San Diego $3,405,278 Other $320,616 Total Revenues $31,167,692 OPERATING EXPENDITURES Salaries & Fringe Benefits $20,543,219 Utilities $3,000,378 General Expenses $2,857,219 Repair & Maintenance $1,768,289 Insurance $609,244 Sales & Marketing $457,804 Subtotal Operating Expenses $29,236,153 Depreciation $2,043,977 Phase III Expansion Expenses $0 Total Expenditures $31,280,130 Net Income/(Loss) $(112,438)

4 ECONOMIC IMPACT JOBS TOP 3 ECONOMIC GENERATORS ATTENDEE SPENDING MEDICAL CONVENTIONS Convention center plays central role in keeping San Diego s economy strong Conventions are big business in San Diego and vital to the city s economy. While the entire convention industry continued to regain its footing to pre-recession levels, in San Diego, hosting mega-events like Comic-Con International and the Society for Neuroscience pushed the total economic impact of events to just over $1.4 billion. This is a 17.4 percent increase above FY09, 12.4 percent above FY10 and our third highest achieving year in this category since opening in For more than two decades, the Convention Center has served as one of our region s strongest economic engines, and going forward, it remains central to keeping our visitor industry strong. In a time when our international convention center members are focusing attention on how best to meet industry challenges, San Diego provided us with an inspirational backdrop. The San Diego Convention Center has been a real industry leader, not only in terms of its own operations, but how it interacts with the broader economic interests of its own community. Edgar Hirt, President International Association of Congress Centres (AIPC) 2011 Annual Conference & 53 General Assembly June 28 - July 1, 2011 FY11-FY09 Economic Impact Comparison $1,500,000,000 $1,400,000,000 $1,300,000,000 $1,272,464,746 $1,218,904,673 $1,200,000,000 $1,430,773,596 $1,100,000,000 $1,000,000,000 FY09 FY10 FY11 What is economic impact? Economic impact measures the value conventions have on the local economy including direct, indirect and induced spending. Direct attendee spending is the money convention attendees spend at hotels, restaurants, stores and attractions. Indirect spending is the positive cycle businesses create to supply and re-supply goods and services to support events and employee wages. Induced spending happens when workers whose jobs are tied to events spend their paychecks locally, thus stimulating the economy.

5 ECONOMIC IMPACT JOBS TOP 3 ECONOMIC GENERATORS ATTENDEE SPENDING MEDICAL CONVENTIONS Conventions Create Jobs Conventions translate into jobs for San Diegans. The direct spending associated with conventions and meetings roll into all areas of the local economy and create an ecosystem of jobs beyond the Convention Center and hotels. According to a study by PricewaterhouseCoopers, there are 12,500 jobs throughout the entire San Diego region directly connected to, or indirectly supported, by conventions held in our waterfront building. "We had a number of people comment about the greeters always pointing them in the right direction and our exhibitors were happy they were able to work with a center whose staff really know what they are doing." Jim Flanigan, Marketing Director Society of Critical Care Management Jan , 2011

6 ECONOMIC IMPACT JOBS TOP 3 ECONOMIC GENERATORS ATTENDEE SPENDING MEDICAL CONVENTIONS "The San Diego Convention Center has all the right elements space, sleeping rooms, weather, dining, shopping, entertainment and convenient airport access our attendees really enjoy San Diego." The San Diego Convention Center holds a nationwide record of success that has made our facility a model for other convention centers. San Diego's incredible weather and outstanding destination amenities aside, we aggressively target market sectors that will return the highest value back to San Diego, including the highly desirable healthcare and medical markets. In addition, 70% of our business is association-based which typically has governing by-laws directing members to meet annually. As a result, San Diego has fared better and is rebounding quicker from the current recession than other cities. FY11 Top Economic Generators Sue McSorley Director of Convention and Meeting Services American Academy of Orthopaedic Surgeons Feb , 2011 *Total hotel room nights reflected for Comic-Con International include the contracted room block of 20,000 and additional rooms booked outside the contracted block reported to the SDCCC by hotels. The contracted room block was increased to 60,000 beginning in FY12 based on an economic impact study by CIC Research in partnership with the hotel community.

7 ECONOMIC IMPACT JOBS TOP 3 ECONOMIC GENERATORS ATTENDEE SPENDING MEDICAL CONVENTIONS Three-year upward trend continues One of the primary purposes of the San Diego Convention Center is to attract high-value business visitors who produce a cycle of spending and economic activity all year round, even in the off season. Convention attendees spend up to four times the amount of money than the average leisure traveler. So just one convention could generate thousands of conventioneers who support San Diego's economy when they stay in hotels, eat at restaurants, shop in stores, visit attractions or hail a cab to get around town. Direct attendee spending rose this year to $596.2 million. It surpassed FY10 spending by 12.4%, and FY09 spending by 17.4%, good indicators that buyer confidence is returning to pre-recession levels. FY11 Breakdown of Spending Factors These results are based on information and research provided by Destination Marketing Association International and by San Diego based CIC Research, Inc.

8 ECONOMIC IMPACT JOBS TOP 3 ECONOMIC GENERATORS ATTENDEE SPENDING MEDICAL CONVENTIONS Medical conventions produce outstanding results This was an outstanding year for medical and healthcare conventions. An all-time record was set for the highest number of hotel room nights sold in this market sector. The economic impact and direct attendee spending categories placed second only to FY08, which was the highest performing year in our building's history. We rigorously pursue this extremely competitive market, so not surprisingly San Diego is ranked one of the top cities in the nation for hosting medical conventions. Healthcare and medical conventions are highly prized by convention cities because they: "People love the walkability of the city, the fantastic weather and the layout of the Convention Center." Germaine Schaefer Director of Convention Services American Diabetes Association June 24-28, 2011 Perform well even in economic downturns Have larger budgets Are well attended by professionals seeking continuing education Attract attendees with more disposable income Are likely to bring family and extend stay for a vacation FY11 Medical Convention Benefits Summary

9 TAX REVENUES TOT REVENUE "... The compactness of the city and large inventory of hotel rooms allows for the creation of a city of science within the City of San Diego." Paula Kara Senior Director of Meetings Society for Neuroscience Nov , 2010 Tax revenues from conventions contribute to our quality of life in San Diego In FY11, $20.6 million in sales tax revenue ($1.07 million) and hotel room tax revenue ($19.5 million) were left behind by conventioneers visiting San Diego as a result of spending for accommodations, dining, shopping and other goods and services they used while in town. This is a 1.8 percent increase above FY10. That's good news for San Diegans because these revenues help to pay for police and fire protection, street and park maintenance, upkeep of museums and beaches, and other city services residents enjoy and that contribute to our quality of life. FY11 FY10 Tax Revenue Comparison $22,500,000 $20,220,522 $20,577,113 $20,000,000 $17,500,000 $15,000,000 $12,500,000 $10,000,000 FY10 FY11

10 TAX REVENUES TOT REVENUE Convention visitors generate 14% of city's TOT revenue When convention attendees book a room in San Diego, they pay a hotel room tax called the Transient Occupancy Tax (TOT). This tax revenue is channeled to the city's general fund and is used to pay for vital services to support San Diego's infrastructure. In FY11, $19.5 million in TOT was received as a result of Convention Center events, or more than 14% of the total TOT revenue collected by the city. It is important to note that these are new dollars brought into our city by overnight visitors and help to relieve the tax load on residents. City's Total TOT Revenue 14.2% TOT generated by events 85.8% TOT from other sources TOT from other sources TOT generated by events

11 ATTENDANCE & EVENTS COMMUNITY "The Center delivered superb and innovative service and a flawless program experience not something easy to achieve when your audience is made up of very knowledgeable and competitive colleagues in the international industry." Edgar Hirt, President International Association of Congress Centres (AIPC) 2011 Annual Conference & 53 General Assembly June 28 - July 1, 2011 Total attendance edged upward with 797,864 people attending events, surpassing last year's attendance, 786,403, by 1.5 percent. Primary attendance (conventions and tradeshows), was slightly up for the third year in a row, signaling San Diego's convention business is still strong despite the economy. Conventioneers falling in this category are highly desired as they spend nearly four times more than leisure visitors. Secondary attendance (consumer, civic, religious, education and other community-based events), attracted 240,536 local guests, was up 5.0 percent from last year. A total of 69 primary events and 152 secondary events were held. FY09-FY11 Primary Attendance Comparison 600, , , , , , , , , ,000 FY09 FY10 FY11 Breakdown of Events

12 ATTENDANCE & EVENTS COMMUNITY The Center of the Community The San Diego Convention Center is a great source of civic pride and serves as our region's premier gathering place. At one time or another, most residents have attended a graduation, banquet, seminar or other community event in our building. Many public and consumer events like the popular San Diego International Auto or the San Diego Bridal Show are San Diego traditions and attract tens of thousands of locals downtown. This year more than 240,500 locals attended 152 community-based events.

13 HOTEL ROOM NIGHTS "San Diego is a great convention city because of the convenience of travel from the hotel to the Convention Center, the close proximity of the hotels, and, if the streams of our attendees are any indication, the great weather and the Gaslamp." Jim Flanigan Marketing Director Society of Critical Care Management Jan , 2011 Hotel room nights on the rise for the third straight year Hosting a citywide convention often requires five or more years of planning and coordinating with multiple hotels throughout the region. Thus, San Diego's hotel community is one of the Convention Center's closest partners and plays an important role in the overall well-being of San Diego's convention and meeting industry. More importantly, hotel room night bookings fuel important tax revenues to pay for city services and also keep San Diego's hotel occupancy levels up all year round, not just during peak travel seasons. This year approximately 735,097 contracted room nights were generated resulting in a welcome 3.6 percent uptick in room night usage over FY10 and an 8.6 percent rise above FY09. Among the challenges facing our industry is tracking room nights that are booked outside of the room block pre-arranged by the convention organizer. Frequently attendees book through loyalty programs or use Internet-based travel reservation sites. Studies indicate 40 percent or more of rooms are booked by attendees on their own. When this undercounting is factored in, the total room nights booked is significantly higher.

14 CORPORATE RESPONSIBILITY GIVING BACK LEED CERTIFICATION More and more meeting planners are helping those in need by giving back to the community where they hold their events. For example, in February 2011, the American Academy of Orthopaedic Surgeons built a Family Fitness and Fun Park in San Diego at the Spring Valley and East Communities Center. It included a multigenerational component with a safe, accessible playground and a walking/running track around the perimeter of the playground so that children, parents and grandparents could all play and exercise together. Because meeting planners are increasingly embracing these types of activities, the San Diego Convention Center developed a dedicated service program connecting them with community organizations. From attendees participating in building safe playgrounds to clients donating reusable materials at the end of an event, meeting organizers continue to help San Diego non-profits improve the quality of life for many in our community. The Convention Center s food and beverage provider, Centerplate, is also engaged in year round giving back through their food donation program. Last year alone, they donated nearly 42.5 tons of food to the San Diego Rescue Mission to provide meals to the homeless. American Academy of Orthopaedic Surgeons build a playground in San Diego at the Spring Valley and East Communities Center

15 CORPORATE RESPONSIBILITY GIVING BACK LEED CERTIFICATION Environmental leadership turns green into silver certification from USGBC In spring 2010, the San Diego Convention Center began the United States Green Building Council's (USGBC) certification process for Leadership in Energy and Environmental Design (LEED) certification. By fall 2011, we were awarded one of the highest LEED ratings, Silver Certification for existing buildings, for our long-standing commitment to minimizing the environmental impact of large events on the earth we all share. In the past year and a half alone, employees from every department have been involved in our green efforts. Listed below are just a few of the recent initiatives that helped us to earn LEED Silver Certification: Installation of new energy efficient lighting in our exhibit hall making us the first convention center in the nation to go 100 percent fluorescent. This resulted in a 44 percent reduction in energy consumption in the exhibit halls. Diversion of more than 45 percent of our recyclable materials from landfills. This was a 7 percent increase over 2009 and a 26 percent increase from Use of composting bins in kitchen prep areas, capturing used cooking oil that is recycled into bio-diesel fuel and use of biodegradable plates, cups and cutlery upon request. When feasible, we also purchase local, organic fruits and vegetables as well as natural-raised, hormone-free and antibiotic free meats from companies offering sustainable products. Introduction of green laundering and dry cleaning services using Environmental Protection Agency approved laundry detergent, softeners and practices for employees who wear uniforms.

16 LEADERSHIP OUR MISSION FY11 Board of Directors The San Diego Convention Center Corporation is a public benefit corporation created by the city to exclusively market, manage and operate the award-winning waterfront facility. A nine-member board comprised of business and community leaders, establishes policy for the Corporation. The Mayor and City Council of San Diego appoint seven members and two members represent the Hotel- Motel Association and the San Diego Convention and Visitors Bureau. Officers Alexis Gutierrez Chair Nikki Clay Vice Chair Phil Blair Secretary/Treasurer Board Members Chris Cramer Steve Cushman Nico Ferraro Cheryl Kendrick Bruce Goodwin Matthew (Mick) Musella Executive Management The San Diego Convention Center Corporation s total service philosophy starts at the top with senior management. All experts in their respective fields, they oversee the various facets of the corporation. Carol Wallace President & CEO Tom Mazzocco Executive Vice President Sandra Butler-Moreno Executive Vice President Sales & Marketing Andy Mikschl Senior Vice President Sales Brad Gessner General Manager Steven Johnson Vice President Public Affairs Mark Emch Vice President Finance John Vingas Senior Vice President Catering Convention Centers West, Centerplate Nancy Murgillo General Manager, Centerplate Bess Eberhardt Director of Business Development

17 LEADERSHIP OUR MISSION The San Diego Convention Center Corporation is a public benefit corporation created by the city to exclusively market, manage and operate the award-winning waterfront facility. The mission of the corporation is to generate significant economic benefits for the greater San Diego region by hosting international and national conventions and trade shows in our world-class facility. We fulfill our mission by: Maximizing positive economic impact, creating region-wide jobs and expanding business opportunities for the benefit of business stakeholders and the local community; Generating event-driven tax revenue from out-of-town attendees to fund essential city services that enhance the quality of life for all San Diegans; Serving as the region s premier gathering place and hosting important community events; Maintaining high ethical standards, being fiscally sound and giving back to the community; Leading the industry in environmental and social responsibility by operating the building in an ecologically sound manner and contributing excess food, as well as select event materials, to local non-profit and charitable organizations; and Providing our clients and guests with outstanding service, consistently exceeding expectations, and in a manner that secures future business and economic benefits for the destination.