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Visitor Spending – 136% of Goal

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Visitor Spending – 136% of Goal MEMORANDUM TO: Teri Killgore, Contract Manager City of San Jose FROM: Karolyn Kirchgesler, CEO, Team San Jose DATE: August 20, 2015 SUBJECT: TEAM SAN JOSE Unaudited Year End FY 2014-2015 (July 2014 to June 2015) Team San Jose Fiscal Achievements: Over 1.4 million attendees brought to Downtown San Jose – 135% of Goal Over $124.1 million in Economic Impact - Visitor Spending – 136% of Goal Achieved 212,929 Future Hotel Room Nights Booked– 106% of Goal Achieved 100% customer satisfaction Achieved 9 out of 9 Performance Measure Goals Team San Jose requests that the City Manager’s Office forward this report to the Community and Economic Development (CED) Committee for consideration. Mission Stimulate economic activity in San Jose, particularly at the City’s hotels, restaurants and arts venues. Background Team San Jose is charged on the City’s behalf to promote San Jose as a destination and to manage the San Jose McEnery Convention Center, California Theatre, Center for the Performing Arts, City National Civic, Montgomery Theater, South Hall and Parkside Hall. 1 | P a g e Hotel Occupancy Tax (TOT) generated from hotel guests provides support for the operation of San Jose McEnery Convention Center and the Theaters. Team San Jose, in coordination with the City Manager’s Office, City Budget and City Finance developed Performance Measures that reflect both cost savings and the minimum performance required that ensures the long-term financial stability of Fund 536. TEAM SAN JOSE is measured on the performance measures as listed below: Exceeded 9 of 9 performance measures Year To Date for Fiscal Year 2014-2015 Performance Measures - Unaudited PERFORMANCE Goal YTD Results % ACHIEVED SCORE Economic Impact Hotel Room Nights 200,000 212,929 106.5% 10% 10.6% Event Attendance 1,035,000 1,400,030 135.3% 10% 13.5% Current Direct Impact $ 91,120,000 $ 124,114,169 136.2% 10% 13.6% New Direct Impact NA $ 160,619,230 NA NA NA New Indirect Impact NA $ 108,645,357 NA NA NA New Total Impact NA $ 269,264,587 NA NA NA Return on Investment* $ 2.46 $ 2.80 113.8% 10% 11.4% Gross Operating Profit/Revenue Gross Operating Revenue 25,939,000 37,302,764 143.8% Gross Operating Profit 7,002,844 8,874,161 126.7% 40% 50.7% Theatre Performance Performances** 86% 104% 120.9% 5% 6.0% Special Events** 6% 8% 133.3% 5% 6.7% Customer Satisfaction Satisfaction Rate 95% 100% 105.3% 10% 10.5% 100% 123.1% * The formula for ROI is (TEAM SAN JOSE Operating Revenue + TOT Revenue + Parking Revenue + Estimated visitor Spending) divided by (TEAM SAN JOSE Operating Expense + Parking Expense + All other Fund 536 expenses including capital spending + Debt Service)- Per new contract. ** Theatre Performance is measured by sold performance and special event days as a percentage of total saleable dates. Saleable dates are defined as dates the venues are available to TSJ beyond commitments to resident art partners’ performance, move-in, move-out and rehearsal dates. It is possible to achieve over 100% of saleable dates by booking multiple events on a single date. Economic Impact - Visitor Spending . Team San Jose hosted over 1.4 million attendees in venues we manage, with spending by those visitors reaching almost $124 million. This measure of direct visitor spending is an estimation of visitor dollars spent in hotels, restaurants, transportation and other businesses attributable to activity in Team San Jose managed venues. 2 | P a g e . Theaters hosted over 552,000 attendees with almost $11.2 million in visitor spending occurring in the community beyond the event. Conference facilities hosted over 848,000 attendees with over $112 million in visitor spending split amongst overnight visitors and visitors driving in just for the day. The methodology used for reporting current performance measures is an older method. In 2004, Destination Marketing Associations International (DMAI) partnered with Oxford Tourism Economics to release a new economic impact calculator that has been adopted as the new standard. The calculator has numerous benefits including: increased accuracy of direct spending, localization and the ability to calculate indirect effects of convention spending. Team San Jose has adopted and run this new, more accurate model for all convention and sporting events for fiscal year 2014-15. During this same period, we continued to run the previous model for comparison purposes. Using the new model: . Direct visitor spending for the year increased by $36.5 million to $160.6 million. The calculated indirect spending for this year was $180.6 million, bringing the total impact of Team San Jose managed facilities to $269.2 million. Indirect spending is defined as the reinvestment of direct spending into the community through the incremental spending of local businesses and employees in the community with revenues garnered from the direct spending of attendees. Hotel Partnership . Team San Jose is measured on contracting and securing future hotel room nights associated with the events held in the San Jose McEnery Convention Center and the Theater facilities. Team San Jose exceeded year end goal by 106% . San Jose hotel partners reported increased hotel revenue of 20.3% and increased hotel occupancy of 5.01%, when compared to last year. Increased transient business travel has created hotel compression and has provided hotels with the ability to charge higher rates. The growth in business travel and corresponding higher room rates are the primary factor to improved hotel revenues. This growth has also affected room availability for group business. Reduced room availability and higher room rates have made it increasingly difficult to obtain the necessary commitment of inventory to remain competitive for larger, citywide groups. Team San Jose continues to work with hotel partners to maintain a balanced portfolio of future business opportunities between transient and group business. Convention Facilities . Team San Jose hosted 155 events in the convention center facilities. Team San Jose, through events held at the San Jose McEnery Convention Center, hosted almost 848,000 attendees to downtown San Jose. 3 | P a g e . Selected major Events that were hosted at the San Jose McEnery Convention Center . BlogHer 2014 Annual Conference . NVIDIA GPU Technology Confernce 2015 . Brocade FY15 Sales Kick-Off . Wrestlemania 31 Axxess . 2015 Silicon Valley International Auto Show . Big WOW ComicFest 2015 . Oracle 2015 Value Chain Summit . SuiteWorld 2015 . World Financial Group New Year . CLEO 2015 Convention . FanimeCon 2015 . NBAA Schedulers & Dispatchers . 2015 Display Week International Conference Symposium Seminar and Exhibition . 2015 AAAS Annual Meeting Theaters . Team San Jose hosted 229 events in our theatres. 71% were concert or performing arts related in the theaters. Team San Jose, through arts and entertainment and special events held at the Theaters brought over 552,000 attendees to downtown San Jose. This fiscal year the offerings ranged from Broadway smashes, unique symphonic/ cinematic experiences, sold-out comedian performances, a Grammy award winning world music icon and a former member of the Beatles. In addition, the theaters continued their history of supporting San Jose’s resident art partners: Opera San Jose, Symphony Silicon Valley and Children’s Musical Theater. Select major events showcase the variety and diversity of events held in the Theaters: . Nederlander Concerts presents “Ringo Starr & His All Starr Band” . Broadway San Jose presents “Jersey Boys” . Nederlander Concerts presents "George Lopez" . Broadway San Jose presents "Wicked" . Broadway San Jose presents “Jerry Seinfeld” . Symphony Silicon Valley presents "Beethoven and Brahms" . Golden Voice “Russell Peters” . Nederlander Concerts presents "Judas Priest" . Children’s Musical Theater presents “The Sound of Music” . Opera San Jose presents “The Italian Girl in Algiers” . Children’s Musical Theater presents “Disney’s Mary Poppins” . Ballet San Jose presents "The Nutcracker" . Emery Entertainment “Men are from Mars, Women are from Venus” . Cinequest Film Festival 25 . Symphony Silicon Valley presents “The Lord of the Rings” . Opera San Jose presents “The Magic Flute” . Nederlander Concerts presents "AR Rahman" . WestBeth Entertainment presents “Eddie Izzard” 4 | P a g e Gross Revenue . Team San Jose operations generated revenues in excess of budget by over $11 million or 143.8% of goal. The additional revenue can be attributed to stronger performance in the following: . Food & Beverage $5.7 million . Labor Revenue $3.3 million Gross Operating Profit (GOP) . Team San Jose reported Gross Operating profit of $1.8 million in excess of goal. Net Parking profits improved GOP by $639,000 in excess of the budgeted net transfer of $2,278,000. Team San Jose utilized over $450,000 in repair and maintenance for the theaters in preparation for Broadway’s “Wicked” and “The Book of Mormon”. Customer Service Team San Jose continues to provide an online survey form that is distributed directly to the meeting planner of each event with the responses sent directly to our contract administrator within the City of San Jose, Team San Jose staff, our labor partners and exclusive vendors working within the convention center. Customer survey satisfaction rates for the fiscal year 2014-2015 were 100% for overall performance. Response rate was 40% (100 out of 247 clients submitted the online survey). Marketing In an effort to broaden consumer awareness of San Jose as a leisure travel destination, Team San Jose launched an emotional branding campaign centering on accolades that the city earned over the past year. The campaign featured three videos featuring locals discussing why San Jose is the Happiest, Healthiest and Smartest city in the U.S. The videos were distributed beginning in May 2015, through YouTube, Google and Facebook. Team San Jose also placed 80 advertisements in 19 trade publications and attracted 609,123 unique visitors to all our websites (SanJose.org, SanJoseMeetings.com, SanJoseTheaters.org and UTrip).
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