For Convention Center Bigger Is Better

April 14, 2006
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GRAND RAPIDS — Sometimes size does matter, and it has in this case.

The sheer largeness of

DeVos Place
, with an exhibit space that stretches the length of three football fields, has played a big role in bringing more event income to the Convention and Arena Authority, the panel that oversees operations at the convention center.

But it's not just the exhibit space that is making the cash register ring, as the rest of the building's 1 million total square feet has begun to contribute in a big way. Revenue from conventions has been up for much of the fiscal year because the building has seen more traffic. Moreover, it has also seen an uncommon type of business than in past years.

Chris Machuta, who directs the building's finances through SMG, said ancillary revenue from conventions is up. More income is coming from food and beverage sales, rentals of audio and video equipment, and charges for electrical use. That means the conventions and trade shows held here are spending more money while they're here than these meetings did in past years.

Why? Because now they can, and they couldn't before the bigger building opened.

"Before, they couldn't do any extra types of activities. They would find some other establishment in town to host some type of reception or some other event," said Machuta.

"Now, given the fact that we've got so much more room and a lot more rooms that fit that type of criteria, we're finding that there are more events that are using the facility for everything and not just for the meat-and-potatoes convention," he said about the dinners, receptions and smaller get-togethers these associations do.

So for the convention center, size does matter. And at least for the time being, even is better than odd, as even brings in more revenue than odd does.

"The even fiscal years always has the woodworkers show in it, which is a very high-revenue producing event for what is only considered two event days. Automatically, every other year with that event in there, it spikes the average a little bit," said Machuta.

Through February, event income from conventions was up by 29.5 percent over the budgeted amount, and total event income to the building was up by 17.4 percent over the forecast. (See related chart.)

The ancillary income that Machuta pointed to — $252,670 at the end of February — was about a third higher than the figure from the same time a year ago.

"We certainly are bringing in a lot more people, from a convention standpoint, than we ever did," said Machuta.

The SMG and Convention and Visitors Bureau sales team has been on a roll. Bureau President Steve Wilson said

DeVos Place
hosted six conventions in January, which is a big number for a normally bleak winter month. He also said they were vying for a super-sized convention from a group that didn't even have the city on its radar screen.

The CVB is hoping to bring the annual meeting of the United Church of Christ (UCC) and its 7,000 delegates here in 2009. And, possibly through a little "divine intervention" that took place a short time ago, the bureau might be able to pull it off.

A local UCC pastor recently attended an outdoors show that was put on by Showspan at

DeVos Place
. He was so impressed with the building that he contacted UCC Associate General Minister Edith Guffey to suggest that the national organization should consider
DeVos Place
for its next available meeting.

Wilson said Guffey came here to look at the building and the city, and then met with Mayor George Heartwell, who is ordained as a UCC minister. Heartwell said he asked Guffey how many mayors she knew who are also ordained UCC ministers.

"And she thought that maybe one," said the mayor. "I think we have a shot at this convention."

Wilson said if the CVB can land the UCC convention and another one with the LutheranChurch, both would account for $4.6 million worth of direct spending here.

Machuta said everyone involved with the convention center is pleased with the way the building has performed this fiscal year. At the end of February, the year's eight-month mark,

DeVos Place
was only $178,610 in the red — a deficit that is $570,000 less than what it was at the same time last year.

"I'm not going to say we're going to gain another 50 percent from the gain that we've made over the last four months. But we will definitely come out ahead for the fiscal year," said Machuta of the probability that income will exceed the forecast.

"There is still some uncertainty of exactly how busy this building is going to be in terms of activity, and maybe we'll know in another year or so."

DeVos Place
Revenue Up

Total event income for

DeVos Place
was 17.4 percent over the expected amount at the end of February. At the same time, event income from conventions and trade shows exceeded the category's budgeted amount by 29.5 percent, and consumer shows have topped forecast by 22 percent.

Here is a comparison of the actual income and budgeted amounts for event income to the convention center from July 1, 2005, through Feb. 28, 2006

Event Type Total Event Income Actual Total Event Income Budget % of Total Income Actual % of Total Income Buget
Conventions $1,252,842 $967,552 42.5% 38.5%
Consumer Shows $623,653 $510,039 21.2% 20.3%
DeVos Hall     $432,391 $409,490 14.7% 16.3%
Steelcase Ballroom $287,827 $348,392 9.8% 13.9%
Other $349,001 $274,065 11.8% 10.9%
Total $2,945,714 $2,509,538 100% 100%

Note: Percentages were rounded.
Source:

SMG DeVos Place
Financial Statement, February 2006.

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