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Consumer Shows Paying Off
GRAND RAPIDS — Event income to DeVos Place for the next fiscal year is expected to top $5 million for the first time ever, and the biggest single revenue gain is projected to come from the consumer shows held in the convention center.
Event income for FY09 should be about $450,000 higher than the return expected for this year, and just under half of that increase is predicted to come from consumer shows. Most of those run from January through March, which is the fiscal year's third quarter, and most are produced by Showspan Inc.
"We are seeing a little bit of increase in those shows and Showspan shows," said Chris Machuta, SMG director of finance.
But a new event in November is also pitching in to hike event income. The first Wine and Food Festival will take place the third weekend of that month. The event is a partnership between the Convention and Arena Authority and Showspan, and is expected to draw wineries from across the state and the globe to DeVos Place for three days of tasting.
The addition of the wine fest should give the building at least 10 event days during the next fiscal year with a focus on food and beverage, the most rental days of any consumer-show category. The total number of public shows, 74 in all, are expected to bring in $1.27 million in event income for the next fiscal year. (See related chart.)
Conventions and tradeshows, though, will continue to do the heavy financial lifting at the building. Income from a projected 142 of those meetings should top $2.16 million. The type of group expected to gather at the convention center most often is educational organizations, with 30 event days on next year's calendar. Health care groups are expected to meet a dozen times next year, closely followed by religious groups with 11 meetings.
"We've had a constant and steady number for these," said Machuta.
Still, SMG will expand its three-person sales staff by at least one this fall. SMG Regional General Manager Rich MacKeigan said he is looking to add a sales director to help increase bookings in the building and he wants that person aboard in September. But he can't begin the search until July 1 when the new fiscal-year budget goes into effect.
MacKeigan explained that the Convention and Visitors Bureau and SMG sales teams take different approaches to selling the building. He said the bureau uses a long-term approach by locking in meetings three to five years in advance, while the SMG staff focuses more on the short term.
MacKeigan also wants to add an IT person to the DeVos Place staff.
Conventions, tradeshows and consumer shows are all held in the building's exhibition space and are expected to be worth $3.44 million in event income. Other events held in the meeting rooms and Steelcase Ballroom, along with shows in DeVos Performance Hall, are expected to give the building another $1.58 million in event income toward its total of $5.02 million. Event income includes revenue from rent, services offered at the building and ancillary receipts.
Total expenses for DeVos Place are expected to rise by $260,000 in the coming year to $5.61 million, with 63 percent of that due to additional personnel.
But Machuta pointed out that the cost to heat, cool and light the building was projected to drop by $3,100 in FY09. He said the reduction came about because they've become more familiar with the systems' nuances and because they've been looking for ways to lower the utility bills.
"DeVos Place isn't as steady as the arena year-to-year, but it's getting there," he said.
The building's annual expenditure for utilities will run $1.62 million again next year.
The fiscal forecast has DeVos Place losing about $379,000 in the upcoming year, nearly $200,000 less than the operational loss expected for this year. The building is expected to host a total of 566 meetings and draw almost 670,000 people through the doors during the next fiscal year.
Revenue Expected To Rise At DeVos
Event income to DeVos Place for the upcoming fiscal year has been projected to top $5 million for the first time since the building opened in late 2003.
The forecast adds nearly $450,000 to the convention center’s overall receipts next year above the current year’s expected return, with 48 percent of that increase projected to come from consumer shows.
Here are the estimated 2009 bookings for DeVos Place and the event income for next year, this year and the increase from year-to-year.
Change from 2008
*Includes corporate and organizational meetings, seminars, wedding receptions, banquets and dances held in the Steelcase Ballroom and meeting rooms outside of the exhibit space.
Source: SMG, DeVos Place Operating Budget, Fiscal Year Ending June 30, 2009