YOUR AD HERE »

Center’s plan is prudent

Brett Mitchell and Dean Dennis

As one of the organizations that provided research and analysis to develop the financial projections for the Vail Conference Center, we would like to take this opportunity to clarify and misperceptions about our methods. The intent is to equip the citizens of Vail with as many facts as possible concerning the facility’s potential success prior to the Nov. 8 election. Global Spectrum operates conference and convention centers across the country, including the resort area of West Palm Beach Florida and the Pueblo Convention Center here in Colorado. We have had an interest in the Vail project and provided assistance in varying degrees for some time prior to the actual formation and submission of a bid to manage and operate the facility. Using the studies completed by HVS and based our own extensive experience, we created a conservative set of facility demand estimates and a financial pro-forma for the proposed annual operations of the facility. While there are certainly many unknowns – as with any project – we are comfortable with our ability to manage within the revenue and expense streams projected. The Vail conference center has the potential to meet and most likely exceed the projections we put forth. We want to point out a few issues with regards to the pro-forma and other factors: 1. We consider the losses projected for this center to reflect a worst-case scenario and will aggressively seek to minimize them if we are fortunate enough to be selected as the management firm for the facility. We took a conservative approach to our projections particularly on the expense side, knowing the seasonal nature of the area and the fixed indirect expenses that are anticipated. 2. The existing name recognition of Vail as a destination and the positive reaction by associations and meeting planners from across the country was essential in developing our pro-forma. While the high level of interest was not surprising, it does validate our financial projections and serves to substantiate our numbers. The business plan HVS developed for the proposed conference center included extensive input from international, national, regional and state corporate and association event planners. This input included phone interviews, on-line surveys, and three focus groups that were held in Chicago, Denver and Vail. In all, HVS received detailed feedback from over 80 individual event planners, far exceeding the number of respondents typically included in such studies. The feedback not only established a strong level of interest in bringing larger events to Vail, but also identified the primary concerns among event planners and enabled the town and HVS to incorporate strategies for addressing these concerns in the business plan.3. This project expands and broadens Vail’s hospitality market opportunities for the entire year, not only when the hotels are full with ski travelers in the winter season, but especially during the shoulder seasons. Our projections added a number of potential new events during these times that previously have not had an opportunity to be held in the community, but are certainly feasible with the addition of the new conference center.4. Conference and convention centers nationwide that are operated separately from any individual hotel for the benefit of several nearby hotels routinely operate with annual operating losses that are financed through public funding sources. While we have had facilities operate in the black over the years, it is certainly not the status quo. Even though most convention and conference centers operate at a loss, the economic impact they generate in the form of hotel, retail, recreational and other visitor-related spending as a result of an increase in visitors to the area amounts to several times the amount of the operating loss. The HVS study estimates that the facility would attract $34 million in annual economic impact by demand stabilization in 2012 with an annual operating loss of less than $1 million. We think we can operate the facility with an even smaller deficit while still maintaining or improving upon the estimated positive economic impact. The conference center will act as a catalyst for increased economic activity throughout the Vail area benefiting the entire community. 5. Nationwide, demand for conference center space is increasing as the industry rebounds from the difficult conditions associated with the downturn in the economy in the early portion of this decade. Meetings & Conventions, an organization that tracks the performance of the industry, published their biannual report in 2004. For corporate and association meetings, this report revealed increases in the number of both events (24,700-plus) and attendance ($4.8-plus million) as the industry emerged from its most difficult period on record. In the midst of this recovery, well-established, premiere destinations such as Vail are faring particularly well.6. We also took into account any factors that could potentially negatively affect the conference center’s ability to attract business. One of these factors include above average lodging costs in the Vail area. However, our thorough surveys of local, regional and national meeting planners have shown that the positive aspects of a world-class destination like Vail ultimately outweigh the relatively higher lodging costs and would not preclude the ability to attract high-end events to the new conference center.The financial projections Global Spectrum submitted for the Vail conference center reflect a prudent and financially responsible plan to leverage benefits from an already successful investment Vail has made in positioning itself as a destination community. We have seen this to be true in other cities where a project of this type benefited the local economy, businesses, and citizens through increased levels of tourism. In summary, our track record is the best testament to the validity of our projections to this and any project. In our history we have met the initial financial projections in all convention and conference centers that we have created. Brett Mitchell, regional vice president, and Dean Dennis, vice president of sales and client service have a combined 27 years of experience in the conference center industry.Vail, Colorado


Support Local Journalism