Hotel-Motel Tax Board Minutes 2019 January 25

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Hotel-Motel Tax Board Minutes 1/25/2019 Pg. 4 The annual VSBM meeting for Industry Partners with a recap of 2018 is Thursday, February 28, from 11:30 am – 1:00 p.m. at Embassy Suites, Notre Dame. Century Center: Jeff Jarnecke reported on 2018 yearend key performance indicators. There were 14,217 room nights contributed to the downtown City of South Bend market largely which equates to a 7% contribution margin which is stronger than in the past. The 2019 goal is 18,000 room nights. Pleased with that number and significant growth with more than 600 hotel rooms downtown. Cost of Goods Sold for MSG/Savor was 27%; contractually obligated to be at 30% or less. This is a strong performance on the part of MSG/Savor with thanks to Leanna, Jake, Kate and the team for their delivery on the work on events. The 2018 net operating loss was $1.046 million. The five-year average was $1,093 million. The low water mark in terms of net operating loss was around $880,000. That was lifted because of the elections a number of years ago. The 2019 net operating loss goal is $900,000. Total 2018 income was $4,437,183; operating expenses $4,259,948; net profit was $177,235. The $192,834 budgeted for building improvements was a rainy-day fund for emergencies and is not in the 2019 budget. That amount was not tapped into because the Capital Improvement Plan which this board approved was tapped into. The significant growth and contribution of the building to especially the downtown hotels started to go up late in 2017. The building is starting to deliver now with the addition of hotel rooms. The number is expected to continue to increase. With the information that the consultant gave the last couple of meetings, the building should be somewhere between 18,000 and 25,000 room nights for a building the size of Century Center; however, 25,000 could be a stretch in terms of the 75,000 square feet that is available to sell. Leanna Belew reviewed 2018 sales and room nights. Although total revenue was a little short this year from the budget, the growth year over year in 2018 was 12%, just a little over $200,000 from the previous year which fell just short of the best year in 2016. New contracts issued in 2018 was 433 compared to 406 in 2017, a 7% increase. Estimated rent from new contracts was $436,932 compared to $408,307 in 2017, a 7% increase. The number of events in 2018 was 450 compared to 437 in 2017, a 3% increase. Attendance was down just a bit at 184,056 in 2018 compared to 192,105 in 2017. Site visits were 427 in 2018 compared to 424 in 2017. Actualized room nights increased from 5,530 in 2014 to 14,217 in 2018. There are 8,887 rooms on the books for 2019; 7,599 for 2020; and 6,252 in 2021. The room night increase is attributed to more hotel room inventory downtown and a different focus to book multi-day events. Net promoter scores hit 75% with the goal of 80%. The return rate was 41% with the goal of 50%. The return rate national average is about 8% rate. Jacob Hamman, Director of Sales & Marketing attended T.E.A.M.S. 2018 with SMG to meet with rights holders of sports events and eSports. He also attended the Expo Expo with SMG to meet with rights holders of expo events around the country. Jarnecke reported that all 2018 capital improvement projects are near completion and outside projects will be completed as soon as soon as the work can be done outside – West Race repair, second entrance to Convention Hall is framed in, building improvements (handrails, doors, lift); parking lot and exterior signage, soft-scaping and wayfinding, exterior color changing lights, and new lifts. The 2019 projects of $1.26 million that the board approved are all underway and many of