Question

All public assembly venues share a common thread in their mission statements or public purpose: to fill all available seats or fill all meeting room and exhibit space as frequently as possible. Why not sell all of the seats or floor space? Some public assembly venues may have financial profit as their primary focus while others may concentrate more on providing programming that best serves the community’s needs. The concept of selling every seat may be literally applied to arenas. With respect to convention centers, the goal may be to attract convention and multi-day meetings that bring large numbers of out-of-town attendees who spend “new” money in the community, thereby stimulating the local economy. Of course it must be recognized that other types of public assembly venues may attract out-of-town audiences from outside the taxing jurisdiction who also spend “new” money.

National Recreation and Park Association Annual Convention

-rental fee (move-in, move-out, and event days) (approximate total rental fee of $45,000 food and beverage commissions (banquets, meeting-room breaks, etc.)

-rentals (exhibit materials, AV equipment, etc.)

-39 Labor charge-backs

Bruno Mars Concert

-Venue rental fee (6% of gross ticket sales) (average ticket price of $75)

-ticket service charges and commissions

-concessions commission (% of gross sales)

-merchandise commission (% of gross sales)

-broadcast origination fee (flat flee of 2,000)

-labor charge-backs

-parking revenue

-only limited room nights would be generated, as concert attendees will be mostly locals

Based on the information provided:

1. Determine which of the two events will generate the greater amount of ancillary revenues for the complex.
2. Determine which of the two events will create greater positive economic impact for the metropolitan community.
3. Formulate for the board of directors a written recommendation regarding which event should be confirmed. Include at least 3 persuasive points to support your recommendation.

Answer 1

- Determine which of the two events will generate the greater amount of ancillary revenues for the complex.

Ancillary revenue is such revenue which is earned by the entity over and above the revenue made for the major goods or services provided by them. Here the major activity of the complex is renting out of the complex for the event. With respect to this, the event which would generate greater ancillary revenue to the complex would be the Bruno Mars concert.

This is because the Bruno Mars Concert would earn the complex with ancillary revenues like:

a. Ticket service charge and commissions

b. Concessions commission

c. Merchandise commission

d. Broadcast origination fee

e. Parking revenue

While the other event would only generate revenue from rental of some additional exhibit materials and AV equipment’s.

- Determine which of the two events will create greater positive economic impact for the metropolitan community.

The National Recreation and Park Association Annual Convention event would create greater positive economic impact for the metropolitan community. This is because, as it is an event based on the national level, it would be attended by many people of officials who are from an outside city and this would bring in new money being spent in the community. There are also chances that there are many suppliers taking part in the event which would open opportunities for networking to the people in the community which would eventually lead to the betterment of the society. There might be small exhibitions also conducted by this event group which would again help in exhibiting the talents in our community.

There are also chances that people who come for attending this event would see a business opportunity in our city and there by investing their money in our economy which would boost our economy and it’s earning. There might also be sponsors and advertisers who get attracted to the city due to this national convention and there by again having new money spend in our economy.

- Formulate for the board of directors a written recommendation regarding which event should be confirmed. Include at least 3 persuasive points to support your recommendation.

In my opinion, the board should conduct the National Recreation and Park Association Annual Convention event in the complex. Following are the reasons why I have selected this event to be conducted;

1. The major reason is that this convention would be attended by many people who do not belong to the local and this would bring in more new money being spent in the economy.

2. As this is a national level annual convention, we can expect this or other conventions connected with the same every year which would help us win more such conventions adding positive economic impact.

3. There are also chances that people coming from the outside places or not belonging to the local would bring us more business opportunities as they find the services and the place attractive and holding much more opportunities. And there would also be officials of national importance who can win us more opportunities to hold national conventions related to the other sectors or services.