By Scott D. Johnston
For The GH Newspaper Group
Consultants experienced in the management of convention centers were in Ocean Shores last week as part of a $20,000 contract with the city to assess the Ocean Shores Convention Center and its market potential for attracting events and tourists to the community.
At an informal meeting at the convention center, consultants from Pinnacle Venue Services of Virginia Beach, VA, listened to a handful of people from local businesses and told them what most already know: that the Convention Center has been operating with an extremely lean staff and that effective marketing of it will require a significant investment of funds.
Here to gather input from Convention Center staff, city officials, local business owners, media and any interested parties were Pinnacle’s Managing Partner Douglas Higgons and Senior VP Barry J. Strafacci. Both men are former regional vice-presidents from venue industry giant Global Spectrum (now called Comcast Spectacor).
Within 60 days, Pinnacle will send the city a multi-faceted assessment of everything involving the Convention Center, including the physical structure, equipment, technological capabilities, operations and marketing. Higgons called it “the overall state-of-the-state as it relates to the Convention Center.”
Their report will also include “a number of action items and ways to get there.” A big part will be to zero in on the sales and marketing of the venue and “give a blueprint, a roadmap, kind of a five-year plan.”
Higgons acknowledged that Pinnacle “may or may not be a part of that,” a reference to the fact that their $20,000 consulting fee is the first part of Pinnacle’s original proposal to oversee marketing of the venue. He said effective marketing ultimately calls for employing an experienced venue sales professional “who wakes up every morning thinking, ‘What can I do to sell the Ocean Shores Convention Center today?’”
Asked after the meeting about potential marketing costs, Higgons agreed that $200,000 per year is “in the ballpark” for a sales person and the requisite materials and support.
Strafacci said of Pinnacle’s staff, “We’re really operators; that’s our experience. I’ve been managing convention centers of all sizes for 35 years. So we’re going to approach it like what kinds of things do we see that may be adjustable?” He noted that they’ve worked with small budgets before and intend to offer “some options for things that are really doable.”
The seven local people at the meeting offered a wide variety of suggestions ranging from the relative desirability of different types of events at different times of the year to opportunities for creating event-based packaging that includes lodging and additional experiences. It was suggested that releasing event schedules earlier could help local businesses better prepare for the visitors that Convention Center events bring.
Local business leader Mike Doolittle, owner of Playtime Family Fun Center, said some see the venue as “a financial noose around the city’s neck” because it costs more than $1 million a year to operate but only generates $200,000 in direct rentals and related fees.
“How can it be used in a profitable manner?” he asked.
Mark Plackett, representing the Ocean Shores/North Beach Chamber of Commerce, noted that even when Convention Center marketing efforts were healthy, fueled by funding made available from a strong pre-recession economy, the venue still operated at a sizeable annual loss.
Strafacci told the group that the situation is the rule, not an aberration and that most facilities like that don’t pay for themselves, but they bring business to the community.
“In 90 percent or greater of buildings this size, profitability is measured by how much business they bring in” to the area. “Convention centers typically don’t make any cash profit on the bottom line.”
It was similar to the message given to the City Council last month by Convention Center General Manager Cheryl Turner, when she estimated that center events generate more than $10 million in local visitor spending annually.
However, Strafacci said there are clear paths to improvement because the biggest underlying issue here is simply, “Nobody’s selling. I mean, you’ve got four people here. You’ve got four people doing the jobs of eight!” He said the solution is to create a full-time marketing position, hire an experienced professional, and provide the requisite support.
City Council member Gordon Broadbent replied, “We tried that,” and referenced the tenure of former Convention Center Director Ken Mercer, who retired in 2011. Plackett said that annual revenue had been as high as $300,000 back then. Doolittle said he thinks the deficit was still too high.
He suggested that Pinnacle also “take a look at our existing manpower and are we using it as effectively as we can?” Strafacci responded, “I can assure you, if we were looking to run a building like this, we would have more than four people.” He later added, “The only way you can grow revenue is to have people that can generate revenue.”
Pinnacle’s presence here was the result of the city, through the Lodging Tax Advisory Committee, seeking proposals for management and marketing of the facility. Pinnacle offered a multi-part approach that could ultimately run into several hundred thousand dollars. The starting point was $20,000 for a venue and market analysis. The lodging tax group did not recommend any money be spent with Pinnacle, but the City Council approved the $20,000 consultant contract with no obligation to proceed any further.
Higgons said Pinnacle expects to have a draft report ready within 45 days and will then plan a formal presentation to the City Council.
