The new operators for the Vancouver Island Conference Centre have extra incentive to drive down the city’s million-dollar operational subsidy, but don’t expect single-minded focus on deficit.
Dean Clarke, regional vice-president for Spectra by Comcast Spectacor and Chuck Loewen, new VICC general manager, spoke with the News Bulletin about taking on the conference centre, reducing the subsidy to the building and changes people can expect.
U.S.-based Spectra by Comcast Spectacor, which manages 39 convention centres in North America, took over operations in March. Loewen began June 1.
Under its agreement with the city, the company will get a lower management fee at $65,000 than the previous operator, Atlific, but has the potential to earn a performance bonus for hitting benchmarks. If it trims the city’s subsidy from $1.03 million to $850,000, for example, it would receive 50 per cent of that reduction.
Atlific received $102,000 annually which included a fee for management and marketing.
Victor Mema, city chief financial officer, said the city wants to limit the VICC subsidy, which is just over $1 million and bring it to $850,000 annually. With the bonus, he thinks it’s possible to see a significant reduction to the subsidy as well as collaboration. A study by CBRE hotels and the core services review both spoke to the lack of a collaborative destination marketing plan between the former Tourism Nanaimo, conference centre and partner hotels.
“For them to lower the subsidy, they have to be efficient, they have to bring in more business and then you have those qualitative requirements as well where they have to collaborate with everyone else so they are not working in isolation,” Mema said.
Clarke said the company loves incentives because it shows partnership with the city. Spectra’s base fee may be lower in most cases compared with other venue managers, but he said the company wants to prove it can do a good job.
“We’re very aware of what the political issues have been around this building and I think the citizens should be excited,” Clarke said. “We have an incredible general manager working there now and he’s going to be able to find efficiencies and through our partnerships with our other facilities here in B.C. we’re going to be able to come up with ideas or share intel when it comes to conferences and be able to maximize revenue and minimize expenses.
“So we’re confident because we’ve done this throughout other cities where we’ve driven that deficit or subsidy lower, but the one thing we’ve found is your building is operating, as far as economic impact, on an excellent level.”
In 2015, the VICC generated $5.7 million in direct spending, the CBRE report showed. This company believes it can provide an annual economic impact of between $6-8 million.
The company anticipates a partnership with the Penticton Trade and Convention Centre, which it also runs, with an aim to pair teams together and refer business. It’s also looking at events held at other convention centres but not in Nanaimo, as well as operational efficiencies, which are expected to be part of the budget the company presents to the city.
Focusing on deficit is the wrong mentality, according to Clarke, who said the company isn’t going to drive down the deficit “in a sense of just having traffic and wear and tear through the building;” it has to work collaboratively with everyone in the city, with a focus on driving tourism and economic impact.
Loewen said the subsidy for this conference centre has to be looked at as an investment where the return is economic impact. Spectra is working toward driving the million-dollar subsidy lower and maintaining or increasing economic impact.
“That’s, I think, the way we should be looking at a subsidy and not just looking at the dollar figure of let’s reduce this subsidy, let’s reduce this subsidy. Yes, let’s reduce this subsidy, but let’s maintain and increase that return.”
Loewen said people can expect more communication so they know what’s being done at VICC and its contribution to the city, more collaboration with the Nanaimo Hospitality Association and other tourism stakeholders and greater involvement in tourism.
“We are looking at trying to get more conventioneers here, conferences here, and actually working towards having them add on a few days before or a few days after to vacation,” he said.
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