Can the Civic Center change with the market?
Wrapping up his final annual report to the Rochester City Council, Brad Jones acknowledged the market for meetings and events in the city is changing.
"There is new competition in the market, and that will have somewhat of a profound effect on certain-size business," the executive director for Experience Rochester said of booking various gatherings in the city.
In his final days before moving to a similar post in Washington state, Jones said facilities such as the new Hilton hotel being built at the intersection of Broadway Avenue and Center Street will require a shift in how the local organization does business.
Experience Rochester, formerly known as the Rochester Convention and Visitors Bureau, is tasked with marketing the city as a destination for visitors and events, but it also sells the Mayo Civic Center as a prime venue for a variety of events.
Currently, he said the Mayo Civic Center attracts about half the meetings and conventions that come to Rochester, as well as approximately 20 percent of sporting events.
City Council Member Mark Bilderback raised the question about the growing number of other venues in the city, which could also include the city-owned Chateau Theatre.
Jones said events catering to as many as 300 people will likely be drawn to other facilities, including the Hilton when it’s complete.
"Our sales team has already witnessed that," he said, noting organizers of some events have been looking at emerging spaces.
To counter that, he said the goal is to attract a greater number of events, so business can be spread among the venues.
"If you pick the volume up, we should be able to place business on top of each other in the market," he said of the ability to draw more visitors if multiple venues are booked in the same weekend.
The challenge then becomes whether the city has enough hotel rooms to meet the growing need.
While Experience Rochester’s annual report cites an uptick in available rooms, it also points to increased rates due to increased demand.
The average daily room rate in 2017 was up 2.6 percent, when compared to the previous year. In the first five months of 2018, the average rate climbed another 3.1 percent to land at $114.41 a day.
"The new supply in downtown will be very important to keep up with that," he said.
While challenges exist, Jones said he’s optimistic about the city’s future to attract visitors and continue growing the city’s tourism and hospitality industry.
Mary Gastner, Experience Rochester’s director of marketing and communications, is set to become the organization’s interim executive director on Thursday.
Gastner’s interim role is set to be indefinite as the organizational structures of Experience Rochester and Mayo Civic Center are being studied by Jones Lang LaSalle Inc. on behalf of the city. The study could result in changes for both organizations.
Experience Rochester, formerly the Rochester Convention and Visitors Bureau, presented its annual report to the Rochester City Council on Monday.
Here are a few insights found in the report:
1. Travel, hospitality and tourism combine to become Rochester’s second largest industry
Approximately 14,800 people are employed in full-time hospitality and tourism jobs, while visitors spend an estimated $493 million in the city.
The overall annual economic impact is $1.2 billion, according to Experience Rochester.
2. Mayo Clinic attracts nearly 7 of every 10 Rochester visitors
Sixty-nine percent of Rochester’s visitors in 2017 were in town because of Mayo Clinic.
Conventions, meetings and sports events combined for a distant second, drawing 16 percent of visitors.
Another 6 percent were in Rochester for leisure, followed by 5 percent for business and 4 percent for undefined purposes.
3. Lodging accounts for more than a quarter of visitor spending
Rochester visitors spent 28 percent of their tourism dollars on lodging, followed by 22 percent on food and beverages.
Another 17 percent was spent on shopping, with 15 percent spent on transportation and 11 percent on recreation.
4. More hotel rooms are available
Rochester added 123 new hotel rooms in 2017 and 94 so far this year, with an additional 89 planned to open by the end of 2018. It brings the expected count to 6,013 rooms in 56 establishments by the end of the year.
Occupancy has also been rising, with a rate of 62.8 percent in 2017 — up by 3.7 percent from 2016. Between January and May of this year, the occupancy rate was 71.2 percent.
5. Mayo Civic Center goal numbers were up and down
Experience Rochester helped Mayo Civic Center exceed its $3.4 million revenue goal by $200,000 in 2017.
The events, however, failed to achieve the established goal for hotel room nights sold, which came on at 90,216, nearly 8,000 below the goal.
6. Experience Rochester will spend more than half its budget on sales and marketing this year.
The local convention and visitors bureau is primarily funded by a portion of Rochester’s lodging tax, which is collected from people staying in local hotel rooms.
The organization’s 2018 budget is $2.64 million, with $1.49 million slated for sales and marketing.
Another $496,000 is budgeted for Rochester Sports, which is a division of Experience Rochester.
Administration of Experience Rochester is expected to cost $419,000, leaving $236,000 for additional efforts to enhance the visitor experience.