1986-87 annual report [1987]

I
George L. Smith II
Georgia World Congress Center
Annual Report
Fiscal Year 1986-87

TABLE OF CONTENTS

Director's Report Financial Analysis
Statement of Income and Expenditures Rental and Exhibit Utility Services Income Food Services Income State of Georgia Economics Benefit Summary Economic Impact of Georgia World Congress Center - Fiscal Year 1986~87 Five Year Summary of Economic Impact Event Attendance Staffing Labor Force Analysis and Affirmative Action GWCC Authority Board of Governors/Legislative Overview Committee

Page
2 4 5 6 7 8
10 11 13
15
16

EXHIBITS

A. State of Georgia Economic Benefits Graph ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

B. GWCC Sales Graph

12

C. GWCC Functional Flow Chart

14

Director's Report

Georgia, our capital city Atlanta and the Georgia World Congress Center are riding a crest of popularity as a meeting destination. In an unprecedented first time bid for a major political convention, the city and state, utiliz~ ing the OmnilGWCC Complex, were chosen to host the 1988 Democratic National Con~ vention. The Omni Coliseum will serve as the main convention floor with the World Con~ gress Center housing media, security, corpo~ rate and party operations as well as caucus activities and special functions.
Atlanta also became the number one Trade Show site in the United States in 1986/87. For the first time in modern record keeping, Atlanta surpassed Chicago as the most popular site for the nation's largest shows according to the 13th Annual Edition of TRADES HOW 200, published by the primary news organ monitoring the exhibi~ tion industry-Trade Show Week. Atlanta led the pack by capturing 26 of the nation's top 200 shows; New York took second place hosting 24 shows; and Chicago, the tradi~ tional front runner, slipped into third place capturing 22 major exhibitions.
When the GWCC opened in 1976, Atlanta jumped into fourth place hosting 10 of the largest events versus that year's leader, Chicago, with three and a half times as many shows. By 1984, with expansion nearing completion, the city had climbed to second trailing the leader by only one event.
The World Congress Center hosted eight of the nation's top 50 shows: Newspaper Publishers Association Operations Manage~ ment Conference and Exposition (9); National Recreation Vehicle Trade Show (10); International Wo~dworking Machinery & Furniture Supply Fair-USA (18); Comdex/Spring (21); Bobbin Show/ American Apparel Manufacturers Association Convention (28); Automotive Parts and Accessories Show (35); Atlanta Marine Trades Expo (37); and International Educa~ tional Poultry Trade Show (44).

The expanded Georgia World Congress Center was also rated "Best Managed" facility in the nation by show managers surveyed for November's cover story in Meetings and Conventions magazine. Of the eleven facility~ related categories, the Congress Center ranked number one in seven categories. When asked which facility was most attrac~ tive and had the best number, size and quality of meeting rooms, the GWCC was the top choice of show managers. The Congress Cen~ ter was also chosen as the number one convention center for: best food service; best quality, cost and availability of labor; best audiovisual equipment and sound systems; and best video conferencing capabilities.
Coupled with this welcomed recognition, attendance and resulting economic impact of Georgia World Congress Center activity set yet another record. During the past fiscal year, 1,343,821 persons attended events in the World Congress Center. Of this total, 598,062 were out~of~town visitors who spent over $315 million creating a $689 million economic impact and generating over $35 million in new tax revenues.
Future space reservations appear strong, averaging 96% of practical maximum occu~ pancy over the next five years and 88% overall for the next decade. (See chart on page 12.)
However, more needs to be accom~ plished in the future. A study, authorized by the 1986 General Assembly and jointly con~ ducted by Laventhol and Horwath and GA/ Partners Incorporated, confirmed additional exhibition facilities are needed by the early 1990s. According to the study, the GWCC is currently the most well~utilized major conven~ tion center in the United States and consequ~ ences of not expanding "would likely erode" the Center's competitive position. The study further projects a highly attractive return on investment for the state and anticipates a profitable operation for the World Congress Center.

2

The addition of two contiguous exhibit halls providing 300,000 square feet, bringing the facility's total exhibit footage to 940,000 square feet, would allow the Center to meet the growing needs of meeting planners, as well as increased scheduling of multiple events. Expansion would also allow Atlanta to sus~ tain its prominent image as a convention and trade show destination.
The market analysis indicates space is needed for early 1990s to avoid losing shows requiring more space than is now available. Delegate and exhibitor spending attributable

to expansion is estimated at $234 million in 1991 rising to over $410 million by the year 2000. Tax revenues from expansion should total $14.7 million in 1991, progressing to $25.8 million by the end of the decade.
The coming years will indeed be crucial to the future well~being of the Georgia World Congress Center and to Georgia's second largest industry-the hospitality industry.
Dan Graveline

Georgia World Congress Center employees gather to pose for a commemorative 10th Anniversary picture in December I986.

Financial Analysis

Fiscal year 1986/87 was a year with an abnormally high number of professional and educational conventions, but fewer heavy industrial shows than the previous year. Even though these events do not typically generate the same income level as do indus~ trial shows, FY 86/87 was an excellent year financially. The World Congress Center required no state appropriation for opera~ tions and realized a net profit of $250,131 for the year.
Self~generated income was $11,029,658, which was within one percent of last year's income. Rental income was up 3% over last year and accounted for 47% of all self~ generated funds. Exhibit utility services gener~ ated 24% of all revenues with food service contributing 13%, parking adding 2% and hotel/motel taxes contributing 8%. "Miscel~ laneous" items which produced revenues for the GWCC included contract labor, tele~ phone service and space rental for visitor services located in the entrance concourse.
Non~operating revenues are a direct correlation with non~operating expenditures. The World Congress Center acts as a "con~ duit" for hotel/motel tax funds allocated to the Atlanta Convention and Visitors Bureau. With an attendance increase from FY 85/86, ACVB's allocation of hotel/motel taxes rose slightly over last year and totaled over two million dollars.
Under Special Projects, state funds were received primarily for costs associated with development of the Northwest Georgia Con~

EXHIBIT UTILITY SERVICE
24%

INCOME

RENT 47%

4

HOTEL/MOTEL 8%

MISe. 5%

EXPENSES

PERSONAL SERVICES
59%
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33%

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CONTRACTS/FEES OTHER EQUIPMENT

4%

3%

1%

vention and Trade Center in Dalton, a GWCC expansion feasibility study and the State's efforts toward attracting a national political convention in 1988.
Overall operating expenses increased, but were in line with budget projections. The amount expended for personal services during FY 86/87 accounted for 59% of all operating expenditures, as compared with 61% for the previous year.
Regular operating expenses rose slightly over last year, as anticipated to retrofit spaces in the original facility with completed expan~ sion facilities. Utility and insurance costs, which constitute 66% of regular operating expenses, were virtually as projected. During FY 86/87, the World Congress Center imple~ mented an electrical management program with Georgia Power Company. This coopera~ tive effort aided in keeping electrical bills slightly under budget.
The GWCC experienced unusually high expenditures in the equipment category, as a long range program was initiated to replace operating equipment in the original facility. Contractual fees included expenses for escalator / elevator repairs, trash removal and landscaping. "Other" expenses account for 3% of all operating expenses and include computer costs, computer supplies and .

repairs, as well as printing costs, travel and telecommunication expense.
In addition to aforementioned special projects, the GWCC constructed a fuel sta~ tion to handle on~site service contractor needs and improved the efficiency of the heating system in the original exhibit halls.

Statement of Income and Expenditures

INCOME: Rent Exhibit Utility Services Food Service (MGR) Parking Hotel/Motel Tax (GWCC) Miscellaneous
SUB-TOTAL State of Georgia Hotel/Motel Tax (ACVB) Special Projects
TOTAL.
EXPENDITURES: Personal Services Regular Operating Equipment Contracts/Fees Other
SUB-TOTAL Special Projects Hotel/Motel Tax (ACVB) Transfer To Reserve Funds
TOTAL
NET PROFIT

FY 1985-86 5,042,274 2,805,339 2,020,188 175,280 895,916 209,051
$11,148,048 638,243
2,090,471 228,830
/I I
$14,105,592
$ 5,859,370 2,986,605 59,467 326,960 450,636
$ 9,683,038 393,239
2,090,471 $ 1,348,906 $13,515,654
\
$ 589,938

FY 1986-87 5,215,994 2,628,009 1,485,834 240,428 931,271 528,122
$11,029,658 -0-
2,172,965 191,833
$13,394,456
$ 6,404,264 3,527,657 123,299 448,892 299,756
$10,803,868 167,492
2,172,965 $ -0$13,144,325 $ 250,131

5

Rental and Exhibit Utility Services Income

The expanded Georgia World Congress Center currently has 640,000 square feet of exhibit space capable of accommodating one mammoth exposition or up to six separate smaller shows. Exhibition space is most fre~ quently used for trade show and convention exhibits, although it also houses public expositions, a variety of general sessions and banquets too large for the ballroom.
During 1986/87, exhibit hall rental accounted for 84% of all rental revenue and increased 6% over the previous year. With exhibit halls booked virtually to capacity, there is very little opportunity to increase this sector of rental income through new business until additional expansion facilities can be developed.
The World Congress Center also offers 72 meeting rooms for groups ranging from 20 to 4,500 people. All are equipped with in~room lighting, sound and technical sys~

Exhibit Hall Rent Meeting Rooms/Ballroom
Auditorium/Conference Miscellaneous Rent

Center

TOTAL RENT

tems. Predominantly these rooms are used in conjunction with exhibit hall events for semi~ nars, receptions and show offices.
Special facilities such as the ballroom, corporate conference center and auditorium, as well as meeting rooms not reserved for major shows, are rented to local associations and businesses as well as corporate clients. During 1986/87, the GWCC hosted literally hundreds of independent seminars, conferences, sales meetings, training sessions, exams, banquets, receptions, fashion shows and special events in various meeting facili~ ties.
Meeting room rental for the past year accounted for 12% of all rental income and significantly exceeded original budget pro~ jections. Miscellaneous rent, representing 4% of rental income, was generated from equip~ ment rental as well as permanent displays in Georgia Hall and fees for guest service areas.

FY 1985-86 $ 4,163,956

FY 1986-87 $ 4,400,567

683,022 195,296

611,970 203,457

$ 5,042,274

$ 5,215,994

Utility Services Income
Providing electrical service, gas, compressed air, water, steam and drains to exhibitors con~ tinues to be a most rewarding operation, rep resenting almost one quarter of all selfgenerated revenues. Significantly, a NET INCOME of 73% was realized last year through the utility services operation.
In addition to generating income, providing in-house utility service has proven

extremely helpful in maintaining a reputation as a facility free from labor problems and exorbitant charges to exhibitors.
Today, providing in-house utility service is fast becoming an industry standard, rather than the exception of a decade ago when the Congress Center first opened and initiated the providing of this service utilizing internal resources.

GROSS INCOME EXPENSE
Labor Materials & Supplies

FY 1985-86 $2,805,339
$ 545,082 126,240

FY 1986-87 $2,628,009
$ 539,665 167,899

TOTAL EXPENSE

$ 671,322

$ 707,564

6

NET PROFIT

$2,134,017

$1,920,445

Food Services Income

GWCC Food Services, operated by MGR, Inc., provide all food and beverage service in the World Congress Center. In addition to the elegant full-service Terraces Restaurant, over a dozen permanent facilities and countless portable buffets, bars and concession stands are available for major events. MGR specializes in receptions, banquets and special events for groups ranging from 20 to 3,000 persons.
During FY 1986/87, MGR generated income at 9% above initial projections to record its second best year to date. Following last year's phenomenal mix of shows and special events such as the Coca-Cola Centennial, MGR succeeded in compensating for a more routine schedule by increased smaller meeting
INCOME:
Food Sales
Beverage Sales
Miscellaneous
TOTAL INCOME
EXPENDITURES:
Cost of Sales (Product)
Wages, Salaries, & Related
Other Operating E~pense
TOTAL EXPENSE
NET INCOME

sales and by aggressively marketing service to exhibitors as well as show management.
The World Congress Center also received invaluable recognition during the past year for food service excellence. Show managers responding to the Meetings and Convention magazine survey selected the Center's food service by a greater proportion than any other category for best overall service and quality.
Figures shown here are operational and do not reflect year-end adjustments to reserve accounts as do figures in the Statement of Income and Expenditures.

FY 1985-86 $5,485,256 1,154,084 116,301 $6,755,641
$1,642,301 1,773,409 1,045,192
$4,460,902 $2,294,739

FY 1986-87 $5,377,456 963,253 103,898 $6,444,607
$1,678,410 2,079,235 1,022,529
$4,780,174 $1,664,433

DIVISION OF NET INCOME MGR, Inc. Georgia World Congress Center

$ 254,474 2,040,265 $2,294,739

$ 174,665 1,489,768
$1,664,433 7

I

State of Georgia Economic Benefits Summary

48,000,000 46,000,000 44,000,000 42,000,000 40,000,000 38,000,000 36,000,000 34,000,000 32,000,000 30,000,000 28,000,000 26,000,000 24,000,000 22,000,000 20,000,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000

TOTAL INCOME
Operating Income

Tax Income

II

TOTAL EXPENSE
Operating Expense

Debt Service Expense

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Net Profit

In essence, the Georgia World Congress Center is in the business of "importing" dollars. Our primary objective is to host national and international trade shows and conventions attracting delegates and exhibi~ tors who contribute to the local economy by spending new money. This audience spends money for lodging, food, transportation, entertainment, shopping and other services during their stay in Georgia. In addition to generating literally hundreds of millions of dollars each year, convention and exhibition activity supports thousands of jobs in private businesses within the hospitality industry.
This exhibit goes beyond operational figures to include the State of Georgia's annual investment and tax benefits resulting from World Congress Center activity. Only through understanding this very real net profit or loss from the State's "ownership perspective," can one fully understand the significance of World Congress Center activities.
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FY84 $11,653,301

FY85 $16,983,204

FY86 $22,598,689

FY87 $22,911,143

EXHIBIT A 9

Economic Impact of the Georgia World Congress Center
Fiscal Year 1987

CATEGORY Personal Income Retail Sales
TOTAL DOLLARS Employment
TAXES: Retail Sales Concessions Hotel/Motel Personal Income Corporate Income
TOTAL TAXES

WORLD CONGRESS CENTER ACTIVITY
"NEW DOLLAR IMPACT"
$ 77,573,785
337,481,243
$415,055,028
5,427

SECONDARY IMPACT
$176,112,829 97,823,489
$273,936,318 8,857

TOTAL ECONOMIC
IMPACT
$253,686,614
435,304,732
$688,991,346
14,284

$ 16,874,062 278,087
6,208,471 1,647,667
359,167 $ 25,367,454

$ 4,893,674
-
3,892,094 873,520
$ 9,659,288

$ 21,767,736 278,087
6,208,471 5,539,761 1,232,687 $ 35,026,742

Five Year Summary

ECONOMIC IMPACT "New Dollars" Generated Total Impact of New Dollars TAX REVENUES Georgia State Taxes Atlanta Hotel/Motel Tax Total Tax Revenue 10

FY 1982-83 $255,439,887
424,137,931
14,737,312 3,088,279 $ 17,825,591

FY 1983-84 $298,946,340
496,377,790
20,774,190 4,517,340
$ 25,291,530

FY 1984-85 $367,703,998
610,544,682
25,552,254 5,556,328
$ 31,108,582

FY 1985-86 $412,069,680
684,035,669

FY 1986-87 $415,055,028
688,991,346

28,611,699 5,972,774
$ 34,584,473

28,818,271 6,208,471
$ 35,026,742

Event Attendance

After hosting 59 major trade shows and conventions, 10 public expositions and over 450 food functions and small meetings, pe~ destrian activity through the Congress Center rose steadily during 1986/87. Of the total 1,343,821 Congress Center visitors, 598,062 were registered as out-of-town guests.
Some events recording over 18,000 in attendance were The Super Show, sponsored by Sporting Goods Manufacturer's Association; COMDEX; Bobbin Show / AAMA Convention; Automotive Parts and Accessories Show; Church of God; International Auto~ motive Aftermarket Show; International Woodworking Machinery and Furniture Sup~ ply Fair - USA; World Educational Congress for Laundering and Drycleaning; International Poultry Trade Show; and Multi-Housing World and Kitchen/Bath Industry Show.
Major consumer and public shows consisting of camping and outdoor, automobile, boat and home shows along with the annual Atlanta Area Council Boy Scouts Show and the Atlanta Fantasy Fair, also attracted record attendance numbers.
The Super Show, sponsored by Sporting Goods Manufacturer's Association, is comprised of I2 separate sports products shows. The event attracted over 63,000 manufacturers, buyers and sellers from across the nation and over 82 countries around the world.

ATTENDANCE
"OUT OF TOWN" ATTENDANCE
TOTAL DAILY ATTENDANCE

FY 1982-83 794,557

FY 1983-84 827,320

FY 1984-85 1,066,641

FY 1985-86 1,091,708

FY 1986#87 1,343,821

360,717

423,180

520,300

593,740

598,062

11,966,887

2,202,655

2,757,616

3,021,363

3,287,522

"TOTAL DAILY ATIENDANCE" is calculated at 4.25 visits per out-of-town attendee plus one visit for area residents attending seminars or public shows.

11

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Staffing

As of June 30, 1987 the Georgia World Congress Center had 232 authorized fun-time positions, of which 222 were filled, leaving 10 positions to reach maximum allocation. In addition, the Congress Center utilized 122,246 hours of part-time labor, equivalent to approximately 59 fun-time personnel at 40 hours per week.
Keeping good employees has always been important to the World Congress Center. In the past several years, our Human Resources Department has made great progress in addressing career development programs which will prove beneficial to all employees. Extensive on~the~job training is provided for an entry-level positions, and supervisory training and counseling is offered for persons with management responsibility. During the

past fiscal year, a series of skills development programs were also conducted at all levels. These programs were designed to upgrade supervisory skills, enhance communication between departments and renew the entire organization's spirit of teamwork.
Through common objectives and individual fulfillment, the GWCC staff has successfuny worked together over the last decade to attain the highest respect from our clients and counterparts. In December, 24 GWCC and MGR Food Service employees received ten-year service awards, while 16 received five-year awards. With the commitment of our current employees, we anticipate presenting many more awards in future years.

13

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14

Labor Force Analysis and Affirmitive Action

ANALYSIS OF CURRENT GEORGIA WORLD CONGRESS CENTER WORK FORCE

MALE

FEMALE

CAUCASIAN MINORITY

CAUCASIAN MINORITY

Number

73

86

35

28

Percentage

33%

38%

16%

13%

The long-range goal of the World Congress Center's Affirmitive Action Program is to achieve parity with the Metropolitan Atlanta Area Labor Force in each occupational category and at various levels within each category.

ANALYSIS OF METROPOLITAN ATLANTA AREA WORK FORCE

MALE

CAUCASIAN MINORITY

Number

513,252

129,057

Percentage

44.3%

11.1%

Source: Labor Resource Information State Department of Labor

FEMALE

CAUCASIAN MINORITY

381,423 33%

133,921 11.6%

The Georgia World Congress Center's work force is divided into six occupational categories which are defined by the Federal Equal Employment Opportunity Commission as follows:
Officials and Administrators Professionals
Protective Services Office and Clerical
Skilled Craft Building Services Maintenance

Georgia World Congress Center Authority
Pictured above are members of the Georgia World Congress Center Authority. Front row (L-R) John E. Aderhold, chairman; Jim Livingston, vice chairman; Joe W. Robinson, secretary; Emily~May Richards, treasurer. Back row (L-R) Don Sands, Perry Hudson, Jack Cole, Luke Morgan and I. Owen Funderburg. 16

BOARD OF GOVERNORS

John E. Aderhold, Chairman President Rayloc Atlanta, Georgia

James S. Livingston, Vice Chairman Chief Executive Officer The Central Bank Swainsboro, Georgia

Joseph W. Robinson, Sr., Secretary
President
J.W. Robinson & Associates, Inc.
Atlanta, Georgia

Emily May Richards, Treasurer President The Richards Group, P.c. Atlanta, Georgia

I.Owen Funderburg President Citizens Trust Bank Atlanta, Georgia

Perry Hudson State Senator, Retired Hapeville, Georgia

Luke H. Morgan Area Supervisor lIT Rayonier Eastman, Georgia

Don W.Sands President and Chief Goldkist Atlanta, Georgia

Executive

Officer

Jack H. Cole President Cook & Ingle Plastics, Inc. Chatsworth, Georgia

LEGISLATIVE OVERVIEW COMMITTEE

Senator Jim Tysinger, Chairman District 41 Atlanta, Georgia

Representative Tom Triplett, Vice Chairman District 128 Savannah, Georgia

Representative Lauren McDonald District 12 Commerce, Georgia

Representative Kenneth Waldrep District 80 Forsyth, Georgia

Senator Paul C. Broun District 46 Athens, Georgia

Senator John C. Foster District 50 Cornelia, Georgia

Georgia World Congress Center 285 International Blvd. N.W. Atlanta, Georgia 30313-1591 (404) 656-7600