Dmai's event impact calculator albuquerque cvb case study


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Following an in-depth study and review of the Event Impact Calculator's use and methodology, DMAI presents a selected case study on how Albuquerque CVB harnesses the power of economic impact data for its destination and meeting planner business.

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Dmai's event impact calculator albuquerque cvb case study

  1. 1. DMAI’s Event Impact Calculator Albuquerque Convention & Visitors Bureau ith year-round “blue skies, calm winds and mild temperatures” and proximity to the desert beauty that inspired the likes of Georgia O’Keefe and Tony Da, Albuquerque, New Mexico continues to attract visitors to participate in events that range from ballooning to sports to corporate retreats. With 29,000 employees in Albuquerque welcoming about 6.1 million visitors in 2013, travel and tourism is the second largest private sector industry that generates over $69 million in local taxes annually, with meetings contributing $65 million in direct spending. However, reaching this estimate independently was a considerable challenge for the Albuquerque Convention and Visitors Bureau (ACVB), as Valerie Lind, CPA, Vice President, Finance and Administration explains. “ACVB was utilizing a formula which took room nights multiplied by average daily rate (ADR), and added additional spending, which we defined as the number of attendees times number of days times percentage peak times average daily expenditure (ADE),” Lind said. “We used a standard ADR and ADE depending on whether the group was meeting at the convention center, within a single hotel property or if it was a sporting event. Additions to the formula also included exhibitor ADE and association spend should the group meet our city-wide criteria.” Needless to say, due to the complexity of applying such a calculation consistently, ACVB found it increasingly difficult to conduct the research to update the calculation’s underlying data, which ultimately underestimated W
  2. 2. DMAI’s Event Impact Calculator At the end of the year, we had left about $7.5 million of unreported direct spend on the table. “ Valerie Lind, Vice President of Finance & Administration Albuquerque Convention & Visitors Bureau the economic value of the DMO’s booked meetings. “Our most recent formula had been in place for seven years with no changes to ADR or ADE values,” added Lind. “Our formula represented only direct spending, and we did not include any economic ‘rollover’ to evaluate or present total economic impact.” Therefore, when DMAI released the Event Impact Calculator as the new industry standard for calculating the economic impact of meetings and events in late 2011, ACVB was one of the first destinations to sign on. The primary reason for doing so was to lift the burden of research from the DMO and allow the organization to capitalize on the tool’s annually updated data sources, which localized impact numbers down to the county level. “Due to the considerable research of multiple conventions, meetings and events, along with the evaluation and analysis provided by DMAI and Tourism Economics, we felt the calculator had been thoroughly vetted to provide the most accurate data for a specific meeting or event,” Lind said. “ As the calculator also takes into consideration local taxes and spending averages, the calculator became destination-specific, providing us a higher level of comfort with its results.” Not relying simply on faith, however, Lind and her team performed a thorough analysis during the first year of use, running their old formula side by side with the Event Impact Calculator to compare how the different models estimated impacts using the same event data. What Lind discovered was that their old model lacked the flexibility to account for different event types, as well as organizer spending depending on the meeting’s location. As a result, ACVB had been grossly understating the direct spend of some groups while overstating others. As a whole, Lind shared, “At the end of the year, we had left about $7.5 million of unreported direct spend on the table.” The challenge was especially apparent for sporting events. As for many destinations, ACVB found it extremely difficult to track sports room nights. At best, they could only obtain information on actual players if a team happened to contract a hotel, which clearly did not truly represent the spending that a sporting event brings to the city. Since the release of the Sports Module to the Event Impact Calculator in October 2013, ACVB have finally been able to provide accurate data in terms of the type of event, total attendees, room nights and direct spend for this important and growing segment. Transitioning from a highly onerous process of manually calculating the economic data, however, to the Event Impact Calculator required some adjustment, but ultimately, ACVB found it more straightforward to populate the correct input fields collaboratively than to run long formulas individually and risk calculation error. During the RFP process, the sales manager obtains the necessary information from Albuquerque, New Mexico | User Case Study
  3. 3. DMAI’s Event Impact Calculator the meeting or event planner. Meetings and sports managers have a standard list of required information to collect on their groups, and then are expected to enter this data into customized fields within ACVB’s CRM database, which interfaces directly with the Event Impact Calculator. The DMO continues to collect meeting historical information through DMAI’s Meetings Information Network (MINT) database, or through previous DMOs and hotels. Lind currently has one staff person input values into the calculator and cross-check results with other data like requested or contracted room nights and previous meeting history. Upon confirming that the findings correlate, the direct spend amount is officially logged in the CRM record and becomes reportable. If any variance is discovered, however, the responsibility goes back to the sales manager to return to the planner for more information or correct initial values in the original RFP. On occasion, the DMO may also identify a specific piece of business that requires significant hosting costs on the part of the organization. In these cases, the calculator is used to determine if the ultimate return on investment result justifies the group incentive. “As a standard component of the calculator, the return on investment number can be helpful in making those hard decisions,” said Lind. The level of due diligence with which the DMO approached the new method of calculating economic impact paid off with its Board Finance Committee. At the beginning of the year, ACVB provided an overview of the tool and demonstrated how data was entered and how source data was collected and incorporated into the model. Currently, the DMO uses room nights generated to set its sales goals, in addition to historical production. That, along with direct spend numbers are published in the organization’s President’s Report, used for press releases on specific groups and shared in all City Reports that communicate the value of business being brought to Albuquerque. The DMO’s Audit Committee also reviews on a quarterly basis, a random set of bookings to ensure inputs and results being reported are accurate as well. In fact, the tool has inspired such confidence among stakeholders as a third- party, industry-vetted software, that the ACVB’s contract with the city now specifically requires they use the Event Impact Calculator to estimate its direct spend numbers for events. “We are extremely satisfied with the Event Impact Calculator,” concludes Lind. “The level of expertise brought into the adaptation of the calculator as well as the ability to provide specific inputs based on the event type, have brought a stronger level to what meetings and events provide to our destination as a whole. The tool ensures that moving forward, we continuously provide the most accurate direct spend and economic impact information for our meetings and events industry.” Reflecting on the industry as a whole, Lind and her team are interested in hearing what other destinations are using from the calculator’s reporting, as well as uncovering best practices, including applying the tool’s summary exports and using the interface with a CRM solution to adjust input values or export summaries. • Albuquerque, New Mexico | User Case Study
  4. 4. Valerie joined Albuquerque Convention and Visitors Bureau as its Vice President of Finance and Administration in 2011. She has an extensive accounting background in many industries ranging from engineering, manufacturing, construction and, most currently, the hospitality industry but what remains the same is her love of accounting and “playing with numbers” all day. As an Albuquerque native, she loves what the destination has to offer and is excited to share that with the world. Although fairly new to the hospitality industry, she feels it is her ultimate career “destination”. As an occasional consultant, she has had the privilege to teach accounting to local small businesses and start- ups. About Valerie Lind Vice President of Finance and Administration Albuquerque Convention & Visitors Bureau DMAI’s Event Impact Calculator Albuquerque, New Mexico | User Case Study