David Campbell

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Optimising leisure and hotel interlink at The O2

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David Campbell

  1. 1. London - A World Class City David Campbell President & CEO AEG Europe
  2. 2. <ul><li>Innovative Live Entertainment & Sports </li></ul><ul><li>State Of The Art Facilities </li></ul><ul><li>Global Coverage </li></ul><ul><ul><li>115 Locations </li></ul></ul><ul><ul><li>4 Continents </li></ul></ul><ul><ul><li>17,500 Employees </li></ul></ul>Who Are AEG?
  3. 3. <ul><li>World Tours To Regional Concerts </li></ul><ul><li>Exhibitions To Festivals </li></ul><ul><li>Focused Sector Specialists </li></ul><ul><li>Changing Market With Residencies </li></ul><ul><li>Largest Owner / Manager Of Sports Teams & Events </li></ul><ul><li>Focused On Marquee Sports </li></ul>AEG Content (Software)
  4. 4. <ul><li>Capital Markets </li></ul><ul><ul><li>17 Of Top 50 US Markets </li></ul></ul><ul><ul><li>5 Of Top 12 European Markets </li></ul></ul><ul><ul><li>Top 2 Australian Markets </li></ul></ul><ul><ul><li>Top 2 Chinese Markets </li></ul></ul><ul><li>Host To 55 Sports Teams Worldwide </li></ul><ul><li>6,200 Events </li></ul><ul><ul><li>22 Million Tickets </li></ul></ul><ul><ul><li>42 Million Guests </li></ul></ul>AEG Facilities (Hardware )
  5. 5. 2009 Pollstar Worldwide Arena Rankings <ul><li>20 of The Top 66 Venues </li></ul><ul><ul><li>3 Continents </li></ul></ul><ul><ul><li>5 Countries </li></ul></ul><ul><ul><li>12 US States </li></ul></ul><ul><li>31% of Total Ticket Sales Across Top 66 Venues </li></ul>
  6. 6. This Morning <ul><li>Location, Location, Location </li></ul><ul><li>A Video Fairy Tale (BBC) </li></ul><ul><li>The O2 Today </li></ul><ul><li>Room For A Hotel? </li></ul><ul><li>Here’s One We Made Earlier </li></ul><ul><li>The Opportunity </li></ul><ul><li>Summary </li></ul>
  7. 7. The O2 - Accessible
  8. 8. The O2 – Fast Access
  9. 9. The O2 – At Heart of New London
  10. 10. This Morning <ul><li>Location, Location, Location </li></ul><ul><li>A Video Fairy Tale (BBC) </li></ul><ul><li>The O2 Today </li></ul><ul><li>Room For A Hotel? </li></ul><ul><li>Here’s One We Made Earlier </li></ul><ul><li>The Opportunity </li></ul><ul><li>Summary </li></ul>
  11. 11.
  12. 12. This Morning <ul><li>Location, Location, Location </li></ul><ul><li>A Video Fairy Tale (BBC) </li></ul><ul><li>The O2 Today </li></ul><ul><li>Room For A Hotel? </li></ul><ul><li>Here’s One We Made Earlier </li></ul><ul><li>The Opportunity </li></ul><ul><li>Summary </li></ul>
  13. 13. Finishing the Decade <ul><li>Finished 2009 At All Time High </li></ul><ul><li>2.5 Million Arena Ticket Sales </li></ul><ul><ul><li>3rd Consecutive Year As World’s No.1 </li></ul></ul><ul><ul><li>+75% vs. Any Other Venue Worldwide (Music) </li></ul></ul><ul><ul><li>+30% vs. Own 2008 </li></ul></ul><ul><li>Gary Bongiovanni, Editor in Chief, Pollstar: </li></ul><ul><li>‘ I get the sense that, on a worldwide basis, the reputation of The O2 is rapidly growing to iconic status’ </li></ul><ul><li>Total Building Footfall: 7.5 million </li></ul>
  14. 14. The O2 – Under The Tent <ul><li>20,000 Seat Arena </li></ul><ul><li>2,500 Seat Music Club – indigO2 </li></ul><ul><li>2,500 Capacity Night Club - matter </li></ul><ul><li>25 High Quality Restaurants, Bars and Cafés </li></ul><ul><li>11 Screen Cinema – 2,700 seats </li></ul><ul><li>Major Exhibition Space - Bubble </li></ul><ul><li>Flexible Event Space – London Piazza </li></ul>
  15. 15. Arena Arena /1
  16. 16. Arena /2 Arena /2
  17. 17. IndigO2 IndigO2
  18. 18. matter matter
  19. 19. Entertainment District Entertainment District
  20. 20. British Music Experience The British Music Experience
  21. 21. London Piazza London Piazza
  22. 22. Our Commercial Partners <ul><li>Major International Blue Chip Companies </li></ul><ul><ul><li>Olympic Sponsor Family Has Allowed Adidas, Visa And Coke </li></ul></ul><ul><li>Often Global Relationships </li></ul><ul><li>Consumer Brands Have Confidence In AEG Delivery, And Also East London </li></ul>
  23. 23. This Morning <ul><li>Location, Location, Location </li></ul><ul><li>A Video Fairy Tale (BBC) </li></ul><ul><li>The O2 Today </li></ul><ul><li>Room For A Hotel? </li></ul><ul><li>Here’s One We Made Earlier </li></ul><ul><li>The Opportunity </li></ul><ul><li>Summary </li></ul>
  24. 24. London Tourism Shows Signs of Recovery <ul><li>Overnight Tourism Was £10.6 Billion Of Spend In 2009 </li></ul><ul><li>Highest Spend Since 2000; Spending “Power” Of The Weak Pound </li></ul><ul><li>Modest Growth Forecast For 2010 </li></ul><ul><li>London Is No.1 City Destination Worldwide </li></ul><ul><li>Drives Large Overnight Stays </li></ul>Source: ONS, IPS, Visit London, Visit Britain, UK Tourism Society Tourism Visitors (mil) £(bil) Overseas 14.1 8.32 Domestic 10.8 2.23 Total 24.9 10.6 Tourism Nights (mil) Ave nights (%) Ave spend/day Overseas 85.8 6.1 £98.06 Domestic 23.8 2.2 £94.54 Total 108.6 4.4 £97.15
  25. 25. London Hotel Provision By Properties By Rooms <ul><li>We Are Looking At 4 Star+ Hotels </li></ul>London Local O2 Arena 44% 56% 59% 41% 44% 56% 37% 63% Other Star Rating 4-5 Star Rating Area 4-5 Star Rooms Greenwich 34% Canary Wharf 100% City Airport / Excel 45%
  26. 26. Market Is Coming Back <ul><li>“ hotels are on the comeback trail. More accurately, hotels appear to be on two separate trails to recovery – a super highway for London and a much rougher provincial trail ”. </li></ul>London Hotels <ul><li>New Supply Will Not Fulfil Demand </li></ul><ul><li>Strong Pipeline But Some Projects Stalled </li></ul>Source: Econometric Forecasts PricewaterhouseCoopers February 2010, Benchmarking Data; STR Global February 2010 2009 2010F 2011F Occupancy (%) 80.42 82.25 85.41 % Change 0.9% 2.3% 3.8% ARR (£) 115.58 119.60 124.03 % Change -5.70% 3.5% 3.70% Rev PAR (£) 93.1 98.47 106.15 % Change -4.80% 5.80% 7.8%
  27. 27. Demand At The O2 <ul><li>Driving Demand </li></ul><ul><ul><li>4 Star Offer </li></ul></ul><ul><ul><li>Local, Jubilee Line, River </li></ul></ul><ul><li>Mid April: 350 Guests </li></ul><ul><ul><li>Purchased Tickets >£100 </li></ul></ul><ul><ul><li>40 – 90 Miles From The O2 </li></ul></ul><ul><ul><li>94% Consider i.e. At The O2 For An Event </li></ul></ul><ul><ul><li>36% Consider If No Event </li></ul></ul><ul><ul><li>51% Would Pay £100+ </li></ul></ul><ul><ul><li>42% Visited 4+ Times </li></ul></ul>
  28. 28. Creating Customer Delight <ul><li>The O2 Has Already Helped Redefine Customer Service </li></ul>Source: JD Power 2009 European Hotel Guest Satisfaction Index Study; Bespoke AEG / The O2 Tracker
  29. 29. This Morning <ul><li>Location, Location, Location </li></ul><ul><li>A Video Fairy Tale (BBC) </li></ul><ul><li>The O2 Today </li></ul><ul><li>Room For A Hotel? </li></ul><ul><li>Here’s One We Made Earlier </li></ul><ul><li>The Opportunity </li></ul><ul><li>Summary </li></ul>
  30. 30. We Love LA LA Live A New Destination And Event Centre For Downtown Los Angeles A New Paradigm For The Entertainment Industry
  31. 31. $2.5 Billion Investment Stimulating More Than $3 Billion Additional Investment 8,000 Permanent Jobs; 7,500 In Construction $2.5 Billion Investment
  32. 32. LA Live: A Content Campus <ul><li>Anchored By: </li></ul><ul><ul><li>Staples Center – 20,000 Arena </li></ul></ul><ul><ul><li>Nokia Theatre – 7,000 Theatre </li></ul></ul><ul><ul><li>Club Nokia – 2,500 Club </li></ul></ul><ul><li>15 Restaurants </li></ul><ul><li>3 Clubs </li></ul><ul><li>Museum & Event Space </li></ul><ul><li>14 Screen Cinema </li></ul><ul><li>650 Live Events Annually </li></ul><ul><li>12 Million Visitors </li></ul>
  33. 33. <ul><li>878 Room JW Marriot </li></ul><ul><li>123 Room Ritz Carlton </li></ul><ul><li>224 Ritz Carlton Residences </li></ul><ul><li>80,000 sq ft Of Event Space </li></ul><ul><ul><li>Ballrooms, Banqueting & Meetings </li></ul></ul><ul><ul><li>Largest In LA </li></ul></ul><ul><li>$1 Billion Investment </li></ul><ul><li>Opened 2010 </li></ul>And Now A Hotel And Event Space
  34. 34. This Morning <ul><li>Location, Location, Location </li></ul><ul><li>A Video Fairy Tale (BBC) </li></ul><ul><li>The O2 Today </li></ul><ul><li>Room For A Hotel? </li></ul><ul><li>Here’s One We Made Earlier </li></ul><ul><li>The Opportunity </li></ul><ul><li>Summary </li></ul>
  35. 35. The O2 Campus
  36. 36. As We See It <ul><li>4 Star+ </li></ul><ul><li>450 Rooms </li></ul><ul><li>30,000 sq ft Event Space </li></ul><ul><li>100 Serviced Apartments </li></ul><ul><li>250 Parking Spaces </li></ul><ul><li>Outline Permission With Dome Acquisition </li></ul><ul><li>999 Year Lease </li></ul>
  37. 37. The Brief <ul><li>3 Hectares </li></ul><ul><li>180m River Frontage </li></ul><ul><li>Litschutz Davidson Sandilands </li></ul><ul><ul><li>High Quality Design </li></ul></ul><ul><ul><li>Compliments The O2 & Peninsula Masterplan </li></ul></ul><ul><ul><li>Maximise River Views </li></ul></ul><ul><ul><li>Lean, Mean & Green </li></ul></ul>
  38. 38. Status <ul><li>Challenging Site </li></ul><ul><ul><li>Physical Constraints </li></ul></ul><ul><li>Challenging Politics </li></ul><ul><ul><li>Council, HCA, CABE, GLA, Local MP, Local Residents, Local Amenity Groups, MDL And Many More! </li></ul></ul><ul><ul><li>No Consistent View!! </li></ul></ul><ul><li>Planning Application </li></ul><ul><ul><li>Extensive Pre Consultation </li></ul></ul><ul><ul><li>Open Book </li></ul></ul><ul><ul><li>Decision Imminent…Post Election </li></ul></ul>
  39. 39. Repelling Magnets – The Hotel Jigsaw <ul><li>Hotel “Jigsaw” Complicated To Complete </li></ul><ul><li>Key Brands On Aggressive Expansion Trail, Banks Lending Again: </li></ul><ul><li>But Key Brands Do Not Generally Build, Or Give Lease Payments, And Banks Still Want Security Before Lending Flow </li></ul><ul><li>The Hotel Jigsaw Remains Difficult To Piece Together </li></ul><ul><ul><li>Construction Pricing Being Very Keen </li></ul></ul><ul><ul><li>2012 On The Horizon </li></ul></ul><ul><ul><li>“… we expect to double our number of guest rooms in Europe in the next 5 years…” (Bill Marriott) </li></ul></ul><ul><ul><li>“ More banks are willing to lend real estate development in the UK again, ending a two year hiatus…” (Savills) </li></ul></ul><ul><ul><li>“ to accommodate potential growth a further 40,000 net hotel bedrooms should be provided in the period up to 2026…” </li></ul></ul><ul><ul><li>(The London Plan) </li></ul></ul>
  40. 40. The O2 Hotel & Event Space <ul><li>Hotel </li></ul><ul><ul><li>450, 4 Star+ Rooms </li></ul></ul><ul><ul><li>Restaurant, Bar, Sky Bar </li></ul></ul><ul><ul><li>Spa With Pool, Business Centre </li></ul></ul><ul><li>Serviced Apartments </li></ul><ul><ul><li>24/7 Service </li></ul></ul><ul><ul><li>Offsite Affordable </li></ul></ul><ul><li>Public Space To River </li></ul><ul><ul><li>Can Be Programmed In Season </li></ul></ul><ul><li>Integrated With The O2 Tent </li></ul><ul><ul><li>Onsite Parking </li></ul></ul><ul><ul><li>Jubilee Line </li></ul></ul><ul><ul><li>New Pier Planned </li></ul></ul>
  41. 41. The O2 Event Space <ul><li>Opportunity To Do To Event Space What The O2 Did To Arenas </li></ul><ul><li>The O2 = London’s Entertainment And Events Destination </li></ul><ul><ul><li>Excel = Exhibitions </li></ul></ul><ul><ul><li>Earls Court & Olympia = Smaller Exhibitions / Conferences (West) </li></ul></ul><ul><li>Event Space </li></ul><ul><ul><li>30,000 Sq Ft / 3,000 People </li></ul></ul><ul><ul><li>Biggest Space In An Underserved City </li></ul></ul><ul><ul><li>2 X Nearest Space, But Flexible & Scaleable </li></ul></ul><ul><ul><li>Above Ground With Stunning Views From Pre-event Space </li></ul></ul><ul><ul><li>Awards, Seminars, Conferences, Meetings, Small Exhibitions, Banqueting, Weddings , Product Launches And Much More </li></ul></ul><ul><ul><li>River Transport To Door Plus Tube, Taxi & Parking </li></ul></ul>
  42. 42. In Summary <ul><li>Dramatic Riverside Location </li></ul><ul><li>Highly Accessible, Including Boat </li></ul><ul><li>Local Bed Stock At Bottom End </li></ul><ul><li>Multi User Group Demand </li></ul><ul><ul><li>Canary Wharf: 2 Minutes </li></ul></ul><ul><ul><li>Excel / City Airport: 10 Minutes </li></ul></ul><ul><ul><li>Greenwich Peninsula / Historic Greenwich </li></ul></ul>
  43. 43. In Summary/2 <ul><li>The O2! </li></ul><ul><ul><li>5% Of Current The O2 Footfall = 100% Occupancy </li></ul></ul><ul><ul><li>15% Of Arena Footfall = 100% Occupancy </li></ul></ul><ul><ul><li>Bon Jovi Audience Fill Hotel For A Year </li></ul></ul><ul><li>Large Event Space Will Drive Group Business </li></ul><ul><li>Strong Existing Commercial Relationships </li></ul><ul><li>Finalising Operator Selection </li></ul><ul><li>Initial Conversations On Equity And Debt </li></ul>
  44. 44. Video Summary
  45. 45. Thank You For Listening
  46. 46. Arena <ul><li>The O2 Arena: </li></ul><ul><li>20,000 seat arena </li></ul><ul><li>96 suites </li></ul><ul><li>1000+ VIP Club </li></ul><ul><li>170 event days 2009 </li></ul><ul><ul><li>209 events </li></ul></ul><ul><ul><li>Music 57% </li></ul></ul><ul><ul><li>Sport 12% </li></ul></ul><ul><li>Probably best music arena in the world </li></ul>
  47. 47. IndigO2 <ul><li>2,500 capacity music club </li></ul><ul><li>170 event days – 2009 </li></ul><ul><li>Highly Flexible </li></ul><ul><ul><li>Broad range of music </li></ul></ul><ul><ul><li>Many different formats </li></ul></ul><ul><ul><li>Awards to investor presentations to lunches/dinners </li></ul></ul><ul><li>Total Building footfall; 7.5 million </li></ul>
  48. 48. matter <ul><li>matter Night Club: </li></ul><ul><li>Operated by Fabric Group (No.1 Club Worldwide </li></ul><ul><ul><li>matter now No.6 club worldwide! </li></ul></ul><ul><li>2,600 capacity nightclub </li></ul><ul><ul><li>Mainly weekends </li></ul></ul><ul><li>Highly Flexible </li></ul><ul><ul><li>McCartney to Pink to Corporate </li></ul></ul>
  49. 49. Entertainment District
  50. 50. British Music Experience <ul><li>The Bubble: </li></ul><ul><li>60,000 sq ft Exhibition Space </li></ul><ul><li>Permanent home to The British Music Experience </li></ul><ul><li>Former touring exhibitions include Tutankhamun Valley of The Kings, Bodyworlds, Michael Jackson </li></ul>
  51. 51. London Piazza <ul><li>London Piazza Events: </li></ul><ul><li>Large event space in the heart of The O2 </li></ul><ul><li>Events include; </li></ul><ul><ul><li>Hot (Beach) </li></ul></ul><ul><ul><li>Cold (Ice Skating, Ski Slopes) </li></ul></ul><ul><ul><li>ATP warm up to roller disco </li></ul></ul>

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