July 15th, 2024

Exhibition making strides to increase revenues

By Lethbridge Herald on June 14, 2024.

Al Beeber

The Lethbridge & District Exhibition had a net deficit of $1,165,093 as of April 30, an increase of $412,325 from March, the Economic and Finance Standing Policy Committee of city council heard on Thursday.

Acting Chief Executive Officer Kim Gallucci told the SPC that the Exhibition is moving in the right direction and that revenue future revenue estimates are “pretty conservative.”

He said  a report made to the SPC is positive, noting “definitely we’re showing movement in the right direction.” 

Gallucci said the Exhibition is showing increases in revenue and it’s trying to control costs so “I would say we are well on our way to starting to do something. It will take a little while but these are very positive items….

“We’re moving in the right direction, we’re making some good changes, we’re landing some events that are really generating some good revenues and we’re really working on ’25 now to further develop that. I’d say we’re in a very positive place but we have a lot of work to do still,” he added.

By October, events such as Whoop-Up Days will be over and the Exhibition will have an indication of where it’s at with revenues. He said it has a “pretty strong back half of the year” as it rolls into Oct. 31, the LDE’s fiscal year-end.

Gallucci said the Exhibition is incurring ongoing expenses such as utilities and wages but it is generating revenues, although not enough to offset espenses monthly.

However, there will be substantial increases in revenue in months such as August and September, he said.

He added May and June are the toughest with the lowest number of events happening, which he said isn’t unusual in the events industry.

But things will improve from July to September and the last quarter from October to December is usually “very strong,” he added.

“We’ve moved the needle from $600,000 in revenue to we estimated to be around closer to $800,000 in revenue so while we’re paying these wages, we’re also generating revenue that will be realized as those contracts come due.”

The Exhibition contracted another 20 events in 2024 and five for 2025 in the last month said a report by Gallucci. 

“And we’re going to grow that,” he added, saying the Exhibition is spending money to make money.

The Exhibition’s goal is to go after bigger events such as large trade shows, he said.

The Exhibition does bookweddings and other events if customers want them but they don’t pursue those, he said.

Sales people are first focusing on, and targeting, convention business, trade events and special events such as Ag-Expo in that order, he said.

Gallucci’s report says there were key areas of change from March when the deficit was $752,768.

Wages for the month were $227,000 and there were $14,000 in Internet expenses, a one-time impact because of an infrastructure upgrade to accommodate future gaming, e-sport and other Internet intensive events the facility can host and attract to the city, which the report says will increase future revenues for the Exhibition. 

Utility costs were $47,000 which the report says were lower than usual because of a cool spring month that required less heat and little air conditioning.

Conference and event expenses amounted to $22,000 while there was an increase at the old pavilions in utilities ($45,000) and maintenance ($9,000).

There was also an expense of $58,000 due to a lower volume of events in March and contract expenses.

Cash in hand as of April 30 was $1,182,285.

For the remaining six months of the fiscal year, the Exhibition is estimating a deficit of $4,664,884, which is an improvement of $1,824,468 from the budget. Gallucci’s report says the Exhibition anticipates that if this forecast prevails, the LDE will only use $1.2 million of the City’s $3 million operating budget.

As part of the Memorandum of Understanding approval and the approval of the original letter of intent, council has approved $5 million in operating and capital grants to the LDE within the 2023-24 fiscal year, stated a report from Manager of Corporate and Strategic Initiatives Graeme Woods.

Council also approved $300,000 to complete an independent third-party review of the Exhibition and the Agri-Food Hub and Trade Centre, the contract for that review which has been awarded to Deloitte LLP. Work has begun on the review says Woods’ report.

“Council approved $850,000 of one-time funding from the MRSR for the required City resourcing requirements within 2024 for contractual services or term backfills to support the Lethbridge & District Exhibition Interim Governance Board, MOU development and City-Led three-party review. As at the date of this report all these funds have been committed and will be allocated to the project account later this year,” the report adds.

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