Immediate steps taken to address Claudelands financial forecast

Immediate steps are being taken to help boost revenue and event bookings at Claudelands after early forecasts show the venue is not on track to meet its targets for this financial year.

A report outlining Claudelands’ current financial situation and forecasts, and the venue’s response will be discussed at Council’s Finance and Monitoring Committee next Tuesday (1 November).

Factors behind the financial shortfall include the weak economy with business and consumer confidence not strengthening as much as anticipated, competition from other venues being stronger than anticipated, securing events has become more difficult due to the reaction from promoters to changes in the New Zealand currency, increases in costs and nervousness around a new venue, and the start-up phase of the new Claudelands taking longer than projected.

After the first quarter of the 2011/12 financial year, Claudelands is showing a shortfall of $740,138 on its financial target. Initial forecasts predict this could be at $1.7 million by the end of June 2012 but with proposed remedial actions will improve to a $1.1 million variance.

Finance and Monitoring Committee Chair Dave Macpherson said that it was disappointing Claudelands was not currently on track to achieve its financial targets. He was however thankful that the problems had been identified early in the operation, enabling remedial action to be taken.

“This shows that Council’s new reporting systems are successful in identifying issues like this at an early stage, allowing us to take prompt action to start addressing them,” he said.

“Council will be going through Claudelands operations and issues with a fine-tooth comb and doing all it can to ensure this facility is the success it deserves to be and builds on the positive feedback we have received to date.”

Improvement actions include:

• a shift in marketing priorities to more strongly target the higher yielding conference and functions market,
• collaboration with Council’s Hallmark events organisers to develop complementary functions to be held at Claudelands,
• improvement to Claudelands website and electronic marketing
• a further 5% improvement in cost efficiencies
• consideration of Claudelands hireage pricing structure
• consideration of a specified sponsorship dollar amount for events at Claudelands
• an independent peer review of the revenue plan