BCI+network Case Study: Memphis Cook Convention Center

The issues

The Memphis Cook Convention Center, located in Memphis Tennessee, is a facility originally built in 1974 and has operated since then with only one expansion and limited enhancements. The expansion added a performing arts theatre, several meeting rooms and a ballroom. The expansion did not include enhancements to the original facility.

The building was originally operated by the City of Memphis and Shelby County. Approximately fifteen years ago the operation of the facility was contracted to a private management company. In 2009 the Center was producing very poor event booking results and limited financial benefit for the government ownership. The condition of the facility had deteriorated to the point that booking the facility was becoming difficult. Additionally the center had developed a “caretaker” culture that was not conducive to providing strong guest services.

The challenge was to find a way to improve the marketability of the center as well as the physical condition of the building, without drastically increasing the City and County’s annual budget investment.

The Process

In 2009 BCI+network was contacted by the Memphis Convention & Visitors Bureau to discuss how the Bureau might help facilitate changes that would improve the marketability of the center and the Memphis destination. The Mayoral appointed Commission which oversees the operations of the Center for the City, contracted with the Bureau to provide long-term sales and marketing services for convention center. Actual contracting and booking decisions were made by the private management company. After lengthy conversations with the leadership of the Bureau and after numerous interviews with Commission members and clients of the facility it became clear that changes needed to be made in how the facility was being operated and marketed. It also became clear that many of the issues of the Center could be greatly improved by a major expansion and enhancement of the existing center or by a decision to replace the existing Center with a new “state of the art” center in downtown Memphis. The Commission was favorably inclined to explore expansion and/or replacement options for the center.

BCI+network was engaged by the Center Commission to serve as a master consultant with instructions to undertake a feasibility study to determine market demand, look at various options for either expansion or replacement of the center, and then explore financing options for such an expansion or replacement. This work was completed with the assistance of Hunden Strategic Partners as feasibility consultants, Looney, Ricks, Kiss Architects and TVS design Architects as facility program and cost consultants and Public Finance Management as financial consultants. The study reinforced the Bureau’s position that either major enhancements were needed to the facility or that a new facility should be constructed. The master planning team also looked at re-purposing the existing building. Unfortunately, while the study showed a need for major physical improvements or a total replacement, the financial consultants determined that financing those improvements was not practical in the next few years. This left the Commission facing this question: In the absence of a new or an improved facility how do we improve our operating results and enhance our marketability?

BCI+network worked closely with the Commission, the management group and the Bureau to address this question. BCI+network recommended that the Bureau be given greater control over sales and that the Bureau actually placed a sales team in the facility, to work with the management company. BCI also recommended that the management company take dramatic action to improve the culture and productivity of its operating staff and management.

After one year the Commission felt that not enough progress had been made by the private management company and they decided that it would be useful to explore other management options. The Commission issued a Request for Proposal for management services in 2010.

The Bureau contacted BCI+network and asked for assistance in developing a new management strategy for the operation of the Center.

The result of BCI+network’s collaboration with the Bureau determined that it would be advantageous for the Bureau, the Commission and the destination for the Bureau to create a new management company, which would be separate from the Bureau, but operated by the top leadership of the Bureau. The thought process was, that the Bureau had an ongoing stake in the success of the Convention Center and that they more than any other operating entities, would make operating decisions that would be in the best interest of the bureau, the facility and the destination. With the assistance of BCI+network, a new company was formed and the new organization “Memphis Management Group” (MMG) submitted a proposal to the Convention Center Commission. In 2011 the Commission awarded an operating contract to MMG. MMG retained BCI+network as their operational consultant to assist them in transition and ongoing operations. BCI+network and MMG adopted a strategy that recognized that there are shortcomings in the facility that can be partially marginalized through a focused approach of providing extraordinary service to clients and guests as well as undertaking high impact, low budget enhancements to the facility. The strategy also focused on a program of cleanliness and enhanced security.

Results

After a year and one half of operations Memphis Management Group has been successful in reducing the operating cost of the facility by over $400,000. They have undertaken major programs of refurbishment of center systems such as fire protection and HVAC. MMG has also greatly improved the cleanliness of the facility and has instilled in its staff a culture of quality guest services. The financial and booking results have improved dramatically and a new spirit of enthusiasm is now present in the staff. Bookings are up and operating deficits are reduced.

While it would be nice to see a new or an improved facility in the City of Memphis, the management changes that have been made will allow the center to stay marketable for the foreseeable future, until the financing can be secured to build a new or expanded center. The strategy of overcoming weaknesses in the service delivery setting through extraordinary service and creativity has proven to be a win for Memphis.