Catering plan requested to help reduce Fort Smith Convention Center deficit

The Oak View Group (OVG) which operates the Fort Smith Convention Center is hoping to expand its catering operation outside of the convention center in an effort to reduce the operating deficit.

In a presentation to the Fort Smith Board of Directors during a study session Tuesday (Oct. 29), Shura Garnett, senior vice president-convention centers for OVG, said the Fort Smith Convention Center will reduce its operating deficit to $936,000 this year, noting that since the group began operating the convention center in 2021, they have been able to reduce operating expenses by $400,000.

One way OVG believes it can increase revenue and reduce the operating deficit is to take its catering to groups outside the convention center, Garnett said.

“We are trying to expand our offsite catering offerings so that when we have slower periods at the convention center or we have clients that we have hosted at the convention center that are doing an event elsewhere, we have the ability to provide the same outstanding catering services,” Garnett said.

OVG has worked with the city to amend its contract regarding revenues and expenses for offsite catering, Garnett said. That amended contract is expected to be presented to the city in November.

One of the first things OVG did when it took over management of the convention center was to make a $500,000 investment in the center. It used about $300,000 of that in the first year to build out a new kitchen, Garnett said. That build out included equipment and smallwares like china, silverware, and glasses.

“That has been one of the primary things we have focused on – trying to build our reputation with our food service, and I think we have done a fairly reasonable job with that,” Garnett said.

Steven Petrovek, part of the business development team for OVG, said the convention center management company is also hoping to amend the length of the contract. OVG is working on a five-year option to renew on the contract, but that option is on one-year terms. Petrovek said they are hoping to lump some of those five years into a set of three with an additional run of two.

“It would help with our staffing and sales stability. Instead of one year renewals, looping together years would help stabilize some of our staff and would help some of our hiring process,” Petrovek said, noting that it would also allow them to sell recurring events for three years rather than one.

In 2021, a year still dealing with the COVID pandemic, the convention center hosted 100 events with almost 30,000 attendees and a gross profit of $298,000. That included revenues generated minus costs to produce events before indirect expenses such as salaries and utilities, Garnett said. The year ended with a net operating loss of $1.132 million.

Though they were still climbing out of the pandemic slump in 2022, the center hosted 119 events with over 65,000 attendees, grew the gross profit to just under $500,000, and reduced the net operating loss to $1.3 million, she said.

“This was the first year we were fully staffed on our food and beverage team for the full year,” Garnett said.

That year, the full-time theater director position was eliminated from staffing, she said.

The convention center booked 130 events in 2023 with 62,000 attendees. Gross profit was just under $700,000, and net operating loss was reduced to $1.1 million, she said.

“For 2024, our projection is that we will host 125 events with 72,000 attendees. Gross profit will come to just under $800,000. We will reduce operating loss to $936,000,” Garnett said, noting one of the highlights of the year was that the convention center was able to bring back the home show for the first time in several years.

OVG has planned about 120 events in 2025 with 81,000 attendees. They estimate the profit to grow to $1.1 million and that they will continue to reduce the operating deficit down to $928,000.

“We believe there are ways we can reduce that operating cost next year,” Garnett said.