2022 Operating Budget Financial Impact Update Due to COVID-19

At the time of our budget submission there were certain assumptions that were used with respect to the Board 2022 Operating Budget. Some of the key assumptions are: - The pandemic phase of COVID-19 was ending in 2022. Booking of events will be back to normal. - Attendance will be lower than pre-pandemic levels 75 percent. - With attendance being lower there will be lower ancillary revenue such as parking and show services. - There will be additional costs and procedures associated with the delivery of food and beverage due to COVID-19, and as well due to the anticipated reduction of attendance and revenue, the associated commission the Board receives will be lower. - Tenants will experience the same trends as the Board and as such the Board anticipates lower services revenue from tenants. - There is still volatility associated with the economy and as such non-essential costs have been delayed/deferred, and discretionary expenditures such as travel, training, etc. has been reduced. COVID-19 costs include both ongoing day to day service costs, as well as, restart, recover, and rebuild costs. The first forecast of the year was provided at the June 2022 Board meeting, this included actual results up to April 30, 2022, with forecast up to year-end. Staff had forecasted a net loss of ($4.900) million, which was unfavourable to our budget by ($1.600) million. The City supported Exhibition Place by funding the anticipated deficit. In April, COVID-19 was impacting business, more so than budgeted, industry insiders at the time were predicting reduced attendance for the fall and potential return of sanctions, which in turn would reduce ancillary and net parking revenue. Financial impacts and the uncertainty surrounding COVID-19 causes by its nature inherent uncertainty with budgeting and forecasting. Since our last update, the lingering effects of COVID-19 have been reducing. Both our trade and consumer shows, conferences, conventions, socials, galas, meetings, and tenants' operations are experiencing improvements to our original budget assumptions in attendance, in rent, net show services, food and beverage, and net parking. Staff have revised our year end forecast with a favourable variance of $0.500 million improvement against our ($3.300) million net deficit, to ($2.800) million net deficit before City funding. Exhibition Place is still forecasting to be in a net deficit position with a forecasted loss of ($2.800) million before City funding, staff continue to meet with City Financial Planning Department to discuss the impact of this deficit to our operations.