Palm Coast Tennis Center2012 -2013 Business Plan

July 10, 2012

Presentation Agenda

• PCTC Today– Overview– Considerations– Corporate Support Team– PCTC Organizational Chart

• Financial Overview• Revenue Strategies

– Annual Passes– Loyalty Program– Pricing strategies– Revenue Building

• A Look Ahead– Goals for the future

Overview

The Palm Coast Tennis Center has faced several challenges over the past couple of years. In spite of these, we feel that the Center has the potential to establish itself as a premier facility in Palm Coast and we also feel that the current reorganization efforts will yield positive results in the future.

A steady and consistent focus on the opportunities listed in this presentation, will be needed to continue to deliver a top class experience, grow the revenue line and attain desired financial goals.

The facility remains one of the USTA’s favorite host sites in the area and we will continue to build upon this relationship in order to drive tournament and league revenue.

Youth programs and instruction will also be a key factor in growing the base of players as well as ultimately attaining positive financial results. We feel that the current relationship we have nurtured with the Flagler County School District is a positive first step towards these goals as well as growing youth programming.

In addition, we must continue to promote the tennis center as a community asset to increase the number of public players and youth programs.

These efforts will ultimately increase the connection with the local community, drive traffic to the property and increase revenues.

PCTC Corporate Support Team

Adrienne FlentgeNat. Dir of Vendor

Relations

Susan Sommers Evans

Dir. Human Resources

Ricardo CatarinoReg. Operations

Executive

Craig FalangaReg. Director

Sales &Marketing

Jim StegallEVP, Managed

Properties

Laura CrayNational Director

F&B

John ClarkVP Finance

The Palm Coast Tennis Center Team

Rich Stanfield General Manager

Doug BarthelDirector of

Tennis

Deborah Stanfield

Tennis Center Supervisor

Tennis Center Hourly Staff

Reggie Hunter Dir. Sales & Marketing

Considerations

• The success of the PCTC will require an all inclusive approach, where we will build upon the current synergies with the City and the Friends of Tennis , reinforcing the tennis center as an asset to the community.

• Current financial results for PCTC may be considered “apples to apples” vs. the beginning of management by KemperSports but these are not inclusive of all expenses.

• Maintenance expenses for the facility have been incurred by the Public Works Department since the courts opened in 2007.

• Only a complete re-organization and restructuring of the facility and programming will enable us to pursue success and minimize or eliminate the amount of subsidies required from the City.

PCTC Financial Performance

Note: Projections for 2012-2013 indicate that we should see a significant reduction in operating losses

2010 -2011 Actual

2011-2012 Projection

-$150,000-$100,000

-$50,000$0

$50,000$100,000$150,000$200,000$250,000$300,000$350,000

Revenue

Expenses

Net Profit (Loss)

PCTC Financial Performance

Revenues by Department vs. Expenses

2010-2011 Actual 2011-2012 Projection 2012-2013 Budget$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

Note: Food, beverage and merchandise revenues are not represented

PCTC Financial Performance

Total$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

Program Fee Revenue 2012-2013

PCTC Financial Performance

Total$0

$20,000$40,000$60,000$80,000

$100,000$120,000$140,000$160,000$180,000$200,000

PCTC Labor Expense

Projected future Financial performance

2012-2013

2013-2014

2014-2015

2015-2016

2016-2017

2018-2019

-$150,000

-$100,000

-$50,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

RevenueExpensesNet profit (loss)

Note: Projections indicate PCTC will start to breakeven starting in 2018-2019

Revenue Strategies – Annual Passes

Annual Passes:One of our main missions going forward will be to continue to establish the property as a PUBLIC facility. In order to do so a new annual pass program will be introduced to the community.

• Annual Passes will be based on a calendar year, renewed every January.

Pass benefits: • 7-day advanced court reservation • Merchandise Discounts• Complimentary monthly group instruction • Special Events for pass holders• Preferential pricing on ball machine use• Preferential pricing for USTA Futures Tournament tickets• Payment plan (optional) • GVTL – Annual Pass Holders will be allowed to participate in the

GVTL leagues.

Revenue Strategies – Annual Passes (cont.)

Annual Passes

As previously mentioned, the pass holder program will boast a competitive rate structure which will provide value to those who chose to participate. Each category will include resident pricing and non resident pricing. Below are the categories which will be offered in 2012-2013:

1. Individual Pass2. Family Pass3. Couple Pass4. Junior Pass - 17 yrs. and younger5. Student Pass – 18 yrs. to 24 yrs. must be enrolled in school

Daily Court FeesThere will be a new rate added for daily fee players that play with an annual pass holder. This will drive additional play at a value price. Our goal here is to steer this person towards the annual pass.

In addition, we will introduce specialty rates to promote the use of courts by 2 or more players.

Competitive Pricing Analysis2011-2012

Property CitySingle

(Res/Non-Res)Family

(Res/Non-Res)Senior

(Res/Non-Res)

Oceanside Country Club Ormond Beach $2,500.00 $3,500.00 n/a

Halifax Plantation Ormond Beach $1,170.00 $945.00 n/a

The Trails Racquet Club Ormond Beach $756.00 $1284.00 $672.00

Florida Tennis Center Daytona Beach $660.00 $936.00 n/a

Palm Coast Tennis Center Palm Coast $504.00 - $583.00 $674.00 - $835.00 $368.00 - $415.00

Ormond Tennis Center Ormond Beach $450.00 $950.00 n/a

Hammock Beach Resort Palm Coast n/a n/a n/a

Revenue Strategies - Pricing

2012-2013 Pricing Strategy The table below reflects our new program pricing for the upcoming year. We are currently priced below the Daytona Beach Tennis Center which is considered to be our largest competitor. The new program pricing is competitive within the market and we feel it will continue to drive revenue to the PCTC. The new program will be launched in January 2013.

2013 Rates TYPE Annual 6 Month 3 Month 1 Month

Individual Resident 550.00$ 325.00$ 165.00$ 100.00$ Non-Resident 640.00$ 375.00$ 190.00$ 112.00$

Family Resident 740.00$ 480.00$ 240.00$ 137.00$ Non-Resident 890.00$ 594.00$ 300.00$ 152.00$

Couple Resident 695.00$ 410.00$ -$ 72.00$

Junior Resident 147.00$ 95.00$ 65.00$ 30.00$ Student 300.00$ 190.00$ 100.00$ 50.00$

Court Fee One player Two Three FourCity Res. $10.00 15.00$ 18.00$ 20.00$ Non- Res. $12.00 18.00$ 20.00$ 23.00$ Per courtwith annual pass holder $6.00

Competitive Pricing Analysis 2012-2013

Property CitySingle

(Res/Non-Res)Family

(Res/Non-Res)Senior

(Res/Non-Res)

Oceanside Country Club Ormond Beach $2,500.00 $3,500.00 n/a

Halifax Plantation Ormond Beach $1,170.00 $945.00 n/a

The Trails Racquet Club Ormond Beach $756.00 $1,284.00 $672.00

Florida Tennis Center Daytona Beach $660.00 $936.00 n/a

Palm Coast Tennis Center Palm Coast $550.00 - $640.00 $740.00 - $890.00 n/a

Ormond Tennis Center Ormond Beach $450.00 $950.00 n/a

Hammock Beach Resort Palm Coast n/a n/a n/a

Revenue Strategies – Loyalty Program

Loyalty Strategies The Palm Coast Tennis Center currently does not have a loyalty Program in place. The majority of revenue is driven by the annual pass holder dues. In an effort to drive daily fee play we feel that a loyalty program that is targeted at daily fee and group play would be an asset to increasing revenues.

Initial efforts will focus on the following:

• Court time player’s card offering a discounted court fee for pre purchasing of court time.

• Weekly pass program as a punch card paying for four days and getting the fifth free. This will address the issue of some of our snowbird play.

• Extensive marketing of the program will be needed to create awareness. This will be done via, print ad, web site, and local distribution of printed collateral.

Revenue Strategies – Additional Drivers

Resident Strategy The following marketing and sales activities are planned for 2012-2013 to drive resident play. Community Play Day• Host a community free play day to introduce the tennis center to more of the community• Data Capture will be key this day for future promotion• Introduction of youth and adult programs to spark interest in the game• Introduction of Tennis professionals and the private and group instruction that is offered• Introduction of our new annual pass holder program for 2013• Promote the fact that we are a community property open for the families of Palm Coast and Flagler County

Creative Events Strategy The following marketing and sales activities are examples of events planned for 2012-2013 to create event-related play. We will schedule monthly events in addition to the specialty events listed below. Round Robin poker• Players participate in a round robin match but earn cards to play poker, with the best hands winning prizes. Cardio Tennis• Cardio Tennis with a healthy lunch afterwards.

Pass Holder Only Events• This will drive the value of the annual pass • Incorporate Food and Beverage with these events to drive incremental revenues

Revenue Strategies – Additional Drivers

Pass Holder Events (Prelim Calendar) JANUARY: New Years Day Hangover Open FEBRUARY: Valentines Day Couples Mixer MARCH: St. Patrick’s Day (up the river, down the river) – Wear Green APRIL: Throwback Tournament MAY: Friend’s of Tennis Scholarship Tournament JUNE: Summer Solstice – Longest Rally JULY: 4TH of July / Wimbledon AUGUST: Opposite Hand Mixer SEPTEMBER: US Open – Wear Red, White and Blue OCTOBER: Rally for the Cure Tournament NOVEMBER: Sadie Hawkins Mixer DECEMBER: Winter Solstice (Tiebreaker Tournament)

USTA EventsAs we continue to develop our relationship with the USTA, we are planning to host several additional events in the upcoming year, a preliminary list includes:

• Three adult USTA sanctioned events and two others non-sanctioned• Five junior USTA sanctioned events• The USTA Men’s Futures tournament(Note: these are awarded by the USTA and the number of events may vary to those above)

Each of these events will bring in resident and non-resident players from around the region, driving daily fee play as well as attracting new pass holders and the entry fees generated will further help drive revenues.

In addition:• We will also introduce new ladder tournament events that will enhance the pass holders and daily fee

experience, offering a new type of competitive play. • We will proactively seek sponsorship that is a good fit for the sponsor as well as PCTC. This will reduce

tournament costs, increase community awareness and lay the foundation for future partnerships with local business.

Local Club Competitions• Competitive events between clubs with a season ending tournament. These will drive interest in being

associated with PCTC, as well as drive ancillary income to the facility.

Revenue Strategies – Tournaments & Events

Revenue Strategies -Lessons, Camps and Clinics

JUNIOR DEVELOPMENT

• Follow USTA 10 and under format

• Players 8 year olds and younger - 36’ court with 18’ (smaller) nets, shorter racquets and red balls

• 10 and under - 60’ courts, orange balls and intermediate sized nets

• Implement simplified scoring system

• Older beginners, intermediate and advanced junior clinics will also be offered on standard sized courts and balls

• Match play will be instituted

• Session cycles will run in 7 to 8 weeks rather than four week cycles

• Continue to offer weekend clinics

• Offer summer and holiday junior development on a weekly basis

• Belle Terre, Holland Park and Seminole Woods hard courts will be utilized for the after school programs

ADULT PROGRAMMING

The PCTC will encourage GVTL participants to take part in the USTA leagues during the off-season

Team Clinics – These will be introduced in order to provide team clinics, improve overall play and strengthen the team concept

Cardio clinics will be offered on a pay-as-you-go basis

“Open Clinics” or “Stroke of the Day Clinics”

Crucial to the success of the above activities will be to drive these programs in the evenings and non-peak times, which is when we have the most opportunity due to open courts space and need for programming.

Revenue Strategies -Lessons, Camps and Clinics

Goals for the Future

• Continue to provide a top tennis experience in the market to Palm Coast residents and the public at a competitive value.

• Ensure that the facility continues to move forward towards becoming financially self sustainable

• Actively introduce additional programming and initiatives geared at increasing annual pass holders, daily fee participation, merchandise and Food and Beverage revenues.

• Re-launch and re-introduce the center as a public family-friendly facility• Efficiently manage resources required to operate as done so far and

maximize the return generated from the center• Strengthen the good relationship with the City of Palm Coast and actively

participate in the planning, development and implementation of improvement plans.

• Emphasize ever more our dedication to community involvement and increase awareness of the Palm Coast Tennis Center amongst the community at large.

Questions or Comments ?

www.palmcoasttenniscenter.com