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How will Kigali Arena’s new managers generate revenue?

Kyle Schofield, QA Venue Solutions Director inside Kigali Arena during a tour guided in the facility on October 17. Photo: Sam Ngendahimana

Last week, a South African company, QA Venue Solutions Rwanda signed a seven-year agreement with the Rwandan government to manage the Kigali Arena, a 10,000-seater multipurpose arena. 

The firm is expected to among other things generate revenue from the facility at the same time having trickle-down impact such as job creation and skills development.

 

 The New Times’ Collins Mwai spoke to QA Venue Solutions Director, Kyle Schofield on their plans to generate revenue, projections and opportunities therein for local private sector and individuals.

 

Excerpts below:

 

Taking on Kigali Arena must require wide experience and capacity, what’s your company’s background and experience?

QA Solutions as a business was established in 1996 by my business partner Mark Ransom. He has been in the business for over 35 years and worked on notable events across the globe. Some of the notable events include the FIFA 2010 opening and closing ceremonies where he was technical director, he has worked on various promotional tours.

The experience I have is from the NBA, having worked on all the NBA Africa games on the continent as well as some global games in the UK, France, Spain and NBA all-stars. 

From the venue side of it, we were involved in the design, build and management of Sun Arena at Time Square in South Africa.

What does Arena Management involve?

Venue management is a matrix model with lots of aspects depending on each other. The core and fundamental piece of venue management is events. Our core mandate is to bring to the Arena as many events as possible. Events have different scales based on the demographic you are targeting and what is taking place. Our aim is to fill the calendar with as many events as possible.

For us, filling the calendar as much as possible is a goal. Second, to make sure that the events hosted are to full capacity. If someone comes and says that they are targeting 10,000 people, we want to make sure that they deliver that.

That is where the model takes effect. When you have 10,000 people in the arena, you have 10,000 drinks sales in one day which has a trickle-down effect on all players.

What are the key revenue generation opportunities for the Kigali Arena?

There are three key components to revenue generation. We can allocate various rights, naming rights and marketing rights. Naming is primary and a very big generator of revenue. As a management company, that is something we are pushing for. We are encouraging people to come and talk to us about these opportunities. There is a big opportunity for any firm that would take up naming rights. With it comes a lot of branding exposure.

Second to that is secondary naming rights, there are suite rights. That’s another opportunity for businesses to take advantage of, host their clients during events taking place at the arena.

There are also retail rights, food and beverage rights which we will put out in the market allowing firms to pay a set fee to make them the exclusive partners to use the entire venue. The assigned partner can assign vendors.

The second component is ticketing, it is a big driver of the business and a good data collection point for clients to keep interacting with the market for them to know what is happening in the space.

The third and fundamental piece is events. We have already divided the arena into 15 venues that people can lease. It is not only a basketball venue. It offers the ability to do banquets, press conference rooms, cocktails venue, activation spaces, plaza that could host events, and a gym that we are seeking a partner to manage among others.

Part of the agreement is that QA Venue Solutions will invest about $2.4M in the Arena. Where will the funds be directed?

For us, with regards to the $2.4M, we are looking into the 7 year period. Depending on how business goes, it could be higher.

In terms of where we intend to invest the money, we want to work with the local market to provide investment for equipment, technical suppliers in aspects such as sound, human resource is also very vital and we will be investing in it too as well as marketing to raise awareness across the world.

Who are your target clients in the medium term?

We are in a period of covid-19 which has brought the industry to a standstill. In Rwanda, the government has done a good job to combat the pandemic allowing resumption of events. With that, we have partners across the globe who we are constantly engaging with on the new market opportunity. 

That said, the focus for now is the local market, we can see most other markets are closed which limits the amount of international exposure we can get. We want to tap into the local opportunities first.

We are also talking to promoters across the continent to see what events and activities we can start hosting.

Let’s talk about the economic impact of the Arena. What kind of economic impact should we be looking out for?

There are very models used by different venues to quantify the impact on the market. If you look at our target of getting a minimum of at least 50 events in the Arena with each event at $200,000 spend and above, you can see numbers we want to workaround.

Some Arena’s host over 400 events in a year and have a trickle-down effect. The moment, moment this model starts to work and we identify a market, we will see a very big impact.

What are your projections?

We would like to have events every day across the year, but given the pandemic, we are actively working to see the way the market is moving and what is the new potential of the business. It would be very difficult to give you a set number. However, coming into the market, you want to target between 50 and 100 events, large to small events and within a 2 to 3 year period, you can move from 100 to 150 events annually.

Given Covid-19, it’s very difficult to put out any strong numbers. We are hoping to have strong numbers out soon but we are targeting anything above 100 events.

What are the opportunities for local Small and Medium Enterprises?

The arena houses a lot of opportunities for people in the local market.  From a work perspective, you can look at events management and services such as equipment rental, photography, and medical services such as physiotherapy among others.

Anyone who would like to contact us and engage us can find our contact details on http://www.qavenuesolutions.com  and http://www.kigaliarena.rw or one can send us an email at inquiries@kigaliarena.rw

How many jobs are you looking at generating in the short term?

We are looking to build our team up as we get past Covid-19. As an immediate, we will have a team of 6 people. Then we will have a cleaning company on site, security and engineers which takes the number to about 90.  With regard to in direct jobs, it is proportional to the number of events hosted annually going into hundreds.  Whenever we have an event, the number goes up rapidly every time per event.

What skill sets will be sought after once business opens?

Facility engineers, sound engineers, lighting engineers, structural engineers are all key components that we need. Others are photography services, Public Relations, social media skills, events management, waiters and restaurant management, retail management, medical services such as physiotherapy, gym personnel, e-gaming aspects, marketing among others.

To maintain standards, we are going through a rigorous process of appointing our preferred service providers who will work through to ensure that there is a standard set. 

In terms of development, we will continuously transfer skills and build capacities so that we can have a fully Rwandan team managing all aspects of the Arena.

cmwai@newtimesrwanda.com

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