Hong Kong Convention and Exhibition Centre: Project Seat-Riser (A)

The Hong Kong Convention and Exhibition Centre (HKCEC), a trade infrastructure owned by the Hong Kong Development Council and operated by the New World Group, was the most prestigious convention and exhibition venue in Hong Kong. After hosting several musical events in Hall Three of HKCEC, the management of HKCEC decided to actively market Hall Three to concert organizers during the off-season. These events could bring in substantial rental income per day. Seat-risers had been leased and temporarily installed for these events, but the cost was prohibitively expensive for concerts booked for short durations, such as concerts by visiting international performing artists, a segment that HKCEC intended to target. The director of operations of HKCEC had been trying to find the most cost effective solution to provide a seat-riser for Hall Three. There were three options: to purchase a seat-riser, to rent a seat-riser for the duration of booked events, or to rent a seat-riser for the entire off-season period. He must analyse the options and find the solution that would be attractive to concert organizers, the most cost effective with the least risk to HKCEC, and consistent with HKCEC's current operations.

This case could be used in a management accounting course and/or international business course. <br><ul><li>To introduce the concepts of fixed and variable costs and cost-volume-profit analysis.</li><li>To apply the outcome of their financial analysis in formulating business plans.</li><li>With its unique Asian setting, this case is ideal to illustrate a common phenomenon in the Chinese business culture, informal business networks and alliances formed through long-term working relationships and trust.</li></ul>

• China
• Contribution Analysis
• Management Accounting
• Cost/Benefit Analysis
• Cost Accounting