And I'm not just talking about the weather! El Nino did its best to dampen our spirits, if not our wallets, during the first quarter of 1997. Pounding rains, while not having a significant effect on our convention business, did keep some leisure tourists away early in the year. Fortunately, as we moved through the year conditions improved dramatically, both from a business standpoint and from what mother nature had to dish out. San Francisco once again enjoyed an outstanding year. The total number of visitors reached approximately 17 million, including 3.7 million overnight hotel guests. Average occupancy in our hotels remained steady at approximately 80%, and the direct economic impact of our industry approached $6 billion.

There were numerous exciting events during the course of the year, but none can surpass the passage of Proposition H this past November, which clears the way for the expansion of the Moscone Convention Center. The additional 300,000 square foot facility will be ready for occupancy in February 2003, expanding our total square footage to 900,000! Our intensive sales effort to pre-sell the building will begin later this year. I continue to be proud of our sales team at the Bureau, as both our convention and tourism divisions once again met every goal for leads and confirmed future bookings.

San Francisco and the Bureau continued to win the acclaim of those who seek the best. Once again, the readers of Conde Nast Traveler, Travel & Leisure and Germany's Globo voted our city "Number One" in the United States. Additionally, the Bureau continued to receive numerous industry awards including the prestigious Gold Service Award from Meetings & Conventions Magazine, Pinnacle Award from Successful Meetings Magazine, Platinum Award from incentive Magazine and the Award of Excellence from Corporate & Incentive Travel Magazine. Local confidence in the Bureau is equally high as we continue to enjoy the member support of 2,200 area businesses, maintaining our position as the largest membership bureau in the country and the largest business organization in San Francisco.

The Bureau also remains on the leading edge of technology with an extraordinary web site - 1,500 to 1,700 users are visiting our site daily, obtaining a vast array of information and links to our members. In the world of "hits," this equates to more than 45,000 per day!

We continue to be a leader in building strategic alliances, often referred to as cooperative marketing. Our Preferred Travel to San Francisco with VISA program continued to grow dramatically this year. As a result of our relationship with VISA, Colavita and Forest Glen, we were able to achieve a series of television commercials that began airing this past fall, and will continue well into next year. They're upbeat, exciting and take us to yet another level.

Mayor Willie Brown remained a powerful spokesman for tourism in San Francisco and participated with the Bureau on numerous occasions. He worked with us in booking ESPN's Extreme Games for San Francisco for both 1999 and 2000, assured the return of the Webby Awards for the third consecutive year and helped convince the National Basketball Association to stage its 2000 All-Star game in the Bay Area. The Mayor joined me, your Chairman Cleopatra Vaughns and a number of Bureau members on a quick trip in November to promote San Francisco in London, Frankfurt and Paris to an audience of key tour wholesalers, incentive buyers and press. As you might imagine, he did a terrific job.

As we look forward to 1999, the year will get off to a strong start from a business perspective, but could slow towards the final quarter of the year. Early in the year, your Board of Directors and key staff will hold a planning retreat, to look at our organization and how we'll market the City in the future. Additionally, a major renovation of our Visitor Information Center at Hallidie Plaza will be undertaken over the winter, and we will prepare to host the prestigious PCMA (Professional Convention Management Association) Annual Meeting in January 2000.