San Diego Tourism Leaders: Uncertain Convention Center Expansion Timeline Could Hurt Sales
Wednesday, March 12, 2014
Bookings for major trade shows and other meetings at the San Diego Convention Center are on pace to meet targets for this fiscal year, but challenges exist that could cost the facility large events in the future — maybe even the home-grown Comic-Con International, tourism officials said Wednesday.
In a presentation to the City Council's Economic Development and Intergovernmental Relations Committee, the officials said they were more than 40 percent of the way to their sales targets for this fiscal year, which ends June 30.
Joe Terzi, president of the San Diego Tourism Authority, said with the number of organizations in the process of contracting with San Diego, a goal of booking 860,000 hotel room nights is in reach. Most groups book their shows late in the fiscal year, he said.
The SDTA markets the convention center to major organizations that schedule their events many years in advance.
The Convention Center Corp. handles shorter-term business, which is usually booked within 18 months. President Carol Wallace told the committee members they should meet their goal of 40,000 room nights.
The primary challenge, according to Terzi, is the litigation-driven delay in the start of construction for the center's expansion. He told City News Service that because no one knows when the work will begin, prospective customers cannot be provided details on what conditions will be like at the facility on a given future date.
"We have to dance around the issue a little bit," Terzi said. "We tell them we have a great building today and it will be better in the future."
However, he said he cannot promise a group right now that their show won't be disrupted by the building project.
The start of construction has been pushed back because of lawsuits over how the work is being financed. Once shovels are in the ground, the project should take 30 months to complete, Terzi said.
He said the American Institute of Architects is considering backing out of its contract for 2016 because of the uncertainty, which would cost downtown hotels thousands of room nights and the city the associated tax revenue. Cisco Systems might be reconsidering coming to San Diego in 2019, he said.
On top of that is the center's largest, most loyal customer, according to Terzi.
"Comic-Con is concerned," Terzi said.
Part of the reason why the center is being expanded in the first place is to accommodate Comic-Con, which attracts well over 200,000 attendees every July. Right now, events related to the show take place not only at the convention center but also in space at downtown hotels.
Organizers of the popular arts extravaganza are committed to remaining in San Diego through 2016. After that, they could look elsewhere, Terzi told members of the committee.
"Comic-Con is concerned they won't be able to expand anymore," Terzi said.
When the project to grow the convention center is completed, it will have the most contiguous floor space on the West Coast. However, convention center expansion plans have either been approved, or are in the works, in San Francisco, Seattle, Phoenix and Anaheim -- all cities that compete with San Diego.
Terzi said a big problem is that only about 10 to 15 U.S. cities are equipped to host the largest trade shows. Organizers who are concerned about the timeline for San Diego's project cannot wait long to back out or they will be frozen out of the marketplace, he said.
The presentation to the committee also said the organizers of 14 major shows that were being wooed by San Diego tourism officials are going elsewhere because of high costs here. Terzi told the committee members that shows are lost every year for various reasons and can be replaced by other groups.
Terzi said the goal for bookings, as measured in hotel room nights, could be increased to 1.2 million once the expansion of the center is completed, which would have a "significant economic impact" on San Diego.
There is still a "tremendous demand" for San Diego among convention organizers, he said.
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