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Plan Aims to Keep Conventions Coming to Town

Facing recent declines in overall convention attendance and the likelihood that an expansion won’t happen anytime soon, local tourism officials have launched a five-year plan to fill San Diego Convention Center with large group gatherings.

The strategy aims to bring in more of the high-profile national and regional medical conventions that remain crucial revenue generators for the center and adjacent downtown hotels. And it includes luring more business to fill the convention center during traditional downtime periods, including the Easter and Thanksgiving holiday weeks.

“This is going to be a major challenge for us,” said Joe Terzi, president and CEO of the San Diego Tourism Authority, the regional agency whose current duties include the long-term booking of large conventions at the center. “We’re walking a tightrope here.”

Convention center and tourism officials have long contended that the San Diego venue needs more contiguous exhibit space to attract and retain the types of large conventions that have major regional economic ripple benefits, including filling hotels and boosting spending at local stores and restaurants.

Had the funding mechanism for a planned $520 million center expansion not been invalidated by the courts, and if the project had moved forward in the coming year, officials said San Diego was in line to offer the largest expanse of contiguous exhibit space on the West Coast and the fifth-largest nationally, starting around 2018.

Ranked 15

As it stands, Terzi said, the San Diego venue remains about the 15th largest nationally for exhibition space, but it faces rising competition from other California cities looking to lure away its existing convention business, including Anaheim, Los Angeles and San Francisco.

Among the few upsides of the local convention center project not going forward now, Terzi said, is that construction disruptions will not be a problem for large conventions in 2017 or 2018. Comic-Con International organizers had raised concerns about construction in recent talks with convention and tourism officials.

Comic-Con is currently booked in San Diego through 2016, and organizers at press time had not announced venue plans beyond that year. Comic-Con has been in San Diego since its 1970 debut, but organizers have made no secret of the fact that they are being wooed by several other cities, including Las Vegas, Los Angeles and Anaheim.

While the four-day Comic-Con International is by far the largest in terms of group size — bringing 130,000 to the center — officials said medical conventions have the largest impact in terms of visitor spending and room nights booked throughout the region.

Oh, Doctor!

According to the nonprofit San Diego Convention Center Corp., which operates the facility on behalf of the city, the 15 medical-related conventions booked at the center for 2014 were expected to have a regional economic of $425.9 million. The 121,650 attendees at those events were projected to generate more than 220,000 hotel room-nights, $187 million in direct spending and $6.3 million in tax revenue for the city.

The largest of the medical gatherings held locally this year included those of the American Association for Cancer Research, American Thoracic Society, Society for Experimental Biology and the global biotech conference known as Bio.

Terzi said San Diego in the future can bring in more medium-sized conferences held by high-profile groups, such as the recent AARP gathering that brought 25,000 people to the center and generated about 17,000 room nights over its three days.

He said AARP officials have informed the city that the group will need more space in order to return to San Diego for the same event.

“We have a lot of groups telling us they love San Diego and want to come back, but they’re just running out of space here,” Terzi said.

Officials note, however, that several factors besides space impact convention booking trends. Those include preferences by some organizations for geographic venue rotations, the proximity of cities to organization members, and organizational budgets for specific events that might rule out some venues.

A combination of those factors has dampened attendance at the San Diego center despite continued improvements in the overall economy. Local center officials reported that overall convention attendance went from 567,000 in 2011 to an expected 513,000 this year.

To fill out more of the convention center calendar for the 2016-2020 period, the Tourism Authority’s sales team will be aiming to book more events for traditionally slow periods at the convention center, including Easter, Thanksgiving, Memorial Day, Labor Day and the first week of January.

Even if some of those bookings result in discounted convention space lease rates, the ripple benefit of hotel room bookings should be greater than their current levels during the slow periods, Terzi said.

Behind-the-Scenes Talks

City officials at press time remained in behind-the-scenes talks on options to expand convention center space, following the court ruling knocking down a hotelier-approved room tax that would have funded the bulk of expansion costs.

Those talks include representatives of the San Diego Chargers and prominent downtown developer JMI Realty, which have both put forth options that would combine a new football stadium with convention space.

Faced with no immediate expansion prospects, the convention center is under pressure to add revenues to an already tight budget. The city budget approved for the convention center earlier this year projects that the center will end the current 2015 fiscal year with a surplus of just over $1 million — down from $2.3 million in the 2014 budget.

In a move to raise revenue for needs such as existing capital improvements and maintenance, center officials recently hired an Ohio-based consulting firm that will study sponsorship and corporate naming rights programs for all or portions of the convention center, similar to what has been done at other municipal-run venues nationwide.

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