Tourism leaders: Uncertain convention center expansion timeline could hurt sales

SAN DIEGO (CNS) – 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.

Categories: KUSI