The Morning Report
Get the news and information you need to take on the day.
Statement: “San Diego’s Convention Center is fully booked,” Jim Desmond, mayor of San Marcos and a member of the Airport Authority, wrote in an Oct. 13 letter to Voice of San Diego.
Determination: Mostly True
Analysis: San Diego leaders have been on a years-long quest to expand the Convention Center.
Expansion boosters have said the current space is too small and a larger footprint is necessary to keep it competitive over the long haul.
San Marcos Mayor Jim Desmond, who serves on the San Diego County Regional Airport Authority Board, seized on a common argument among expansion backers in an Oct. 13 letter to Voice of San Diego.
“San Diego’s Convention Center is fully booked,” Desmond wrote.
That’s mostly true. For a number of good reasons, convention centers rarely, if ever, achieve 100 percent booking and San Diego’s Convention Center firmly fits into the industry standard for a fully booked site.
Convention spaces can remain open for a couple days between bookings because of the time it takes to set up and tear down complex events. It’s common for one convention to leave one day and then for another to start a couple days later so organizers can take advantage of available space and prep time.
That’s why a Convention Center can be considered fully booked even when a passerby might spot open exhibit halls or meeting rooms on a random weekday.
Industry experts say the standard for a fully booked convention center is around 70 percent occupancy.
Here’s how PricewaterhouseCoopers, one of the experts I spoke with, summed it up in a recent report:
It has been recognized industry-wide that the “practical” maximum exhibit hall occupancy rate is approximately 70 percent and the “efficient” range is considered to be approximately 50 to 60 percent. Occupancy levels less than 50 percent generally suggest the existence of marketable opportunities or open dates, while an occupancy rate above 60 percent increases the potential for lost business or “turn-aways.”
Here’s how the San Diego Convention Center has performed in the last seven fiscal years. These numbers are in percentages.
And this is a month-by-month look at how the Convention Center performed over the last year, also in percentages.
So booking data from the San Diego Convention Center Corp. shows the space has reached occupancy rates as high as 80 percent in the early summer months. Overall last year, the facility reported a 65 percent occupancy rate. This supports Desmond’s argument, even though the occupancy is never 100 percent.
How the Convention Center gets to its occupancy numbers also matters, especially as boosters make their case that an expansion would be a boon to the city’s bottom line.
It turns out that the Convention Center sometimes discounts its rates, which could affect how much taxpayers have to subsidize center operations.
San Diego’s independent budget analyst noted in a May review that the Convention Center planned to offer $5.1 million in rent discounts this year to attract certain conventions and trade shows. This number isn’t easy to pull every year but we know the Convention Center reduced rents in 2009 too. Center employees say those incentives ensure San Diego’s Convention Center can compete with other facilities.
We dub a claim mostly true when a statement is accurate but there is an important nuance to consider.
This ruling applies to Desmond’s claim that the Convention Center is fully booked. Its occupancy rates are close to 70 percent, the number many in the industry have decided equates with the need to turn away potential convention visitors.
At the same time, the Convention Center’s decision to offer discounts – and its argument that they’re needed to ensure the facility can compete with others across the nation – indicate there’s far more to the story about center performance than just the occupancy rate. The center cuts its rates to increase occupancy.
If you disagree with our determination or analysis, please express your thoughts in the comments section of this blog post. Explain your reasoning.