The Morning Report
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For the first time since it took over bookings for the Convention Center in 2012, the San Diego Tourism Authority met the goals spelled out in its contract and booked more than 1 million hotel room nights for convention-goers last year.
The San Diego City Council transferred all long-term bookings from the public Convention Center Corp. to the nonprofit Tourism Authority in 2012, just before asking hoteliers to approve a hotel tax. The authority is run by a 30-member board, 12 of which are hotel executives and another works for a hotel management company.
The tax money was supposed to fund the $520 million Convention Center expansion project, but was never levied and a court ultimately struck down the funding scheme. Still, the Tourism Authority controls the bookings until at least July 2016, when the contract expires.
Under the terms of the contract, the San Diego Tourism Authority is supposed to reserve at least 860,000 room nights each year for events occurring more than 18 months into the future. It gets $1.9 million a year for the effort.
Here’s a look at how it’s done so far.
Joe Terzi, CEO of the Tourism Authority, said that bookings are “very complex and competitive and influenced by a number of factors” but did not respond to further questions.
Convention Center CEO Carol Wallace has long been frustrated by the loss of long-term bookings. She declined a request for an interview and deferred to spokesman Steven Johnson.
“That’s great news,” Johnson said of the latest numbers. “It’s encouraging and I think the two years of Comic-Con bookings helped push them over the goal.”
Indeed, the Tourism Authority signed the deal keeping Comic-Con in town for 2017 and 2018 before the end of the fiscal year in June. That means both of those years — with 60,960 discounted room nights secured per year — counted toward the 2015 quota.
Hotels turned out to be a huge sticking point in negotiations with Comic-Con in recent years, with some hotels resisting discounted room blocks for Comic-Con in order to command higher rates and higher profits.
Though the Tourism Authority breached its contract the first two years, the Convention Center never formally moved to terminate the contract.
“We work very closely with the Tourism Authority and felt like there was strong commitment toward reaching their goals,” Johnson said. “I don’t think at 95 percent of the goal there was a thought that there was breach of contract. … The goal is a win-win across the board.”
The authority has also faced “challenges with the expansion financing falling through and that has a ripple effect throughout the market,” said Johnson, although that hasn’t hindered the Convention Center’s efforts – it still has booking power over near-term events less than 18 months away.
Here’s how the Convention Center has done during the same period.
Johnson said the Tourism Authority’s recent success hasn’t changed Wallace’s belief that all convention booking work belongs in-house.
Responsibility for bookings has volleyed between the two groups over the years. Before the 2012 transfer of long-term events, the Convention Center handled all bookings from 2005 to 2012 and met or exceeded goals those years.
Whether the the Tourism Authority’s contract gets extended next summer remains to be seen, but “continuing to see them reach their goals will be part of the conversation as the board evaluates extending their contract moving forward,” Johnson said.
At the suggestion of the County Grand Jury, Convention Center staff members are seeking consultants to review the effectiveness of the current split booking system. Results are anticipated before the end of the year.