San Diego Convention Center liars

Heywood Sanders responds

"Even in the face of the current economic downturn, the San Diego Convention Center continues to deliver significant benefits to the greater San Diego region,” boasted the center in its 2010 annual report.

Do not swallow this assertion whole. The statement is based on false statistics the center has been disseminating for several years.

Now the center and downtown boosters are using the same bogus statistics to generate public support for a $550 million expansion of the existing center, $750 million if a hotel is included.

Here’s how the ruse works: each year, the center publishes a four-page forecast edition. On page 2 is a chart showing “Top Five Economic Generators.” It predicts the attendance, hotel room nights, direct spending, tax revenues, and economic impact of five upcoming center events — say, the convention of the American Diabetes Association.

However, often there are fewer attendees than predicted. If you look hard enough, you may see some revised attendance figures in the center’s year-end annual report. The consulting firm AECOM, which was hired to make recommendations on a center expansion, used the actual attendance numbers — not the ones that had been forecast — in its November 15, 2010 report to the San Diego Convention Center.

Heywood Sanders, the ranking national expert on convention centers, discovered vast discrepancies in San Diego Convention Center numbers. Basically, what Sanders found was that in many cases when actual attendance declined from the forecast, the number of room nights cited in the report stayed the same. This means that the center has been systematically overstating hotel room nights, and therefore overstating hotel tax receipts, attendee spending, and the center’s impact on the overall San Diego economy.

In January 2009, the center predicted that 16,500 attendees at the convention of the National School Boards Association would generate 37,400 hotel room nights. However, as the AECOM data revealed, only 9446 people showed up — a whopping 42.75 percent fewer than forecast. But the consultant reported the same room nights figure as was forecast: 37,400. “It doesn’t make sense that the number of attendees would be so much less than forecast and the hotel room nights would be exactly the same,” says Sanders. “It strains credulity. In my judgment, it explains why the center looks so good. It looks so good because the numbers aren’t right.”

Sanders, a professor of public administration at the University of Texas at San Antonio, is the author of a seminal study on convention center overbuilding published by the Brookings Institution in 2005. He has published several other papers for prestigious think tanks.

There are other examples. In January 2009, the center predicted that the convention of the Direct Marketing Association would attract 16,000 attendees who would generate 23,100 room nights. Actually, 6800 showed up — 57.5 percent below forecast, but the room nights number reported by AECOM remained 23,100. In April 2010, the National Council of Teachers of Mathematics attracted 47.22 percent fewer attendees than forecast, but in the final report the room nights remained the same.

In 2008 and 2009, the conventions of the National School Boards Association, American Public Transportation Association, and American Academy of Family Physicians had attendance that was, respectively, 42.75 percent, 30.76 percent, and 27.59 percent lower than the center had forecast, but the consultant’s report showed room nights the same as initially predicted. There is no way that actual attendance could be that far below the forecast while hotel room nights remained the same.

The above examples are a few of the discrepancies that Sanders discovered. He found more than one attendance number that didn’t look right. For example, for 2009, the center reported that there were 16,000 attendees from the American Thoracic Society. Sanders checked audited numbers of the society’s last two conventions in New Orleans and Denver. In 2010, only 13,725 people attended its annual convention. This year, it was 12,817. So 16,000 in 2009 is a suspicious number, says Sanders.

Buckle your seat belt. According to the consultant, Comic-Con attracted 126,000 attendees in 2010, resulting in 20,310 room nights. But this year, the center predicted attendance of the same 126,000 and a whopping 60,765 room nights, or almost triple the previous year’s number. “How did some event magically get 40,000 room nights?” while attendance is expected to remain the same, asks Sanders.

The convention center relied on the consultant’s bullish suggestions in deciding to go ahead with the proposed expansion. (Actually, consultants are normally paid to give a city the go-ahead on a course it has already decided to take.) In any case, the consultant carefully words its preface: it says it greatly depends on information provided by its client and the client’s representatives. “No responsibility is assumed for inaccuracies in reporting by the client [or] the client’s agent and representatives,” weasel-words AECOM. The consultant trusted information supplied by the center.

“The room night issue pervades all [San Diego Convention Center–related] reports,” notes Sanders. “Since the consultants use the upwardly biased room night figures to estimate the impact of the proposed expansion, those too are inflated. And with inflated forecasts of expansion room nights come unrealistic estimates of the increased [transient occupancy, or hotel] tax revenues that are supposed to pay for the expansion. It’s a veritable house of cards.

“This kind of fudging is really scary,” says Sanders, who wonders why mainstream media and city leaders repeat the center’s rosy figures as gospel when actual numbers are published by the center itself, albeit tucked away in hard-to-find nooks. “Is it incompetence? Willful blindness?” he asks.

I asked Alexis Gutierrez, chairman of the center, and Steven Johnson and Denise Mosgrove of the public relations staff to comment on Sanders’s findings. I heard nothing.

Share / Tools

  • Facebook
  • Twitter
  • Google+
  • AddThis
  • Email

More from SDReader


The first drawback to that center is that its economic impact is felt mainly by hotels and restaurants. There is some spillover into tourist attractions such as the zoo. Those things are generally in the low-paid service sector of the local economy and don't pay enough to live well in the county. That's the general criticism of local over-dependence on tourism.

As to the manipulation of numbers regarding that actual impact, one should not be surprised. All of the hype regarding those conventions has taken the "best case" scenario. Ignoring the shortfall in true attendance just goes along with the biased projections that are generated each year.

I'm wondering why the actual attendance at these gatherings is suffering such declines from forecasts. The question might be whether the forecast numbers came from the sponsoring group, or out of the convention center management. The economy has been weak enough to explain the shortfall in the past three years, I suppose. Or does the center chronically over-project those numbers?

Comic-con is a wild card. Its growing popularity could soon wane, and all the worries about keeping it here could fade, or it could decamp regardless of anything the city might do to retain it. Something tells me that part of the appeal is that it is held locally, and that moving it to LA or to Las Vegas or who-knows-where could kill its appeal.

You are correct: the major beneficiaries are hotels and restaurants. In San Diego and elsewhere, the public seems to think that convention centers pay for themselves. Not so -- studies by Heywood Sanders show that. Convention centers are vastly overbuilt and are slashing prices We should not be surprised by official manipulation of numbers in San Diego. After all, bureaucrats told a grand jury that they were told to jiggle the numbers to make it look like the ballpark would generate enough TOT revenue to pay for itself. Then the City claimed on the ballot statement that the ballpark would be economically neutral. This has proved laughably untrue. The ballpark is a drain. But it all started with lies from the City government. Best, Don Bauder

The City and taxpayers should definitely be paying attention to Heywood Sanders, not JERRY Sanders! And shouldn't the San Diego Convention Center exec who signs off on those bogus attendee/hotel room figures be indicted for fraud?

You make a point, dwbat, that I thought of putting in the article. I have seen private sector fraud cases in which far less statistical manipulation was cited in a criminal case. One of the questions I put 3 people at the convention center (none of whom replied), was this: who put these numbers together? And whose decision was it to use these numbers? Keep in mind that the disparities found by Heywood Sanders come from a very small base -- those five forecasts that are made annually. In recent years, most of those numbers have been false. So what does that say about the bulk of the statistics compiled by the center? It's possible that those stats are overwhelmingly distorted. San Diegans should demand to know. Best, Don Bauder

I downloaded their FY10 Annual Report [http://www.visitsandiego.com/pressroom/annualreport/fy10/index.shtml]. On page 10 it says: "Among the challenges facing our industry is tracking room nights that are booked outside of the room block pre-arranged by the convention organizer. Frequently attendees book through loyalty programs or use internet-based travel reservation sites. Studies indicate 40 percent or more of rooms are booked by attendees on their own. When this undercounting is factored in, the total room nights booked is significantly higher." They did not provide any documentation of so-called "studies." Didn't "studies" once indicate the world was flat, and the center of the Universe? And on page 6 it says "For many San Diego businesses, convention visitors offer a welcome stream of steady spending all-year round that would not take place if the Convention Center and related infrastructure was not there. In FY10, $530 million, a 4.4 percent increase over FY09, was spent on everything from dining and shopping to transportation and sight-seeing." Again, there is no source offered to back up that figure. Did they just grab it out of thin air?

As Heywood Sanders makes clear, they grabbed those economic impact estimates in part from the hotel room nights numbers, which are inflated. As to those room night "studies:" nobody knows more about how convention centers make their estimates than Heywood Sanders. He has long suspected, and now has much more reason to believe, that numbers presented by the San Diego Convention Center are dubious. Best, Don Bauder

The downtown hoteliers appear to be behind the push to expand the convention center. These hoteliers apparently believe that expanding the convention center will raise the value of their hotels, thereby enabling them to unload their properties on unsuspecting suckers. The expanison will likely have little or no effect on hotel occupancy. The convention center is big enough as it is. Tranporting 12,000 conventioneers by air to San Diego to attend a convention burns over one million pounds of aviation fuel. With world oil supplies dwindling, and fuel costs soaring, conventions will soon be a thing of the past.

Excellent points, Burwell. Heywood Sanders has shown that not only are convention centers overbuilt, the audience is dwindling for the reasons you cite, as well as the slow growth the nation is likely to suffer for several years. You are correct that hoteliers' asset-flipping game is a major reason why downtown overlords push an expansion of the convention center. I am sure the flipping is a major reason that the San Diego Convention Center puts out false statistics. This demands an investigation. Best, Don Bauder

It DOES demand an investigation. But who will do it? The DA will not do it; she wants to be mayor. The city attorney will not do it; he's busy busting pot stores. The city council will not do it (and cut off campaign contributions from downtown fat cats?). And the U-T will certainly not do it under the Manchester/Lynch regime. You're our only hope, Don!

I cannot imagine council doing anything with Donna Frye gone. All it will take is an HONEST statistician to check the stats of the last few years, and then tell the citizens of San Diego whether or not they have been completely hoodwinked. A possible criminal investigation might come later, but I agree that nobody in law enforcement here would take it on unless forced to do so. One possible angle: there are still bonds outstanding on the latest expansion. Has San Diego been feeding false information to investors in filings related to those bonds? Could the SEC take the first look? If it found rigged statistics, it could hand the case to the U.S. attorney. Or maybe the SEC would like to keep it as a civil matter. Best, Don Bauder

COMDEX, the Computer Dealers Exposition that ran for 24 years in Las Vegas eventually imploded on its own popularity. COMDEX, once called “Geek Week,” was once one of the largest trade shows (in any industry sector) until it started a New York show in the spring and then other niche conventions cannibalized its segments.

The same will happen to Comic Con. With the rapidly expanding personal electronics and computer based entertainment, there will be other niche conventions that set-up and saturate the market.

I went to Comic Con in 2011 out of curiosity. In my opinion, what started as a comic collector bizarre has morphed into a mish mass of market segments that have coalesced into one big entertainment convention. It reminds me of COMDEX before the implosion in the early 2000’s.

Nothing is certain but change. There are very few large conventions like Comic Con. When San Diego puts all its egg in one basket, it had better watch that basket! It’s not a matter of if, but “when” Comic Con leaves San Diego. The “leaders” in city hall just amuse me. They are so naïve and we are so naïve for voting them into public office.

Excellent points, Ponzi. But with the new ownership of the Union-Tribune essentially saying that it will slant the news toward legacy projects downtown (it particularly mentions the proposed football stadium, which is preposterous for a city in this financial condition), one wonders if San Diegans will get the straight story. We will continue to give the straight story at the Reader. But more San Diegans have to know what is happening. Steve Erie, incidentally, believes that Comic-Con will eventually move closer to Hollywood, where it belongs. Best, Don Bauder

it will slant the news toward legacy projects downtown (it particularly mentions the proposed football stadium, which is preposterous for a city in this financial condition),

If Papa Manchester thinks a stadium giveway to Spanos et all is going to happen I woudl suggest chekcing him into Passages Malibu Alcohol Rehab And Drug Addiction Treatment up in Maliboo;


With the City close to financial insolvency, the whole idea of a stadium for the Chargers is totally absurd, of course. The notion that a loan from the NFL will fill much of the gap is crazy, too. If the Spanos family would foot the bill for the entire stadium plus infrastructure, nobody could object to that. But it won't happen. If stadiums were good investments, owners would pay for them and make money on them. But since they are money-losing investments, business overlords and the politicians in their pockets want taxpayers to pay. Best, Don Bauder

If stadiums were good investments, owners would pay for them and make money on them


However, if governments hold on to their opposition to subsidies, the owners may well go ahead and pick up the tab (usually except infrastructure). Consider Kraft in Boston. Neither the city nor the state would give in. Kraft even claimed he would try a move to Hartford, Connecticut, neither large nor rich enough to support a team. It was ridiculous. Finally, Kraft picked up the tab for the stadium, although governments did chip in on infrastructure. Owning a pro football team is enormously profitable. The owners will try to sucker local taxpayers, but chances are they will cave if they can't find another city, or the league won't permit the move. Now, the Chargers prefer LA, but there are roadblocks. Best, Don Bauder

The owners will try to sucker local taxpayers, but chances are they will cave if they can't find another city, or the league won't permit the move

I think the NFL may have problems if they try to block a move, Al Davis proved that point in spades.

Let the Chargers pack up and move to LA and play at the ridiculously-named "Farmers Field" stadium. Good riddance, and don't let the door hit you in the ass, Spanos.

Spanos would love to be hit in the rear with a door on his way to LA. But the NFL might not permit it, or might want a relocation fee that would be too expensive, or the Spanos family would not want to sell part of the team to Anschutz -- there are a whole lot of things that could block the move. Best, Don Bauder

Does the NFL have the power to level a relocation/moving fee??

Al Davis paid no such fee when he took the Raiders to LA from Oaktown.

Assuming the room rental figures were deliberately inflated, there probably would be no crime unless a lender, bond issuer, or some other entity relied on those figures to their detriment. In other words, a lender made a loan that it would not have otherwise made if the true room rental figures were disclosed. Publishing false rental data under such circumstances could constitute fraud.

Excellent point, Burwell. In an earlier post I wondered whether the City has to update its filings with the SEC for the bonds outstanding on the first expansion. If it is doing so with false numbers, San Diego could be in trouble with that agency again. Or, as you suggest, there could be an investor suit, possibly a class action. Bonds for the proposed expansion have not been issued, obviously, since the deal has not been approved, but possibly an investor who bought bonds on the most recent expansion would have a case. Best, Don Bauder

Municipal bond issuers do have to file updates on their original filings. The updates on the outstanding convention center bonds use attendance figures, not room nights. Thus, the numbers may not be misleading. It's the room nights figures that are rigged. Best, Don Bauder

The "City" can't go to jail, it can only PAY, and that means US.

But, metaphorically, the taxpayers will be in jail if they OK a convention center expansion that is based on fraudulent statistics. Best, Don Bauder

In jail??? More like bent over and.........

Bent over and... Yeah, but isn't that the favorite sport in jails and prisons? Best, Don Bauder

It's kind of like those Hollywood "back-end" participation deals, supposedly about $$$ coming their way. Boy, do THEY get fooled later on. ;-)

Trouble is, Hollywood business practices have taken over U.S. business. Back in the 1960s, accounting by conglomerates was phony as a $3 bill and everybody knew that Hollywood was a snake pit. Now accounting has gotten distorted almost everywhere, and Hollywood's pathological swindling has swept the country. Best, Don Bauder

As in Hollywood and in City Hall, you SHALL have a gay old time--and LIKE it! Or suffer great pangs of liberal guilt. "Some of my best friends are ____." And some our worst enemies . . .

Hollywood and San Diego City Hall do have similarities. Best, Don Bauder

Yes, in several ways: 1. Both love cameras and microphones pointed their way. 2. Both love spending other people's money, especially if it's in the $millions. 3. Both love the media, IF the coverage is favorable. 4. Both hate to give up power, after having it. 5. Both love ribbon-cutting ceremonies, even if it's for the opening of a can of beans. 6. Both know they couldn't survive long, without a boatload of PR flacks. 7. Both have skeletons in their closets. 8. Both pretend to know what the people really want. 9. Both do business with sneaky/sleazy characters. 10. Both love the word exaggeration.

Your point no. 9 is quite important. Historically, organized crime money was behind much of Hollywood's early development. The same was true of San Diego. Dirty money still pours into Hollywood, and laundered drug money is a big source of capital in San Diego. Best, Don Bauder

Right, the old Universal/MCA was very mob-connected.

There is more to the Hollywood story. San Diego, too. Teamsters and buddies were once major landholder in San Diego. Best, Don Bauder

One thing I never knew was that while the production of movies has been Hollywood since the turn of the century-ALL the money decisions were made in New York.

The studio heads ran the studios, but the purse strings were pulled by the ones who oversaw the studio heads and they were in NYC.

Well, some big entertainment companies -- Disney, e.g. -- are based in LA. Some of the studios are owned by foreign companies. But to a certain extent, many decisions are made on Wall Street. That's true for almost all public companies. Best, Don Bauder

Yes, today it is different, but during the Studio Mogul days in the 30's - 50's all the money decisions came out of NYC.

They got Camp Elliot for peanuts . . . I mean, The Land of the Saints. Tierrasanta--hilarious! In the 70's and 80's you could hardly avoid bumping into them. Some of their most distinguished representatives were "right out of central casting." One pair, who shepherded their subdivisions through approval, were a laughable Mutt and Jeff pair of Chicago thugs who once threatened me in the City Hall elevator. I survived because they found another way to get approval, and wasting me would have been a waste of resources. I was rendered irrelevant. Peñasquitos, La Costa, and other names born of arrogance.

Penasquitos, Murrieta Hot Springs, elsewhere in the county -- that's where the dirty money of yore meant. Now the laundered money from Mexico is powering more of the local economy than San Diegans would like to admit. Best, Don Bauder

Microsoft is pulling out of the Consumer Electronics Show. This is the last year Microsoft will appear at the giant trade show making industry watchers speculate that it will be the end of CES in a few years.

. http://www.ecommercetimes.com/story/CES-2012-The-End-of-an-Era-74107.html .

. http://www.mercurynews.com/business/ci_19691989?source=rss .

Apple dropped the Consumer Electronics Show some time ago. Sans Apple and Microsoft, there will be some serious holes in that show. Best, Don Bauder

Apple and Microsoft are dropping out because they are not getting their money's worth. This is why other companies cut down their participation in conventions. As I have said many times: the industry is vastly overbuilt and attendance is declining. Yet San Diego wants to expand its center again. Its statistics are rigged, but the public will only read about it in the Reader. Best, Don Bauder

Don Bauder Apple isn't "dropping out" of CES. I can't remember Apple having a presence at CES for at least 15 yrs, which was when I first attended, and I have had old timers tell me they don't recall Apple ever being there. The Macworld Expo was held in San Fran around the same time, sometimes AT the same time, until a couple of yrs ago and they haven't even been there since 2009. Steve Jobs started giving the keynote speech at Macworld his first year back as interim CEO. Apple doesn't do trade shows. When they have new products to reveal, they stage their own events as we have all seen in the last few yrs. BTW, according to an article I read last week in TWICE The 2012 CES was the largest in it's history, with a record numbers of attendees, exhibitors and show floor space. So maybe not so much with the declining attendance on this one.

Our oldest son, who has been with Apple about 20 years, used to go to CES. Maybe that's why my prose made it sound like Apple has only recently backed away from it. Father's poor memory. So mea culpa. But I still am not convinced that it is booming. Remember, there is a lot of bullish misinformation that passes in this industry. Best, Don Bauder

Don Bauder "Our oldest son, who has been with Apple about 20 years, used to go to CES" As noted in the comment below, there are Apple employees who attend, as there are employees of many other companies as well. However, unless I am mistaken, you were referring to Apple and Microsoft as a corporate presence, as vendors, so to speak. As far as things "booming", I didn't imply, or intend to imply any such thing. You wrote the convention industry is vastly overbuilt and attendance is declining and I was merely pointing that in this one particular case, not so much. This year was the first time I did not attend in many years, so I can't speak from personal knowledge. However, several friends who did attend have all said it was a pretty busy place. In reference to the comment below, I looked at a few resources this morning. They all say pretty much the same thing. Attendance was up about 2% from last year and it was also higher than 2006, which was the previously the highest attended show, which was what I said in my previous post. The 2012 CES was the largest in it's history, with a record numbers of attendees, exhibitors and show floor space. I can't speak for the overall convention industry, as Comic con is the only one I've ever attended besides CES, so overall attendance may well indeed be declining. But again, as I said, for this one, this year, apparently not so much. We will have to wait and see how much, if any, Microsoft's departure has on future events. As for Comic con, what was the attendance at comic con this year? I read a press release recently that they signed a new lease with the SDCC keeping Comic-Con in San Diego through 2015. According to their release, they have maxed out their self imposed 125k attendance cap every year since 2007.

If CES was in Vegas again, you can probably get attendance figures from the Vegas convention center website. Caveat: San Diego's convention center numbers are grossly inflated; I don't know if the same is true with Vegas. As to Comic-Con, there is no doubt it is a huge draw. But opponents to the convention center expansion question whether spending $500 million+ just to keep Comic-Con is a worthwhile investment, particularly since it is likely to go nearer Hollywood at some point.

There is a much bigger question here. The U-T just came out with a fatuous plan for building a Chargers stadium, entertainment district, etc. etc. in the greater downtown area. The question is with San Diego's infrastructure -- roads, sewers, water, fire protection facilities, etc. -- a billion dollars in the hole, and libraries and rec centers closed, should ANY money be spent downtown? The answer is no. Because the downtown overlords have local politicians in their pockets, all the money gets steered downtown as the rest of the city rots. This has to end. Best, Don Bauder

Don Bauder, I am fine with the numbers I have seen and it's really not such a big deal to me. But if you have doubts about the veracity of the published numbers, please feel free to follow up. As far as a $500 million expenditure to expand the the convention center, well like you I don't reside in SD, so it really doesn't matter to me. I'm not trying to engage in a debate about who should spend how much to expand whatever to keep whomever from leaving. My intent was much simpler: to point out that there have been two recent conventions that have not suffered from declining attendance. Nothing more, nothing less. As for your bigger question, as I said, I don't reside in SD, so it doesn't matter to me. And as history has already show, voters do some pretty dumb things on occasion, so nothing would surprise me, especially in San Diego.

CES reported that their attendance was up about 2% over 2011. And yes, some Apple employees do go there, even though there is no Apple booth.

Apple employees go if they can get off work. Best, Don Bauder

I would believe that would hold true for many organizations.

CES aside, it is true that fewer individuals are attending conventions. It would seem to follow that companies aren't encouraging employees to go as much as they did a decade ago. Best, Don Bauder

While it's true that tourism contributes to creating mostly low-paying service jobs, those extra dollars from the service workers join the cash flow spent in the city. This makes for more money all around, to an extent. As a tanning salon business that gets its business from both tourists and San Diego locals - http://downtownsandiegotan.com -, we welcome the city helping fund projects to boost tourism. HOWEVER: Anytime the government, or anyone else, is basing profits and income on fudged or slanted numbers, that's just bad business. It also contributes to a sense of distrust and white collar sleaziness. Boo.

And to agree with another poster: Yes, ComiCon could be gone very soon, to Las Vegas or somewhere else.

Thank you for bringing this info to light, SD Reader!

Log in to comment

Skip Ad

Let’s Be Friends

Subscribe for local event alerts, concerts tickets, promotions and more from the San Diego Reader