Convention center report padded with favorable numbers

"People aren't staying anywhere near four nights, and they never have."

The San Diego Convention Center's 2016 annual report is out, and it raises many questions. For starters, why in the world do cities keep expanding space when only 50 percent of it is in use nationwide and rental prices are being slashed?

In the report, San Diego's center boasts that in the fiscal year 2016, the building was 66 percent occupied — better than the national average of 50 percent. San Diego cut its facility rental prices by 38 percent. So, why are cities racing to add space if centers are half-used?

Seattle, Los Angeles, San Francisco, and Anaheim are in the process of expanding centers or planning to do so.

Heywood Sanders

Heywood Sanders

"It is not plausible that all will succeed or any will succeed," says Heywood Sanders, author of Convention Center Follies, published in 2014, and also author of a seminal study on convention-center overbuilding.

San Diego claims in this year's report that the average stay of attendees is almost four nights.

"People aren't staying anywhere near four nights, and they never have," says Sanders. Many attendees double up and triple up in hotels; many stay with local friends, and many are local. This is especially true with Comic-Con, by far the largest event. Many attendees are brown-baggers and many live in San Diego County or near it.

In this year's report, the Environmental Systems Research Institute (a producer of map software) was counted twice because its conferences were in July of last year and June of this year. Counting the organization's use of the facility twice in one fiscal year inflates money spent on food, hotel-room nights, attendee spending, and overall economic impact of the center in 2016.

The number of events dropped to 158 from 172 in 2015. Nonetheless, attendee spending supposedly went up. But attendee spending and overall economic impact have always been questionable, says Sanders. For example, attendees are said to have spent a total of $44.8 million — $80 per attendee — on retail shopping in the 2016 year. But how can this be measured? Similarly, attendees are said to spend $143 each on food and beverages, for a total of $79.7 million in the latest report. But if the assumption is that attendees spend four days per person, such figures can be grossly inflated, says Sanders.

Says a footnote in the report, "Attendance projections are provided to the [convention center] by the event planner or show manager." These projections can be notoriously high because planners often give inflated numbers to make sure they will have space. Actual attendance often craters, Sanders repeatedly shows, but the numbers often remain the same as in the planner forecast.

"If you net out the extra [Environmental Systems Research Institute] conference, hotel-room nights are doing about as well as in 1998 and 1999," says Sanders. Yet the fervent race to build into a massive national surplus — particularly on the West Coast — goes on.

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Mike Murphy: Money flowing to contractors is one of the factors. But the main factor is that convention centers are one of the most naked examples of corporate welfare. The centers lose money. But hotels make money -- lots of it. So there is pressure on citizens to approve a convention center for the good of the local people.

Utter hogwash. Convention centers are built and expanded for the good of the local tourism industry. Centers' losses are covered up. The people vote for a new center or an expansion.

Tell me: how many times have you been to the convention center? Best, Don Bauder

Don: If I may, I will answer your question posed to Mike Murphy.

I go to the convention center once a year. For the Auto Show. And rest assured--I don't think there are too many room nights generated by that event.

aardvark: That's exactly what I mean. How many locals use the convention center regularly? Few. But the people vote for new centers or expanded ones.

The convadiium was thoroughly defeated, but that was such a wacky idea that it was never going to fly. Anybody who knew anything about convention centers knew that a so-called expansion 5 or 6 blocks away is not an expansion -- it is a new facility, and it made no sense, particularly combined with a subsidized football stadium. Best, Don Bauder

I think Don Wood's explanation is correct. The convention centers exist primarily for the benefit of the hotel industry. The hotel industry should privately raise the money needed for any convention center work. In that case the industry will be highly motivated to make the economic studies as accurate as possible because if the studies aren't accurate the hotel industry will make the wrong business decision and lose money.

ImJustABill: You and Don Wood make excellent points. Convention centers are built and expanded for the benefit of the hotel owners. Heywood Sanders often points to a deal in Los Angeles in which the convention center paid a trade group to use its convention center. Sanders reminds people that convention centers lose money. They are massive subsidies for the hotel and restaurant industries. Best, Don Bauder

Don Wood. Yes. in San Diego, taxpayers pick up the cost of advertising the city or county as a tourist destination. Further, the convention center loses money. It is a subsidy for the hotel industry.

The mainstream media do not point this out. The Union-Tribune is a classic example of a newspaper swallowing the lies spewed by the convention center. That was true in this case. Best, Don Bauder

Don: In one of the paragraphs above--the one that starts with, "People aren't staying anywhere near 4 nights, and they never have,". The same holds true for that farce of a convadium-thingy the Chargers tried to force onto the electorate. There really aren't that many out-of-town fans that come to Charger games (with rare exceptions), as most of the out-of-town team's fans already live here.

aardvark: So true. Mainly locals go to pro sports events. There are some exceptions. Los Angelenos come to San Diego on a Friday night when the Dodgers play the Padres. They get drunk, stay overnight, and then return home Saturday. Another exception was last year, when fans from Boston and Pittsburgh, in particular, jammed into Qualcomm to see their teams demolish the Chargers. This year, less than 80 percent of the Chargers seats are being occupied. I doubt if many out-if-towners are coming because only 78 percent of the seats are filled. Best, Don Bauder

I understand that the convention center was built when downtown needed all the help it could. That is not the case anymore. I cannot tell you as a downtown resident now how upsetting it is to have a giant wall (convention center) blocking the view of the bay. You should be able to walk out of a building on 4th and Broadway and see the water. Instead at the end of the street is just a giant long building blocking the view. This has become about one issue to most locals, Comic Con. The times ones convention or sports team can hold a city hostage are quickly drawing to a close.

Naraka: I certainly hope you are right that convention centers and pro sports teams will soon be unable to hold a city and its taxpayers hostage. I hope that the public begins to understand what convention centers and subsidized stadiums really are: egregious corporate welfare. Best, Don Bauder

Since sports attracting tourist $$$ was mentioned... has anyone done a good analysis of how many dollars are spent by people coming to San Diego to watch or play golf? I'd love to see an estimate of the economic impact of the Torrey Pines Golf Course vs that of the Convention Center - with each figure divided by the respective public spending on each venue.

MikeinSD: I would imagine there is a report on the alleged economic impact of the Torrey Pines course. Note the word "alleged." Most of these reports are filled with faulty statistics. The convention center puts out these bloated reports every year. These reports are promotional pieces, often meant to sway elections, rather than actual scholarly studies. Best, Don Bauder

It would seem that the Civil Service attorneys can't spell "investigate" "prosecute."

How doth I detest thee? Let me count the ways Civil Servants suck--literally and figuratively, up and down.

Flapper: You have put your finger on a major problem we have. We knew that companies are cozy with their regulators, whom they often hire for fat salaries after the bureaucrats have had 3 or 4 years to learn the system. So we tried deregulation. Deregulation of Wall Street was a colossal failure, and now it looks like Trump and his lackeys will soften or eliminate Dodd Frank, which was pretty weak tea from the start. Deregulate Wall Street again? Preposterous. Best, Don Bauder

David Gripon: That's the story San Diego's establishment uses. But Heywood Sanders, the real expert on convention centers, knocks down that theory. I side with Sanders. There is already far, far too much convention space in the U.S. Public money is being wasted on this expansion binge of money-losing centers. Since this is corporate welfare for hotels, the glut and the sharp price-slashing are ignored. Best, Don Bauder

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