Convention Center Sales and Marketing Issues
In 2004, City Council consolidated the sales and marketing of the San Diego ConventionCenter under one entity, the San Diego Convention Center Corporation. The move was made toincrease accountability, remove duplication, increase efficiencies and save taxpayer money. ConVis,which had a shared role in marketing the facility prior to 2004, was removed and the City of San Diegoreduced funding to ConVis, requiring the Corporation to absorb approximately $2.5 million in sales andmarketing costs. Since that time, the Corporation has exceeded annual sales goals (see chart on page 2)for future hotel room nights, something ConVis failed to do consistently before 2004. Despite anarrowing of their mission to focus on single hotel meetings and leisure travel, ConVis is still unable tomeet sales goals (see second chart on page 2).As discussions about funding the expansion of the Convention Center have begun, some members of thehotel community and ConVis have begun a push to transfer sales and marketing back under ConVis.
Shifting sales and marketing of a public asset to a private entity funded and controlled bythe hotel industry will allow the hotels to use the facility to maximize their private revenueswhile undermining the operations of the Center.
The Convention Center Corporation is a public-benefit corporation accountable to the City Council, Mayor and taxpayers. ConVis is a private membership organization controlled and funded by the hotel industry, accountable onlyto their member organizations and funding arm, the Tourism Marketing District.
Taxpayers will be at greater risk for absorbingoperating shortfalls in the future as currentrevenues used to sustain the operations are shiftedto private hotels or are significantly diminished.
Because the Corporation handles sales, marketing andoperations, it can provide flexibility in meetingclient’s constraints while ensuring the positive revenueto the operations of the Center, minimizing taxpayer subsidies.
The legality and future funding stream created tofund ConVis, the TMD, is in question and unless itis renewed by City Council, will expire inDecember 2012.
Placing the sales and marketing of the facility under the control of ConVis, based on theunanswered questions regarding the future of theTMD, is risky and could threaten future TOT revenuesand raise questions/concerns with the BondUnderwriters of the Convention Center Expansion bonds.
Why would policy-makers shift sales andmarketing away from the Convention CenterCorporation that has a consistent track record of success to one that continues to miss goalsdespite a budget that has almost doubled?
The Convention Center Corporation has exceededtheir annual sales goals every year since assuming control of sales and marketing despite
ConVis continues to beunable to perform, despitereceiving a huge fundingincrease, of which $17.18 is from the TMD.
$14.7 M$24.4 MFY08 FY10
ConVis Funding Comparison