Tourism boosters want you to know that the hordes of people who descended on downtown San Diego recently for Comic-Con came with their wallets.
San Diego Convention Center officials estimated Comic-Con provided a $178 million economic boon to the city this year. The figure has been repeated in numerous news reports about the event and Comic-Con’s impact on the local economy is cited as a key reason the city needs to expand the Convention Center. (The expansion hit a major snag Friday with an appeals court decision to throw out the project’s financing.)
But the $178 million figure has a lot of problems. It’s based on outdated information. It includes assumptions of visitor spending from events that aren’t anything like Comic-Con. And it counts certain effects on San Diego’s economy twice. Two local economic researchers believe Comic-Con’s true effect on the economy could be significantly less than the study claims.
“It overstates the impact,” said Erik Bruvold, the president of National University’s Institute for Policy Research.
Skip Hull, an economist with Kearny Mesa-based CIC Research who came up with the Comic-Con figure, conceded that some of those problems are real. He said he was working with the best information he could get his hands on. Many of his assumptions, he said, are conservative and the event could have an even greater impact than he’s able to calculate.
Let’s break down the holes in the $178 million number and Hull’s defense.
Support Independent Journalism Today
Sounds like a great local university research project for a statistics or sociology class? We have plenty of extraordinary tech talent as well that could help facilitate significant data collection regardless of if the Con approves or not. Public streets teem with obvious attendees (badges) and could easily be polled. If we want a true snapshot all we need is someone to organize.
Why do we care so much about having a more correct estimate of how much benefit a convention brings to the downtown hotel and restaurant businesses? I don't want more of my taxes used to enrich the downtown power brokers. So, unless there's a much broader benefit to the average tax payer having a more accurate estimate doesn't change the story at all.
@Comixace How do they do a study based on 6 year old info? O.O
What I find most interesting here regardless of the lack of honest economic data there are always going to be people arguing what they believe is the right policy regarding the use of public resources. There is the same exact argument for a new stadium for the Chargers to be paid with public expenditures. And this directly ties in with your recent articles and studies regarding San Diego being a "business friendly" city. What business friendly apparently means is the willingness of the city to offer subsidies and special deals in order to attract new businesses or keep older ones here. In the up front piece VOSD linked to a an article in The Dallas Morning News where the city of Dallas, Texas gave $14 million in corporate welfare to lure two of San Diego businesses. What I find surprising is that there are people who actually believe this is the best use of public funds. Somehow the old conservative values of limited government go out the door when they realize that the use of public funding can directly benefit their political allies and of course their political careers not to mention sweeten their own personal economic wealth.
You see the operation of the San Diego Convention Center should be able to stand on its own two feet. It needs to charge those who use the facility enough rent to cover the costs of its operation. Same goes for Qualcomm Stadium. And then when it becomes necessary to expand that particular facility it can do so by simply directly generating the revenue from the demand for that facility. But it seems that is not the logic our politicians and the powerful and influential players who benefit from this public money want you to believe. The are now in the business of convincing the public otherwise. They are basically saying to the public is you must GIVE me all the money I can get out of you, or else I will leave town and take my stuff with me. They want ticket sales guarantees, free rent, no taxes, new public funded buildings, and low wage workers or else they will leave and declare San Diego as "Unfriendly to Business". But the sad part is that to an uneducated bunch of fools, and greedy self serving politicians this tactic not only works, but works well. Otherwise they would not do it and we the readers of VOSD would not be commenting on such tactics.
You see this is why the American city of the 21st century can face bankruptcy. Special interest politics is now the politics of choice and seems to be the trend. Big business and big government (even at the local level) can basically call the shots. The voters are either simply ignorant or too apathetic to care. There is no real intelligent economic argument to be made here. There needs to be no defining economic study. The virus that is damaging our economic growth is nothing more than the ever increased level of greed and how it has basically infected every level of our public sector. Once local level politics was somewhat immune from this but not any more.
@andykoppsd Blows my mind we're even still talking abt this when we can't even fund a new roof to replace one that's "rotting"
@AshDHarrington, I can appreciate the logic of bundling the deferred maintenance into the expansion (to a degree) but the premises don't + ↑
Don’t get me wrong. I LOVE Comic-Con. It’s a HAPPENING, as we used to say. There’s no other convention like it in San Diego. It’s fun!
But, GIVEN THE COST OF THE CONVENTION CENTER EXPANSION, it’s not worth the taxpayer outlay. And even if we DID expand the con center, that’s no guarantee Comic-Con wouldn’t move anyway.
Some DO profit mightily from con center subsidies — mostly national hotel chains. If the price of the rooms go up for a “full house” downtown, that extra revenue flows mostly to the hotels’ bottom lines — we get only the increase in TOT revenue. And remember, we should count only the NET increase in revenue from Comic-Con, as we have a booming tourist trade here already.
Yes, our economy benefits, but apparently much more from several other current conventions that come here.
The economic impact of Comic-Con is even less than Bruvold and Cox say when you factor in the impact of an alternative convention that would use the convention center and hotel rooms, etc. if Comic-Con was not there. I live downtown and have asked restaurant owners for there thoughts on Comic-Con. They generally say that it doesn't help them, as attendees do not eat in fine restaurants. Some have even said that it hurts their business, since their regular customers tend to stay away during Comic-Con.
One BIG false assumption about conventions, bowl games, etc. is that if the convention were cancelled, the hotel rooms normally rented by conventioneers would be empty, the restaurants vacant, etc. Not so. If you look at our San Diego hotel occupancy with smaller conventions (or none) in town, you'll likely find that our hotels are still 70+% occupied with business people and tourists. One should count as economically beneficial only the "delta" -- the increase above "normal" occupancy.
Indeed, the Super Bowl experience can be instructive. Because of the full house and busy restaurants during that wonderful time, tourists avoid the Super Bowl city to avoid the crush -- and to get better deals on pricing. Such has been the experience on both the week before and the week after Super Bowl week in designated cities -- LOWER than average hotel occupancy as tourists (and conventioneers) stay away.
Comic-Con is a unique happening. To pull it off as a major "participation" event, it must be within commuting range of a huge populace. Currently it draws mostly young "locals" from the 25 million people that live in Southern California. There are not too many places that could provide that populous a base combined with a huge convention center. Maybe Los Angeles.
But the main competitor would be Las Vegas, where the combined convention capacity is unsurpassed. Unfortunately for Comic-Con, Las Vegas has less than 2 million people within commuting distance -- compared to 25 million in Southern California. The convention would lose many of their current decked out attendees.
Besides who would want to wear such elaborate costumes in summer's 100+ degree heat of Las Vegas? San Diego's mild coastal summer weather is an advantage that Comic-Con should carefully consider before moving elsewhere.
The problem for Comic-Con is that if it moves to a larger convention center within a smaller populated area, it won't NEED the extra space!
@Richard Rider You make some very valid points as to why it could be a huge risk for the owners of ComicCon to move from San Diego to especially Las Vegas. I think when they threaten to move they are mostly talking about LA or Orange County. A move to Vegas would not be good idea. That is not a good fit at all. But even a move to LA or Orange County could also be a mistake. Why try to fix something that is really not broken? I think the threat to move it is nothing more than the operators of this convention trying to put the squeeze on our Convention Center for cheaper rent and other subsidies. Not any different than what the Chargers do to the city every year. You see the Chargers owners have it down to a science. And it seems many other significant businesses have also started doing this. Obviously I'm trying to demonstrate how this ties into the articles that Lisa has been writing regarding San Diego being "unfriendly to business". My belief is that is what "unfriendly to business" really means. It means expecting private business (especially large business interests) to pay their own way. It means the city leaders need to protect public interests and resources and to stand up to these economic bullies. If all local governments and even state governments could do this I think the greedy businesses would have to start singing a different tune. But it seems politics won't let that happen.
@Phillip Franklin @Richard Rider It's not just small businesses that find California (and San Diego) unfriendly:
The top U.S. CEO’s surveyed rank California “the worst state in which to do business” for the 10th straight year (May, 2014).
Yeah, go postal on local big businesses. Let's see if we can give them some additional reasons to leave the Golden State.
That being said, I oppose any subsidies for the Chargers. Or for any other business the politician decide to favor over other companies.
@Richard Rider @Phillip Franklin If asking businesses to pay their fair share and not to give them special subsidies is going postal then you are living in a bubble that I can't even begin to understand. You say you oppose subsidies to business, but when corporate big wigs give billions to lobbyists and politicians in Sacramento and DC for their special interests you just think of it as the poor business people are looking out for the poor and unfortunate. That is such a crazy place I can't even begin to understand. Trying to understand your logic will simply make me go postal. Well I am at least happy that we can both agree that funding the special interests of the huge tourist industry here in SD and NFL billionaires is not good for the taxpayers. So as they say even a broken watch can give correct time twice a day.
One BIG difference in the regional Comic-Con attendees and conventioneers from (truly) out of town is that the latter group has a tendency to stay a couple extra days in San Diego after the convention to enjoy our city. MOST Comic-Con attendees are young "day trippers" from Southern California who often don't stay in hotels for the evening -- let alone pay to stay for extra nights.
@Richard Rider That is a guess you have gotten very, very wrong. "MOST" of the visitors are from all over the world, they save for this all year, or are well paid entertainment industry people. If you do a quick survey you will find a ton of them staying on for Sea World and the Zoo after the Con for a day or so extra. Days never factored in to any of the estimates.
Not that it matters. San Diego isn't the kind of place that could embrace a world class pop culture event ANY larger than it is. It cuts into the douchebag industry that we DO nurture.
@Rex Edhlund @Richard Rider I'm not "guessing." Read the study. The next four smaller conventions all have a more beneficial impact in San Diego than Comic-Con.
And yes, the study DOES count the overall impact -- including staying in San Diego before and after the convention.
To help you with the math, "most" is over half. No, over half the visitors are NOT from "all over the world." Your impressions don't make it so.
Most are "day trippers," or regional people who do the show on the cheap. Again, read up on Comic-Con.
Don't get me wrong. I LOVE Comic-Con. It's a happening. But it's NOT the economic juggernaut that justifies the convention expansion. Not even close.
@Richard Rider @Rex Edhlund Well thanks for helping me with the math, the condescension certainly adds to the conversation, and allow me to clarify, which I should have in the beginning. The MOST that I am referring to are the exhibitors- the people doing the Con and paying for it no matter how many people attend. I walked around a reporter from the SD Business Journal a few years back and everyone of the 7 or 8 people we asked were doing extra stuff in town. Informal, sure, but it is what made my impression an/or makes it so. I didn't just "feel" this.
THE BIGGEST POINT is that the expansion is NOT ABOUT COMIC CON! It is about the business we are missing. You know, like the next four smaller conventions that spread the precious money better. We are losing these opportunities because fools are making this about Comic Con.
The scary part of this, which is typical of San Diego, is that there has been an institutionalized acceptance of this entire narrative for a long time with no meaningful questioning by the powers that be (including the media). If, as the NY Times reports, Comic Con “ranked first in terms of the convention center’s attendance, far outstripping the combined total of its next four largest conventions,” then massive parts of the expansion of this edifice exist only to accommodate one convention. In my very limited observation, that’s indeed the case. I’ve seen incredible amounts of unused space when I’ve been to events at the convention center. I’d love to see a capacity study (i.e. how often is it used and to what percent). No one would build a hotel, for example, to accommodate maximum capacity if 95% of the time half the hotel were vacant.
I certainly hope we are having an emperor has no clothes moment here and we can stop, take a deep breath, and get real.
As for the comments on VOSD about anecdotal beliefs on the value of Comic Con from apparent adherents it might be better to consider the NY Times observations: “At Comic-Con, dining out is apt to mean eating a sandwich while squatting on a city street. McCormick & Schmick’s, a high-end seafood restaurant across from the convention center, sold wraps from a cart, two for $10. At midday on Thursday, more than 150 people stood in line at a nearby Subway.”
Let’s contrast that to a medical convention, where clients interested in million dollar medical devices are probably being wined and dined INSIDE McCormick & Schmick’s. There is no way you can equate Comic Con attendees to medical convention attendees.
And finally, let’s note the reams of studies about convention centers being net losers in the vast majority of cases. There is one logical business model for a convention center. Transfer it in some responsible way to the hotel industry. Let them manage it and decide if they want to expand it and let them pay for any expansion. Then they will be using their own money. I’d bet that would end the pie in the sky studies.
@voiceofsandiego no, the problem is that it thinks too small. Effects of Comic Con are even felt in Chula Vista. Freeway from LA was full
@wrichter00 @voiceofsandiego: A full freeway doesn't necessarily translate into economic benefits. That sort of overcrowding can be the cause of losses when paying customers stay away to avoid the congestion. Meanwhile, its the economic benefits that must be considered in order to justify expanding the convention center.
@LisaHalverstadt yeah, but I bet if Comic Con sponsored a study by Eric Bruvold (like the beer industry) he would sing a different song.
@wrichter00 @LisaHalverstadt : Excellent point! The survey is biased depending upon who pays for it!
@voiceofsandiego those "old" hotel numbers can only be much higher now and, yes, people come to comic con TO spend money.
@Matty Azure Sales tax anyone? Does anyone think that sales tax is a revenue source? The precious medical conventions don't generate that in their shows.
SDCC organizers should have data on how many attendees are from area zip codes vs not. The out of towners are staying somewhere, just maybe not the posh downtown hotels as the medical conference folks.
@Jennifer Reiswig: Heck, YES! They're probably already getting zip codes each time they sell a ticket and get the buyer's credit card info, or when they mail the ticket to the buyer. Perhaps they don't want anyone else to know that?
"...and the convention center hasn't had the cash to bankroll a Comic-Con-only study." Apparently, they don't have ANY money. A story on U-T San Diego today states the convention center has over $40 million in deferred maintenance and operational expenses.
At Comic-Con I see hundreds of people lining up to pay lots of $$ for collectibles and such. Are those numbers taken into account in these studies? More to the point - lots of these transactions are in cash, and, presumably, are therefore under the table. That may not be the case with the bigger companies, but more likely with respect to individual artists' sketches & such (someone correct me if I'm wrong about any of this). Is there any reasonable way to capture some of this lost sales tax revenue?
Are vendors required to have a resale Lic and collect sales tax?
One would assume they do to have a space..
@David Lizerbram Good point. Certain vendors might be making a ton of money...but that doesn't benefit SAN DIEGO's economy if, after the show, those vendors simply pack up and return back to where they're from, taking their profits with them. The only the local economy benefits from the show is if there is significant, increased spending at local businesse and/or increased sales tax...but even then, all but about 0.5% (1/2 of 1 percent) of sales tax goes to Sacramento, and so doesn't stay in town. Further, even when local businesses prosper, it's very, very isolated...If every restaurant & hotel downtown makes a killing, 99.99% of the local population will still never see any benefit. Consider, that the profits made by Hilton and Marriott go back to Hilton's and Marriott's HQ's.
Personally I don't believe any of the economic numbers put forth by any city entity. These numbers are self serving and it doesn't seem like the numbers are gathered objectively. I wonder how much of a discount the Comic-Con convention got this year for the use of the convention center? Last year the convention was given about a 50% discount. Just like the numbers that are thrown around about how much money a Super Bowl brings to the local economy. All these numbers are highly inflated.
@richard brick --Per a U-T article last year, ComicCon paid (and will pay each year until 2016) $150,000 in rent to the Convention Center. In 2010 they paid over $300,000.
What costs would those be? Most of the staff is Comic-con volunteers and the Convention Center makes some serious bank from their overpriced concessions. A lot of these local-yokels you look down your noses at will pay $8 for a slice of pizza so they don't lose their place in a line.