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    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 It’s based on outdated information.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.


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    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.

    It’s Based on Old Numbers

    One of the studies crucial to determining Comic-Con’s economic impact was conducted six years ago. It focused on Comic-Con-related hotel bookings.

    The study was meant to establish whether hotels should set aside more rooms for Comic-Con visitors. At the time, CIC Research found about half of Comic-Con attendees were staying in a hotel. The study found Comic-Con guests resulted in $25.1 million in room sales, and it’s the basis for the number used now.

    Problem is, Comic-Con has changed since 2008.

    Bruvold, a longtime fan of the convention, has seen it transition from a gathering mostly focused on comic books and table-top games to one that boasts broader popular culture forums and lots of celebrity appearances.

    This may have also shifted the percentage of out-of-town visitors, the number of Comic-Con attendees who stay in a single room and the amount they’re paying for their hotel stays, Bruvold said.

    “I don’t know if (today’s attendees) have a different spending pattern but there’s a plausible chance that they do,” he said.

    It’s Not Just About Comic-Con

    The other study the $178 million figure relies on isn’t only based on Comic-Con. It likely skewed the figures upward, economic researchers said.

    In 2011, CIC Research interviewed attendees from Comic-Con and 41 other conventions in the city to see how much they spent while they were here.

    But most of the conventions in the study had attendees who likely had little in common with the average Comic-Con traveler. The list of conferences whose attendees were surveyed includes the International Association for Dental Research, Airports Council International and the federal Government Services Administration. And the average median household income for those interviewed was about $106,000.

    Comic-Con attendees probably aren’t that rich. The New York Times recently reported that the estimated 130,000 Comic-Con-goers were projected to spend $603 each at the convention, far less than attendees of other major events held at the Convention Center. The Convention Center hasn’t used this metric in its own promotional materials because its direct spending estimates are based only on attendees staying in hotels.

    In its study, CIC Research found that about 33 percent of spending by visitors staying in hotels was funneled toward lodging. So it took the $25 million figure from the 2008 study and assumed that made up a third of what Comic-Con attendees spent. The rest of the numbers followed from there after a few adjustments for inflation and changes to hotel and other rates.

    The method resulted in CIC Research’s estimate of $78.3 million in direct spending by Comic-Con hotel visitors.

    Marney Cox, the lead economist for the San Diego Association of Governments, is skeptical of that approach.

    “Comic-Con is different enough in terms of attendees that you wouldn’t want to apply average attendee characteristics and behaviors to it,” Cox said. “That wouldn’t work.”

    It Counts Certain Economic Effects Twice

    Bruvold and Cox are more concerned with another method CIC Research used to calculate Comic-Con’s spillover effects on the economy.

    Hull’s team assumed the region would see another $99 million in trickle-down effects thanks to the convention featuring thousands of costumed comic book characters and dozens of celebrity appearances.

    Traditionally, economic impact studies simply estimate so-called indirect and induced effects to capture this dynamic. The effects could include a beer supplier who gets larger orders from restaurants it services due to Comic-Con and then gives its employees overtime for the extra deliveries. Or a local print shop that gets some business from Comic-Con exhibitors looking to promote their wares.

    Hull added another category: labor income, which he says covers the wages and income workers receive, as well as income for business owners.

    Hull assumed all these factors would multiply Comic-Con’s impact 2.27 times, leading to the $177.8 million estimate.

    But the main source of economic data and modeling that allowed Hull’s team to make its analysis already includes labor income in its group of spillover effects. That means Hull is double counting the effects of wages in his figure.

    Bruvold and Cox said the method results in a higher estimate than it should.

    “You can’t add things together that are already in the multiplier,” Cox said.

    Assuming other factors in Hull’s study were correct, Bruvold estimated that Comic-Con’s economic impact would be closer to $135 million.

    ♦♦♦

    Hull said he wished that he had more recent numbers and that he studied only Comic-Con attendees.

    But he said Comic-Con organizers wouldn’t let him get any better information. Hull and a Convention Center spokesman said Comic-Con organizers haven’t allowed a large-scale questioning of their attendees that would facilitate more detailed research, and the Convention Center hasn’t had the cash to bankroll a Comic-Con-only study.

    So he’s going with the best numbers he has. He has answers for Bruvold and Cox’s objections, too.

    It’s clear Comic-Con is bigger now than it was in 2008, Hull said. That means visitors could be spending much more on lodging than they did back then.

    Hull also defended his use of the labor income multiplier and said it’s long been factored into studies his company has performed for the Convention Center. He said his approach is not out of the ordinary, and leaving the multiplier out could put San Diego at a disadvantage. Hull, however, couldn’t immediately name another agency or group that has factored this multiplier into an economic impact analysis other than his own.

    Hull believed Comic-Con actually has a much larger economic impact than he’s estimated. The current study, for instance, only focuses on Comic-Con visitors who stay in hotels, leaving out economic benefits that come from Comic-Con passholders who live here and visitors who don’t stay in hotels.

    “We would prefer to do a lot more in-depth analysis,” Hull said. “There’s so much that has been left out of the picture that would add to the economic benefit of the event.”

      This article relates to: Business, Jobs, News, Share, Tourism, Tourism Economy

      Written by Lisa Halverstadt

      Lisa Halverstadt is a reporter at Voice of San Diego. Know of something she should check out? You can contact her directly at lisa@vosd.org or 619.325.0528.

      41 comments
      Jerry Hall
      Jerry Hall subscribermember

      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. 

      Steve Miller
      Steve Miller subscribermember

      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.


      Phillip Franklin
      Phillip Franklin subscriber

      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.

      AshDHarrington
      AshDHarrington

      @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"

      andykoppsd
      andykoppsd

      @AshDHarrington, I can appreciate the logic of bundling the deferred maintenance into the expansion (to a degree) but the premises don't + ↑

      Richard Rider
      Richard Rider subscribermember

      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.

      bgetzel
      bgetzel subscriber

      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.

      Richard Rider
      Richard Rider subscribermember

      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.

      Richard Rider
      Richard Rider subscribermember

      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!

      Phillip Franklin
      Phillip Franklin subscriber

      @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. 

      Richard Rider
      Richard Rider subscribermember

      @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).
      http://chiefexecutive.net/best-worst-states-for-business-2014#ranking

      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.

      Phillip Franklin
      Phillip Franklin subscriber

      @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.

      Richard Rider
      Richard Rider subscribermember

      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.


      Rex Edhlund
      Rex Edhlund subscriber

      @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. 

      Richard Rider
      Richard Rider subscribermember

      @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.

      Rex Edhlund
      Rex Edhlund subscriber

      @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.

      Chris Brewster
      Chris Brewster subscribermember

      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.

      wrichter00
      wrichter00

      @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

      Edward Teyssier
      Edward Teyssier subscriber

      @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. 

      wrichter00
      wrichter00

      @LisaHalverstadt yeah, but I bet if Comic Con sponsored a study by Eric Bruvold (like the beer industry) he would sing a different song.

      blakejp
      blakejp

      @voiceofsandiego those "old" hotel numbers can only be much higher now and, yes, people come to comic con TO spend money.

      Matty Azure
      Matty Azure subscriber

      We did pretty good.  We sold 30,000 pairs of our Star Wars gym shoe.

      Signed,

      Vans

      Rex Edhlund
      Rex Edhlund subscriber

      @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.


      Jennifer Reiswig
      Jennifer Reiswig subscribermember

      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.

      Edward Teyssier
      Edward Teyssier subscriber

      @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? 

      David Crossley
      David Crossley subscriber

      "...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.

      David Lizerbram
      David Lizerbram subscribermember

      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?

      Mark Giffin
      Mark Giffin subscribermember

      @David Lizerbram 

      Are vendors required to have a resale Lic and collect sales tax?

      One would assume they do to have a space..

      Edward Teyssier
      Edward Teyssier subscriber

      @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. 

      Rex Edhlund
      Rex Edhlund subscriber

      @Edward Teyssier @David Lizerbram They will see a benefit from the restaurant being able to keep it's doors open, hire people, and put a lot of that money back into the community.  Downtown is not a WalMart, it is mostly entrepreneurs, many barely getting by.


      richard brick
      richard brick subscribermember

      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.

      David Crossley
      David Crossley subscriber

      @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.

      Rex Edhlund
      Rex Edhlund subscriber

      @Richard Rider @David Crossley @richard brick For a week? Come on, with the money they make from vending and other peripheral moneymaking ops added to it... chump change?  You should let all of those other convention facilities know that they are also chumps since they are begging for Comic Con.


      Monika Weikel
      Monika Weikel subscriber

      @Richard Rider @David Crossley @richard brick 

      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.