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The Convention Center is essentially at maximum impact for its size and capacity, and the San Diego market is a strong one for conventions. The convadium will perform very well as a convention center, plus host major sport and entertainment events.
Much has been debated and written about the value of the multipurpose convention center and stadium envisioned by Measure C. In fact, Voice of San Diego’s Lisa Halverstadt conducted an assessment of the two economic reports analyzing the Chargers’ proposed project. One report was done by HVS, a consulting firm hired by the Tourism Marketing District, and the other was commissioned by the Chargers and done by my firm.
Each study author was given a chance to make their case to Halverstadt and explain their methodology and results. Apparently, though, that was not enough for the opposition to Measure C. HVS continues to repeat inaccurate claims about my firm’s study.
We can generally determine if something passes the “smell test” by comparing the results with metrics and experiences at other convention facilities in San Diego and around the U.S. Such industry averages help objectively evaluate success.
One common way to understand if a convention center is performing well is to look at the ratio of room nights generated to square feet of exhibit space. Only convention centers in strong destination cities can achieve a ratio greater than one room night per square foot of exhibit space. Many convention centers in non-compelling destinations are lucky to generate a ratio of .5.
So where does the San Diego Convention Center fall? A recent study for the San Diego Convention Center Corporation estimated that the San Diego Convention Center generated 689,000 room nights in 2015, a metric of 1.12 room nights per square foot of exhibit space – and that includes the less preferred Sails Pavilion section, which is 90,000 square feet. This tells us that the Convention Center is essentially at maximum impact for its size and capacity, and that the market is a strong one for conventions. Now, imagine a new convention center is built for the hundreds of groups that cannot meet here due to a lack of availability.
Remember, the convadium will be a brand new, state-of-the-art facility, with some of the best-quality convention space in the country. Both studies concluded that hundreds of events want to be in San Diego and cannot fit on the San Diego Convention Center calendar.
My firm’s study projected that the new convention center annex would produce .72 room nights per square foot of exhibit space, when not including the influx of visitors from NFL games. So already, our study was quite conservative, estimating a room night productivity level at a rate less than two-thirds of the current facility. When adding in the room night impact of the season of NFL homes games, the metric increases to .98, still only reaching 88 percent of the productivity of the existing San Diego Convention Center. This does not count concerts, bowl games and one-off major events like NCAA events and potential Super Bowls. All of this is a way to demonstrate that our projections were in no way overblown, aggressive or optimistic.
According to HVS, the building will only generate 69,000 room nights per year, yielding a metric of .265 room nights per square foot of exhibit space – that’s less than one-quarter the rate of the current San Diego Convention Center. Assigning this low level of performance to a new, cutting-edge multipurpose convention facility in a proven destination like San Diego is simply ludicrous and cannot be supported under any circumstances. Convention centers in terrible locations with poor climates and no destination appeal produce more room nights per square foot than what HVS is claiming for a new facility in San Diego.
We have pointed out the fallacies in HVS’s arguments, its methods and its client’s motives in the past. Attempting to minimize the impact of this proposed and vitally important facility to such a degree is specious and violates the public trust.
A simple look at the numbers suggests that our projections are reasonable and rational.
When looking at the attempt to kill this project, the extremely low figures in HVS’s report are so far outside the bounds of reasonableness as to beg the reader to wonder if there may be some other motive at work here. I know HVS usually conducts solid studies with results within the realm of reality. I am frustrated for my industry and the public that HVS appears to have been put in a position by its client, the hoteliers, to go outside of standard methodology and reasonable industry results to minimize, in an extreme way, the impact of the convadium. I can think of no other cause for this than client intrusion into both the methodology and results.
The truth of the matter is that the facility envisioned by Measure C will perform very well as a convention center, host major sports and entertainment events and make San Diego proud.
Rob Hunden is the president of Hunden Strategic Partners Inc. Hunden’s commentary has been edited for style and clarity. See anything in there we should fact check? Tell us what to check out here