|By Penni Crabtree, The San Diego
Union-TribuneMcClatchy-Tribune Regional News
Sep. 12, 2008 - Dollars generated for San Diego by business-related meetings at the San Diego Convention Center reached an all-time high this fiscal year, but some industry observers say the ailing economy may put a damper on 2009.
The San Diego Convention Center Corp. said events generated an estimated $1.8 billion in regional economic impact in the fiscal year that ended June 30, up 15 percent from $1.56 billion a year earlier.
Events in the building also generated $30.4 million in transit occupancy taxes, surpassing last year's figure of $23.7 million by nearly 28 percent. Most hotel tax revenues go into the city's general fund, which helps pay for basic services.
"Despite a time of economic uncertainty, we are thrilled that the convention center continues to break performance records and deliver on promises made to taxpayers when this facility was built and then expanded," said Carol Wallace, president and chief executive officer of the San Diego Convention Center Corp.
The convention center hosted 234 events in the fiscal year that ended June 30 with an overall attendance of 996,226. That includes a 5 percent increase in out-of-state attendees -- an estimated 648,159 of them -- who tend to be the biggest spenders.
Convention officials estimate that attendees spent a record $751.8 million at area hotels, restaurants, shops and local attractions, up 15.6 percent from last year's $650.3 million.
Steven Johnson, vice president of public affairs for the Convention Center Corp., said the convention center is somewhat sheltered from the economic downturn that has softened the leisure tourist market because business meetings are booked years in advance.
"We book three to five years out, so contracts are in place," said Johnson, who estimates that about 75 percent of convention business is done with industry trade associations. "The primary way trade associations pay their bills is through their annual meetings, so come rain or shine they have their meetings."
Still, Johnson said the convention center is forecasting a slightly softer year in fiscal 2009, which runs from July 2008 through June 2009.
The convention center is projecting that about 978,805 will attend convention events in 2009, and generate $1.55 billion in regional economic impact.
That will include $648.1 million in direct spending on hotels, restaurants and local attractions, convention officials predict. Out-of-state attendance in 2009 is also expected to be down 5.9 percent, from 648,159 this year to 610,000 in 2009.
Attendees in 2009 are expected to generate about $26.2 million in transit occupancy taxes in 2009, down 13.8 percent from this year's figure.
Still, that would make 2009 the second-best year on record, Johnson said.
"This year we just finished is just so superior that it is going to be hard to match it," Johnson said.
Some hotel analysts were dubious that 2009 convention business -- and that of the hotels and restaurants that feed off of it -- will prove to be so resilient.
"I think this next year will be a tough one," said Jerry Morrison, a local hotel consultant. "We are in a recession, the fallout from the mortgage crisis we aren't even feeling yet and no one knows how many banks are going to go belly up.
"We are seeing corporations cutting back on travel budgets and putting hiring freezes in place, and they are doing everything they can to reduce expenses," Morrison added. "So while association meetings may go on, how many attendees will they have?"
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