"Even in the face of the current economic downturn, the San Diego Convention Center continues to deliver significant benefits to the greater San Diego region,” boasted the center in its 2010 annual report.
Do not swallow this assertion whole. The statement is based on false statistics the center has been disseminating for several years.
Now the center and downtown boosters are using the same bogus statistics to generate public support for a $550 million expansion of the existing center, $750 million if a hotel is included.
Here’s how the ruse works: each year, the center publishes a four-page forecast edition. On page 2 is a chart showing “Top Five Economic Generators.” It predicts the attendance, hotel room nights, direct spending, tax revenues, and economic impact of five upcoming center events — say, the convention of the American Diabetes Association.
However, often there are fewer attendees than predicted. If you look hard enough, you may see some revised attendance figures in the center’s year-end annual report. The consulting firm AECOM, which was hired to make recommendations on a center expansion, used the actual attendance numbers — not the ones that had been forecast — in its November 15, 2010 report to the San Diego Convention Center.
Heywood Sanders, the ranking national expert on convention centers, discovered vast discrepancies in San Diego Convention Center numbers. Basically, what Sanders found was that in many cases when actual attendance declined from the forecast, the number of room nights cited in the report stayed the same. This means that the center has been systematically overstating hotel room nights, and therefore overstating hotel tax receipts, attendee spending, and the center’s impact on the overall San Diego economy.
In January 2009, the center predicted that 16,500 attendees at the convention of the National School Boards Association would generate 37,400 hotel room nights. However, as the AECOM data revealed, only 9446 people showed up — a whopping 42.75 percent fewer than forecast. But the consultant reported the same room nights figure as was forecast: 37,400. “It doesn’t make sense that the number of attendees would be so much less than forecast and the hotel room nights would be exactly the same,” says Sanders. “It strains credulity. In my judgment, it explains why the center looks so good. It looks so good because the numbers aren’t right.”
Sanders, a professor of public administration at the University of Texas at San Antonio, is the author of a seminal study on convention center overbuilding published by the Brookings Institution in 2005. He has published several other papers for prestigious think tanks.
There are other examples. In January 2009, the center predicted that the convention of the Direct Marketing Association would attract 16,000 attendees who would generate 23,100 room nights. Actually, 6800 showed up — 57.5 percent below forecast, but the room nights number reported by AECOM remained 23,100. In April 2010, the National Council of Teachers of Mathematics attracted 47.22 percent fewer attendees than forecast, but in the final report the room nights remained the same.
In 2008 and 2009, the conventions of the National School Boards Association, American Public Transportation Association, and American Academy of Family Physicians had attendance that was, respectively, 42.75 percent, 30.76 percent, and 27.59 percent lower than the center had forecast, but the consultant’s report showed room nights the same as initially predicted. There is no way that actual attendance could be that far below the forecast while hotel room nights remained the same.
The above examples are a few of the discrepancies that Sanders discovered. He found more than one attendance number that didn’t look right. For example, for 2009, the center reported that there were 16,000 attendees from the American Thoracic Society. Sanders checked audited numbers of the society’s last two conventions in New Orleans and Denver. In 2010, only 13,725 people attended its annual convention. This year, it was 12,817. So 16,000 in 2009 is a suspicious number, says Sanders.
Buckle your seat belt. According to the consultant, Comic-Con attracted 126,000 attendees in 2010, resulting in 20,310 room nights. But this year, the center predicted attendance of the same 126,000 and a whopping 60,765 room nights, or almost triple the previous year’s number. “How did some event magically get 40,000 room nights?” while attendance is expected to remain the same, asks Sanders.
The convention center relied on the consultant’s bullish suggestions in deciding to go ahead with the proposed expansion. (Actually, consultants are normally paid to give a city the go-ahead on a course it has already decided to take.) In any case, the consultant carefully words its preface: it says it greatly depends on information provided by its client and the client’s representatives. “No responsibility is assumed for inaccuracies in reporting by the client [or] the client’s agent and representatives,” weasel-words AECOM. The consultant trusted information supplied by the center.
“The room night issue pervades all [San Diego Convention Center–related] reports,” notes Sanders. “Since the consultants use the upwardly biased room night figures to estimate the impact of the proposed expansion, those too are inflated. And with inflated forecasts of expansion room nights come unrealistic estimates of the increased [transient occupancy, or hotel] tax revenues that are supposed to pay for the expansion. It’s a veritable house of cards.
“This kind of fudging is really scary,” says Sanders, who wonders why mainstream media and city leaders repeat the center’s rosy figures as gospel when actual numbers are published by the center itself, albeit tucked away in hard-to-find nooks. “Is it incompetence? Willful blindness?” he asks.
I asked Alexis Gutierrez, chairman of the center, and Steven Johnson and Denise Mosgrove of the public relations staff to comment on Sanders’s findings. I heard nothing.