Get More Time to Prepare
With Set Contracts
BY TANYA RODRIGUES
The San Diego Convention Center Corp. recently launched a new sales policy in which the center is guaranteeing its space and rates up to 10 years in advance.
The center’s previous guarantee was for 2 & #733; years ahead.
Convention contracts have always been a conflict for convention planners, said corporation President Carol Wallace. The planners often have to sign contracts for hotel bookings years before they have a guarantee from a city’s convention center, Wallace said.
“One of the issues that has surfaced many times across the country is the fact that they would really like to have their convention center contracts earlier,” she said.
“This has been discussed in our industry for a number of years, looking at what we could do to shorten that distance and so now we’re taking the steps to say, ‘Let’s do this,'” Wallace said.
Other convention centers have developed similar policies. At the Orange County Convention Center in Orlando, Fla., the sales staff has been guaranteeing 10-year advance bookings for the past 18 months in “long-term lease agreements,” said sales manager Jeff Maggerine.
The organization booking the space is able to downsize or cancel its bookings with penalties that increase as the assigned date draws closer, Maggerine said.
In Seattle, the convention center lures the larger conventions by offering the same kind of long-term guarantee. However, Seattle’s policy doesn’t extend to smaller organizations, said Carole Ann West, associate vice president of sales for the San Diego Convention Center.
According to Tom Smith, vice president of facilities at the Las Vegas Convention and Visitors Authority, the San Diego convention sales team’s actions make sense.
“With the addition and expansion of (San Diego’s) convention center, they’re going to become a little more aggressive in conventions and trade shows,” Smith said. “At the same time, we’ll do what’s in our best interests.”
For Las Vegas tourism, that involves a three-year booking guarantee, he said.
“We have a marketplace that’s entirely different from San Diego,” Smith noted.
San Diego is guaranteeing convention space and rates, but not what’s considered insularly, or secondary charges, West said. These include food and beverages, audiovisual and telecommunications hook-ups, cleaning and ticketing, she said.
According to Fred Sainz, spokesman for the San Diego Convention Center Corp., the corporation won’t guarantee those insularly rates because predicting them 10 years ahead would be too difficult.
Forecasting rates for space appears less complicated. According to Wallace, the rates for the upcoming decade were based on the direction rates have taken over the past 10 years.
The Convention Center’s guaranteed rates are: from 2000 to 2002, 30 cents per square foot; from 2003-2006, 33 cents per square foot; and from 2006-2010, 36 cents per square foot.
Wallace isn’t concerned that guaranteeing rates will find the Convention Center underbid by competitors in the future.
“Convention center rates can be all over the board, because there are first-tier cities and second-tier and third-tier cities,” she said. “You may find a situation where a convention center, in a third-tier city, may have a very low rate, but they are priced very low because they get very little business.”
Helpful For Planning
According to Jack Zimmer, executive director of the International Association of Assembly Managers, San Diego’s new policy is “a pretty bold step.”
Zimmer’s Dallas-based group is a professional association for the managers of facilities such as convention centers, arenas, stadiums and theaters. (Wallace, of the San Diego Convention Center, is president of the organization this year.)
Zimmer can relate to the change as a meeting planner who organizes his own group’s annual convention. It raises more than $1 million, a significant part of the association’s nearly $4 million budget, he explained.
“That week is very important to us,” he said. “Being able to work out all the details with the hotels and convention centers , getting contracts nailed down and rates stabilized and knowing exactly what your expenses are going to be so then you can adjust your registration fees , having that done further in advance has got to be a win I think the bigger the show, the bigger the advantage is.”
The new sales move will also generate publicity for the San Diego center, Zimmer said.
“It probably will make some convention centers say, ‘Well, they got out of the box on this one, I wonder if we should, too?’ I imagine that there will be a little bit of a wait and see on that, in terms of how it’s panning out.”