San Diego Business Journal

If it can clear some significant long-range hurdles, San Diego can turn its cross-border proximity to the growing city of Tijuana into a boon for the local hospitality industry, tourism and government leaders said at a recent forum in Mission Valley.

The challenges include public perceptions about safety in Mexico, as well as excruciating wait times at local border crossings due to security issues.

“We know that about $6 billion in retail sales are left on the table every year, because people don’t want to be spending that time heading north at the border,” said San Diego Mayor Bob Filner, one of several speakers at the 20th Annual San Diego Hospitality Industry Outlook, presented by the local chapter of CCIM Institute.

Filner has made several business-promotion trips to the Tijuana area since taking office earlier this year, and is pressing ahead with plans to apply to have the two cities host the 2024 Olympics, as a binational effort.

The proposal faces long odds, since a binational Olympics has never taken place, but the mayor has enlisted the help of former presidential candidate and La Jolla resident Mitt Romney, who oversaw the 2002 Winter Olympics in Salt Lake City and will informally advise local officials on the process.

‘Two-Nation Vacation’

Even if it ultimately falls short, Filner said the application process could help raise the binational region’s profile as a tourist destination, among other economic benefits.

Joe Terzi, president and CEO of the San Diego Tourism Authority, said Mexico is already the second largest international market served by San Diego International Airport after Canada, and tourism is currently the biggest economic generator for the San Diego-Tijuana border region. That relationship can be leveraged to bring more overseas travelers to San Diego.

Japan Airlines’ local direct service to Tokyo goes daily as of June 1, adding to direct flights to London started in 2011 by British Airways. Terzi said recent visitor patterns indicate that travelers from Asia, Europe and Australia are attracted by the notion of taking a “two-nation vacation” by visiting San Diego and Mexico on the same trip.

“California is still the No. 1 destination of all the states for those international travelers, but lots of those end up going to just San Francisco and Los Angeles,” Terzi said. “We want more of those people to come into San Diego.”

Terzi said marketing the two destinations as a region might also help offset capacity limitations at San Diego International Airport. However, there are other infrastructure and security obstacles to turning the 43 million annual northward border crossings into overnight hotel stays.

For instance, changes imposed by the North American Free Trade Agreement in the early 1990s made it nearly impossible to have commercial buses carry large numbers of travelers north across the border.

Beefed-Up Tourism Infrastructure

Tijuana and nearby Mexican cities have recently made strides in beefing up their tourism infrastructure. Mariano Escobedo, chairman of the Tijuana Convention & Visitors Bureau, pointed to the recent opening of a new convention center just south of Tijuana, and the upcoming construction of a cross-border terminal that will provide direct access by travelers to the Tijuana airport.

The Tijuana region in the past year has also seen the debut of an Olympics-style training center with facilities for sports including diving and volleyball. Venues in the works or recently opened include a cultural center, casinos and other dining and entertainment options, and the region, like San Diego, has a budding microbrew beer industry.

The improvements continue as Tijuana and other Mexican cities deal with public perceptions that drug-related violence is still making the country unsafe for tourists, even though crime actually remains limited mostly to a few non-tourist areas.

Waterfront Appeal

“There are some problems in the eastern part of Tijuana, but the violence is not in the center of town, where you and I might go,” Escobedo said.

Ann Moore, chair of the San Diego Board of Port Commissioners, said current redevelopment plans for the Chula Vista waterfront could help draw more local visitors from Mexico because of that city’s proximity to the border.

Moore said the port district is also looking to add more local cruise ship stops between San Diego and Mexican ports, which have been in decline over the past few years as the cruise lines focus on other global markets.

The hospitality forum was presented at DoubleTree by Hilton, by the San Diego Chapter of CCIM Institute. The organization is an affiliate of the National Association of Realtors, focused on certification and education of commercial real estate professionals.