The region’s primary tourism promotion agency has a twofold strategy for the coming fiscal year: Go local and go global.
At the San Diego Tourism Authority’s recent annual industry meeting, its leaders discussed plans for the 2015 fiscal year starting July 1, as the region looks to boost awareness among international travelers, especially the growing contingent of U.S. visitors from China.
At the same time, the agency — recovering from last year’s political snags that slashed funding and forced layoffs — will seek to enhance business in stalwart local hotel markets, such as Mission Valley, Mission Bay and La Jolla. One strategy involves pursuing business from smaller organizations known within the industry as SMERFs — social, military, educational, religious and fraternal organizations that hold annual gatherings throughout the U.S. These are often smaller groups that don’t require large convention center spaces for their meetings, and don’t need to be in hotels closest to the San Diego Convention Center.
“We’re going to put more emphasis on some of these markets outside of downtown, where the hoteliers have asked for some help in increasing business during certain periods,” said Joe Terzi, the Tourism Authority’s president and CEO, during an interview prior to the March 27 tourism outlook gathering.
Fitting the Puzzle Pieces
Challenges come in matching the needs of local hotel markets to the visitors available during certain periods. While Mission Valley and Mission Bay want to boost corporate and organizational meeting business, especially for non-
summer weekdays, La Jolla hotels are looking to better compete for recreational travelers who frequent upscale locations like Laguna Beach, Santa Monica and Santa Barbara.
“It’s sort of like dealing with a puzzle, where you’re trying to figure out what needs to go where,” said Kerri Kapich, the Tourism Authority’s senior vice president of marketing and strategic partnerships.
Mission Bay has 3,205 hotel rooms, while coastal La Jolla has 1,850. Mission Valley has 8,904 rooms — second locally only to downtown’s 13,432 — and officials said priorities include helping that neighborhood regain business that migrated to newer properties adjacent to the convention center during the past decade.
Another priority for fiscal 2015 is boosting the local overnight visitor count by capitalizing on the region’s recently rising roster of international direct flights. Since 2011, San Diego International Airport has seen the arrival of new direct daily services to London and Tokyo, with carriers also adding flights to Mexico and Canada.
Kapich said goals include boosting the local share of overnight visitors coming from overseas destinations, especially from China, which has a growing contingent of middle-class travelers. In 2013, California alone greeted 783,000 Chinese tourists who spent $2.2 billion in the state, according to Visit California, the state’s tourism agency. The number of Chinese visitors statewide is expected to rise 18.6 percent this year and 62 percent by 2016, the agency has projected.
Currently, 9 percent of San Diego’s overnight visitor base is from outside the U.S., Kapich said. By comparison, such visitors account for 21 percent in Anaheim, 22 percent in Los Angeles and 30 percent in San Francisco.
Funding for Marketing Returning
San Diego County is expected to finish 2014 with 33.6 million visitors, generating $8.8 billion in direct spending and filling 58,830 hotel rooms, according to researchers at A.D. Little Inc. and CIC Research Inc.
The local region greeted 32.8 million visitors during fiscal 2013, up 3.7 percent from the prior year, the Tourism Authority said. Tourism is San Diego County’s third-largest industry, after defense and tech-related manufacturing, with an estimated annual economic impact of $18.7 billion and employing about 165,000 people in the region.
Tourism Authority funding has nearly returned to fiscal 2012 levels, Terzi said, although the agency has not yet fully restaffed in the wake of layoffs enacted last summer after the city delayed distributing money collected from local hotels by the Tourism Marketing District. The district funds the bulk of the Tourism Authority’s budget.
Early in 2013, then-Mayor Bob Filner refused to sign legislation approving renewal of the marketing district, which had been approved earlier by the City Council. Filner forced a renegotiation of the agreement, including obtaining legal indemnification from local hotels in the event that the marketing district’s funding mechanism was invalidated by pending civil lawsuits.
With those issues essentially resolved, Terzi said the Tourism Authority is on track to receive about $24 million from the marketing district in fiscal 2015. The Tourism Authority employs 69, below the peak of 90 who worked there before last year’s marketing district disputes.
