For the San Diego region, 2016 marked a continuation of a general post-recession trend of rising hotel revenue, airport traffic, convention business and visits to local attractions. San Diego was still benefiting from a strong nationwide tourism economy, aided by low fuel prices and steady levels of confidence among traveling consumers and business meeting planners.
This was the year that two more global carriers – Germany’s Condor Airlines and Switzerland’s Edelweiss – added San Diego to their lists of U.S. cities getting direct flight services. Starting in May and June 2017, respectively, those carriers will join British Airways and Japan Airlines in connecting the local region directly to key overseas markets in Europe and Asia.
Also in 2016, local government officials took steps to deal with unwanted fallout from the rising use of popular short-term vacation rental sites, including Airbnb. Resisting a proposal to essentially ban home and room rentals in most of the city, the San Diego City Council opted instead to more stringently enforce current laws dealing with noise and other nuisances created by those temporary visitors.
Convention Center Upgrade
City officials also moved to obtain a state loan of up to $25.5 million, to deal with long overdue repairs and maintenance at the San Diego Convention Center. Still not known as 2016 concluded was how officials would undertake a future expansion of the convention center, deemed crucial to attracting and retaining large gatherings, led by Comic-Con International. Extra downtown convention space won’t be coming from a $1.8 billion stadium and convention facility proposed by the San Diego Chargers but soundly rejected by voters.
Looking ahead, the region in 2017 should see the results of a mini-boom in downtown’s high-end luxury hotel development, with the opening of Pendry San Diego in the Gaslamp Quarter, continued construction of an InterContinental Hotel on the former Lane Field site, and plans moving forward on an East Village mixed-use project set to be anchored by a Ritz-Carlton hotel.
Joe Terzi, president and CEO of the San Diego Tourism Authority, said he is optimistic that city, port district, hotel and tourism leaders can come together on a potential solution for expanding the convention center, after a prior funding mechanism was struck down by a court in 2014. The answer may be another trip to the ballot box, where voters could be asked to raise hotel or other taxes to fund a center expansion – possibly in 2018 – though that would require the same two-thirds approval that the Chargers’ measure failed to obtain.
Booking Optimism
Barring a major jolt to the national economy, Terzi said the region in 2017 has a good chance of continuing – if not topping – recent annual gains in advance convention and hotel bookings, along with the overall visitor tally that topped 34 million in the past year. To aid that effort, local officials will continue efforts to bring in a global air carrier to provide long-sought direct services to cities in China.
“We are pretty bullish on the overall economy, and we feel that the new U.S. presidential administration understands the importance of tourism,” Terzi said.
Convention center operators are also counting on the ever-changing health care arena to keep the waterfront facility busy with gatherings in 2017 and beyond. Among all sectors, the medical industry has long held the largest number of conventions in San Diego – 14 in the past fiscal year, with 21 expected in the coming year.
“Medical professionals want to know how the latest scientific breakthroughs, and also the potential government insurance reforms, are impacting their own businesses and practices,” said Clifford “Rip” Rippetoe, president and CEO of the San Diego Convention Center Corp.
CONVENTIONS AND TOURISM
No. of local jobs: 180,900
Average annual salary: $22,700
Economic Impact (2015): $18.3 billion
Top three employers (2015 jobs): SeaWorld San Diego (4,330); Barona Resort & Casino (3,095); San Diego Zoo Global (2,000)
Sources: San Diego Tourism Authority, San Diego Regional EDC, SDBJ Book of Lists 2016
