New Cancellations Put Dent in L.A.’s Convention Hopes

By ANDY FIXMER

Staff Reporter

In another indication of the city’s continuing struggles at attracting convention business, seven meetings booked for the Los Angeles Convention Center over the next six years and accounting for more than 100,000 room nights for area hotels have been yanked since April, according to tourism officials.

The reasons for the cancellations include anticipated poor attendance, better facilities elsewhere, a general dislike of L.A. and, perhaps most compelling for local tourism officials, the lack of a nearby convention center hotel.

Los Angeles has been losing convention activity since its peak in 2000, when there were 29 meetings, including the Democratic National Convention, which generated 390,500 room nights.

Last year, the city hosted 27 conventions that generated 195,853 room nights. With the July cancellation of NeoCon West, originally slated for next March, there are just 14 conventions booked in 2004.

LA Inc. officials are using the decline to renew their call for a convention center hotel, arguing that the city is hamstrung in its competition with other West Coast cities that have thousands of hotel rooms and hundreds of restaurants and shops nearby their convention centers.

“Without a convention center hotel, we are always going to be hampered,” said Mike Collins, executive vice president at LA Inc., the visitors and convention bureau.

Both software company SCT and the American Federation of Teachers cancelled their conventions over concerns that downtown did not have enough hotel rooms.

SCT’s convention, which would have generated nearly 18,500 room nights, was contingent upon a new convention center hotel being functional by the time of its planned 2007 meeting.

Last month, when it became clear that goal would not be met, SCT cancelled. The company still plans to hold its 2012 or 2013 convention in Los Angeles if a convention center hotel is built.

While some of the groups canceling cited the lack of nearby hotel rooms, it was not the sole reason.

The American Pharmacists Association cancelled its 2008 convention on July 8 after a survey of its membership found “the ratings for Los Angeles were not positive,” according to its cancellation letter to LA Inc.

The American Academy of Otolaryngology (head and neck surgeons) called off its 2009 convention after holding last year’s meeting in San Diego, which the organization’s meeting planner, Lauren Kramer-Whelan, described as “simply hard to beat” in its cancellation notice.

“These days you don’t need to have Disneyland next door but you need some shopping and some really good restaurants nearby. L.A. doesn’t have that,” said Brian Stevens, president and chief executive of Los Angeles-based meeting planner ConferenceDirect.

Also, many associations depend on attendance at conventions for the bulk of their annual revenues and won’t risk holding meetings in cities where its members may not want to travel.

“I don’t think the smog is any better in Anaheim, or crime is that much lower in San Francisco or that there are less homeless in San Diego,” Stevens said. “It’s more about what are we going to do once we get there and will our attendees have a good time once we’re there. In Los Angeles it’s harder to answer that question.”

Strength elsewhere

Perhaps the biggest blow came when the American Society of Association Executives, a convention of convention planners, cancelled its 2005 meeting here.

The group decided to hold its annual meeting in Nashville, Tenn., although it said it may look to L.A. again for its 2010 meeting.

“It’s the convention of all conventions, so to speak,” said Fred Sainz, spokesman for the San Diego Convention Center. “It’s thought to be the biggest marketing opportunity you could ever have for your city. It’s absolutely unprecedented that ASAE would take a convention away from a city.”

Sainz could be in a position to gloat.

Over the last year, not one convention was cancelled in San Diego, Anaheim, San Francisco or Las Vegas markets with which Los Angeles is in direct competition. Indeed, those cities’ convention centers are reporting record years.

The Anaheim Convention Center hosted 81 events generating 530,000 room nights in the fiscal year ended June 30, while the convention centers in San Diego and San Francisco both set records for room nights in that period.

San Diego hosted 65 conventions that generated 800,000 room nights, and San Francisco’s Moscone Convention Center hosted 50 conventions. While its numbers haven’t been tabulated yet, it’s believed the convention center generated 925,000 room nights.

An addition to the Moscone Convention Center opened in June, increasing the size of the building by a third. The added space is expected to generate an additional 100,000 room nights a year, according to Mark Theis, vice president of the convention division of the San Francisco Convention and Visitors Bureau.

“It’s another nail in the coffin,” he said. “Now more than ever L.A. is feeling the pinch from us. It’s a competitive field out there and everybody is fighting a lot harder for the remaining business.”

Renewed evidence

LA Inc. officials argue that a 1,200-room convention hotel funded in part by public subsidies would attract larger groups because most could stay within walking distance of the event.

But lawsuits have so far blocked construction, and political support for using public subsidies is slim at best. Still, the bureau won a victory last week when an L.A. Superior Court judge reversed a previous ruling that blocked the public funding mechanism for the hotel.

In the revised ruling, Judge James Chalfant said the city could proceed with its plans for a convention center hotel if tighter funding controls were put into place. In response, members of the City Attorney’s office met with City Council members to plot their strategy.

Downtown hotels depend upon citywide conventions and tourism from Asia to generate 30 percent to 40 percent of their room nights in any given year, according to PKF Consulting, which tracks hotel trends.

“This is a big, big piece of the market downtown,” said James Stockdale, a PKF consultant. “These two segments are huge, and when they perform poorly downtown loses a lot of room nights.”

The average daily room rate at large downtown hotels in June was $118, off nearly 17 percent from June 2002, when rooms fetched $142 a night. One explanation for the precipitous drop: there were no conventions downtown in June compared to three in the year earlier.

If there is an upside to the weak activity, it is that the Convention Center has been able to sign two groups that had cancelled in other cities and needed a replacement location.

SIGGRAPH, a meeting of computer graphics artists, cancelled its 2004 convention in Atlanta and moved it to Los Angeles to be closer to where most of its members live and work. The group is expected to generate 28,000 room nights, according to LA Inc.

And the Optical Society of America moved its 2004 convention from New Orleans to Los Angeles, where it’s projected to generate 33,000 room nights.

Still, convention sales directors in other cities said until more hotel rooms are built in near the convention center, L.A. won’t be able to compete.