Big Revenue Loss Tied to Delay in Opening Convention Center

San Diego County could lose as much as $257 million in hotel- and restaurant-generated revenues between 1988 and 1992 if financing and construction problems delay the convention center’s opening until 1991, according to a study released Wednesday.

The real cost could reach $772 million, however, because those convention-related dollars change hands “six or seven times” before leaving the county, according to Bruce Goodwin, a senior principal in the San Diego office of Laventhol & Horwath, the national accounting firm that conducted the study.

Although the San Diego Convention Center Corp. hopes to open its doors before its latest predicted opening date of 1990, Goodwin suggested that “it’s conceivable that there should be concern about a 1991 (opening).”

A 1991 opening would have a “quite dramatic impact” on hotel occupancy rates, food sales and other revenue sources at existing and planned hotels in the county, Goodwin suggested Wednesday at a Chamber of Commerce-sponsored luncheon.

San Diego’s inventory of 28,000 hotel rooms this year have reported an occupancy rate of about about 67%, running counter to a declining national trend. During the 1990s, the ability to maintain a healthy occupancy rate could be tested because the county’s supply of rooms could grow by about 50% to about 44,000, Goodwin predicted.

If the center opening is delayed until 1991, county occupancy rates probably will be dragged down, Goodwin warned. Especially hard hit will be existing and planned hotels in the downtown area, where occupancy rates could fall to as low as 51% and likely would not return to previous levels during the early 1990s, he said.

Both the $257 million in lost revenues and the lower occupancy rates, however, are contingent upon all of the proposed rooms actually being added. The direct and indirect economic losses were based on economic gains that might have been registered had the center opened as planned in 1988, Goodwin said.

The later-than-anticipated center opening could cast a shadow on several proposed hotels around the county, Goodwin pointed out. In the past, hotel companies and investors have been attracted by the San Diego market’s ability to add thousands of hotel rooms and maintain healthy occupancy rates, he added.

However, convention center delays have caused “concern,” especially among out-of-town investors, Goodwin said.

Those out-of-town investors were attracted to the county because of the convention center, increased tourism, and business-related travel in San Diego’s defense sector and high-tech businesses, he said.