Center Offers Mixed Plate So Far
Although the downtown restaurant industry has been licking its chops in anticipation of extra business from the newly opened San Diego Convention Center, industry analysts believe the fate of most restaurants will be determined by how well they attract local patrons.
Observers say it is too early to know how the Convention Center will affect the restaurant industry. The center’s first two months of business have elicited mixed reviews from local restaurateurs.
The opening of the Convention Center has had “a positive effect, and most restaurateurs feel it’s doing them some good,” said Paul McIntyre, executive director of the San Diego Restaurant Assn. “But, when you get down to asking for numbers, the reviews are too mixed to put a count on it. In the opinion of many restaurateurs, there has been too much anticipation of how much business will be provided by the Convention Center and how many restaurants can be supported by it.”
Some restaurateurs have noted an increase in business during some of the recently scheduled trade shows and conventions, which have attracted an estimated 50,000 out-of-town visitors since it opened in early January.
“Since the opening, business has been exceptional,” said Salvatore Gangale owner of Salvatore’s, an Italian restaurant that opened more than two years ago on Front Street in downtown San Diego. Gangale said business was so good during one convention last week that he ran out of tables and had to turn away patrons.
But not every restaurant can expect to benefit equally from every convention, experts say. The style, tastes and income level of Convention Center visitors will determine which restaurants fill up and which close early.
Lubach’s, an upscale, continental-style restaurant on North Harbor Drive, seated many conventioneers in mid-February during a convention for the National Assn. of Secondary School Principals, but it didn’t serve a single patron from the Action Sports Retailer trade show two weeks earlier.
“Not every type of group is going to be my type of clientele,” said Bob Lubach, who now runs the restaurant his father opened 34 years ago. “You’re not going to generate revenue out of every group that comes to San Diego.”
Although analysts say restaurants as far away as University City might attract Convention Center business, the center will have the biggest impact on the downtown Gaslamp Quarter, which has been the focus of intense redevelopment during the past few years.
Since 1986, the number of Gaslamp Quarter eateries, ranging from fast-food outlets to trendy full-service restaurants, has nearly doubled to 50, said Louise Miesfeld, marketing director of the Gaslamp Quarter Merchants Assn. During a one-week period last December, four new restaurants opened in the Gaslamp.
The openings have been exciting to local palates in search of exotic tastes, but they have also been troubling to established restaurateurs competing for a limited number of patrons.
“The perception I have from the restaurant people this year is that this has been a tough year in the restaurant business because of the tremendous growth in the restaurant industry,” said San Diego Convention & Visitors Bureau spokesman Al Reese. “The growth in restaurants has been pretty rapid, and more rapid than the growth in visitors this year. There just hasn’t been enough . . . growth in patronage.”
That conclusion is supported in a study released last week by the accounting and consulting firm of Laventhol & Horwath. According to the study, while food and beverage sales in restaurants throughout the city of San Diego increased 9% between 1987 and 1988, average sales per outlet increased only 3% over the same period.
“The bottom line is sales per outlet is good, but it hasn’t grown a lot more than the inflation rate,” said Todd Wynne-Parry, a restaurant and food service consultant for Laventhol & Horwath. “But, when we get information from 1988 to 1989, I think we’ll see strong growth.”
Restaurateurs who want to make the most of Convention Center traffic can pay a fee to advertise on a classy restaurant kiosk set up at the entrance to the center. Reidy O’Neil’s, a new restaurant and bar in the heart of the Gaslamp, is among more than 50 restaurants that so far have taken advantage of the kiosk. Larry Moss, the restaurant’s managing partner, said business booms when a convention is in town.
Still, the Gaslamp’s future won’t be determined solely by the Convention Center, experts say. Equally important are redevelopment efforts that observers believe will increase the downtown population and turn the area into a bustling nighttime entertainment center rivaling New Orleans’ French Quarter.
However, the financial health of downtown businesses could be hurt by poor lighting and state laws that restrict amplified music and the amount of alcohol revenue a downtown restaurant can earn, said Michael McDade, a San Diego attorney who chairs the Gaslamp Quarter Council, a merchant planning group.
Downtown restaurateurs have complained that the music ordinances, which cause problems for establishments with entertainment, interfere with their ability to attract patrons. In December, city officials agreed to issue special permits to downtown restaurants that hoped to circumvent an ordinance prohibiting them from serving more alcohol than food. But the state Alcoholic Beverage Control Department has been citing some restaurateurs for violating the music regulations.
Still, most restaurateurs who opened their doors before the restrictions were lifted and who struggled to pay their bills while the Convention Center was being built remain optimistic that the center will attract patrons to the Gaslamp Quarter and eventually boost business.
“I think everybody realizes that it’s not a gravy train, but from what I’ve seen so far, it’s going to be a positive,” said Chuck Kovar, co-owner of 2 1/2-year-old Cabo Cabo Grill and Hotel Bar downtown. “You still have to be good. You still have to show up at work and do a good job. Reputation is something you have to earn and keep. . . . I don’t think the Convention Center is a quick fix for a bad operator.”
