Convention Bureau Called to Explain Bookings, Bonuses

Leaders of a city panel on Wednesday called for reform of the way the Los Angeles convention bureau books major events and pays bonuses to its sales staff and executives.

The changes were proposed by members of the city Convention Center Commission as City Controller Laura Chick announced she is auditing the Los Angeles Convention & Visitors Bureau.

The bureau, which is a nonprofit corporation independent of city government, books events at the convention center and promotes tourism for Los Angeles under a city contract that has paid it up to $17.5 million in city hotel tax money annually.

The city commission held a sometimes contentious, nearly three-hour meeting Wednesday with bureau President George Kirkland, demanding an explanation of the cancellation of 42 conventions in the last three years.

Kirkland told the panel that the lack of hotels near the convention center has played a major role in the high cancellation rate, and is partly responsible for the low number of new bookings this year.

“Our biggest challenge is our hotel inventory being sufficient enough,” Kirkland said.

But commissioners questioned whether Kirkland’s bureau has adjusted its marketing plan to address the crisis.

“I was highly disappointed they did not have a new marketing strategy,” said commission President Peter Zen, owner of Westin Bonaventure Hotel.

Zen ended the meeting telling Kirkland they should meet again “to discuss your marketing strategy when you have one.”

Kirkland said the bureau has been studying 30 competing bureaus to see if there are ways to win back business, and his sales staff has logged thousands of additional calls to potential clients to drum up new sales leads.

Zen and commission Vice President Lesa Slaughter said they are concerned that the bureau pays bonuses to its salespeople and executives if a convention organizer signs a nonbinding letter saying his company or group plans to hold an event in Los Angeles.

They cited a report in The Times that $225,000 in bonuses were paid during one two-year period, despite later cancellation of 20 of the conventions.

Kirkland told the commission that although sales personnel do not pay back bonuses if conventions later cancel, the lost bookings are counted against incentive goals for future years.

Slaughter and Zen said bureau practices and policies should be changed to require convention organizers to sign a legally binding commitment to the city or its hotels before a convention is considered “definite” for purposes of paying bonuses.

“I absolutely think that there is room for change,” said Slaughter, who was chief of staff to former Mayor Richard Riordan.

Bureau Chairman Alan I. Rothenberg defended the way the bureau designates a convention booking as “definite,” saying it is standard in the industry.

Meanwhile, Chick said her audit, requested by Mayor James K. Hahn, will determine whether city funds given to the bureau are being properly spent and yielding good results.

“We want to see how they measure up with performance,” she said. “We want to look at the city’s monetary contribution and determine whether it is being used in conformance with the contract.”

Chick said the audit also will examine the method for determining bonuses.

“I’d be interested to understand why aren’t the bonuses paid after the convention takes place,” she said. “I think there is room for improvement. They have taken some steps, but the audit is going to take a look at whether they have gone far enough.”