Hahn Seeks Convention Bureau Cuts

Frustrated by slumping convention bookings, Los Angeles Mayor James K. Hahn is proposing to cut millions of dollars from the city’s Convention and Visitors Bureau, a step that agency officials say would eliminate nearly half the staff and force the closure of overseas offices.

Hahn said he is cutting the bureau’s $19.6-million budget in part to signal his “disappointment” over reports of wasteful spending and bonuses paid to bureau staff at a time when conventioneers are shunning Los Angeles.

The mayor’s budget for next year would take half the hotel bed tax revenue that now goes to the bureau -- about $7.5 million -- and divert it to the general fund.

“If they want to throw lavish parties to entice people to bring events to Los Angeles and it results in people coming to Los Angeles, we’d feel differently,” Hahn said in an interview. “But it seems to me they’re all show and no go. What we want to see is results, and that just hasn’t happened. And the infuriating thing is people were getting bonuses for signing up events that were canceled. And they didn’t return the bonuses.”

Cutbacks urged by the mayor would prove crippling, a bureau spokesman said. The portion of the 14% hotel tax set aside for the bureau covers salaries, overhead and core operating expenses that are crucial to promoting Los Angeles, said Michael Collins, executive vice president of the convention bureau.

He estimated that if the mayor’s plan were enacted, the bureau would lose 35 to 45 of its 90 employees. Offices in London and Tokyo would be closed. Some staff might be asked to work from home as a cost-saving measure.

“Our ability to do our job would literally be gutted,” Collins said. “Our ability to have a presence in [foreign] markets would be nonexistent.”

To stave off that prospect, Collins said, the bureau is talking with the mayor’s office about restoring funds. But in a tight budget year -- when trash-collection and sewer fees are being raised and road paving scaled back -- many other departments are also facing cuts.

In 2000-01, the convention center hosted 35 events that netted $123 million for the city in economic benefits. This year, the number of conventions is down to 16, netting $88 million.

Over the last two years, 19 conventions planned for Los Angeles were canceled, depriving the city of $46 million in economic benefits, according to figures provided by the bureau.

As booking agents spurned Los Angeles, the bureau was embarrassed by disclosures in The Times that staff members pocketed thousands of dollars in bonuses for conventions that ultimately fell through.

At the same time, to woo tour operators and others, the bureau paid for trips to the Wimbledon tennis championship, entertained at London’s Kensington Palace and hired Natalie Cole to sing at a dinner in Glasgow, Scotland.

“The only way to hopefully minimize these excesses is to cut the budget, because they apparently don’t have the will to replace any of these people,” said Aldwyn Hewitt, a former bureau vice president who left last year.

Hotel executives said they were divided over the mayor’s move -- happy to see a message delivered that the bureau’s performance is lagging, but worried that cuts may further damage a weakened tourism industry.

“The bureau has done an extreme disservice to the city for many, many years, and the city has failed to address the issues,” said Brian Fitzgerald, general manager of the Westin Bonaventure Hotel downtown. “But throwing the baby out with the bathwater doesn’t help anyone. My recommendation would be to make changes in the management, which brought us this difficulty, and keep the funding because the city needs it to be competitive.”

Bill Worcester, general manager of the Los Angeles Marriott Downtown, said, “I’ve been disappointed in a number of things that have happened in the bureau, but this is not the time to pull back in our investment in future bookings.”

Hahn said he is open to discussions about boosting funds for the bureau. But he said he must be convinced that the money is justified. Arts and cultural programs depend on the hotel tax, the mayor said. So when the bureau can’t book conventions, hotels stay empty, tax revenues drop and such programs suffer.

“I need to see that they have a different business plan -- a different way of doing business and whether they have real plans to bring events to L.A.,” Hahn said.

In a politicized budget debate where the City Council also plays an important role, the convention bureau may yet find a way to see its funding restored, some said.

“The bureau has a lot of chits out there,” Hewitt said.