Interview with CEO Joe Terzi
Morgan M. Hurley | Downtown Editor
The San Diego Convention and Visitor’s Bureau (known as “ConVis”) is a 501 (c) 6 non-profit organization established in 1954 to foster and manage tourism for the City of San Diego. They were funded directly by the City through the Transient Occupancy Tax (TOT) until 2008, when the financial crises of the time sapped more and more of that money to pay infrastructure bills.
In 2008 the City created the Tourism Marketing District (TMD) and established a two-percent assessment on transient occupancy not associated with the tax, which not only guaranteed a funding stream for the struggling non-profit, it also allowed ConVis to operate completely independent of the City for the first time since its inception.
In 2009, longtime local resident and hospitality titan Joe Terzi took the helm, ushering in a new age for the Bureau. Under his leadership, and with a locked-in assessment and the added income of annual membership dues, the Bureau has thrived and is currently operating within a $29 million budget.
This year, Terzi is rolling out a name change for the Bureau and Downtown News Editor Morgan M. Hurley interviewed him to learn more.
(Downtown News) I understand ConVis recently changed to San Diego Tourism Authority (SDTA). Tell me what this means to the organization and to San Diego.
(Joe Terzi) We’ve contemplated this over the last year or so, and really it has a lot to do with what we had prior to the change. San Diego Convention and Visitor’s Bureau is a long name and really is an old name that has existed in the industry for a lot of years.
I’ve looked at a lot of destination marketing companies over the years, which is the pot we really fall into, and looked at name changes that relate more general to the tourism economy. For us it was first of all shortening the name – there had been a lot of confusion for a while between what we do and what the actual Convention Center does – the building. We would always get, “I was just at the car show and I really liked it.” Well, we don’t do the car show. So we wanted to clarify who we were and at the same time … tourism is the international common word that relates to what organizations do to promote their destinations.
So for us it was shortening the name, it was getting the name tourism in there, and we use the name authority because what we want to be known as – is not necessarily authority meaning a public entity because we’re not – the authority means we’re the authority on everything that relates to tourism in the region.
We are the official destination marketing organization and we want to be seen as the authority in anything that has to do with tourism in San Diego.
So I said simple change, cleaner, more contemporary, more international in recognition and one of the things that we’re committed to, one of our key objectives has been over the last couple years and will continue to be, is to develop a more international presence for San Diego.
(DTN) Looking back at 2012, what were some of the high points of San Diego tourism?
(JT) In 2012 we continued to rebound, we saw about an eight percent increase in what we as an industry use to measure performance and that’s REVPAR (revenue per available room), which is a combination of occupancy increases and average rate increases.
So we continue to see significant increase at about eight percent and that was a little stronger than we expected in ’12, and citywide occupancy is now above the 70 percent mark, which is [healthier] than … a few years ago, so we are on a strong recovery curve. We still expect 2013 to be a good year but we are projecting anywhere between a 4 and 6 percent increase, so again continued improvement over 2012. We’re optimistic but cautious.
We’ve [also] seen a significant increase in our marketing funding. We have an overall budget of about $28 million – the majority of which gets spent in consumer advertising and marketing. We are very fortunate … that we have funding necessary to go out and be competitive in the tourism space.
Two of the things we are most proud over the last couple years is supporting and helping to get the [direct] British Airways (BA) flight which started a year and a half ago in the summer and then the recent Japan Airlines (JA) flight, direct from Tokyo to San Diego, that just started December 2, 2012. We’ve been integrally involved in getting those flights to San Diego and we’re working hard [to give] San Diego more of a presence internationally.
We’ve continued to enjoy success in the traditional markets – Los Angeles, Phoenix, San Francisco, Sacramento – the West Coast markets have always been very strong for San Diego, obviously because they are close in and there is a huge population base. This last year we branched out and spent advertising dollars in Denver and Salt Lake because we have good air service in those destinations and we’ve seen some good improvement out of those markets.
The BA flight … has also been very successful and opened up the door a little bit more to some international traffic and we’ve benefitted greatly by that and we expect to see the same thing with the JA flight.
And we’ve had some domestic air service improvement, too, year over year, so one of the key objectives we have is to continue to work with the airport authority – that’s doing a great job not just in [expanding] the airport but in continuing to attract new air service into San Diego – and it’s critical that we continue to be competitive in that area.
(DTN) So the Tourism Authority, Airport Authority, and Port Authority work very closely together?
(JT) Yes, absolutely, and another partner really is EDC (economic development corporation). A good example is, we’re working hard to get people from Japan out of Tokyo to get on the plane and come over here, and that’s my role, but we also have to get San Diegans and San Diego companies to use that service and to make it successful to travel to Asia. So we get a lot of help and support from the economic development people who work to get San Diego-based travel onto that flight to make sure it is full.
(DTN) Tell me more about your “meeting planners.”
(JT) have two major components when it comes to meetings in San Diego. One is individual hotel meetings – not large citywide, but small meetings to midsize to large meetings that fit into an individual hotel – we book over 700,000 rooms a year of meetings into the San Diego hotel community. I have a staff of 18 sales people around the country that are just out there trying to find people and events and convince them come to San Diego, so that is a big component of what we do.
Then there is the Convention Center – the large citywide conventions that we are now responsible for booking, as well – and that number is somewhere about 850,000 rooms that we will book in a year for people coming to San Diego in the future.
So a major component of what we do is booking group meetings whether they be small individual property meetings to large citywide conferences like ComicCon and some of the other well known ones that we do.
(DTN) Is it fee for service?
(JT) Nope. We’re funded by the TMD assessment principally and then through membership. So any of the services we provide are supported by either [of those].
(DTN) San Diego is undergoing a lot of changes, what are you most exicted about?
(JT) The Convention Center expansion, of course! Projections are that it will allow us to book somewhere between 300,000 – 400,000 more room nights a year. So let’s say we book 800,000 room nights, with the new building, that number can move to a million-two or a million-three. The value of that to the economic stability and growth of San Diego can’t be understated and certainly for the Downtown community, from a retail / restaurant / anything else [perspective], all of those establishments benefit greatly from the activity Downtown.
So that is the number one objective from our standpoint, but I also can tell you that everything else that is happening adds to the attractiveness of the destination.
The North Embarcadero work that’s being done along Harbor Drive and the County work that is being done adjacent to it, that’s long overdue. I think unfortunately, it should be the front door to San Diego and it really is not very attractive right now, but once it gets finished, its going to make a major difference in the Downtown community being able connect almost all the way to the airport, down through the waterfront all the way past the Convention Center and down south. It is fitting for the destination we have.
Regarding the stadium – first of all, it would be a travesty if the Chargers leave San Diego, but personally I am not sure why we couldn’t renovate the current stadium … think about New Orleans after Katrina. They were going to have to tear that building down but they put a lot less money into it than they would have to build a new stadium and its fine.
I would love to see [our stadium] Downtown, because selfishly it continues to make Downtown a more attractive place and if it were a multi-use entertainment facility not just eight or ten football games per year … could it get done? Yes, but it should be done in a way that it has more value than just to support a football team. It should be used for other things that draw people into the Downtown community … used more effectively as a driver of economic value for the community.
I’m on the Centennial committee so I’m very positive about that, [too], but we’ve got a lot of work to do. We’re now kind of in the concept stages and hoping we can raise the support necessary to really put on a world-class event starting on Dec, 31, 2014 or Jan. 1, 2015, all the way through the year – and have this be as impactful as the original event was in 1915.
A future issue will address membership and its upcoming infrastructure changes. To learn more about the San Diego Tourism Authority (SDTA) visit their website at sandiego.org, follow them on twitter and Facebook at @visitsandiego.