Fee Hikes and Exclusives Scrapped in San Diego after Industry Backlash

May 27, 2014
Fee Hikes and Exclusives Scrapped in San Diego after Industry Backlash alt

Less than a week after the San Diego Convention Center Corporation sent a letter to all of its clients announcing the implementation of not only fee hikes for shows coming into the center after July 1, but also exclusive contracts for security and event staffing, the changes were put on hold after swift industry backlash.

Steven Johnson, vice president of public affairs for SDCCC, said they had extensive feedback from their clients expressing concern after the letter was sent.

“The decision to suspend the changes was a result of the strong reaction from our clients and our desire to be responsive to their concerns,” he added.

The clients were told that over the last year, the City of San Diego had directed SDCCC to reduce costs and identify revenues to become more financially independent.

Johnson said of proposed changes; “The Corporation has been asked by the City of San Diego to identify new revenues to help address deferred capital, operations and maintenance as part of a 5-year plan.  The fees and staffing changes were adopted by the Board of the Corporation at the same time additional cuts in staffing were made.”

The staff reductions, combined with the new fees/staffing changes, were part of the funding plan identified by the Corporation, he added.

Here are the changes that were proposed for shows coming into the San Diego CC:

-          $5 facility improvement fee for each 10 x 10 equivalent booth ($5/100 square feet equivalent) sold to an exhibitor by show management.

-          A fee of $1 per square foot will be assessed on any paid advertising deployed in the lobby of the convention center by shows held in the facility. For example, an escalator wrap is approximately 200 feet so the fee would equate to $200. 

-          Shows coming into the center after June 1 would be required to utilize the center’s security staff.

-          Shows coming into the center after June 1 would be required to utilize the center’s event staff.

Johnson said that the center’s clients were not consulted before the changes were announced.

One of the strongest statements decrying the proposed changes came from the Society of Independent Show Organizers when its executive director, Lew Shomer, and chairman, Rick McConnell, sent a letter to San Diego Mayor Kevin Faulconer.

Among other things, the SISO letter said: “It is obvious that the Convention Center wants to deter conventions and exhibitions from coming to San Diego, which I am sure you will agree will result in significant economic losses to the Center and to the City of San Diego. Some of my members have already reacted to this letter and are considering moving their shows to more friendly venues.”

In addition, the SISO letter warned about the pitfalls of the proposed exclusives for security and event staffing: “These exclusive arrangements take away all of the organizer’s rights to protect their customers by forcing them to use agents that they might not necessarily consider competent or cost efficient.”

Shomer and McConnell suggested a meeting with them, as well as the heads of the International Association of Exhibitions and Events and Exhibition Services & Contractors Association.

David Dubois, president and CEO of IAEE, conceded that, while every convention center and hotel who hosts exhibitions and events are allowed to make their own policies and pricing strategies,  he added, “I do suggest that they be reminded that show organizers and event planners have a lot of facility choices. Additional expenses could deter clients from choosing their facilities due to perceived or real budget ramifications.”

San Diego had six shows on the 2013 TSNN Top 250 Trade Show list, with the largest being the Golf Industry Show.

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