Mayor London Breed’s budget includes proposed subsidies that would reduce the cost of renting Moscone Center. <ins>(Kevin N. Hume/The Examiner)</ins>

Mayor London Breed’s budget includes proposed subsidies that would reduce the cost of renting Moscone Center. (Kevin N. Hume/The Examiner)

Moscone Center is ready to welcome back conventions: But will the crowds return?

Moscone Center was essential to San Francisco’s COVID-19 strategy, serving as a mass vaccination site where thousands were inoculated against the virus. For its next act, The City’s convention center is hoping to welcome back an army of returning conventioneers.

But will anyone show up?

Officials and tourism industry experts alike say the return of large events to San Francisco is crucial to economic recovery and its elemental personality as a city.

“It’s really important for all of us to realize that those visitors are helping to support our quality of life,” Joe D’Alessandro, CEO of San Francisco Travel, said of convention attendees. “Visitors here don’t go to casinos and theme parks, they go to restaurants in our neighborhoods. That’s what San Francisco’s attractiveness is all about.”

Before the pandemic, San Francisco’s convention industry accounted for $4.9 billion of overall economic impact, nearly $500 million in tax revenue and over 39,000 jobs, according to a city report released in October 2020. Moscone Center alone accounted for roughly 20 percent of The City’s entire $10 billion tourism sector.

But the shelter-in-place order ground these large events to a halt.

In a typical year, Moscone would host an average of 40 to 60 conventions, bringing in roughly $1.9 billion in direct spending. Last year, that dropped to $275 million.

It hasn’t opened its doors to a convention or conference since March 2020. The vaccination efforts at Moscone ended in May.

The first major event to return will be Dreamforce this September, the annual gathering hosted by San Francisco tech company Salesforce. Ordinarily, it brings in over 140,000 guests. This year, due to capacity constraints, it’s expected to host about 5,000 attendees with required vaccinations.

“San Francisco is Salesforce’s hometown — we can’t imagine Dreamforce without it,” said Karin Flores, senior vice president of Strategic Events at Salesforce.

Many are banking on other organizations feeling a similar fondness for The City as they decide where to host their post-pandemic conventions, but San Francisco must compete with locations nationwide billing themselves as cheaper alternatives with fewer COVID-related restrictions.

Already, 30 conventions for 2021 have canceled their San Francisco events, representing an estimated $357 million in economic impact, according to D’Alessandro.

Some are going to hybrid or entirely virtual models, such as the 16,000-person American College of Rheumatology conference, which pulled out for its 2021 date citing uncertainty around international travel restrictions.

Other have said they plan to move to new cities, even before the pandemic, including Oracle’s OpenWorld, or that they will only come to San Francisco on a rotating basis, such as the Convening Leaders conference hosted by event organizer industry group PCMA .

Convention attendees invigorate the economies of key commercial corridors, bolstering the bottom lines of restaurants, hotels, and cultural institutions.

On average, a convention visitor in 2019 spent $584.32 per day, according to SF Travel’s year-end report.

Last year, that dropped to $182.26 per day, and they accounted for just 121,000 total hotel room nights during the same period, down 87.5 percent from the year prior.

Mayor London Breed’s budget includes proposed subsidies that would reduce the cost of renting Moscone Center. (Kevin N. Hume/The Examiner)

Mayor London Breed’s budget includes proposed subsidies that would reduce the cost of renting Moscone Center. (Kevin N. Hume/The Examiner)

Their return has the potential to reinvigorate businesses, many of which took years, maybe decades to build, while their departure has the potential to threaten these same businesses’ ability to survive.

“These are generational businesses that have the reputation that draw people from around the world,” said Rodney Fong, CEO of the San Francisco Chamber of Commerce. “ There’s the economic piece of recovery for conventions and tourism, but then there’s also a human side.”

Even before the pandemic, the future of the Moscone Convention Center was uncertain.

A Civil Grand Jury report from October 2020 concluded San Francisco’s flagship event space could lose business in coming years due to “street blight” and steep costs.

These losses aren’t just theoretical.

In 2019 alone, 35 future events at Moscone Center were canceled, the report stated. It went on to say visitors often express feeling “insecure and perturbed,” so much so that it offsets advantages offered by The City such as easy airport access, stunning scenery and cultural opportunities.

The City hopes to remedy its reputation as an exceedingly expensive place to do business.

Mayor London Breed’s budget calls for $4.6 million in subsidies over the next two years to reduce the cost of renting Moscone Center, an attempt to entice companies to host their conventions at the The City’s hallmark event space.

The proposal would dedicate $2.6 million in the upcoming fiscal year, which starts July 1, and $2 million in the following toward cutting costs for large event hosts.

This idea was put forth in last year’s Civil Grand Jury report as a recommendation for how to mitigate potential losses Moscone Center. It also recommended the addition of more beat patrol officers to the four-block radius around the center during events and the creation of a task force to address security and cleanliness concerns.

At the time, city officials, including Breed’s office, said none of the recommendations would be implemented because they were not “warranted or reasonable.”

Addressing the public’s perception of unclean streets and poor safety might be a more difficult task than lowering prices.

Yet full recovery will be impossible without residents and tourists feeling comfortable and safe navigating The City, Fong says.

Though it’s hard to know how many people are experiencing homelessness, the most recent point-in-time count in 2019 tallied more than 8,000 individuals, up more than 30 percent from two years before.

Many believe the number of people relying on homelessness services, or experiencing housing insecurity, could have increased during the pandemic, even as The City invested in emergency hotel placements and other programs.

Breed’s budget also calls for $1 billion in new funding to combat the challenge of homelessness over the next two years, an addition to roughly $300 million spent annually to address the issue.

Also, she recently unveiled plans to allocate $9.5 million to revitalize downtown neighborhoods, put approximately 50 community ambassadors at highly trafficked tourist locations, beautify the area and host events.

Numerous tourism professionals described these efforts as paramount to San Francisco’s long-term recovery, citing repeated concerns from visitors and residents alike over safety and cleanliness.

This pivotal moment in time also allows San Francisco the opportunity to recast itself more broadly as it emerges from this pandemic, some say.

Rather than rushing to recover to how it was, Fong believes The City should take a beat to think about what it wants to be, and consider more transformational approaches to its future, such as reducing the cost of housing to support workers, improving transit access and lowering the cost of doing business.

“San Francisco has a great opportunity to not just bounce back, but be much greater than we were before,” he said. “The world is watching us either go up or down. Eyes are on us. So, what’s our move?”

cgraf@sfexaminer.com

san francisco newstourism

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