LA City Tourism Department Executive Director Doane Liu on Convention Center Expansion & Investments in Tourism Infrastructure

Doane, it has been almost 2 years since we last interviewed you as the Executive Director of the City Tourism Department (CTD) and much has happened since. Let’s start with the LA City Council's recent action re the long-anticipated expansion and modernization of the LA Convention Center. Give us a sense of what’s being planned and why Council support is important.

The City Council, taking a step toward final approval, approved funding to get us through the next two months. In that time, we’ll finalize a construction schedule, cost, and most importantly, a public-private partnership agreement with a joint venture of AEG and the Plenary Group. These things should have been done by now, but for a myriad of reasons, they're almost done. One key instruction from the City Council was to try to reduce the annual payment—essentially, the mortgage—on the Convention Center.

According to the City Administrative Officer (CAO), there’s about $200 million in annual debt service. But unlike most infrastructure projects, the Convention Center generates revenue—about $155 million a year. That leaves a gap of about $45 million, which is roughly what the General Fund had been paying annually on the last bond issue for the Convention Center for 30 years, up until 2022. The idea was to keep that payment level steady. My dad used to say, when you pay off your car, keep making the same payments to your savings account or for your next car. Same thinking here: the city’s already used to paying $45 million a year, so let’s keep it at that level.

But the budget crisis and wildfires have shifted the Council's mindset. Even though many of us believe that the Convention Center and the visitation it attracts are well worth the $45 million a year, the Council wants us to see if we can bring that number down.

There are only two ways to do that: one is to reduce the cost of the building, which is currently about $2.2 billion. That figure includes a lot of additions that we think are negotiable, and I believe we can bring that number down. The other way is to look at revenue. We’re evaluating whether the current projections are accurate and exploring ways to increase revenue.

For example, we haven’t raised our rental rates at the Convention Center since 2006 because the building hasn’t been in great shape. Also, we offer a generous discount to citywide conventions, giving them a discount equivalent to the TOT (transient occupancy tax) their event generates. That’s not typical in other cities.

There's a good opportunity to reduce that discount from as much as 100% to something closer to 50%, which is the market rate. Or even lower. And when we’re brand new—essentially the “new kid on the block”—we may not even need to offer any discount at all. Our size and modernized facilities could be a real draw. We’re working hard with the CAO’s office, the Bureau of Engineering, and our operations and management team to find ways to lower construction costs and increase revenues.

Why does LA’s Convention Center need any programmatic upgrades; and what exactly is being proposed?

Quite simply, the biggest challenge in attracting conventions is the amount of contiguous space we have. We have two halls—one is 350,000 square feet and the other is 250,000—separated by Pico Boulevard. If your convention needs more than 350,000 square feet, it’s hard to convince you to come to LA because your event would have to be split across two halls. When we compete with larger convention centers around the country, we’re often not even considered. We don’t even receive RFPs from the top 10% of conventions based on size. In terms of capacity, we’re currently ranked 22nd in the country, tied with Kansas City.

The biggest conventions can’t even consider LA, even though their board members, attendees, and exhibitors would love to be here. That’s the primary reason for this expansion.

The other reason is hotel development. Over a dozen hotel projects in downtown LA have been approved or are close to approval. They're just waiting for this expansion to become real. The entitlement work is done, some financing is in place, but it’s not financially feasible for developers until they know the Convention Center will expand. It’s a bit of a chicken-and-egg situation—more hotels bring more conventions, and more conventions justify more hotels.  And more hotels, of course, means more jobs and more city tax revenue.

What will the new convention center footprint include and will it cover Pico Boulevard?

Yes. Right now, we have the West Hall and the South Hall, with Pico running between them. The plan is to build over Pico Boulevard—adding 190,000 square feet of new space and connecting the two existing halls into one large, contiguous hall of 750,000 square feet.

That puts us in direct competition with San Diego, Anaheim, and San Francisco—cities that currently beat us on contiguous exhibit space.

Doane, as a numbers person—if finally approved, what’s the return on investment that you shared with the Council?

Well, in terms of direct benefit, I’ve said this publicly several times during this budget crisis—it’s wrong to think of us as a budget problem or a budget challenge. We’re a budget solution.

Unlike other infrastructure projects—like a bridge, a highway, or even the automated people mover—those don’t generate direct revenues. They’re built for good reasons, but very few infrastructure projects can say they pay for themselves. We’re talking about generating $155 million a year. We’re almost covering the cost of the development. And it has the potential to be cost-neutral or close.

Beyond that, we will attract dozens of citywide conventions more each year, even perhaps double what we currently get. Each of those brings tens of millions of dollars in economic impact. That’s the indirect return on investment, creating jobs, filling hotel rooms, and keeping restaurants busy. We all know downtown restaurants are struggling. It also helps small businesses—the ones that provide flowers, food trucks, janitorial services, all those vendors that support our events. So, the direct return might be cost-neutral, but the overall economic impact and the indirect return to the city are incredible.

Lastly, there’s a harder-to-quantify return on investment, and that’s the future of Downtown LA. Office space is struggling, residential is doing okay but could be better, and retail is almost nonexistent. There’s a real possibility we could lose downtown, and to keep it a viable neighborhood, really, more than a neighborhood, a business center--will rely on our campus: entertainment, sports, and events. That will keep downtown from devolving into a place no one will visit. I hate to say that, but we have to be honest. We’re trying to solve homelessness, and one of the best ways is to keep people employed and keep eyes on the street. Bring the activity back to downtown.

I started working here in 1984, and downtown has changed so much because of the activity. When people are walking around, when there are eyes on the street, everyone feels safer, and the business community thrives.

When last interviewed in 2023, you said that at its peak, over 500,000 jobs in the county were in the leisure and hospitality sector. Is that the current goal?

We just got back to that level in the last year or two.

During the pandemic, it dropped by more than half. It’s been a struggle to get those numbers back up, and yes, it’s absolutely true—one in eight jobs in LA County are in leisure and hospitality. That sector is growing, but we need it to grow faster. And these are good jobs. These aren’t just entry-level roles, they’re careers. If you go to a well-run hotel, most employees have been there for years, if not decades.

Doane, you shared at our VerdeXchange 2024 conference that LA was ready then for the Olympics. Speak today to LA’s readiness for the 2028 Olympics in light of the Convention Center plans. Are we more ready?

The Convention Center plans don’t affect the Olympics in any way. We’re hosting five Olympic events—with or without the expansion. In other words, the expanded space isn’t necessary for the Olympics. The current plan is that we wouldn’t even finish the expansion before the Olympics. We’d finish about 80% – all of the core, shell, exterior, and landscaping, but the interior of the expansion space wouldn’t be completed until after the Olympics.

Are we ready? Yeah, absolutely. There is no other city with 11 or 12 professional teams and the amazing venues that we have. It’s business as usual to host major events, and we do it all the time—Super Bowl, All-Star Games… People forget that we host the Grammys, the Emmys, and the Oscars every year—major, major undertakings. I’m pretty certain we’ll have the Super Bowl here every four or five years. So yeah, it’s pretty much business as usual.

I do not doubt that we’re ready for the Olympics. It’s intense, but it’s only 17 days. We can do this, especially with the talented people running the amazing venues we already have here in Los Angeles.

As the City of LA Tourism Department Executive Director, share the long-term vision for tourism in the city and the metropolitan area.

I've said it a couple of times, but one of the legacies of the ’28 Olympics is going to be the fact that visitors from other cities and countries will essentially teach Angelenos how to use Metro. We have a great system in place—and it's only improving. My mom has never even ridden one of our subway lines. I use her as an example, because a vast majority of Angelenos don’t know how good our public transportation system is. Visitors here at the Convention Center from other cities, especially East Coast cities and from abroad, use our Metro with no problem. They come back and say, “Hey, that was pretty cool. It was easy to use.”

I think a huge legacy—and one important for the future of tourism—is public transit. In a few months, someone attending a convention in Los Angeles will be able to hop off the plane and get to the Convention Center using transit—quickly, safely, and conveniently. Public transit is going to be a key part of tourism’s future in LA. I’m also pushing the idea of transit-oriented hotel development. I’d like to see the city, and all cities in the county, support that. Not at the expense of residential TOD, of course, but let’s also think about hotel TOD. I’d love to see a hotel at every transit station.

That would improve our visitor offerings, but more importantly, help our workforce. It’s hard to afford to live in Los Angeles. We’re doing what we can to address that, but saving hundreds of dollars a month on commuting and parking by having hotels within walking distance of transit would be a game-changer for workers. In addition, these workers would be using transit during off-hours, so it wouldn’t add to peak crowding. Honestly, if I had a dream about hotel development in LA County, it would be to put a hotel at every transit station.

Let’s turn now to the realities of LA’s budget crisis and how tourism will contribute to what the Council and Mayor are now considering to address the budget crisis.

We’re a big part of the city’s revenue. In TOT alone, the Transient Occupancy Tax, we bring in over $300 million a year. That’s a big chunk of the city’s general fund. I believe LA Tourism once calculated that TOT pays for about $800 worth of city services per household. That revenue goes into the general fund and helps pay for things like street improvements, fire fighters and police officers—it helps run the city.

We’re a budget solution, not a budget problem. Every dollar we invest in bringing more visitors to LA generates revenue into the City’s general fund. 

So yes, the budget crisis is very serious and top of mind for every policymaker—but I hope to keep communicating, on behalf of the tourism industry, that we’re part of the solution. Anything we do to restrict our ability to attract visitors will hurt the city’s budget further.

To conclude, because of space and time: how are current federal uncertainties and international travel decline impacting the outlook for the tourism industry in metropolitan Los Angeles?

It’s very impactful. It’s still a little early to have hard numbers since our data tends to lag a few months, but we’re already seeing signs.

For example, there’s been a 70% drop in air traffic from Canada to LA. That’s seven-zero—not seventeen—seventy percent. My friend John Ackerman at LAWA presented that fact to a Council committee last week, and it’s frightening. Canadians are our second-largest feeder market for visitors, and that’s just one piece of what’s happening.

International travel is way down. International visitors spend twice as much or more as a domestic visitor. They stay longer and they spend more money. It's critical for our tourism industry, and so we're very worried about these impacts. We're hoping that smarter minds will prevail and realize that some of these policies can really, really hurt everyone. I’ve just got to believe a guy that owns hotels would understand this, but we’ll see.