Controversy racks tourism agency as visitor woes grow.

Controversy racks tourism agency as visitor woes grow

The tourism industry in Southern California woke up New Year's morning with a hangover and a black eye but a smile on its face.

Last year was not a good year for tourism in the Southland, particularly Los Angeles' long suffering convention market, but a December development had even the most pessimistic industry observers confident that the new year and new decade would mean much more than a new calendar.

The Los Angeles Convention and Visitors Bureau -- torn by turmoil, accusations of mismanagement and inefficiency and continued delays in a Convention Center expansion -- made what many insiders figure was its first smart move in years.

Looking for its third president in two years, the bureau tripled the ante to hire the convention and tourism industry's superstar, Greater Miami Convention and Visitors Bureau President George Kirkland, a man that even the most cynical insist is the person most capable of reversing Los Angeles' tourism woes.

Kirkland is credited with resurrecting the convention business in Miami and San Francisco. Conventions are the cornerstone of any city's tourism marketing because expense-account toting conventioneers typically spend far more when they visit a city than tourists.

The Los Angeles Convention and Visitors Bureau, furthermore, is considered key to Southern California's second largest industry. Tourism employs 327,000 in Los Angeles County, more than any other sector except business and financial services.

Los Angeles will pay dearly for Kirkland, who in Miami was already widely regarded as the highest paid convention and visitors bureau executive in the country. He can reportedly make $1.2 million, with incentive bonuses, for the three-year term of his contract.

But by all accounts Los Angeles was desperate and even the bureau's harshest critics said Kirkland is a bargain. In fact, many feared that the bureau's inability to pay its president a competitive salary has prevented Los Angeles from hiring a high-quality, top executive in the past.

Kirkland's Los Angeles predecessor, Bill F. Miller, whose contract was not renewed in August after just 14 months on the job, earned $165,000 annually.

A native of Oakland who has also headed convention and visitors bureaus in Kansas City and Oakland, the 46-year-old Kirkland has earned a reputation as a high-stepping, free-spending, strong-willed workaholic. He is expected to start by Feb. 1.

The Miami bureau wooed Kirkland from the San Francisco bureau in 1987 after seven years in charge. In San Francisco he helped double the bureau's private sector revenues, was instrumental in securing the 1984 Democratic National Convention and the 1985 Super Bowl and helped push through a $150 million expansion of the city's primary convention center.

After 29 months in Miami he has doubled the bureau's budget and staff size by increasing private sector revenues. When he arrived, there were just 23 conventions booked into the the Miami Beach Convention Center through 2004. Nearly twice that number have been booked since. The number of hotel room nights booked for conventions tripled.

Kirkland's tenure was not without controversy. He drew the wrath of the Miami media and some city officials for his extravagant expense spending and angered some small hotel owners for emphasizing convention promotion at the expense of tourism, long the bread and butter of the South Florida tourism industry.

The annoucement of Kirkland's hiring last month was tainted slightly by news that two former bureau executives, including deposed president Miller, had sued the bureau for breach of contract, further bruising the bureau's already black-and-blue image.

Miller's suit claimed that his contract had been automatically renewed when no action was taken by April 4 and that the bureau, therefore, owes him 10 months pay, severence pay, other benefits and damages.

Frank Santos, ousted director of convention marketing, charged in another suit that he had been wrongfully terminated and that he was forced to resign when it was discovered he falsified convention booking performance records at the direction of his superior, Roger M. Gilmore, former senior vice president of industry sales and No. 2 man at the bureau.

Santos' suit alleges Gilmore, who resigned at Miller's request shortly before he was ousted in August, asked Santos and his staff to reclassify as "leads" convention contacts that had not previously been classified as leads so that Santos could receive a quota-based bonus.

The staff upheaval in August left two of the bureau's top five positions vacant and the marketing department with only four of eight positions filled. The positions are not expected to be filled until Kirkland arrives.

The bureau had counted on Miller, hired from the Long Beach Area Convention and Visitors Council in June 1988, to turn around the bureau amid allegations of mismanagement and inefficiency following a city-order organization audit.

Los Angeles, the nation's second largest city, has long lagged behind other major markets in its ability to lure major conventions, ranking 16th nationally in 1988.

Convention business has fallen 25 percent since 1983 and a recent Business Journal study indicated Los Angeles ranks last among 12 cities surveyed in the number of citywide conventions booked into its center in five out of the next six years.

Hotel executives, furthermore, have been strongly critical of the bureau's ability to lure tourists to Southern California.

Facing growing competition from emerging destinations in Florida and Texas and hurt by Southern California's growing reputation as a traffic-clogged, violence-torn, smog-choked megalopolis, Los Angeles' popularity as a tourist destination fell in 1988. The number of visitors to Los Angeles County declined 2.2 percent in 1988 and increased just 0.1 percent in 1987.

The revitalization of the Los Angeles Convention and Visitors Bureau is considered especially critical in light of $390 million expansion of the Los Angeles Convention Center.

Even the convention center expansion project has been rife with problems. Once expected to be completed this year, the anticipated completion date has now been pushed back to July 1993. The project will more than double the size of the center's exhibition space, making the Los Angeles Convention Center the largest such facility on the West Coast.

The proposed construction of a more than 1,700-room hotel across from the convention center, crucial to making the expansion pay off, was also in jeopardy when the lead developer in the project defaulted in September on a $100 million bond issue from another development.

The hotel, the Pacific Basin, would be the largest in Southern California and the first within reasonable walking distance of the convention center.

Business growth at Southern California hotels, meanwhile, continued to slow in 1989 and is expected to get worse before it improves because of a glut of new hotel rooms planned for downtown to coincide with the expansion of the convention center.

Demand for hotel rooms in Los Angeles County grew twice as fast as the national average between 1978 and 1985, but slowed recently. The number of rooms also grew twice as fast as the national average. Construction of new rooms has decreased recently but so has growth in demand for new rooms.

The occupancy rate at Los Angeles County hotels grew just 0.2 percent through the first nine months of 1989 compared with a year earlier. The number of new hotel rooms has still increased faster than demand for rooms.

Several major hotels opened or reopened after renovation last year, including the 349-room Loews Santa Monica Beach Hotel, the 485-room Hyatt Regency and Checkers Hotel downtown.

The news wasn't good at Hollywood's landmark Roosevelt Hotel, which filed for protection under federal bankruptcy laws in May. Site of the first Academy Awards in 1929 and important to Hollywood's $922 million redevelopment project, the Roosevelt remained opened and officials are expected to release a restructuring plan soon.

The largest Southern California-based hotel chain, Beverly Hills-based Hilton Hotels Corp., announced last year that it would consider offers to buy the chain and has begun to distribute financial information to prospective buyers.

The announcement came after the resolution of a stock dispute in May that gave President Barron Hilton voting control over 24 percent of the company's stock and prompted the price of Hilton stock to nearly double by year's end.