Experts predict tourism industry will rebound soon

By ERIC LINDBERG — Nov. 18, 2009

After weathering a serious financial wallop during the steep economic recession of the past year, local hoteliers, restaurant operators and other tourist-centric business owners may have reason to rejoice after a panel of travel industry experts expressed optimism about the coming year.

During the 2010 Tourism Outlook held yesterday morning by the Santa Barbara Convention and Visitor’s Bureau & Film Commission, tourism officials said they are projecting a gradual turnaround in the travel and hospitality industry beginning early next year.

“Small growth in 2010, a little more growth in 2011 — that’s what we’re expecting,” said Dan Mishell, research director for the California Travel & Tourism Commission.

While tempering their statements with caution about the possibility of a second economic dip, the panelists advised attendees to find ways to capitalize on the rebounding economy.

Although room rates remain low across the state and international air travel is still down, Mishell said there are signs of recovery — particularly in employment rates in the leisure and hospitality industries that are flattening out.

“We’re hoping that is the sign of a little bit of a turnaround,” he said.

Bruce Baltin, vice president of PKF Consulting, a national firm that specializes in the hospitality and real estate industries, said the recession is officially over and small signs of recovery have been seen since June and July. With the consumer sector hit so hard by the housing crisis and credit crunch, he said the business sector appears to be leading the nation out of the recession.

The hotel industry typically lags behind larger economic trends by approximately three months, Baltin noted, advising attendees to monitor major indicators such as gross domestic product, employment and personal income as the economy inches along the road to recovery.

“We project an upturn in [hotel] demand in the second quarter of 2010,” he said.

Occupancy rates at local hotels are expected to bottom out at roughly 65 percent this year, with beachfront resorts being hit the hardest. Those figures should rebound slightly by next year and continue improving into 2012 and 2013.

Baltin said the downturn has presented opportunities for hoteliers to partner with cultural institutions and the wine industry in terms of marketing.

“Everybody is in the same boat,” he said, explaining that some businesses that had been indifferent to working with hotels might be more receptive to the concept now.

Tim Bridwell, vice president of operations and new project development for Hilton Hotels, Inc., also offered several tips for local hoteliers on how to adapt to what he termed the “new normal.”

In addition to highlighting any sustainable or “green” practices and renegotiating contracts with vendors, he said hotel owners could work with other local businesses to develop new travel packages for visitors.

He ran down a few examples — from a “Hard Rock and Hog” promotion featuring a stay at the Hard Rock Hotel in San Diego and a day rental of a Harley Davidson motorcycle to an “Ink and Stay” package at the Erwin Hotel in Venice Beach offering a room, $100 toward a tattoo and a bottle of tequila.

“Packages work, but sometimes they don’t work,” he added as a word of caution.

As far as hotel development in the coming years, Bridwell said potential development for larger hotels in the near future appears to be limited.

“There is no money out there,” he said, and the days of larger hotel projects are “pretty well gone for quite some time.”

Money that is available is coming in packages of $5 million, a good option for smaller hotels with strong management.

The final panelist, Rosemary McCormick, executive director of Shop America, a travel trade association representing shopping destinations, urged those in attendance to capitalize on “shopper travelers” and “cultural and heritage travelers.”

Those two groups are important segments in the state’s tourism industry, she said, describing how a recent survey by the association found that shopping is a key motivator for international visitors.

“Women are the key decision-makers in most travel plans,” McCormick said.

International travelers to the United States spend the most money on apparel, footwear and electronics, according to the survey. Visitors typically look for good value and wide selection when considering shopping destinations.

A second survey of domestic travelers revealed that 78 percent of respondents were interested in visiting cultural and historical sites.

“That’s where Santa Barbara is so rich in the myriad cultural opportunities,” McCormick said.

She advised hotel and business attendees to partner with cultural and shopping institutions to attract those key tourist populations.

“Your challenge is how to make Santa Barbara the cultural star, the wine-tasting star — or whatever you want to be — in the state of California,” she said.

Kathy Janega-Dykes, president and CEO of the convention and visitor’s bureau, acknowledged that the recent recession was the “worst time anyone under 70 can remember” and the national economy could experience anything from a strong recovery to a major collapse next year.

Nonetheless, she said affluent travelers are still taking trips and are looking to invest in experiences, rather than “stuff.”

“That’s where we need to go as we develop our marketing strategy in the coming months,” Janega-Dykes said.

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Don't get your hopes up : 11/19/2009

Until we get our gang and crime problem under control. We are apparently in denial that we have taken a huge hit on our reputation as a tourist destination because of this. It's not just the economy stupids.

Realist

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: 11/19/2009

Maybe they should include a gun and a knife and a can of spray paint in the promotion packages.

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