Client mix changing as hotels face tough times

The consensus among La Jolla hoteliers is that local hotel occupancy rates are holding their own this summer despite the double-whammy of high gas prices and a recessionary economy. They say business is somewhat down overall from last year, but that last year was an unusually good year.

“We definitely don’t have the same kind of business this year as we did last year,” said Inger Reid, general manager of Empress Hotel of La Jolla at 7766 Fay Ave. “It seems the leisure part of the business has diminished.”

The Empress has been undergoing an extensive remodel and much of it has been closed, but Reid believes the root cause for the leisure business decline includes something more fundamental. “People are more economy-minded now,” she said. “They’re looking more toward saving money and getting deals.”

Hotel Parisi, a nine-year-old Village boutique hotel at 1111 Prospect St., reports a bit of a drop in business so far this summer. “Maybe 10 percent from last year,” said Jon Shyp, the hotel’s operating manager. “We’re not as busy as we’ve been in the past.”

Shyp suspects fuel costs may be the reason for the business downturn at the hotel, which rents rooms for $300 to $800 during the summer tourist season. “A lot of our clientele are from Arizona and L.A,” he said. “Those people aren’t coming out as often as they used to.”

On the positive side, many La Jolla hotels, large and small, are reporting visitors are increasingly coming from more far-flung places. “We’re seeing fewer of the moms, dads and kids in from Phoenix for three or four days,” noted Terry Underwood, general manager of The Grande Colonial at 910 Prospect St. “We’re seeing more international travelers because of an exchange rate that makes it very favorable for them to be in the United States. We’re seeing a good demand from them for our suites, particularly our new suites.”

“Definitely our clientele has changed,” agreed Lisa Emigh, manager of the 15-room Bed & Breakfast Inn at La Jolla at 7753 Draper Ave., whose rooms during summer rent between $210 and $459 a night, a $260 average. “We’re getting a lot of Europeans and Canadians.”

La Jolla Shores Hotel and La Jolla Beach & Tennis Club general manager John Campbell concurred that summer guests are increasingly coming from overseas and becoming more a fixture of the local landscape. “There are more languages being spoken in La Jolla this year than I’ve heard in the past,” he said, adding La Jollans themselves are opting for “staycations” as opposed to going elsewhere. “Many locals are staying close by,” added Campbell. “We’re seeing an increase in direct local traffic from Beach & Tennis Club people and their friends staying in the hotel and using the facilities, the pool, the tennis courts, etc.”

Though La Jolla’s hotels vary greatly in size and atmosphere, there’s one thing nearly all of them share in common: Each has specialized within their own market niche in order to distance themselves from their competition.

That’s proven to be a winning strategy for four-year-old Estancia La Jolla Hotel & Spa at 9700 N. Torrey Pines Road, which has transformed itself into a destination resort by creating a garden showpiece out of its nine-acre setting across from UCSD. “We’ve had an excellent first half of the year,” reported the hotel’s general manager, Gordon MacMitchell, “and we have been outpacing our selected competition. We’ve been fortunate we’ve had a good portion of group business, which has sustained us, and our corporate business is strong.”

For two decades, Martin Lizerbram, owner of Redwood Hollow Cottages, a sort of mini-hotel hybrid with 11 coastal units tucked-away at 256 Prospect St., has catered during summertime to return guests, mostly Southwesterners booking well in advance. But this year there has been a distinct change in Lizerbram’s clientele. “For the first year in 20 years, we’re getting last-minute people when, traditionally, we’re filled a few months ago,” Lizerbram said. “After Aug. 15 it was looking a little slow for us. But at the last minute, we’ve had people filling in for August wanting three or four days. It’s kind of scary. We’re a small property used to seeing it filling up in advance.”

According to research compiled by San Diego Convention and Visitors Bureau’s Market Intelligence Department, La Jolla’s hotel lodging year to date shows a 5.6 percent decline in occupancy, but a 4.4 percent increase in average daily rates over a year ago.

La Jolla’s hotel numbers for 2008

January - 62.7 percent occupancy, $163.88 average rate

February - 69.9 percent occupancy, $166.52 average rate

March - 72.4 percent occupancy, $161.78 average rate

April - 72.3 percent occupancy, $164.32 average rate

May - 70.5 percent occupancy, $162.13 average rate

June - 77.5 percent, occupancy $198.05 average rate