The La Jolla hotel and restaurant community has a newly formed group.
“The La Jolla Destination Marketing Alliance was formed by hotel and restaurant operators to try to secure funding sources for marketing campaigns to enhance tourism in La Jolla,” Deborah Marengo said, former president of Promote La Jolla (PLJ) and current president of the Alliance.
But the new group, whose goal is to make La Jolla the region’s most sought-after, upscale coastal destination for business and leisure travel, is finding that securing funding from San Diego Tourism Marketing District (SDTMD) is a tough sell.
One of two applications by the Alliance seeking approximately $1.5 million in funding over the next 18 months from the SDTMD, was turned down. A second application is pending.
The 16 hotels of the Alliance located in greater La Jolla, which includes UTC, are pursuing grant monies to pay for a variety of services including public relations, travel trade missions, electronic press kits, trade show booths, online advertising, targeted print advertising, a new Web site and e-mail marketing.
Deborah Marengo, owner of Goldfish Point Cafe is the Alliance president and Peter Wagner, owner of Hotel Parisi, is the Alliance vice president. Other key board members on the Alliance are Terry Underwood, general manager of the Grande Colonial Hotel; George Hauer, owner of George’s at the Cove; Gregory Rizzi, general manager of the La Jolla Shores Hotel; Jerry Burwell, owner of CrabCatcher; and Michael Ullman, former general manager of the La Valencia.
Created about a year ago, the SDTMD follows the model of Business Improvement Districts allowing tourism-related business owners to organize and generate funds. In San Diego, lodging business owners within the district have begun assessing themselves to fund the District. Those funds will be used to provide programs and services that specifically benefit the assessed lodging businesses.
Underwood said local hotels would be using an industry self-assessment, a percentage of gross room sales, to generate a funding pool that can be drawn from to promote tourism.
“The self-assessment is passed on to the traveler,” Underwood said.
Instead of paying 10.5 percent, they pay 12.5 percent in room taxes and fees. That money goes into a fund that is controlled by the San Diego Tourism Marketing District, which has a board that evaluates application grant proposals.
Lorin Stewart, executive director of San Diego Tourism Promotion Corporation, the board of directors that administers SDTMD –generated funds, said the board’s efforts are directed toward increasing hotel room revenues which fund tourist-promotion organizations like the San Diego Convention and Visitors Bureau.
“We had a substantial downturn in the amount of monies we had anticipated which went into how much, and what, was funded,” Stewart said. “We look at the best way to employ these funds, with the least amount of duplication.”
Stewart said La Jolla hotel alliance’s application for funding wasn’t turned down because it lacked merit, but rather because the SDTMD lacks the money to fund all the grant applications it receives, due to declining recessionary revenues.
“We know from research into surveys of occupancy and room rates that the La Jolla submarket has been disproportionately affected by this economic downturn,” Underwood said. “We’ve felt the pain more than other regional sectors.”
Underwood speculated there may be a number of reasons why La Jolla has been more impacted - the cost of its being a more affluent destination, its being more distant from the downtown San Diego Convention Center, etc.
Underwood pointed out PLJ, the community’s Business Improvement District, can’t generate enough money from its dues-paying members to fund all the marketing needs of all the business entities in the area.
“We realized the potential of reaching into Tourist Marketing District money, which required an incremental room night return,” Underwood said. “That’s when we started to evolve from cutting across multiple industries in the Village, into hotels specifically requesting Tourism Marketing District funds.”
Underwood said Tiffany Sherer, executive director of PLJ, worked with the emerging Alliance group, on her own time, to help them come up with a plan for marketing La Jolla as a destination. “That evolved into creating the grants submittal,” he added. “We felt, with the economy starting to soften, district businesses would be willing to move forward with a tourism marketing.”