Tightened belts, fewer tourists hurt LJ business
Community seeks locals’ support
By most accounts, business in the Village suffered this summer as the economic downturn brought fewer tourists, particularly international travelers, but at least one local businessman thinks the situation is improving.
Kent Horner of Kent Horner Photography at Lila Jolla Studios at 1002 Prospect St. said the demographics of the tourist trade in La Jolla changed this summer.
“There were no Europeans here at all - very few international travelers, some Canadians,” he said, adding that Village merchants he’s acquainted with are saying their business has been down 30 percent or more this year.
“I took a walk six blocks around me and counted 27 vacant retail spaces,” he said, estimating some 200 total businesses in that same area.
Some, such as Powell’s Sweet Shoppe at 1000 Prospect St., shut their doors because of declining tourist trade.
Jennifer Clark, vice president of Promote La Jolla, the community’s merchant district, said it wasn’t just tourism - or the economy - that accounted for this summer’s business slump.
“I am hearing from business owners that that they need more locals’ and San Diegans’ support,” she said. “If we want to see our unique local businesses maintain their livelihoods, we have to support them.”
Clark added that the recession had visitors to the Jewel drawing their purse strings tighter.
“Spending was down across the board,” she said.
Online shopping also cut into brick-and-mortar merchants’ take this summer, noted Clark, but she was quick to point out that La Jolla’s boutiques offer something that can’t be found on the Internet.
“Shopping person-to-person is such a wonderful experience,” she said. “Socialization will never be replaced by the Amazon.coms of the world.”
David Friederich, managing director of La Valencia and Rancho Valencia hotels, agreed that business was in a state of flux this summer.
“We were significantly down - 10 (percent) to 18 percent,” he said, adding that it translated into lower room rates, higher vacancies and decreased profits. “Everyone was looking for a bargain.”
A “recession mindset” developed, he said.
“The average spend was less,” said Friederich. “People said, ‘I’ll have one drink instead of two, or wine by the glass instead of a bottle.’ ”
Once customers’ habits - and expectations - are altered, it’s hard to get them to change back.
“The business mind-set of the consumer is never pay the same price you paid before,” Friederich said. “Our (hotel’s) goal is to produce an experience that is exemplary, engage the client so they’ll feel it (cost) was worth it again.”
La Jolla entrepreneur Peter Wagener, who owns Hotel Parisi, agreed that economic times were tough this summer but feels “we’re pulling slowly but surely out of this.”
“Comparable sales to last year’s are slightly increasing,” he said. “We’re through bottoming. We’re moving sideways. It’s better than down.”
Wagener believes the Jewel needs to polish its tarnished image.
“We need to clean up,” he said. “The jewel is certainly getting dusty.”
The bear market notwithstanding, many merchants and analysts such as longtime La Jolla commercial Realtor Mike Slattery remain bullish about La Jolla’s long-term economic future.
“I have a long history (27 years) in this market, and I’ve seen its ups and downs,” he said. “It (business) always rebounds even stronger after a recession.”
Slattery said coastal submarkets such as La Jolla are well positioned to withstand recessions.
“La Jolla is a very unique, defined, affluent area,” he said. “Properties tend to hold their value better in coastal markets and to rebound quicker than more inland markets.”
Slattery blames financing for the real estate recession.
“Turnover you see in the retail sector is really because of the lack of credit,” he said. “One art gallery owner told me, ‘We went from a credit society to a cash society almost overnight.’ ”