Call it the case of the hype that just didn’t pay off.
As the turn of the millennium draws closer, local hoteliers continue to adjust their rates and packages for a market that’s not as celebration-hungry as they hoped.
According to Jerry Westenhaver, president of the San Diego Hotel/Motel Association, the media’s millennium coverage was a factor.
“It started last year, when everybody said that everybody’s going to be sold out by February,” Westenhaver said. The predictions created huge expectations of shortages, he said.
“What happened is that you had a big flurry of people making reservations right after the New Year.”
Since then, the hype might have overplayed itself, Westenhaver said. “It’s kind of like we’ve been millennium’d to death the whole year,” he said. “I don’t think people are quite as excited about it as we were last January.”
Citing increased labor and entertainment costs, the hospitality industry expected to raise prices, charging two to three times the regular New Year’s rates, and requiring that guests stay at least two nights.
As it turned out, the decision makers were not the hotels but the customers, who didn’t take the bait and book early. Many will quietly meet the year 2000 at home, Westenhaver said.
Like Any Other New Year’s
If anything, 1999 has proven to be much like any other New Year’s, he noted. Bookings will likely pick up between Dec. 25 and the 31, he said.
Other than hype fallout, several factors are affecting local New Year’s bookings, said Westenhaver, who is general manager of the Hyatt Islandia on Mission Bay. Westenhaver cited concerns that potential Y2K infrastructure foul-ups have also prompted people to stick close to home, plus the high costs of most parties, and what he called “the Vegas syndrome.”
Las Vegas, which competes with San Diego for tourism markets, added 20,000 hotel rooms this year, Westenhaver said. It’s created a soft market for millennium events, likely to result in lower prices.
The bargains could draw last-minute visitors away from San Diego, he said.
The Mission Bay area hotels are ahead of pace, from what he’s heard, Westenhaver said.
Prices of other local hotels will be “hit and miss” and adjusted accordingly, he said.
At the Wyndham Emerald Plaza Hotel last year, the Downtown hotel was filled for dinner and room bookings, said general manager Jim Hollister.
Slow Sales
This year began with many inquiries, but sales have been very slow, he said. As 1999 progressed, Wyndham found customers balked at the prices, which started as a two-night minimum for $699 that included a party and dinner, he said.
In October, the hotel revised its packages, taking out the party and offering a one-night, room-only package for $199. The Wyndham’s other packages include a one-night room, four-course dinner, champagne, dancing and morning brunch for $476, and a one-night stay and brunch for $296.
Currently under construction, the 436-room Wyndham is limited to 50 percent of its regular occupancy, which pleases Hollister. Despite the lack of calls and minimal bookings for the dinner package, the hotel’s nearly full, he said. The Wyndham’s meeting space for private parties is sold out, at “a pretty good price,” he said.
Hollister expects the amount of phone calls to increase from Dec. 25-31, but it would be tempered by Y2K anxieties.
At the Hyatt Regency San Diego next to Seaport Village Downtown, the hotel’s two packages, one for its bayfront restaurant and another for its ballroom party, also weren’t booking as its marketers hoped, said sales director Rob Cameron.
Profitable Season Predicted
Originally, both packages required two-night stays. The Hyatt added a one-night option to its packages last week, Cameron said. Many potential customers are local residents who don’t want to spend an extra night, he said.
Westenhaver predicts a profitable season.
“It’s going to be a very successful New Year’s. There’s no doubt it will be,” he said.
“Will it be the major cash flow like it was hyped at the beginning of the year? I don’t think so. But, compared to past years, I think most businesses can say it’s going to be a good New Year’s.”
