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Some Hotels Struggling As War and the Economy Cut Into Occupancy Rates

Some Hotels Struggling As War and the Economy Cut Into Occupancy Rates

Tourism: Business From Military, Education Drops Off

by CONNIE LEWIS

A relatively stable San Diego lodging industry has begun to show signs of weakness since the outbreak of war in Iraq.

Countywide, hotels posted single-digit occupancy increases in January and February. But that trend has dropped since bombs began to fall on Baghdad.

According to statistics from Tennessee-based Smith Travel Research, which independently surveys the lodging industry, hotel occupancy in San Diego fell about 4 percent in an 11-day period starting March 19, when the war began.

“We’ve seen a single-digit decline in occupancy rates, but the hotels that depend on government business are having a worse time,” said Karima Zaki, general manager of the Doubletree San Diego Mission Valley.

The Ramada Inn & Suites in the Gaslamp District is one that counted many Navy personnel among its guests.

“We’ve had a great decline in occupancy,” said Ramada General Manager Tracey Thompson. “We started to see it the day we went to war.

“A lot of our business came from the military. But that has dropped off completely. And I think it’s safe to say the war isn’t going to end next week. April could be the worst month in the history of the hotel.”

Jay Park, general manager of the Howard Johnson on El Cajon Boulevard near San Diego State, said the hotel’s revenue began to erode in the wake of California Gov. Gray Davis’ announced budget cuts.

“We’ve seen a lot of cancellations of group bookings for conferences that were scheduled at San Diego State,” Park said. “Compared to last year at this time, we’ve lost close to $15,000 in revenue.

“It’s partly because of the state budget decline and partly because of the war.”

But the good news, according to Smith Travel Research, is that average daily room rates rose slightly in March vs. the same month of 2002.

Despite a recent decline in occupancy, “standard room rates and group booking rates have been consistent,” said Peri Flora, director of marketing for the San Diego Marriott Mission Valley.

Yet business travel, which has been down since the terrorist attacks of Sept. 11, has continued to soften as corporations play a game of wait-and-see.

“We haven’t seen any major cancellations in group bookings,” said Rob Stirling, marketing manager of the W San Diego, which opened late last year. “But (group bookings) are slowing down because the decision process is taking longer. People are saying they want to wait and see what happens with the war before they commit.”

Meanwhile, a few hoteliers, including Stirling and Mark Dibella, director of sales for the Wyndham San Diego Emerald Plaza and the U.S. Grant Hotel Downtown, said business has been strong.

Two of the area’s major attractions, SeaWorld San Diego and the San Diego Zoo, are seeing a steady flow of visitors, officials said.

It’s too early to say whether the county’s tourism industry will be significantly affected by the war, said San Diego Convention & Visitors Bureau spokesman Sal Giametta.

“There’s no doubt it’s having some impact, but it’s difficult to quantify how much impact at this early stage,” Giametta said.

But a protracted war could result in “a continued reticence on the part of the traveling public,” he added.

Looking on the plus side, San Diego is still “somewhat better positioned than many of our competitors,” since it draws tourism largely from people who drive or fly from nearby cities, Giametta said.

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