2011

By far, one of the things I look forward to the most as The Hotel Guru is going out and interacting with people who are impacted by and interested in travel and the lodging industry. This week, I was invited to speak with 60 thought leaders at the La Jolla Rotary Club and reflect on the hospitality industry, its future and its influence on our economy. Here are some of the hot points that I highlighted:

RA Rauch and Associates

· My company, RA Rauch and Associates, has played many roles for more than 20 years. We are hotel developers, owners, managers, and also consultants for other hotel owners, lenders, developers.

· There are four levels of service: basic, expected, desired, and WOW.  Stephen Covey of 7 Habits of Highly Effective People, referred to an emotional bank account that keeps guests returning to your business if you create that special “mojo” that is referred to by Chip Conley in his book, Peak.

·  RAR targets “wow” customer service in EVERY guest interaction.

What matters now

· Revenue management, distribution channel management and social media marketing has changed the face of hospitality from art to science.

· Today’s consumer is wired and dangerous in this Internet age…social media drives five times the impact of traditional media or more!

· The economy – housing, unemployment and GDP –  are all weak. Our present situation includes the rising oil prices, slowing global growth and shaky consumer confidence.

· The stock market drop in 2008 also caused a drop in hotel values. The net income dropped 40 percent and that is what drives value of real estate assets.

· The San Diego leading indicators were down in June, but we expect to come back on track and not dip into another recession.
Lodging Industry – local and national

· Most forecasters are calling for 6-8 percent revenue growth over both 2011 and 2012. Supply is constrained and occupancy approaching long term average of 60 percent.

· California is doing better in every way.

· San Francisco is leading the country with 20 percent revenue growth this year.

· In San Diego, we ran 66 percent at $121 in 2010, 68 percent at $126 in 2011 and should be at 70 percent at $134 in 2012.

· Revenue per available room (REVPAR) was up every month this year.

· There is virtually no new supply as construction loans are very difficult to obtain.

· The San Diego Convention Center expansion is a big topic on the table. The current plan being tested by Mayor Sanders and Steve Cushman is for a 3 percent hotel fee in the vicinity, 2 percent around a larger circle (estimated  5 miles away from the center) and 1 percent  in areas like La Jolla and outlying regions.

· Another big topic on the table is the Chargers stadium downtown. There’s possible funds from the NFL’s G3 stadium subsidy program, naming rights sponsorships and redevelopment dollars (if it comes back from the state).

· San Diego is home to 56,000 hotel rooms and employs over 150K in the hospitality industry. We have arts, attractions, beaches, climate, gaming, restaurants, shopping, spas, sports and wineries.

· With all of these assets, many of which are available in La Jolla, how are we not busy outside of the summer?

· It takes marketing dollars, especially the funds provided by the Tourism Marketing District!   La Jolla has done a great job with the limited dollars it has, but it is time to keep the San Diego Convention & Visitors Bureau accountable with their own La Jolla marketing efforts.

I ended with one of my favorite verses:  “He who faileth to market, will perish” From the Gospel of Bob, Verse 3.

If  you’d like to hear expert insight on the local and national lodging industry during one of your events, please give me a  call. My team is happy to speak to your association or organization and are  consistently quoted by local and regional media. You can reach me directly at [tel:858-720-9500] 858-720-9500 (office), [tel:858-663-8998] 858-663-8998 (mobile),  rauch@hotelguru.com.

Talk to you soon,
Robert Rauch