Area’s Tourism Success Creates Room for More Luxury Hotels

From San Diego Business Journal (01/05/2015)

Hotel Trends 2015

Consultant Robert Rauch predicts that these will be among the top trends in local and national hotel operations in the coming year.

Millennials Rule: New and renovated hotels are catering to the 30-and-under crowd that seeks wide-open lobby bars and Wi-Fi-enabled spaces allowing for combinations of work and socializing. This group uses mobile technology to book rooms, check in and out, and pay their restaurant and bar tabs.

Tech Touches: Guests increasingly want to be self-sufficient, so hotels are developing mobile apps to help them access on-site services and information on neighborhood attractions via their smartphones and tablets. Ultra-personalized services are still being provided for the tech-challenged in upscale settings to ensure loyalty and repeat business.

International influx: Gains in international visitors have been talked about for the past two years but are now likely to materialize on a large scale, following recent moves by the U.S. and China to relax tourists visa restrictions. The Commerce Department projects annual growth of 4 percent in international travel, meaning more than 80 million new visitors to the U.S.

Booking More Profits: Hotels are relying less on online travel agencies to bring in business and directing guests to their own websites and phones. Operators making sue of online travel sites for their marketing booking will be negotiating to reduce commission rates, as they take on other rising costs related to health care and worker wages.

Sharing Economy: Like cab companies dealing with app-enabled ride services such as Lyft and Uber, hotels are being challenged by Airbnb and other sites where house and apartment owners can rent rooms out to guests for limited stays. The impact on hotel room demand will be a trend to watch in coming years, especially among the millennials who are most comfortable using those services.

Read more on the Top Trends of 2015

Hotels: Dual Brand Development Is Also Gaining Popularity

…”It’s an advantage from a developer standpoint, and an advantage from an operational standpoint,” Robert Rauch, president of San Diego- based hospitality consulting firm R.A. Rauch & Associates Inc.

Rauch owns and operates two local Hilton-branded hotels, a Homewood Suites adjacent to a Hilton Garden Inn in Carmel Valley. He was among the first operators in the nation to develop two national0brand hotels on the same property, and the idea initially received resistance from skeptical Hilton officials when Rauch was planning the hotels nearly a decade ago.

Hilton and its competitors have since embraced the concept nationally, and Rauch said there are now numerous dual-brand hotels either completed or in development in major U.S. markets.

…Rauch said the local hotel market has nearly recovered to levels seen at the peak of 2007 on most performance metrics, and San Diego County should be well poised to take advantage of an influx in new international visitors in coming years. Those travelers tend to stay longer in the local region than U.S. visitors, he said, and Asian travelers spend on average nearly $1,000 a day, exclusive of lodging costs and airfare.

Recent moves to extend the duration of tourist visas from one to 10 years, resulting from agreements between the U.S. and China, should accelerate a trend that Rauch has been preparing for during the past several years. “I’ve been learning Mandarin, and I’ve been learning Japanese, and I really feel that these will be strong growth areas,” he said.

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