Hospitality industry poised to roar into 2012

from the North County Times (Dec. 30, 2011):

And local hospitality veteran Bob Rauch said he and nearly all of his peers have been very busy this December.

“There’s a bunch of pretty happy people going into 2012,” said Rauch, who operates a Homewood Suites and a Hilton Garden Inn in Carmel Valley.

“We are having a record December, and it’s all leisure business,” said Rauch, president of R.A. Rauch & Associates Inc. This week, he said, the hotels “have been running at nearly 100 percent capacity.”

While business can be brisk this time of year, Rauch said he’s never seen the hotels this full. Most of the travelers at his hotels arrived by air, for the first time including many international travelers, from China, Europe and Canada.

Rauch, who sits on the marketing committee of the San Diego Convention & Visitors Bureau, said he heard similarly optimistic accounts from his colleagues there in a committee meeting last week. Nearly across the board, the industry said visitor numbers had increased from last year.

“We all talked about how things were going, and everybody was up … hotels, restaurants and attractions were all up” more than 5 percent, Rauch said. There were some exceptions, namely a few museums that were flat or a bit down, but the overall outlook was positive.

Looking ahead, Rauch said he’s forecasting “a very strong tourism year in 2012.” Rauch will be delivering his forecast on Feb. 9 at the Hilton Garden Inn.  He described the trends in a November report titled, “Let the Good Times Begin,” which is also the title of his February presentation.

“The ‘Great Recession’ followed by the ‘Great Hangover’ has ended,” Rauch wrote in his report, which sees strong growth nationwide, not just in San Diego County. And for hotel owners, that means an increase in property values as average revenues per room, a key industry statistic, go up.

“Going forward, I believe we can look at double-digit per annum growth in values over the next four years,” Rauch wrote. “That means that a hotel that is currently valued at $150,000 per room will be worth over $220,000 by 2015. Why? Because average rate, by and large, drops to the bottom line and that is where much of the growth will come from.”

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