ECONOMY: Hotel construction picking up in North County
from The North County Times May 7, 2011:
“The hotel industry isn’t quite back to its boom times before the Great Recession, but improved revenue and occupancy rates are helping to fuel a wave of hotel construction in coastal North San Diego County cities.” (Read more…)
Historic Park Manor Sold in San Diego
from the Union-Tribune, Friday May 20:
“Park Manor Suites, a historic boutique hotel across from Balboa Park, was sold Wednesday for $11.5 million to an Illinois company that specializes in time shares.
” (More…)
From the Recent “The Hotel Report” May 2011
Rauch and Associates’ Bob Rauch writing in The May 2011 Hotel Report (PDF): “Yes, there is light at the end of the tunnel. Two years ago, we hit bottom as an industry.
We are now experiencing the end of the “hangover” from the great recession of 2008.”
Hotels asked to pay $30m a year for convention center expansion
From the San Diego Union-Tribune, May 12, 2011
…While hoteliers are supportive of the convention center expansion, some expressed concern about the fairness of the proposed assessments, whether they’re in downtown or further out, said hotel owner and consultant Robert Rauch.
“There were people in each of the areas who felt they get less benefit than others,” said Rauch, who operates hotels in northern San Diego near Del Mar.
“The downtown hotels not along the waterfront were concerned about not getting as much benefit as core convention center hotels, and there are certainly hotels in the 1 and 2 percent areas that feel they don’t get any benefit.
“I feel I don’t get direct benefit but I want to do what is right for San Diego.”
Trends in the U.S. Lodging Industry – 2011Q2 Update
By Robert A. Rauch, CHA
As an observer and active participant of our industry through five economic recessions and expansions, it is clear to me what will occur over the next five years. That is not to say I know more than others but history does repeat itself and all of the competent hotel industry consultants know that we are in the early stages of a long economic expansion. While there have been exceptions, particularly the Reagan years, five years is the most likely time period we can expect for the expansion to continue.
That means 2011-2015. Two years ago, we hit bottom as an industry. We are now experiencing the end of the “hangover” from the great recession of 2008.
News: San Diego’s hotel industry headed in right direction, execs say
from the San Diego Daily Transcript Wed. May 11, 2011:
| …Hotel consultant and developer Robert Rauch said while room rates have risen, they remain heavily discounted — making it challenging to remain profitable.
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“It’s difficult to come back from the discounts we’ve had,” Rauch said. |
 Bob Rauch Photo Courtesy San Diego Daily Transcript |
Full Story at http://www.sddt.com/Hospitality/article.cfm?SourceCode=20110511czm
Boutique Coronado Hotel Gets New Management
R.A. Rauch & Associates leads El Cordova to profits
SAN DIEGO, Calif (Jan. 31, 2011) – Hotel management company, R.A. Rauch & Associates (RAR) was awarded the contract to manage El Cordova Hotel, a 40 room boutique hotel in Coronado. As a third party management firm, R.A. Rauch & Associates has taken over the marketing and management aspects of the hotel in an effort to return El Cordova to the high level of quality and consistency it enjoyed in the recent past.
“We are really focusing on strengthening our relationships in the wonderful community of Coronado,” said Robert Rauch, President of R.A. Rauch & Associates. “Additionally, we are cooperating more with other local hotels in the area. That strategy has helped El Cordova’s business get off to a great start in 2011 and begin a return to the reputation is has previously enjoyed.”
El Cordova Hotel was originally built as a retirement mansion for wealthy industrialist Elisha Babcock in 1902. In 1930 it was converted to a Spanish Village hotel and has been updated and expanded several times to provide additional rooms and amenities. The most recent renovations took place in 2010. The Hotel sits in the heart of the Coronado village, on Orange Avenue, one block from the best beaches on the Island. It has twelve boutique shops on site and four restaurants, including The Brigantine and Miguel’s Mexican restaurant.
R.A. Rauch & Associates has managed the assets of several properties over the years, and has managed all of the properties in which it has had an ownership position. However, this is the first third party management agreement for R.A. Rauch & Associates in many years and the beginning of a new strategy where R.A. Rauch & Associates is able to assist selected hotel owners of premium properties in San Diego with hotel development, operations, and marketing.
“The economy has taken a nose dive over the last couple of years, but is finally on the upswing,” said Natasha Perez, Managing Director of Acquisitions and Development at R.A. Rauch & Associates. “Whether a hotel was under performing due to the economy, reduced sales force, or underachieving marketing, this is the perfect environment for our company to help get hotels back on track.”
For more information about R.A. Rauch & Associates, Inc. visit www.hotelguru.com.
For more information about El Cordova hotel visit www.elcordovahotel.com.
Hospitality Forecast – Q1 2011
With no new supply, increasing demand, and growth in average rate, we expect the next several years to be very strong.
Nationally, Smith Travel Research (STR) reports that supply grew 2.2 percent during 2010, and demand increased 6.6 percent. They further project the industry will end 2011 with increases in all three key metrics: Occupancy is forecast to rise 1.4 percent to 57.9 percent; Average Daily Rate (ADR) is expected to be up 3.9 percent to US$101.55, and Revenue per available room (REVPAR) is projected to rise 5.3 percent.
With all the key metrics like Consumer Price Index, Gross Domestic Product, Industrial Production and even unemployment headed in the right direction, the hotel industry, which closely follows these metrics is beginning an upward cycle as we head toward the end of February. We expect the next several years to be very strong for several reasons; no new supply, increasing demand and growth in average rate.
(more…)
State of the Hospitality Industry – 2011
U.S. Economy/Introduction to Hospitality Market
Most economic forecasters believe that the past several quarters of economic growth were partly a result of fiscal stimulus. Based on that, the forecast for 2011 is for slower growth as the supports and stimuli are now dissipating. The recovery now depends more heavily on the private sector, which faces weakness in income based on high unemployment, reluctance of businesses to rehire aggressively and large overhangs of vacant homes and unused industrial capacity. Moreover, availability of credit is expected to be slow. Goldman Sachs is forecasting a reacceleration in growth to 3 percent in the fourth quarter of 2011 as the headwinds gradually dissipate.
This jobless recovery is creating an environment where expectations from several economists are for 10 percent unemployment again in 2011. Inflation is expected to remain well under control going forward based on the latest survey of Federal Reserve Board likely actions. The following chart shows the Goldman Sachs Forecast for key indicators of the U.S. economy though we have already mentioned that many believe unemployment will actually climb next year:
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Regional Lodging Conference
From Left: Robert Rauch, Guy Maisnick, and Alan Reay discuss the state of the hospitality industry at the regional lodging conference.
The speakers at the conference discussed how the hospitality industry is coping in the current economy, and what those in the industry can expect in 2011.
Additionally, they discussed who the buyers and sellers are in today’s market, how to value and save and manage distressed assets, and legal considerations for distressed assets.