Entrepreneurial success
There are over 440 hotels in San Diego County, representing over 54,000 rooms and suites. Chains and institutions own most of the larger hotels, but small business operators own many. Whether one gets excited about taking an asset and converting it into a more successful venture or developing “ground-up,” it takes an entrepreneurial spirit as well as a willingness to take financial risk to be successful in this game. After all, hotel performance has ups and downs and the capital markets virtually walk away from the hotel market when times are tough.
This year, at each lodging conference, analysts talk about the Commoditization of the industry due to the transparency of rates, difficulty in obtaining terrorism insurance, the potential for war and the inability to determine where the top or bottom of this cycle is. Generally, the conversations have turned rather pessimistic for the short term. Hence, is it a good time to get in the game? My typically contrarian answer is yes. San Diego’s lodging industry is resilient and growing, and with the proper ingredients, success is very possible.
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Creating Wealth in Turbulent Times
According to Yoram “Jerry” Wind, professor of marketing at the University of Pennsylvania’s Wharton School and founding director of Wharton’s SEI Center for Advanced Studies in Management, “wealth is created during periods of uncertainty. Making money depends on identifying opportunities in a turbulent marketplace.” Wind proposes three essential characteristics of organizations that flourish in times of turmoil:
1. Disciplined opportunism. Think of the world right now as one magnificent fire sale. “There are huge tactical opportunities to buy cheap assets,” Wind says. “You can buy technology or talent for very little money and build assets that will create the great companies of the future. But you need to have discipline about this,” he continues. It’s one thing to snap up a failing technology outfit for half of its book value. It’s another to land an asset that truly plays to your company’s strategic strengths.
The Tourism and Hospitality Industry
We are active and continually involved in the tourism and hospitality industry – the fastest growing industry in the world. This involvement has provided an in-depth knowledge of the market and its rapidly changing conditions. The result is a tangible understanding of complex issues stemming from over-built markets, shifts in the market positioning of effected properties and the difficulty in finding new sources of capital.
Education on Entrepreneurship
Robert A. Rauch, CHA teaches a course on Venture and Entrepreneurship in the Hospitality Industry each semester.
His course requires 40 students to submit comprehensive business plans for review.
Sandiego.com, Inc. Recruits Rauch as New Chairman
San Diego, August 13, 2008 – Locally owned sandiego.com, Inc. operator of the www.sandiego.com web site has recruited Robert A. Rauch as chairman of the board. Rauch is managing partner of Del Mar Hotels (Homewood Suites and Hilton Garden Inn) and director of the San Diego Convention Center, Chairman of San Diego North Convention and Visitors Bureau and the Director of San Diego Tourism Promotion Corp.
“Bob brings outstanding vision and connections to the company in the hospitality industry,” said James Earwicker, CEO of sandiego.com. “He has the pulse of the local and national tourism industry and is a tremendous asset to our team.”
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An Interview with Bob Rauch – Hospitality Expert, Hotel Owner
By Mark Burgess – Recently, we sat for a conversation with Bob Rauch, local hospitality expert, hotel owner, professor and one of the most active people in the local tourism scene. He has a bachelors degree in Hotel Administration from Western Inter
national University and a masters degree in Tourism Administration from Arizona State University.
Bob started his career as a banquet dishwasher in for a Ramada in Champagne, Illinois in 1974. Rising quickly through the ranks of Ramada to become General Manager in 1979. In 1981, he opened the Hilton Embassy Suites in Phoenix as the GM and then the Hilton Pavilion in Mesa, Arizona in 1985.
Travel Predictions for 2008
Times will be great during 2008
Happy New Year to all! Yes, tightening credit conditions are expected to make times more difficult for small business entrepreneurs and home equity loans will continue to be troubled as the housing recession might continue into 2009. The current credit crunch, which began in August of 2007 with sub-prime mortgages, will continue to impact the economy well into 2008. The increasing price of gasoline will be of concern to businesses in 2008. With prices now hitting $100 a barrel and almost $3.50 a gallon, proximity to attractions and demand generators will be of increasing importance for hotels. But it is not all bad news!