Monday, May 31, 2010
Memorial Day marks the start of the summer tourist season for San Diego. We'll find out how the recession has impacted local tourism and what's ahead for the summer.
MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. The lighter side of Memorial Day is its status as the beginning of the summer holiday season. Up to 800,000 people were expected at San Diego city beaches over this three-day weekend. And the local tourist industry is keeping its fingers crossed that San Diego is about to pull out of two years of declines in both visitors and revenues. Joining us for a look at the start of the 2010 summer tourist season is my guest Patrick Duffy. He’s president of the San Diego County Hotel-Motel Association, and general manager of the Hilton La Jolla Torrey Pines. Patrick, welcome to These Days. Thanks for doing this.
PATRICK DUFFY (President, San Diego County Hotel-Motel Association): Maureen, good morning. We’re coming off a great weekend and anxious to discuss it with you.
CAVANAUGH: Fabulous. Now, do you have any information on what kind of bookings that we had in the hotels and motels in San Diego this holiday weekend?
DUFFY: Well, Maureen, speaking with the hoteliers last week, most anticipated strong occupancies. A number of the properties were sold out for the weekend as early as Wednesday or Thursday.
CAVANAUGH: And how important is that, that the Memorial Day weekend be strong for tourism in San Diego?
DUFFY: Well, we always think that it’s a good barometer for us. We always are excited that Memorial Day is here. It gives us an idea of what the whole summer is going to be like and, obviously, the summer season for hoteliers in San Diego is very important. Traditionally, it’s strong occupancies, we enjoy business from Phoenix, LA, Vegas, all of those drive-in markets.
CAVANAUGH: Now, I identified you, Patrick Duffy, as president of the San Diego County Hotel-Motel Association. What does that association do?
DUFFY: Well, the association, Maureen, is a group of hotel people as well as allied members, and the allied members are people that assist our business so it could be Ace parking, for example, it could be a group of people that provide people for jobs, and we’re dedicated and concerned about issues that affect all of the hotels in San Diego.
CAVANAUGH: How does the – In other words, if the Hotel-Motel Association has a good year, is it reasonable to assume that places like the zoo and Sea World and the Wild Animal Park are also having a good year?
DUFFY: Absolutely. And we don’t want to kid ourselves. I mean, the people, the visitors really don’t come to stay at our hotels per se, they come here for our world class attractions and that is, obviously, Sea World, the zoo, Legoland, our museums, beaches, all of that.
CAVANAUGH: Now, how many hotel-motel rooms do we have here in San Diego County?
DUFFY: Well, we have about 58,000.
CAVANAUGH: And what kind of an occupancy rate have we been enjoying or not enjoying for the last couple of years?
DUFFY: Well, Maureen, the last couple of years have been very difficult, probably the most difficult in my 38 years with the business. And it’s caused all of us to, you know, reevaluate the way we run our operations, and by that I mean we’ve restructured our operations. We’ve had to reduce staffing where appropriate based on occupancies, and it’s always – it’s a careful balance between, you know, delivering an operating margin for your ownership and providing the right service levels for your customers. So it’s, again, it’s something where, you know, the recession will end and we’re going to be back to good business and we think that that’s going to be fairly soon. So operators can’t be too short-sighted about the recession and, you know, we need to really protect the San Diego brand as well as our own company flags.
CAVANAUGH: I’m speaking with Patrick Duffy. He’s president of the San Diego County Hotel-Motel Association, and also general manager of the Hilton La Jolla Torrey Pines. So, Patrick, I’m going to ask you what are you expecting this summer in terms of tourism here in San Diego?
DUFFY: Well, I think we’re going to find that there is pent-up demand, Maureen, so customers are going to come from, again, the drive-in markets, and San Diego is really very fortunate to have such strong drive-in markets. But we’re going to find a very price sensitive customer; they are still making decisions based on price. And we’re going to find that the booking window is much shorter than it’s ever been, and by that I mean people are booking, well, 7 days within, to the day. Actually, our property here, we picked up—as an example—we picked up 50 rooms for Saturday on Saturday.
CAVANAUGH: I see. So people are making – Does that mean that they’re making quick decisions about whether or not to go on vacation? Or does that mean they’re waiting until the last minute to book their rooms?
DUFFY: Well, it’s actually a combination. You have people out there that want to have the structure of a planned vacation in advance and all of their arrangements sealed tight. And then you have others that are shopping us online and waiting to see if they have the right rate, and if they get the right price on a room then they make the visit.
CAVANAUGH: That’s sort of like the Priceline, the Orbitz factor, that’s – that you have to also consider now in your line of work.
DUFFY: Correct. Exactly.
CAVANAUGH: That’s interesting. Give us a sense of the economic impact that local tourism has to this county.
DUFFY: Well, I think it’s tremendous, Maureen, and what I always like to talk about is the flow of that dollar. While we take it in here at the hotels, it’s being taken in at the parks, the museums, at the beaches. The cab companies are benefiting, the restaurants are benefiting. It’s – it just spreads throughout our city.
CAVANAUGH: Tourism actually, I believe, is the third largest industry in San Diego County. Am I right about that?
DUFFY: That’s correct, Maureen.
CAVANAUGH: So how, indeed – so when the tourist industry is down, it must also have an affect, as you said, that flow of the dollar being turned off.
DUFFY: Well, exactly. And I think what we’ve benefited from is the whole tourism marketing district, which was developed a couple of years ago where participating hotels self-assessed themselves and then that money is taken and allocated to, say, the Convention and Visitors Bureau to market our city in other destinations.
CAVANAUGH: And how has that been going?
DUFFY: That’s been going fabulous. It’s providing CONVIS with funds that they would not have had and it allows us to have a greater presence in these drive-in market areas. And when you’re competing against Vegas as a destination, their budget is tremendous, so without this Tourism Marketing District funds, we’d be in sad shape.
CAVANAUGH: How long – When people do some to San Diego, how long do they usually stay for? Is this an overnight trip destination or longer vacations?
DUFFY: Well, I think it’s, again, both. If you have people flying in then generally it’s probably four to five nights. If you have people driving in then I would say it’s probably a two- to three-night stay.
CAVANAUGH: And you say but most of our tourists come in – by car, is that right?
DUFFY: That’s correct.
CAVANAUGH: Now I’ve been reading articles in the paper lately about some concerns that the tourist industry has in San Diego about San Diego’s reaction to Arizona’s new immigration law that people – some concerns have been getting letters, canceling reservations because of misunderstanding. Tell us a little bit about that and the reaction from the tourist industry here in San Diego.
DUFFY: Well, Maureen, we have – the City has received letters, the Convention and Visitors Bureau has received letters from individuals and they’re voicing their displeasure about the opposition to the immigration law. However, we really have not experienced a lot of cancellations. I think that there is concern but, to date, we have not received a lot of cancellations and no group business has cancelled.
CAVANAUGH: And is there any collective response that the Hotel-Motel Association or CONVIS is making an outreach to Arizona vacationers?
DUFFY: Well, each letter has been responded to individually by the Convention and Visitors Bureau. We’re waiting – we’re taking a wait and see attitude, Maureen, particularly with Memorial Day weekend having just occurred, so we wanted to check the facts after this weekend and see how the occupancies were. When I walked through my garage this morning, there’s plenty of Arizona license plates out there, so we’re all optimistic that when people are ready to travel and vacation that they come over to San Diego. After all, we’ve enjoyed a great relationship, a very strong relationship, with Arizona for years.
CAVANAUGH: And to be clear, the San Diego City Council did not vote for a boycott of Arizona as the LA Count – as the LA – LA did vote for a boycott as did San Francisco. So that sort of leaves Arizona residents, you know, limited choices in California if, indeed, they want to be offended by this.
DUFFY: Exactly. Our council voted to oppose and not boycott and as that information is delivered back to the residents in Arizona, I think we’re going to have a strong season with them.
CAVANAUGH: Tell us a little bit more about the effects of the recession on the tourist industry because I think there – some of the nervousness that people have expressed in articles that I’ve read about the reaction to some letters from Arizona speaks about how difficult the past couple of years have been.
DUFFY: Well, the past couple of years have been difficult and actually we saw the softening, Maureen, here at Torrey Pines as early as June of ’08 when we were planning for the U.S. Open because there were various companies that were cutting back then on the hospitality suites and the entertainment that is normally associated with the U.S. Open. So it has been a difficult couple of years. There’s been less demand, which in our business does not allow us to increase our rates as we need to to keep up with operational costs. So it’s been a tough, tough couple of years.
CAVANAUGH: Because of the recession, because of this long downturn, do you think there will – there has been some fundamental changes in San Diego County hotel-motel industry that we’re going to see long in the future?
DUFFY: Well, I think it has caused us to be more prudent and, again, rethink our business models. And obviously positions have been eliminated based on lack of demand, and we’re looking forward to changing that. I mean, going forward, we see business travel is strengthening, association business is still out there, there’s more military business for San Diego than there has been in the past, and let me explain that. Because there’s a lack of demand, many properties have reduced their rates and, therefore, that military or government business is now able to afford hotels in San Diego when they may not have been able to afford them in the past.
CAVANAUGH: And so what has the tourist industry in San Diego learned from this?
DUFFY: Well, I think that we’ve learned, what has really been underlined, is what a great product we have. And San Diego as a destination has – pardon me, has not lost market share to its competitive cities. And we do have a strong brand here and people know that we consistently deliver great weather, great beaches, great museums, great attractions. I mean, this weekend, as an example, downtown you had the Padres playing and you had the jazz festival going on, and the weather was fabulous. So, you know, what’s not to like?
CAVANAUGH: Well, let me end this by asking you, Patrick, realistically when are we expecting to see the level of tourism go back to what it was in, let’s say, 2006 or 2007?
DUFFY: Well, Maureen, I think, again, the summer will tell us a lot.
DUFFY: And we do anticipate the leisure customer to come back this summer. Realistically, this summer is not going to get us back to where we were before and it will probably be into next summer before we really realize those numbers again.
CAVANAUGH: Thank you so much for – I know it’s a busy day for you so, Patrick, thank you so much for speaking with us.
DUFFY: Maureen, it’s a pleasure. Thanks very much.
CAVANAUGH: I’ve been speaking with Patrick Duffy. He’s president of the San Diego County Hotel-Motel Association, and general manager of the Hilton La Jolla Torrey Pines. If you’d like to comment about anything that you’ve heard on this segment, please go online, KPBS.org/thesedays. Coming up, a conversation about Memorial Day as observed at our nation’s national cemeteries. That’s as These Days continues here on KPBS.