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# Hotels hope to spur profits through reorganization
- URL: https://www.smdp.com/hotels-hope-to-spur-profits-through-reorganization/
- Published: 2004-01-08T16:00:00.000Z
- Updated: 2026-10-23T03:28:27.000Z
- Author: John Wood
- Tags: Business, Santa Monica, #archive-import

*Bed tax expected to generate more than $17M this year*

In a move designed to increase profits, the company that owns Casa del Mar and Shutters on the Beach, two seaside luxury hotels in Santa Monica, is reorganizing its top executives.

The changes could mean a healthier bottom line for City Hall, which collects a 12 percent “bed tax” on local hotel rooms. This year, the city stands to earn more than $17 million from the tax, said Steve Stark, City Hall’s finance director.

As part of the changes, Armella Stepan, general manager at Shutters, is expected to take over as director of corporate branding in the next few weeks. And Klaus Mennekes, general manager at Casa del Mar, has already begun his role as operations manager for both hotels, owners said.

The move is designed to make daily operations more efficient, raise occupancy rates and, ultimately, boost profits in the faltering economy, said Tim Dubois, president of the Edward Thomas Companies, which owns several hotels.

“We want better coordination,” he said. “We own both hotels and it just made sense to streamline the decision making. Plus, we wanted to concentrate on new business development, which is what Ms. Stepan is working on.”

Besides the bed tax, thriving hotels are important to city coffers for another reason — tourist dollars spent at local restaurants and in local shops account for millions of dollars in sales tax revenue. For every taxable dollar that is spent in Santa Monica, one penny goes to City Hall.

“As tourism increases, that would also increase our sales taxes and visitors, especially international visitors tend to spend a lot of money on meals, souvenirs and all that kind of stuff,” said Dave Carr, the city’s treasurer.

Carr added that although the budget predicts $17.1 million in bed tax revenue this fiscal year, the last few months of 2003 saw higher hotel occupancy than what was expected. City Hall accountants are currently crunching those numbers and more is expected to be known when the mid-year budget is reviewed later this month, Carr said. Last fiscal year, $17,058,749 was generated.

“Barring any kind of extraordinary circumstance, the (bed tax revenue) is going to be higher this year,” Carr said.

The 12 percent bad tax is less than what is charged in some neighboring communities. With budget shortfalls painful in recent years, some have suggested raising that tax locally. But doing so has it’s consequences. Mayor Richard Bloom in a recent interview cautioned that raising the bed tax may drive a segment of the tourism industry elsewhere. He said the low rates act as a magnet, particularly for travel agents that buy hotel rooms in bulk.

To fill the vacancies left by Stepan and Mennekes, Dubois promoted two other workers from within the company. Henry Birmele, who most recently worked as a rooms executive at the St. Regis Hotel in Century City, has taken over as general manager at Shutters. And James Barela, previously the general manager of a hotel in Albuquerque, NM., also owned by Edward Thomas Companies, assumed the general manager role at Casa del Mar.

33F,“There are changes happening, there is no doubt about it,” said Mennekes, who worked at Shutters before moving to Casa del Mar.

Dubois declined to disclose specific sales figures for the two hotels. But he did say that although the 198 rooms at Shutters and the 129 rooms at Casa are often sold out on a weekly basis, occupancy at the hotels on a yearly basis is still down considerably over healthy years.

“Things are getting a little better over last year, but we’ve got along way to go before we can claim a recovery,” Dubois said. “We’re still in a post 9-11 environment, from a travel standpoint.”

> “Things are getting a little better over last year, but we’ve got along way to go before we can claim a recovery.” — — TIM DUBOIS President, Edward Thomas Companies

Tim Dubois

*Originally published in the Santa Monica Daily Press print edition on January 8, 2004.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/010804.pdf?ref=smdp.com)