Hotels are targeting niche travelers to weather economic storm
DOWNTOWN When it comes to filling rooms during trying financial times, all it takes is marketing to a specialized audience.
That’s what a number of hotels in Downtown are doing in response to the recession-like conditions plaguing the national economy, the rise in gas prices and looming crisis in the airline industry expected to hit local tourism after the summertime bubble bursts.
Hotels like the Viceroy Santa Monica are offering promotional “staycation” packages starting next month, targeting Southern California residents who might not be able to afford a costly trip overseas, or even out of state, instead opting for one in their own backyard.
“Because of the price of gas and the price of fuel, people aren’t flying as many places anymore,” Kate Jerkens, spokeswoman for the Viceroy, said. “This (promotion) would target people in Los Angeles, Orange County or Santa Barbara who are close enough to get in a car for a quick hour or two drive.”
The Viceroy’s “Stay Put” package includes three nights of accommodations, valet parking, brunch for two at the hotel’s Whist Restaurant and a $25 gas card. The promotion, which starts at $1,300, runs through the end of the year.
Similarly, Casa del Mar and Shutters on the Beach, both of which are run by the Edward Thomas Management Co., will be offering staycation deals. The packages feature oceanview rooms at Casa del Mar for $675 and includes $50 in hotel credit every day. The package at Shutters runs about $750 a night.
While the two beachfront hotels are experiencing their strongest summers to date, that success might dwindle in the coming months, said Scott Evans, the vice president of sales and marketing for Edward Thomas.
“We anticipate the economy is going to affect business travel as well as the airlines,” Evans said. “We hope that we’re wrong but we think that is going to cause a bit of downturn for business.”
The high-occupancy trend the past few months holds true in many of the local hotels, the summer traditionally being one of the strongest seasons.
But, with fuel costs rising and airlines announcing cuts to the amount of flights, times could soon get worse for tourism on the Westside.
“How deeply are we affected? No one knows that yet,” Misti Kerns, the president and CEO of the Convention and Visitors Bureau, said. “The economy and consumer confidence are at record lows and when people think we’re in a recession, they don’t spend as much money.”
Yet while economic conditions are keeping more and more Americans at home, some hotels are reporting seeing an increasing percentage of overseas travelers whose countries are thriving financially.
The Holiday Inn is currently offering special deals to international clients who book through select travel agents, making it more inexpensive to upgrade a room or stay longer.
“We are trying to make it more easy to be able to sell the product,” Jonathan Go, an accounting specialist with Holiday Inn who deals with foreign tourism, said.
The influx can be attributed to the strength of certain foreign currencies, making the relatively inexpensive prices in the United States a reason to visit.
“Gas and everything else is cheaper here than in Canada,” Julie Magnam, a visitor from Montreal who stayed at the Georgian Hotel for her honeymoon, said. “Due to the lower dollar value, it’s much easier here. It’s a place I can go without worrying about the money.”
Klaus Billep, the owner of Universal Travel System, said that prices are usually double in Europe than in the United States, particularly gas, many Europeans finding the $4 average in California to be a bargain.
“In Europe, it’s $9.50 a gallon,” Billep said.
While the larger hotels could experience a drop in occupancy during the coming months, those offering mid-to-low budget accommodations could be immune.
The Travelodge and Pacific Sands Motel in particular are seeing 100 percent occupancy year round, according to owner Michael Farzam.
“Because we’re in the limited amenity, affordable price range, we haven’t seen a change this summer,” Farzam said.
The Ambrose, which is located about 20 blocks east of the beach, is expecting to see an increase in business executive clientele, the mid-priced boutique hotel normally attracting managers and middle-level employees.
The hotel has also experienced a strong summer.
“We might see a shift in who is staying with some corporations cutting their travel budgets,” Megan Kelly, the sales manager with the Ambrose, said. “We might see more of the high-profile people just because some corporations aren’t willing to spend as much as they used to.”
Originally published in the Santa Monica Daily Press print edition on August 13, 2008. Read the original PDF.