Expertise

Longest Serving Certified Hotel Administrator in San Diego

Robert A. Rauch recently reached a milestone that no other in San Diego, and few in the country have reached. The Certification Commission of the American Hotel & Lodging Educational Institute (AHLEI) recognized Mr. Rauch for achieving 25 years as a Certified Hotel Administrator (CHA). The 25 year certification status marks an unparalleled commitment and dedication to the hospitality industry and to the standards of professional certification.

Maintaining CHA status for the last 25 years means Mr. Rauch has shown continued professional experience, continued education, continued involvement, and educational service in the hospitality industry.  The AHLEI says Mr. Rauch has demonstrated his commitment to staying on the cutting edge of hospitality management.

“Robert A. Rauch is truly an extraordinary example to those who strive for excellence in the hospitality industry. The 25-year pin does not simply reflect longevity, but also a dedication to continued professional education and a willingness to share one’s knowledge with others for the betterment of our industry,” said Barbara Blankenship, AHLEI’s senior director of professional certification.
Read More About Robert Rauch Recognized For 25 Years of Professional Certification

By: Robert A. Rauch, CHA

Today’s economy has had an enormous impact on the fortunes of the U.S. lodging industry. Some markets have been impacted more than others. Thankfully, for San Diego, the access to millions of potential travelers within a short driving distance, along with a diverse economy and a strong convention center, has lessened the blow. This article seeks to show how San Diego is faring vis a vis overall industry financial performance.

According to Smith Travel Research, (STR) the U.S. hotel industry is projected to end 2010 with increases in two of the three key performance measurements, according to their most recent forecast update earlier this month.

Read More About State of the Hospitality Market

Matt Seamons andAmy Buitenhek promoted ,Viera Kovalejva Hired

SAN DIEGO, Calif (Apr. 1, 2010) – The Hilton Campus, San Diego/ Del Mar is pleased to announce Matt Seamons is the new General Manager, Amy Buitenhek is the new Assistant General Manager, and Viera Kovalejva is the new Director of Sales for the Hilton Garden Inn, San Diego/ Del Mar.
Read More About New Leadership Takes Reins At Hilton Campus, San Diego/ Del Mar

So what is really happening in 2010?  According to the U.S. Travel Association, business travel will be up 2.5 percent in 2010 with leisure travel up 1.9 percent.  That leaves the group market…it would be nice if we could find someone who will project an increase in that market segment but we can’t.  Naturally, each market and submarket in the U.S. will respond differently to the recovery.  However, the latest travelhorizons survey indicates that travel intentions of U.S. travelers is improving, which is certainly good news for strong markets like San Diego.

San Diego’s occupancy finished at 63.3 percent, down nearly 9 percent from 2008.  Clearly, 2009 was not a banner year.  But the real problem was the drop in average rate to $124.45, down 12.7 percent.  The second half of 2009 saw Revenue per Available Room (REVPAR) drop nearly 15 percent, with a late year trend of 8 percent declines.  This was a big improvement from the first half of 2009, when we saw 25 percent declines.

The good news: we are on the road to recovery, and 2010 should see a flattening out of occupancy and rate.
Read More About The Light at the End of the Tunnel is Closer than You Think: Hospitality Forecast, 2010

Interactive online specials, special events, amazing and genuine customer service, leadership required to weather the storm.

Naked bootleg is a term used in football whereby the quarterback runs counter to his blockers and tries to create a run or pass opportunity with no help from his blockers. Well, we are operating our hotels naked but not by choice. We have no “wind at our backs” from a strong economy and no “compression” from other areas such as conventions or events. No, we must build our hotel businesses from scratch during these times.

Management today must include creative leadership that stresses the urgency to work as a team and find ways to entice corporate travelers and groups to our hotels. Gone are the days when we just responded to leads from our brands and convention bureaus. Also gone are the days when we posted our “vacancy” signs outside the hotel and guests would just check in…yes, I was around in the 1970s when that is all that was necessary to fill a limited service or mid-market hotel.

Today, we need to be developing revenue sources in a whole new ballgame. Consumers are vigilant at finding the absolute best value out there. They shop multiple web sites and rely on social media to get input from friends or those who think alike. That means that we as operators must know what key words to use to get potential guests to find our own web sites and we must proactively utilize social media to market our products. This medium includes but is certainly not limited to Trip Advisor, Twitter, Facebook and Linked-In.
Read More About Naked in 2010: Football Play Gives Game Plan to Hoteliers

During periods of economic recession, there is typically a shifting of market share from traditional channels to discount channels. In 2008, brand sites had 73 percent share of the market. According to TravelClick, it is 70 percent in 2009. Another sign that we are in the economic doldrums is when corporate bookings disappear and the consumer leads the market. Weekends are up in 23 of the top 25 markets according to Smith Travel Research (STR) – considering that each of those top 25 markets is down in revenues year over year, corporate bookings have got to be lagging badly.

RRC Associates states that leisure trips are not impacted like corporate bookings. While that is heartening, those of us who are full with leisure travelers know that they are not paying for rooms without negotiating aggressively for the very best deal they can get. To date this year, REVPAR (revenue per available room) is down 21 percent in those top 25 U.S. markets. In San Diego, it is down 25 percent according to STR. The RRC Associates study indicated 32 percent feel that the business travel recovery will be in 2011, ahead of 19 percent who say it will be in Q3 of 2010, 19% Q4 2010, 13% 2012, 17% beyond 2012 and there is a major shift or “trading down” of accommodations from luxury to upscale and upscale to mid-scale.

Big negative changes in average daily rate have fueled big drops in net operating income. This has already had a massive impact on the ability or lack thereof to refinance. One of the following scenarios will actualize in 2010:
Read More About The Hotel Industry Recovery: A Primer

Five strategical points that will lead to success: location, product, management, marketing and financial structure.

There are over 450 hotels in San Diego County, representing over 57,000 rooms and suites. Chains and institutions own most of the larger hotels, but small business operators own many. 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. The capital markets virtually walk away from the hotel market when times are tough…and tough is an understatement today.

This year, at each lodging conference, analysts talk about the commoditization of the industry due to the transparency of rapidly declining rates, difficulty in obtaining any kind of financing and the inability to determine where the 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.

Today, the supporting team is more important than ever before. The pace of change in technology alone keeps most entrepreneurs close to a technology advisor. Further, investors, partners and lenders are often required and these individuals can make or break a business plan. The quality of and relationship with key employees and team members is paramount to the success of a hotel. One entrepreneur cannot optimize revenues and expenses, go out and make sales calls and handle the financial end of the business.

Read More About Entrepreneurial Success in Today’s Ridiculously Ugly Hotel Environment

By: Robert A. Rauch, CHA

No, we’re not talking about former President Bush.  The “W” hotel is the talk du jour as they basically handed the keys back to their lender this past week.  Is this the first of many to come? While the underlying market value of hotels typically declines only 20-30 percent during a recession, there will be some distressed assets that will trade at an even deeper discount.  In the case of the “W,” the owners, Sunstone, made a strategic decision. They are a public company with a non-recourse loan, and the value of the asset as well as the cash flow no longer footed to the debt on the property.  Any hotel purchased or refinanced in the “go-go” years of 2006 and 2007 might find themselves in a similar loan default.

What is the proximate cause of the decline in values and subsequent defaults?  One is the hotel finance market and the other is declining net income (NOI).  Read More About It’s Not About “W”