U.S. Economy/Introduction to Hospitality Market
Most economic forecasters believe that the past several quarters of economic growth were partly a result of fiscal stimulus. Based on that, the forecast for 2011 is for slower growth as the supports and stimuli are now dissipating. The recovery now depends more heavily on the private sector, which faces weakness in income based on high unemployment, reluctance of businesses to rehire aggressively and large overhangs of vacant homes and unused industrial capacity. Moreover, availability of credit is expected to be slow. Goldman Sachs is forecasting a reacceleration in growth to 3 percent in the fourth quarter of 2011 as the headwinds gradually dissipate.

This jobless recovery is creating an environment where expectations from several economists are for 10 percent unemployment again in 2011. Inflation is expected to remain well under control going forward based on the latest survey of Federal Reserve Board likely actions. The following chart shows the Goldman Sachs Forecast for key indicators of the U.S. economy though we have already mentioned that many believe unemployment will actually climb next year:
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Bob Rauch answers questions from Craig Sullivan of The Hotel Inventory on the hospitality market in San Diego during the 2010 Lodging Conference.

Click here to see Bob’s article in The Hotel Inventory

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.

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Hydrating, Rejuvenating Sunless Tanning System Comes to Serenity Spa & Salon

In an effort to combat the most common form of human cancer, Serenity Spa & Salon is now offering the Infinity Sun spray tan to people who want a healthy glow, without the dangerous side effects that come from spending hours in the sun or tanning bed.

In addition to slicing the risks of skin cancer, Infinity Sun uses a cutting edge technology to deliver the most customized tan through anti-aging, hydrating elixirs for the ultimate beautifying experience. Celebrities like Jessica Alba, Giselle Bündchen, Paula Abdul, David Beckham stand by Infinity Sun, and apply the sunless spray tan before red carpet appearances and big events.

“As people are becoming ever more aware of the dangers of sun exposure and tanning beds, we are happy to offer this new service that will give our clients a healthy glow without aging their skin or putting them at risk,” said Jessica Woolfrey, manager of Serenity Spa & Salon. “This system, and our expert tanning consultant will deliver the longest-lasting, most natural looking sunless tan possible.”

Infinity Sun’s “Glow On the Go” eco-friendly sunless tanning aerosol is made with 7 essential oils, Vitamin A, E and vanilla aromatherapy. It is the only spray tan in a can that does not use propellants and alcohol, and keeps the skin soft and hydrated, while creating a luminous glow that lasts for up to 7 days.

Serenity Spa and Salon, a full-service Spa and Salon in Carmel Valley, serves locals and visitors to America’s Finest City. They offer a full range of services including hair, beauty, massage, and nail treatments. For more information about Serenity Spa & Salon visit www.serenityspasandiego.com or call 1-858-369-4900 to book an appointment.

Infinity Sun is featured prominently on many hit TV shows, including Millionaire Matchmaker, Entourage, Sunset Tan, The Style Network’s “Style Scenes”, E! Entertainment’s Academy awards “48 hour make-over”, Dr 90210 and many others. Infinity Sun was also the Official Spray Tanning system on the Britney Spears Circus Tour. For more information about Infinity Sun visit www.infinitysun.com or call 323-782-1049.

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.
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