California’s first oceanfront boutique hotel modeled after Balinese retreats captures exotic charm and the culture of genuine hospitality

La Jolla, CA, November 21, 2011 – Reminiscent of the tranquil retreats of the Indonesian island, Pantai Inn (pronounced pawn-tai) will open Thanksgiving weekend 2011 with ten richly appointed suites designed with custom-made, wood-carved furnishings, stone carvings, and hand-selected décor from Bali. Pantai Inn offers one- and two-bedroom suites, plus Pandang, the property’s signature three-bedroom villa.

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The budgeting process for 2010 has been very difficult but we have the answers.  PKF Consulting just came out with a forecast saying that nine straight quarters of declining lodging demand will come to an end in the second quarter of 2010. They are forecasting continued erosion of average rates.

Most investors expect continued declines in revenues and net income and that will result in lower asset values. While all of this is bad news, I am very bullish on the long-term prosperity of the lodging sector, especially in San Diego. In this article, I will provide insights into San Diego’s current, and near term financial performance based on a wide variety of factors.
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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.

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