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City Snapshot: San Diego

(January 2013) posted on Fri Feb 22, 2013

A look at hospitality development trends in the city that will host the inaugural BDwest trade fair.


By Matthew Hall

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THE PULSE

Life’s a real beach in this oceanfront metro, whose tourism-driven economy features such regional attractions as Sea World, the San Diego Zoo and Legoland California Resort (which later this year will become home to the second Legoland Hotel in the world—see item on page 26). Graham Downes, founder of San Diego-based Graham Downes Architecture, notes that the area’s “vibrant economic climate, picturesque location and enviable weather patterns will always lure new brands and concepts.”

THE NUMBERS

A major uptick in the metro area’s hotel development pipeline over the next three years is forecast by Robert Rauch, president of R. A. Rauch & Associates, a San Diego-based provider of management and consulting services to boutique hotels. Rauch’s research shows 478 rooms will be added to the market in 2013, followed by 1,000 more in 2014 and 2,000 additional in 2015. “Those figures translated into an increase in added capacity for the market totaling 6 percent, which will be largely absorbed by anticipated increases in demand of 2 percent per year,” he notes.

THE HOTSPOTS

The region has seen continued strength in both leisure travel, fueled by a steady stream of international visitors, and in corporate travelers visiting its cluster of communications technology and biotech/biomedical companies, says Rauch. That activity has translated into healthy results for hoteliers in such submarkets as La Jolla, Del Mar, Mission Bay/Beaches, Mission Valley and the Interstate 15 corridor, he notes.

And in the next few years, development activity on the city’s south side is likely to experience a major uptick, once work starts on the 556-acre Chula Vista Bayfront complex. That project involves transforming a major swath of land on south San Diego Bay from an underused industrial waterfront property into a world-class resort and conference destination. If all goes according to plan, construction on that mega-development will get underway in 2016. (An insider’s view of the Chula Vista development will be offered at an educational seminar during the inaugural BDwest interiors trade fair, April 4-5 at the San Diego Convention Center.)

THE OBSTACLES/OPPORTUNITIES

Many hotels in downtown San Diego are reliant on the city’s convention center for business, and bookings at that facility have been relatively soft over the past couple of years, Rauch notes. But Downes says that there has been a plus side to that situation for local hoteliers: “They’ve focused more on alternative revenue sources, such as their food and beverage and corporate meeting business. These extra marketing initiatives and overall honing of their operations will serve them well in coming years.”

In addition, Downes notes that plans to expand the convention center by 2016 would help the city attract more large-scale meetings and boost business for nearby hotels, including those in the historic Gaslamp Quarter. San Diego’s restaurant sector, meantime, is hyper-competitive right now, Downes says. “There’s an over-saturation of hipster-attentive dining places opening,” he explains. “It feels like Brooklyn on steroids.”
 


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