Tourism Officials Plan Pivot to Staycations as Revenues Plummet

San Diego hoteliers whose business has been hammered amid coronavirus shutdowns plan to look to locals and regional road-trippers to help them recover once pandemic restrictions are lifted.

Since the governor and county officials issued stay-at-home orders two months ago, San Diego Tourism Authority data shows one of the region’s most crucial moneymakers has seen average countywide occupancy rates drop to as low as 24 percent among hotels that remained open. By comparison, hotel occupancy hit about 80 percent countywide last March and April. In the last two weeks of April, hoteliers had closed down about a quarter of the county’s nearly 64,000 rooms.

The city’s Tourism Marketing District has also projected a 90 percent drop in revenue that comes from a surcharge on hotel bills in April and May, hinting at the magnitude of the city budget hit during those months alone. Mayor Kevin Faulconer’s revised budget released Tuesday  forecasted a 30 percent drop in hotel-tax collections compared with initial projections for the budget year ending on June 30 – and a 37 percent deviation from initial forecasts in the coming budget year.

Tourism leaders are hoping San Diegans and tourists from neighboring cities and states can help the industry start to emerge from that devastation in coming weeks.

The Tourism Authority is tentatively planning to roll out a marketing campaign on July 6 to encourage locals to enjoy hotels, restaurants and destinations. That date could change depending on the status of local attractions such as SeaWorld, the San Diego Zoo or Balboa Park.

Next, they plan to begin targeting potential visitors from Arizona, Nevada and elsewhere in Southern California to try to start filling more hotel rooms.

“We’re bullish on the fact that as soon as people are able to travel and we are able to talk to them, we are going to get a big spike,” Tourism Authority CEO Joe Terzi said.

Exactly when – and how – reopening looks for the tourism industry is unclear.

With the information it has now, the Tourism Authority said it doesn’t expect to begin marketing San Diego to tourists nationwide until next year.

What is clear: Demand is already increasing for local getaways despite coronavirus restrictions – and there is confusion about what those restrictions allow.

For now, state and county officials say hotels and vacation rentals should only remain open if they are assisting with coronavirus responses such as temporarily housing essential workers, people who may have coronavirus or vulnerable homeless Californians though those restrictions. Hotel workers who are working on these efforts are considered essential workers.

Helen Robbins-Meyer, the county’s chief administrative officer, also clarified Tuesday that the county doesn’t expect the state to lift tourism restrictions until the final stage of its four-phase reopening plan – which puts it in the same category as theme parks, stadiums and bars.

But Tourism Authority data shows hotel room bookings are on the rise as San Diegans get antsy at home. During the final week of April, hoteliers saw about 17,000 additional nightly bookings than it did the previous week. During the week of May 3, they saw a spike of another 15,000 nightly bookings over the previous week. More recent data was not available.

Bill Evans of Evans Hotels, which operates the Catamaran and Bahia resorts in Mission Bay and The Lodge at Torrey Pines, said his hotels have remained open to house health care workers during the pandemic but have seen more staycationers in recent weeks.

“They can shelter in the hotel room just like they can shelter in their condo,” Evans said last week. “I think it’s for a change of scenery. I think it’s for mental health purposes.”

At the time, Evans said he believed his hotels were “following every guidance we have.”

County Supervisor Nathan Fletcher later clarified the restrictions at a county press briefing.

“Any of those types of rentals – vacation rentals, short-term vacation rentals or hospitality industry rentals – are appropriate and available if – and only if – they’re housing essential workers or if they are directly tied to the COVID response efforts,” Fletcher said.

Chuck Abbott, general manager of downtown hotel InterContinental San Diego, said last week he had been unaware of that restriction until a conversation with Voice of San Diego. The Embarcadero hotel has remained open during the pandemic and Abbott said his hotel has done its best to keep up with new directives.

“We have had people tired of being at home and wanting to get away and (who) feel a hotel would be a nice place to get away,” Abbott said.

Abbott said Tuesday his hotel has not been proactively marketing to out-of-towners or even local visitors other than provide information on its website but said he was confused about how he might vet other visitors to the hotel, particularly given the wide spectrum of essential workers and privacy concerns.

“I think we’re doing everything that we need to do at this point, and as new things come out, we are adapting,” Abbott said.

What Evans, Abbott and Namara Mercer of the San Diego County Hotel-Motel Association said they have been clear on is the need for their hotels to implement new protocols, including increased cleaning schedules, social distancing standards and requirements that employees wear masks. They have also begun leaving hotels vacant for 24 to 72 hours after guests leave a room and before hotel workers enter to clean it.

Those new protocols have been included in guidance from the state and the California Hotel & Lodging Association.

The goal is to be prepared now – and whenever they can begin welcoming more guests.

“The hotels are ready to open,” Mercer said. “They have the demand to open.”