Jan 29, 2008

Weak U.S. dollar fuels tourism boom

Industry report: Hotel occupancy rising in San Mateo County

By Tim Simmers / MediaNews

While others worry about a possible recession and the stock market continues its roller-coaster ride, San Mateo County hoteliers keep on smiling.

Buoyed by a weak dollar that makes the Bay Area a bargain for international travelers, hotel occupancy levels are holding up well, and room rates are rising, according to an industry report.

Combine that with a fairly strong local high-tech sector that's fueling business travel, and it's a recipe that's paying dividends to hoteliers.

"The economy looks a little skittish, but everybody's looking at the Bay Area skirting a recession," said Tom Callahan of PKF Consulting, a hotel advisory firm. "It won't be a great year, but travel planners still see the West Coast as a bargain."

International travel through San Francisco International Airport was up 11 percent from Europe in November, compared to the previous November. Travel through SFO was also up 9 percent from Australia, 8.4 percent from Canada and nearly 5 percent from Mexico. In addition, SFO is considered a gateway to the Far East, where traffic has also been growing.

In November, San Mateo County's average daily hotel room rate jumped 21 percent to $137.41, compared to November 2006, according to the PKF report.

Occupancy levels were up 7 percent in November, to 73.7 percent, from the same month in 2006.

For the first 11 months of the year, occupancy rates in the county were off 1.7 percent, but that was due to a number of large hotels renovating and taking rooms off the market, Callahan said.

"The meeting market is holding up well for now," said Stan Moore, general manager at the Airport Marriott in Burlingame. The hotel has booked more group rooms for conventions in 2008 than ever before, Moore noted.

San Francisco also expects a stellar convention business this year, with 950,000 conventioneers booked, compared to 700,000 in 2007, Callahan said. Traditionally, there's a big spillover of hotel business to San Mateo County when San Francisco is bustling.

The big money in hotels comes from convention and group business, said Anne LeClair, president and chief executive officer of the San Mateo County Convention and Visitors Bureau.

But this year, LeClair and her group are making a push for international travelers, hosting top travel bookers from Air New Zealand recently and also top travel writers from Australia.

LeClair plans to take the travel writers on a tour of San Mateo County.

"What is generated in ink can create a lot of interest," said LeClair, referring to potential travel articles. "Travelers are getting a good deal in exchange rates, and the bookers say they're going to send a lot of people to the (Peninsula)."

With room rates on the rise and occupancy levels holding steady, local cities that depend on hotel occupancy taxes are also benefiting.

Cities with hotels get a tax on the rooms for their coffers, which help pay for fire protection, police and street improvements.

"We're experiencing a 10 percent growth rate on the hotel taxes year-over-year," said Jesus Nava, finance director and treasurer of the city of Burlingame, where hotel tax revenues climbed 11 percent in fiscal 2007 to $10.3 million.