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Despite its Small Stature, the 44-room Motel 9 in Oceanside, California
 Offers an Example of the Punishing Effects of the Recession
 on the Hotel Business

By Jeff Rowe, North County Times, Escondido, Calif.McClatchy-Tribune Regional News

October 28, 2009 --The end of the Great Recession can't come soon enough for the hotel business.

Because people cut leisure travel at the first whiff of a jittery economy and companies neither hire new workers nor send them on trips until they are sure a recovery is in place, lodging is typically among the last parts of the economy to recover after a recession.

Thus far, reports of tentative national recovery apparently lack enough zip to inspire confidence in many leisure or business travelers, although some of the best rates in years are available.

At the Motel 9 in Oceanside, 44 rooms await guests; only eight were occupied Sunday night.

Occupancy has plunged 60 percent since the recession began, and manager Mark Gallagher and owner Chang "Charlie" Kim yearn for even feeble signs the recovery is pulling into their parking lot.

They may wait a while longer.

Los Angeles-based PKF Consulting tracks the hotel business; the company's most recent report says occupancy at hotels along the coast in North San Diego County fell almost 7 percent in August compared with the same month last year, while the average room rate fell almost 14 percent. Occupancy fell 15 percent at Temecula-area hotels while the average daily room rate fell 11 percent.

Moreover, room rates are expected to continue to fall next year, PKF said.

"We're not going to see a change in the hotel economy until mid-2010," says Jordan Richman, senior vice president-hospitality practice group for Grubb & Ellis in Los Angeles. "The industry has tightened up dramatically and laid off a lot of people."

Hotel recovery typically follows declines in office vacancies, and that hasn't happened yet, he said.

To be more competitive in a tough environment, smart hotel operators are marketing aggressively on social networking sites such as Facebook, Linked-In and Twitter, said Mark Kallenberger, a Costa Mesa-based hotel consultant.

More broadly, up to a third of hotel bookings are made online, he said.

Kallenberger and Richman said hoteliers soon will begin suffering the same fate as homeowners in recent years -- a wave of foreclosures. Just as giddy homeowners did, hoteliers bought properties in the boom years with down payments as low as 20 percent and now struggle to make their loan payments, especially if they refinanced and the hotel is worth less than they owe.

"We're certainly going to see closed hotels," Kallenberger said. "The reason we have not seen them yet is a paralysis of the lenders."

Despite its small stature, the Motel 9 nonetheless offers an example of the punishing effects of the recession on the travel and tourism industries.

It has cut two full-time maids, generates far less linen to send to a laundry service and has shelved a $185,000 refurbishing that would include a tile roof, arches along the walkway rooflines and tower for the hotel sign, which looks every one of its 34 years.

Motel 9 also confronts several other challenges. As an independent, it lacks a national reservation center to feed it customers. Motel 9 also ranks last in a tripadvisor.com ranking of 24 Oceanside hotels. Among other things, guests complained about the water pressure, service and room smells.

Mention of the online complaints seems to visibly pain Gallagher, who says the hotel never scrimps on cleanliness.

Gallagher says he suspects some of the complaints were fabricated by rowdy guests the hotel evicted.

How can the hotel overcome the negative online complaints?

"There's nothing you can do," shrugged Gallagher.

Given its challenges, Motel 9 perhaps has suffered more than most other hotels. But try telling that to Lily Hsue.

Her family owns the 25-year-old Dolphin Hotel in Oceanside and struggles to fill half the rooms on weekdays. Moreover, she has cut room rates to match competition.

"Everyone is shopping around," Hsue said.

Little of the glamor and sparkle of top-drawer hotels dribbles down to the Motel 9s of the world where, at best, people leave the room clean, and at worst, they spill beer on the carpet, break furniture or steal light bulbs, fire alarms and interior door handles.

A big beer spill typically is fatal for a hotel room carpet, Gallagher says, because it is extremely difficult to get the smell out.

Carpet usually lasts for three years in an economy motel, he said; beds last for five.

Famous faces turn up only infrequently at hotels such as Motel 9, where rooms begin at about $50. But Gallagher said the then-wife of football great O.J. Simpson -- Nicole -- checked in one day a few months before she was killed.

He gave her the best room at the time -- 366. Nicole Simpson hadn't been in the room for 20 minutes, Gallagher recalled, when a tall man came and a ferocious argument ensued.

Gallagher says he couldn't tell if it was O.J.

It's likely that tonight room 366 -- and many others -- will be silent, and empty.

"The economy never has been as bad as this," Gallagher said. "We just have to hang in there."

Call staff writer Jeff Rowe at 760-740-5417.

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To see more of the North County Times or to subscribe to the newspaper, go to http://www.nctimes.com.

Copyright (c) 2009, North County Times, Escondido, Calif.

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