April 25, 2009--Data released this week showed a sharp drop in the number of people visiting Riverside County this year, an accelerating downturn that people in the hospitality industry have blamed on a deep freeze in business travel.

Visitors stayed a total of 308,000 nights through the end of March, a 14 percent decline from the same three months of 2008, according to monthly reports from Smith Travel Research, a Tennesee-based company that tracks the nation's lodging industry.

The reports cover about 6,800 rooms in local hotels, motels, inns and resorts across Riverside County, excluding the resort-rich Palm Springs area and the Ontario-Riverside-San Bernardino metropolitan area.

Doug Leiber, a former general manager of the Temecula Creek Inn now with the Azul hotel management firm, said the year-plus recession has damped business travel more dramatically than tourism.

Leiber called it the "AIG effect": He and other people in the industry have said that publicly held companies, particularly, have hesitated to hold conferences at pricey resorts since fall, when several such conferences for American International Group triggered outrage among shareholders and taxpayers.

Tourist traffic has slowed less dramatically, Leiber and other hoteliers said. Rather than foregoing vacations altogether, tourists are usually responding by taking shorter trips, staying closer to home and hunting for bargains.

"There's no doubt that the consumer is looking for deals," Leiber said.

The Smith Travel reports appear to confirm accounts that discounting and aggressive bargain-hunting may be cutting deeply into the lodging industry's profitability. The average daily room rate in the three months fell 6 percent from the year-earlier period, to $80.60.

Tourists and travelers paid $24.8 million for rooms between January and March, 20 percent less than a year earlier. Those numbers don't include spending on restaurants, theme parks and other tourist attractions.

Lodging industry representatives said again this week that Temecula Valley and San Diego County's status as "drive" markets is helping to blunt the recession's impact: Southern Californians who decide against more elaborate vacations overseas often travel locally, even as other Americans find themselves lacking the means for a vacation in Southern California or anywhere else.

Smith Travel reported a less drastic downturn for the lodging industry in San Diego County, whose tourism sector is more fully developed than Riverside County's. Average occupancy fell to 54 percent from 63 percent in the first three months of 2008 and 67 percent in the same period of 2007.

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