Nov. 20, 2009--Hotel occupancy fell further in September at area hotels, and a new report tells hoteliers that improvement is unlikely until 2011.

Compared with the same month a year earlier, occupancy fell 2 percent to 62.4 percent in coastal North San Diego County hotels. Occupancy fell 1.8 percent to 62 percent in Temecula-area hotels, according to PKF Consulting of Los Angeles.

Average room rates also fell, dipping 3.5 percent in North San Diego County and 5.5 percent in the Temecula area.

Tough days lie ahead, PKF said, in part because hoteliers budgeted for a nearly 7 percent increase in revenue last year. Instead, they got a 1.8 percent decline. Moreover, the outlook for next year is grim, PKF said.

"Budgeting for 2010 will be extraordinarily tough for U.S. hoteliers," PKF said. The hotel consulting firm forecasts an 8.3 percent drop in hotel profits nationally.

Rick Lawrance, president of the Sacramento-based California Lodging Industry Association, said the recession has hurt all segments of the state's travel industry.

Moreover, he said, the industry is still struggling to overcome an image that business travel is frivolous, an impression created earlier this year when it was revealed that some companies that accepted bailout money used it to take trips to Las Vegas and the Super Bowl.

Yet no amount of marketing or promotion can replace a simple economic fact, Lawrance said: Millions are out of work, and if they don't have a job, they aren't traveling. And "travel deals are everywhere," Lawrance said.

Area hoteliers hope they can build both Temecula and Oceanside as easily reached destinations for people living in adjoining counties.

"Oceanside has great plans, especially for the downtown," said Ria Jareno, general manager of the Holiday Inn Oceanside Marina, which opened earlier this month. She hopes the hotel will be part of Oceanside's emergence as a tourist destination and center for business meetings.

Occupancy at Marriott's Residence Inn Oceanside rose in October compared with last year, a boost managers attributed to more government, military and business travelers.

In the longer term, the California Welcome Center Oceanside and Oceanside hoteliers are planning to ask the City Council to allow hotels to add a 1.5 percent fee to hotel bills. Such a fee would raise about $470,000 the first year, said Leslee Gaul, director of the welcome center. Funds would be used for marketing and to finance a study of "what are the core characteristics of Oceanside -- what is the soul of who we are," Gaul said. That information will be used to help formulate a marketing campaign.

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

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