As co-owner of San Luis Obispo’s Comfort Inn & Suites Lamplighter, Nipool Patel is always working to attract more visitors to San Luis Obispo County. The former chairman of the California Lodging Industry Association board has also served for three years on San Luis Obispo’s tourism business improvement district board to fund marketing efforts for hotels in the city. Patel recently talked to The Tribune about the economy’s impact on tourism and shared his views on marketing the county overall.
Q: In 2009, San Luis Obispo County’s tourism industry was down, but less than neighboring counties. At that time you called SLO County “the best of the bunch” in California. What’s your assessment of where the local tourism industry stands now?
A: San Luis Obispo County has improved drastically in tourism. 2009 was a very bad year, not only for our industry, but for the economy as a whole. I called it the “best of the bunch” back in 2009 because our numbers looked the best in the state. Other cities lost occupancy and average daily rates (ADR) at a much faster rate then we did. This is also because most of these cities had a lot more inventory (rooms) then we did. As the economy has gotten better, we have been able to increase our occupancy and average daily rates. Given the economy now, our city stands in a good place. We as a city and county have stayed strong in our marketing efforts and have continued to increase funding year after year. We can see the results when we compare our bed tax (transient occupancy tax, or TOT) collected. For the first quarter this year, we are up almost 10 percent compared to last year.
Q: Which areas of the county do you see as the strongest or having the most potential to attract visitors?
A: Paso Robles right now is looking very strong. The wine region and the city itself have grown quite a bit in the past five years, and they are capitalizing on that. Here in San Luis Obispo, we don’t have that much room for hotel room growth. There are not a lot of places to put hotels. But when you are talking about growth, there is room growth and rate growth. Paso Robles has a higher potential for adding rooms, but San Luis Obispo has a stronger potential to increase rates on existing rooms.
Q: How meaningful of a measurement is revenue per available room (REVPAR)? Are there other meaningful metrics for measuring the success of the local tourism industry?
A: REVPAR is calculated by multiplying the hotel’s average daily rate and its occupancy rate. REVPAR is a very meaningful indicator. It gives you a more accurate picture of a hotel compared to only seeing its occupancy or average daily rate. However, you need to remember that this only gives you information on the hotel’s room revenue. For hotels that offer other services such as meeting space, food and beverage, etc., you need to look at more detailed financials to compare how they are doing year over year.
Q: Do you know where we are compared with last year in terms of REVPAR?
A: We are about 10 percent above last year in bed tax (TOT) revenue. From talking to several hotel owners in the county, they are about 8 to 12 percent above last year in occupancy. REVPAR has gone up this year compared to last year; however it has not increased at the same level. This year we are looking at REVPAR to increase about 6 percent compared to last year.
Q: What are the new trends in hotels and their services? How does SLO County compare with other communities in terms of setting or following trends?
A: There are a few different trends I can think of. Your company needs to have a presence online. Not only does it need a regular website, but it also needs to be mobile-device friendly. More and more people want their information on their mobile devices. More travelers are booking their stays while they are on the road and trying to get the best deal. I am not sure how many of the hotels in the city or county have their websites mobile friendly. We are currently in contract to get our site redone. For a small business it can be a costly expense. Another trend I see is that hotel shoppers have become very savvy. They are always looking for the best deal.
Q: Why are there not more hotels in the downtown core in San Luis Obispo?
A: Availability and cost of land are probably the most important factors. Parking is also a large issue.
Q: Are there any other upcoming hotel expansions or renovations you are optimistic about? Any you think are ill-planned?
A: There is a new hotel in Paso that has broken ground. It’s an upper-mid-scale property and should do well in that market. San Luis Obispo has two projects that are going to change downtown, The Garden Street Project and The Chinatown development. Both of these projects are quite large. They are also a few years out. Once they are completed they will attract more tourists. San Luis Obispo definitely needs more boutique types of properties.
Q: What defines a “boutique” hotel experience?
A: Boutique hotels cater to unique individuals. San Luis Obispo County has always been that way. We draw people who don’t want to go to the big city. If you travel a lot and stay in a chain-affiliated hotel every night, it all is the same — you know the exact floor plan and where the bathroom is in every room. A boutique hotel can also be referred to as a lifestyle or design hotel. It creates an individualized and personalized experience for someone wanting to spend some time in the room.
Q: Communities throughout the county have organized tourism business improvement districts (TBIDS), where hoteliers agree to collect a monthly assessment of 1 percent to 3 percent on hotel rooms to use for marketing. What are your thoughts on the effectiveness of this approach so far?
I have been involved in the organizations of the TBIDs since they started. I currently serve on the city of San Luis Obispo TBID. I think that this is a great approach. Hotel owners/operators control the funds and make decisions on how to market their area. We as a county now have a budget of more than $3 million to market ourselves and compete directly with our neighboring counties and other larger cities.
Q: What is the TBID’s marketing strategy? What is the message you want to send that will attract visitors to our area?
A: The San Luis Obispo TBID’s goal is to increase room revenue. We try and focus on increasing room stays in the off-season months and slower weekends. How we do this is through our marketing strategy and our partnerships with events and organizations locally.
We have had a great relationship with Rosetta over the past four years, and they have created a great marketing program for us.
The TBID has partnered with several events that have grown in the past few years and put San Luis Obispo on the map, such as Remnants of the Past, San Luis Obispo Concours, SLO Film Festival and Sunset Savor the Central Coast. We have also partnered with Cal Poly’s athletic department.
The TBID has grown in the past four years, and I feel that it has done a great job. The TBID in the past few years has collaborated with the city of San Luis Obispo’s Promotional Coordinating Committee, as we have similar goals. We together have this year hired a tourism manager. The city has not had someone whose job was to oversee the promotion of its city. This is big.