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The Seattle Times
July 12, 2011
http://seattletimes.nwsource.com/html/localnews/2015580659_hoteltax12m.html
Downtown Seattle hotel owners want to add a $2-per-night room tax to fund advertising that would promote leisure travel to Seattle, particularly in the offseason.
Cuts in government funding — including the closure of the state tourism office — and a rash of “staycations” prompted hotel owners to seek the fee, which was expected to be announced Tuesday morning.
More than three-quarters of hotels that would be included already have signed petitions expressing support. The Seattle City Council could vote on the tourism-improvement district this summer.
The fee would apply to 53 hotels downtown and in Belltown, South Lake Union, the Chinatown International District, Pioneer Square and part of Capitol Hill. Hotels with fewer than 60 rooms would be exempt.
The $2 fee would be on top of the 15.6 percent tax Seattle hotel guests already pay in sales taxes and a room tax. The 7 percent room tax goes toward paying off debt on the Washington State Convention Center and advertising the city as a business-convention site.
The new fee would raise about $5 million to $6 million in 2012 to fund promotion, supporters say.
“Hotel stays, especially leisure business, is all discretionary, so that takes the biggest hit,” said Howard Cohen, president of the Seattle Hotel Association.
While hit by a decline in visitors because of the economic downturn, hotels locally also have seen a drop in Japanese tourists after their nation’s March earthquake and in visitors from the South and Midwest after tornadoes there, said Cohen, who manages two Best Western hotels near the Space Needle and the Sixth Avenue Inn.
“This industry is huge for Seattle,” said City Councilmember Tim Burgess.
Government funding for tourism promotion has been slashed in recent years. The state’s elimination of the Washington State Tourism Office makes Washington the only state in the country not to spend money promoting tourism.
Seattle donated $50,000 this year to Seattle’s Convention and Visitors Bureau for promotion, but that money is expected to be cut from the city budget next year.
“I think traditional sources of funding tourism in many cities and many states is changing dramatically,” said Tom Norwalk, president and CEO of the visitors bureau. “We’re really using something that’s been adopted widely around the country.”
The new fee would make Seattle’s taxes and fees on hotel rooms among the highest on the West Coast, according to 2009 data from the National Business Travel Association. In San Diego and Portland, for example, hotel guests pay 12.5 percent. In San Francisco, they pay 15.5 percent.
A City Council analysis showed for a $150 room, guests would pay 16.6 percent with the new fee.
Mayor Mike McGinn said he supports the fee in part because the industry is offering to tax itself.
“They see the value in the ability to promote Seattle as a destination,” he said.
The new money would market Seattle as an offseason destination. A committee would determine how to spend the money.
Tourism is not a problem during summer months, said Norwalk. The new marketing would advertise the city’s food and wine scene, cultural events, holiday shows and activities like that, he said.
“We have many, many cultural activities,” said City Councilmember Jean Godden. “We were having Picasso last winter … We don’t have harsh winters. Sometimes we have a little bit of rain, but it’s usually misty and light and not gullywashers by any means.”
Seattle’s tourism industry is on the rebound after a low point in 2009.
In 2010, 9.3 million overnight visitors booked hotel rooms in King County, versus 8.8 million in 2009. Visitor-generated state and local tax revenue was up 8.4 percent in the county in 2010, as well, according to the Convention and Visitors Bureau.
San Francisco Business Times
July 11, 2011
http://www.bizjournals.com/sanfrancisco/news/2011/07/11/san-francisco-hotel-rates-high-may.html
San Francisco hotels saw strong gains across all industry metrics in May 2011; occupancy, average nightly rates and revenue per available room were all up.
Occupancy in the city was 84.5 percent in May 2011 compared with 82 percent in May 2010. Better still, average room rates jumped 19.5 percent to $193.72 compared with an average nightly rate of $162.10 a year ago; revenue per available room grew 23.2 percent in May 2011 to $163.70.
All of Northern California posted strong results for May 2011, according to PKF ConsultingbizWatch , though few sub-regions performed as well as San Francisco. Northern California occupancy was 74.1 percent in may 2011, compared with 71.2 percent full a year ago. Average room rates in Northern California jumped 10.1 percent in May, to $138.55 from $125.80 a year ago; revenue per available room was $102.72, a 14.7 percent over revPAR of $89.55 a year ago.
Among the strongest sub-regions, both San Francisco Airport and Marin County outperformed San Francisco on revPAR in May, primarily because of occupancy gains. Monterey/Carmel, Napa and other Northern California, including Lake Tahoe area, were among the weakest submarkets in May 2011.
For the first five months of the year, San Francisco has outpaced Northern California, though the entire region is recovering. San Francisco occupancy is at 77.8 percent through May. Average room rates are up 15.5 percent to $176.32, compared with an average daily rate of $152.65 for the first five months of 2010. Revenue per available room is up 21 percent in San Francisco, to $137.15.
For all of Northern California, revenue per available room is up 13.6 percent for the first five months of the year, to $89.14 compared with $78.46 in the first five months of 2010.
Press Release – Grand Hyatt San Francisco
July 8, 2011
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/07/07/prweb8625467.DTL
Grand Hyatt San Francisco, an iconic hotel located in the heart of San Francisco’s Union Square, announces an extensive $70 million, multi-phase transformation. With completion anticipated for fall 2012, the substantial project will re-establish the landmark hotel as a world-class property, with 659 newly appointed, tech-forward guestrooms and suites, and a redesigned Grand Club®, lobby, open kitchen concept restaurant and lounge, and upgraded meeting facilities.
“With our unparalleled location in the heart of vibrant Union Square, Grand Hyatt San Francisco has been a time-honored favorite for visitors to the city by the bay for more than 42 years, offering limitless access to world-class shopping, historic landmarks and attractions, and premier dining and entertainment,” said David Nadelman, general manager of Grand Hyatt San Francisco. “Our exciting renovation will reveal a sophisticated and luxurious new product, providing guests the very best in style, comfort and technology.”
Elegant Guestroom Renovations – The hotel recently completed the renovation of all 630 guestrooms and corridors including 21 Respire hypo-allergenic rooms designed to provide a comfortable sleeping environment for all guests, especially allergy sufferers. The new residential-style guestrooms feature ergonomic and spacious workstations, custom woodwork and spa-like glass and tile bathrooms. Rooms also have the latest in wired and wireless technology, including Uno-Bitell phones that double as alarm clocks and iPod® players, and 37″ LCD flat screen HDTVs that can be watched from all areas of the rooms. Connected to the televisions are jack packs, all-in-one multimedia hubs that easily pair the television with laptops or DVD players. Smart door locks “talk” to the thermostat and in-room safe, creating a wireless network, which helps the hotel monitor energy use and notify guests if items are left in the safe upon check-out. Floor-to-ceiling windows create sweeping views of the city and bay, while electronic blackout shades ensure a great night’s sleep.
New Grand Club®, Suites, and Meeting Space – Slated for completion in Aug. 2011, the renovation of Grand Hyatt San Francisco’s Grand Club® will provide new, exclusive and sophisticated amenities for members of the elite Diamond tier of Hyatt Gold Passport, Hyatt’s global loyalty program, as well as guests staying in Grand Club® rooms. In addition, the hotel’s 29 spacious suites will be completely updated to include hardwood floors, residential style furniture and fixtures, and the latest high-tech enhancements. The hotel will offer a variety of suites designed to fit a broad range of entertainment and business needs.
The renovation of Grand Hyatt San Francisco’s meeting space will also be completed in Aug. 2011. The transformed space will include the creation of the hotel’s Grand Foyer, 5,700 square-feet of flexible meeting space. The renovated Grand Foyer will be a highly-adaptable meeting and event space that can accommodate both large and small groups.
Renovations in 2012 – Additional improvements to Grand Hyatt San Francisco, expected to begin in early 2012, will include the redesign of the front drive and lobby, the introduction of a new open kitchen concept restaurant and upscale bar, and the exciting repositioning of Grandviews Restaurant and Lounge.
For more information about Grand Hyatt San Francisco, please visit the hotel online at www.grandsanfrancisco.hyatt.com or call (415) 398-1234.
About Grand Hyatt San Francisco – Sophistication on a Grand Level
With an unparalleled location in the heart of the vibrant metropolis of San Francisco, Grand Hyatt San Francisco offers luxurious accommodations, authentic hospitality and limitless access to the City by the Bay’s world-class shopping, historic landmarks, attractions, premier dining and entertainment. Ideal for business and leisure travelers alike, Grand Hyatt San Francisco features 659 guestrooms, including 29 suites, Respire hypo-allergenic rooms, a private Grand Club, expert Les Clef d’Or Concierge staff, a state-of-the-art Stay Fit health club, sophisticated dining with spectacular panoramic views, as well as award winning business facilities with 25,000 square-feet of flexible function space, plus San Francisco’s only conference theatre. For more information regarding Grand Hyatt San Francisco, please contact the hotel by phone at 415.398.1234 or visit the hotel website: www.grandsanfrancisco.hyatt.com
Lodging Hospitality
July 6, 2011
http://lhonline.com/news/time_to_buy_hotels_0706/
Lots of people I spoke to at the 33rd Annual New York University Hospitality Industry Investment Conference in New York last month agreed a fundamental method for determining whether it’s a good time to purchase hotels is whether within a given hotel market, there’s the ability for investors to purchase properties at below replacement cost at a time when average daily room rates are beginning to gain traction and show increases. There are now a number of hotel markets fitting into this acquisition opportunity model.
According to HVS President and Founder Steve Rushmore, areas that fit the model include traditionally strong markets like New York and San Francisco, and also re-emerging markets like New Orleans and Las Vegas. Many smaller markets fit the bill, too. One would expect in the not-too-distant future, investors will find it increasingly difficult to buy hotels below replacement cost in such markets. Combined with the early re-emergence of hotel acquisition financing at a time when mortgage interest rates are near historical lows, this period is indeed an attractive one for hotel acquisitions.
Consistent with Smith Travel Research’s recent re-categorization of midscale hotels from Midscale with Food & Beverage and Midscale without Food & Beverage to Upper Midscale and Midscale, the Penn State Index of U.S. Hotel Values has re-categorized its classifications, as well. The Upper Midscale category includes such hotel brands as Comfort Suites, Hampton Inn, Holiday Inn and TownePlace Suites, while the Midscale segment includes Baymont, Howard Johnson, La Quinta and Quality Inn.
The Upper Midscale hotel segment is anticipated to register strong improvements in market value of approximately 11% in both 2011 and 2012. The Midscale category is expected to show decent value increases of 7.6% and 10.9% in 2011 and 2012, respectively.
The Economy segment is projected to record the strongest percentage increases in hotel values in 2011 and 2012 of 15.0% and 17.8%, respectively. The Luxury segment is anticipated to show the highest increases in value per room of approximately $24,500 and $36,400 in 2011 and 2012.
John W. O’Neill, MAI, CHE, Ph.D., is director of the School of Hospitality Management at The Pennsylvania State University. He can be reached at jwo3@psu.edu or 814-863-8984.
Los Angeles Times
July 5, 2011
http://articles.latimes.com/2011/jul/03/local/la-me-sfo-glitz-20110702
Cheryle and Ernest Chin were anxious about getting home to Australia, and American Airlines wasn’t making it easy.
The massage therapist and her real estate developer husband had started out three days earlier in Brazil; they were still thousands of miles away, and the shortest flight of their multicontinent odyssey had just been canceled — San Francisco to Los Angeles.
But for two people on a forced seven-hour layover, the Chins looked remarkably relaxed. Ernest was face-down in a massage chair at the XpresSpa in San Francisco International Airport’s Terminal 3, his neck and shoulders being expertly kneaded. Cheryle was admiring her half of a his-and-hers pedicure.
If you have to be marooned at a California airport, San Francisco is the place to be. Free WiFi? Check. Linen-tablecloth restaurants? Check. Meditation center? Accredited art museum? Showers? Full-service independent bookseller with a children’s section, Man Booker Prize winners and shelves of erotica? Yep.
And that was before the flashy new Terminal 2 opened in April, with its slow-food restaurants, broad workstations, nearly 350 electrical outlets for laptops and chargers, and a “recompose area” for getting dressed after the often-stressful security screenings.
For the better part of a generation, Los Angeles International Airport has been hard-pressed to catch up to other major airports and to its smaller, sleeker competitor to the north. Although LAX officials are now doubling the size of the Tom Bradley International Terminal, the airport has lagged painfully behind SFO in critical renovation.
Airports have long been architectural statements, grand municipal gateways that shout “you are here!” in steel and glass. Think Berlin’s Tempelhof circa 1938, which Hitler called an “air stadium,” or nearly anything built in the 1990s — described as the Age of Air Terminals just as the mid-13th century was the Age of Cathedrals.
With Terminal 2, SFO Director John L. Martin hopes to make airport interiors as distinctive as their soaring rooflines. The airport that began in 1927 as a wooden hangar on a dirt road with a lunch room and four cots today is home to America’s newest terminal, filled with natural light, commissioned art, “hydration stations” and ample eco-friendly touches.
“I’d like to think we started a new trend here in Terminal 2,” Martin said. “There’s a look and feel to the terminal that’s akin to a W Hotel, which changed the look and feel of hotel lobbies in a dramatic way. That’s what I see SFO moving toward.”
SFO’s success is all the more remarkable considering its Achilles’ heel: Because it is perched on the edge of San Francisco Bay, a combination of runway configuration and bad weather place it among the most delay-plagued airports in the country — the worst for arrivals and second-worst for departures after Chicago’s Midway International, according to the National Air Traffic Controllers Assn.
Fly and buy
San Francisco unveiled its sparkling International Terminal to great fanfare in 2000.
With marble hallways, bright, airy holding areas, and the ability to handle today’s massive jets, the new terminal was billed as America’s biggest. The first airport-based Gucci boutique in the country was built there, along with a full-scale medical clinic and a meditation center whose compass rose helps the faithful find Mecca. The terminal was key to an important goal: becoming the aviation gateway to Asia.
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SFO is proof positive of why it pays for airports to coddle their passengers — particularly international travelers. Happy passengers with lots of options spend more money.
San Francisco is only the 10th-busiest airport in the United States, but it vaults to No. 4 in North America based on how much departing passengers spend per capita at airports with international flights. Only John F. Kennedy, Vancouver and Montreal-Trudeau airports make more per so-called enplanement. LAX is 10th on the list.
SFO rakes in $14.08 per enplanement, according to the 2010 Airport Revenue News Fact Book, compared with $11.66 at LAX. When duty-free sales to overseas travelers are stripped out, the take drops to $11.17 and $8.85, respectively.
But not even fancy amenities are a shield from disaster. Shortly after SFO’s international hall opened, “every conceivable problem that hit the industry hit this airport hardest,” said Martin, who was hired by SFO out of graduate school in 1981 and became director in 1995.
“I was hit by the dot-com crash, hardest in San Francisco,” he said in a recent interview. “Everybody was hit by 9/11, but United [Airlines] filed for bankruptcy shortly afterward and they’re 50% of my traffic and they cut back a lot. I was hit by SARS” — the virus outbreak that began in China — “because we’re such a big Asia destination. Southwest [Airlines] pulled out of the market.”
San Francisco Business Times
July 1, 2011
http://www.bizjournals.com/sanfrancisco/print-edition/2011/07/01/hotels-spend-big-to-lose-tired-looks.html?page=all
Not all the mad money trading on San Francisco hotels is going toward acquisitions.
Tens of millions of dollars are being pumped into hotel renovations across San Francisco and the region, a trend that will continue for the next year and beyond.
Hotels are being refurbished now for several reasons, in addition to the obvious one that with the constant coming and going, hotel rooms and public spaces take a regular beating that requires constant maintenance and upgrades.
During the recession, however, many hotels stopped making these routine investments.
“Most hotels went for at least two years just trying to stay alive operationally and pay debt,” said Rick Swig of RSBA & Associates. “Now many are long in the tooth and not brand-standard-compliant. This is not a San Francisco phenomenon; it’s a national phenomenon.”
Every hotel brand has specifics on staffing levels, television screen sizes, age of mattresses and countless other criteria that must be met. Many brands gave hotel owners a hall pass on satisfying every brand standard when the hotels were struggling to stay solvent. Now that hotels are again making money — occupancy in San Francisco is very strong and room rates are up double digits over last year — brands are insisting that hotel owners reinvest if they want to maintain their brand standing.
Considering that a 42-inch, flat-screen TV can go for $1,000 or more, “reinvesting” to become compliant is no small thing.
Just ask the Grand Hyatt at Union Square, which has completed the first phase of a $70 million renovation. It has redesigned and modernized 659 guestrooms and suites, all of which had old tube televisions prior to the renovation, and which now have 37-inch, high-definition flat screens.
The Grand Hyatt is now finishing up a reinvention of its meeting rooms, adding flexible walls that will allow two smaller meeting rooms to be opened into a large, 7,500-square-foot grand foyer, greatly increasing the size and type of events that can be held there. Next year, the final phase of the renovation will involve transforming the mezzanine level into a bar and restaurant with an open kitchen, though Hyatt is still working out that vision.
Another reason San Francisco is poised to see a rash of hotel renovations has to do with recent sales activity. New owners often plan to reinvest capital for at least minor upgrades to a new property.
The Mandarin Oriental is in escrow to sell, and once that deal is complete, the new owners expect to invest around $15 million to upgrade the property, according to General Manager Clifford Atkinson.
The W Hotel sold to Keck Sing Investments for $90 million in 2009. The hotel is now undertaking a multimillion-dollar full reinvention of the hotel’s public areas, the first since the hotel opened 12 years ago.
In that period, W has gone from being an edgy New York-centric brand to an edgy global brand that wants to reflect its local culture and look like the city where it is.
W San FranciscobizWatch hired local architect Stanley Saitowitz to redesign all the lobby and public spaces, as well as the hotel restaurant and bars. His design has sharp angles reminiscent of city blocks on the carpet and floor design while the ceiling is covered in a gauzy fabric that resembles fog.
“It’s a very whimsical and creative way to bring San Francisco to life in the W Hotel that is not about putting up a photo of Coit Tower or the Golden Gate Bridge,” said W General Manager, Michael Pace. “We are taking a local design narrative and incorporating it into the DNA of the W.”
W’s new restaurant, Trace, will open at the end of August, while the lobby and two hotel bars will be complete in late September.
Countless other area hotels have or will have their own renovations of varying scope and cost.
Hyatt Fisherman’s Wharf will start a $3 million renovation of its 20,000 square feet of meeting space in November. It has been eight years since the space was updated.
The Hyatt Regency San FranciscobizWatch , which is for sale, is renovating its meeting space.
Crowne Plaza Cabana Hotel in Palo Alto completed a multi-million renovation in May that upgraded all technology in the hotel, updated the 194 guestrooms and enlarged the bathrooms, refurbished meeting rooms, the lobby and pool area.
The Napa Valley MarriottbizWatch recently spent $7 million to renovate guest rooms, event space, ballrooms and spa, and to open a destination bar and restaurant called VINeleven.
Another bonus to being at the vanguard of renovations: You don’t need to inconvenience guests or take any rooms out of service while occupancy is high, plus you have the newest and most contemporary product at a time when hotels are looking for ways to raise their rates, and to win hotel guests on experience, not on discounts.
AsianWeek
June 29, 2011
http://www.asianweek.com/2011/06/28/mayor-lee-praises-citys-tourism/
Mayor Ed Lee spoke to 900 attendees at the 101st Annual Luncheon of the San Francisco Travel Association on June 23.
“Today is an opportunity to reflect on the impact tourism has had on our City and celebrate the successes of SF Travel and its partners as they continue to bring visitors and economic activity to our City,” said Mayor Edwin M. Lee. “Tourism is an important driver of stimulating our local economy, and these are jobs are employing San Franciscans and people from around the Bay Area at every level of the economic strata. At a time when the City’s budget is as challenging as it gets, it’s time to acknowledge that tourism is keeping San Francisco a top world class city.
SF Travel is a private, not-for-profit organization that markets the city as a leisure, convention and business travel destination. Tourism, San Francisco’s largest revenue-generating industry, generates in excess of $8.3 billion annually for the local economy.
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