Sonoma County hoteliers bet on summer visitors

<p>The tourist season kicks off today as travelers begin arriving for the Memorial Day weekend.</p><p>So far, signs are good this year's season will rebound off the abysmal 2009 performance that left many hotel owners short of guests and short on cash.</p><p>Innkeepers report fewer empty rooms and say people are booking vacations further in advance and staying longer.</p><p>“We are up substantially from last year,” said Karl Bruno, general manager of Kenwood Inn and Spa, which is fully booked this weekend. “Every month this year we have had higher occupancy than last year. And that is phenomenal.”</p><p>For Sonoma County, where tourism is a $1.3 billion industry, it is perhaps an early sign of economic recovery. No one is declaring the 2010 season a triumph or predicting the immediate return of freewheeling tourists who, during the boom years, plunked down big money on luxury resorts, costly dinners and high-priced wine.</p><p>Rather, after a dreary 2009 when occupancy rates fell more than 10 percent, many in the tourism industry simply hope for a small improvement signifying the worst is over. And they say, in cautious tones, it appears their wish is coming true.</p><p>“All indicators show it is better than 2009,” said Mark Belhumeur, owner of Village Inn in Monte Rio. “Which is great, because we've had enough of this lousy economy.”</p><p>Like other innkeepers and hotel managers, Belhumeur said people were booking rooms at his place further in advance and for more nights.</p><p>The importance of tourism for the local economy cannot be overemphasized, said Ben Stone, director of Sonoma County's Economic Development Board. Visitors don't just pay innkeepers and chambermaids.</p><p>They shop at Healdsburg boutiques, dine at Forestville restaurants, and even buy sculptures and paintings from local artists. Those business owners, artists and employees then buy insurance from local agents, shop at regional stores and otherwise feed the tourist dollars deeper into the Sonoma County economy.</p><p>“It has a lot of indirect as well as direct effect,” Stone said. “If you put ag and tourism together, it is about 40 percent of our economy.”</p><p>The 2010 tourism report, which is compiled by the Economic Development Board in partnership with the Sonoma County Tourism Bureau, outlines just how integral a role it plays.</p><p>The sector employs about 16,500 people in Sonoma County, or nearly 1 in 10 workers, according to the annual report that will be released in early June.</p><p>Tourism's pervasive reach into the local economy meant last year's downturn was broadly felt. About 500 people lost their tourism jobs, according to the state's seasonally adjusted employment numbers.</p><p>Occupancy revenues dropped 12.6 percent, according to county data that measures money earned from renting rooms. If that decline is mirrored in overall tourism spending, as it has been in recent years, it means the local economy lost about $150 million last year.</p><p>Few expect the county will fully recover from that loss this year, but many hope to start making up a little ground starting this weekend.</p><p>“Running level or declining from last year would be very bad,” said Keo Hornbostel, general manager of the Hyatt Vineyard Creek in Santa Rosa. “I think hotel owners will be pleased with even modest growth.”</p><p>Sonoma County might have an advantage. It can be less-expensive than its high-priced neighbor, Napa County, said Tim Zahner, spokesman for the Sonoma County Tourism Bureau. People are still shopping for the best prices, and with its robust supply of low and mid-range campgrounds, home rentals and motels, Sonoma County is better suited to attract those tourists, he said.</p><p>“The Petaluma KOA actually expanded last year,” Zahner said.</p><p>But hotel prices can't drop much lower, property managers and owners say.</p><p>Hotel prices in Sonoma County, on average, have already dropped about 6 percent since the prior year, according to April data complied by Smith Travel Research. Those cheaper rooms resulted in lower revenues and decreased profit margins for hotels, which historically run slim profit margins with little wiggle room.</p><p>Many hotels struggled last year. At least two hotel owners filed for bankruptcy in 2009. The 104-room Days Inn in Santa Rosa and the 109-room Quality Inn in Petaluma both sought bankruptcy protection after occupancy rates declined.</p><p>“There are still a lot of hoteliers who are hurting,” Hornbostel said. “So we really need to gain some ground this year to get our cash flow back up.”</p><p>Now, with growing optimism about this year's tourism season, some hotel managers are wondering if they can reverse the trend and begin raising rates again.</p><p>“This is when you see hotels start raising their rates and seeing if people will come at premium rates,” Hornbostel said. “This is when we start to get a feeling for the pulse of how the summer is going to be.”</p>