Lodi in good position for tourism turnaround

A day doesn't pass without much talk about the slowing economy. It seems almost no industry has escaped the downturn in the economy, not even tourism. It is not surprising. After all, tourism is economic development, and travel is mostly a luxury.

When unemployment and gas prices are high, people tighten the proverbial travel belt.

With the re-emergence of the "staycation" (i.e. day trip), perhaps the industry taking the hardest hit is the lodging industry. PKF Consulting forecasts two years of declining lodging demand, with hotels bottoming out in 2009.

A little-considered contributing factor in the drop in occupancy rates is the increase in supply. With lodging demand having steadily increased in 2003 through 2006, it is not surprising that we are beginning to see many new hotels being built. In Lodi alone, we will have added 115 new rooms in 2008 and will add an additional 113 next year. In the U.S., it is being reported that as many as 275,000 new hotel rooms will be built in 2008-09.

Consider that supply and demand are moving in opposite directions and you can guess what the resulting impact has been on occupancy rates!

The Central Valley region as a whole seems to be faring better than some other Northern California regions. In their report on variance in 2007 and 2008 occupancy rates for the month of August, PKF reports that while the Central Valley is down 2.5 percent, San Jose, Sacramento and Napa are down 7.9 percent, 3.4 percent and -2.7 percent, respectively. To put it into perspective, Lodi hotels are unofficially reporting anywhere from a 2 to 20 percent decrease in occupancy for the year, depending on the accommodation.

In spite of the growing concerns over the economy, local hoteliers remain upbeat. Experienced hoteliers have been through the cycle before — as recently as 2001-02. The events of Sept. 11, 2001, created an almost instantaneous drop in long-distance travel, and hoteliers found themselves increasing rates and instituting cost containment measures to get them through an economically challenging time.

Today we see hoteliers getting creative: offering travel incentives, packages and programs geared to the budget-conscious consumer and business. Perhaps one of the smartest examples I've seen of late is the "share the holidays!" promotion being offered by Wine and Roses Hotel. They are offering two nights in December in which small businesses can share the Grand Ballroom (and costs) for their company's holiday party. The evening includes your company's own dining section along with hors d'oeuvres, buffet, holiday decorations and a D.J. What a great idea to attract businesses who otherwise may be considering cutting back on holiday party expenditures!

So when will we see a reversal in this travel trend? Most likely not until 2010, when experts in the housing and finance industries expect that the housing and credit markets will begin to pick up. Additionally, lodging experts project that hotel supply growth will be diminishing in 2010 — further reducing the polarization of supply vs. demand.

And while I am no expert in travel trends, I have been around long enough to see the economy swell, and I have seen it tank (more than once!), and I am confident enough in our product and the experience of our local hoteliers to know that we will weather this dip in the economy.

As I've noted in other columns and Visit Lodi! communications, there is always opportunity in a down economy, and the winners are those who can identify them and take advantage. It is much like the person who enters the stock market when everyone else is running scared: There are some great deals to be had! When the economy is tough, businesses pull back on advertising dollars, giving those who do advertise the ability to get their message across with less competition. That's what Visit Lodi! plans to do. We plan keep pushing the Lodi story because we know that when the economy turns around, Lodi will be better positioned to draw in the tourist market.

Nancy Beckman is president and CEO of Visit Lodi! She can be reached at 365-1195 or nbeckman@visitlodi.com.

Reader Feedback

4AStrongLodi wrote on Nov 24, 2008 1:53 PM:

" What we need to realize is that Lodi is never going to be a top wine tourist destination. Napa will always get the bulk of it. Every state and every area now has a wine region. Just look at CA: Napa, San Joaquin, Santa Ynez, Temecula Valley. Even Texas and Ohio have multiple "wine countries".

Wine tourism is now a commodity and Lodi needs to find new ways of attracting tourists, and more importantly, business.

We don't have many luxury hotels, resorts, or niche bed & breakfasts. We have Wine & Roses and some new (and old) discount motel chains. People that tour wineries have money and they want to stay someplace nice. Lodi simply does not offer it. "

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Nancy Beckman wrote on Nov 24, 2008 1:33 PM:

" I wanted to take a moment to clear up some confusion. Visit Lodi! is not located out by Wine & Roses - that is the Lodi Winegrape Commission (LWC). LWC is supported by the Winegrape growers and they are tasked with promoting Lodi wines and Lodi wineries whereas Visit Lodi! promotes all of Lodi including the downtown. Since you are unfamiliar with our promotions and programs, if you would like to send me your email address I would be happy to add you to our list so that you can receive regular updates about activities and programs we are undertaking on behalf of the Lodi community. "

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loadeye wrote on Nov 22, 2008 7:55 PM:

" Ms. Beckman, just what is it you've done for tourism in Lodi? You said 2 weeks ago that tourism was down in Lodi again this year and it hasn't seemed to increase at all since you've buried yourself out in that corner of nowhere by Wine&Roses. It appears to me that for the extravagant salary you receive you should be held to some kind of performance standards. Your idea of promoting Lodi is based on freebies, gimmees and favors for only your pet associates involved with the wine industry and not involving the downtown businesses at all except, of course, the wine tasting rooms, some of which are already subsidized by the city of Lodi. I recommend the visitors center find a location downtown with some high traffic and accessibility rather than in some isolated corner only locals travel. You need to do a much better job than you have in the past or you should be replaced with someone who is capable of doing what you've failed at since being hired by your good friends and associates at city hall. It's time to wipe the brown from your nose and get the job done or step down. "

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