Lacking Conventions, Hotel Cuts Rates Before Opening
Admitting that the delay in the San Diego convention center has proven a “tremendous disappointment” to their marketing strategy, the operators of the soon-to-open 450-room Omni San Diego Hotel are reducing some room rates by as much as 25% in a bid to build customer traffic.
Omni General Manager William Torresala said the hotel, set to open in downtown’s Horton Plaza on Sept. 15, will offer corporate customers 20% off the $99-a-night weekday rate and 25% off the $80-a-night weekend rate. He defined corporate customers as those who book rooms through in-house travel coordinators.
The discounts are Omni management’s way of responding to what it foresees as probable “difficulties” in keeping the hotel adequately booked until the completion of the San Diego convention center, which was to have opened at the same time as the Omni.
Banking on New Center
Like most of downtown’s new generation of hotels, the Omni was banking on the center’s flow of delegate traffic to help fill the 15-story structure. But political wrangling over the convention center’s financing, plus construction delays, have set the convention center’s opening back to 1989.
“Our planning was engineered to having the convention center open,” Torresala said. “We have done some rethinking.”
Roger Cline, Omni’s senior vice president for development, said the Omni has redirected its marketing strategy--at least until the convention center opens--toward smaller corporate groups of 350 people or less. The hotel features 18,000 square feet of convention floor space plus a ballroom that can accommodate 1,150 guests.
“It’s unfortunate we are losing these two years because they are two years we can ill afford to have lost,” Cline said. Although the prime fall and spring seasons for corporate group meetings run much shorter than the full-year calender for convention groups, Cline expects his hotel can do between “the mid-60s and low 70s” in occupancy percentage until the center opens.
Fortunately for Omni, the San Diego hotel market is experiencing solid growth. According to a hotel occupancy survey conducted by Laventhol & Horwath of San Diego, occupancy at the 127 San Diego County hotels it monitors is running at 79%, Torresala said.
High Rate of Growth
Room night sales in the county are growing at an annual rate of 5.9% per year, a relatively high rate of growth compared to other U.S. cities, he said.
But Omni isn’t the only hotel operator rushing to meet the growing demand. A recent San Diego Convention & Visitors Bureau survey found that 3,522 hotel rooms will be added to the San Diego County hotel room inventory of about 32,000 in 1987, an 11% single-year boost and the largest annual increase in room inventory in the city’s history.
In 1988, 3,000 rooms will be added to the county’s room inventory, the survey found. The projected increase over this year and next has led some industry observers to predict an impending glut in hotels.
Omni, owned by the Irish airline Aer Lingus, operates 30 hotels in the United States, most of them in downtown locations across the country. In addition to San Diego, Omni is opening hotels in Richmond, Va., and in Jacksonville, Fla., this year.
The $58-million San Diego hotel is owned by Py-Vavra Development of Milwaukee and will employ about 400 people.
