Tourist numbers heating up after cold start

Posted on September 27, 2010 by Sonoma Valley Sun

After a cold winter of first quarter room tax figures frozen at record-low numbers, the hospitality sector has warmed up nicely, according to industry sources.

“It’s like the good old days,” said Bill Blum, general manager of MacArthur Place Inn & Spa. Currently, Blum said, he is seeing high occupancy rates and a boom in group sales, business meetings and weddings.

Michelle Heston, of the Fairmont Sonoma Mission Inn & Spa, is also positive. “We did indeed have a strong summer and are seeing improvement month over month.”

The Transient Occupancy Tax, a 10 percent surcharge on hotel rooms, totaled a disappointing $261,783 for the first quarter of 2010. The figure was about $5,000 less than the same period in 2009, and well behind the $400,000 collected in 2008.

Heston said that the first quarter number might have been affected by a renovation project at the property, which made 42 rooms unavailable during the period. “Recent reports from the county show steady growth in TOT figures,” she said.

In the overall tourist picture, the low TOT figure is somewhat deceptive as it is based on room rate, which has been driven down by the lack of demand, and promotional activity, since the boom period of 2007-08. The number of visitors, paying less for a room but still spending money eating, shopping and wine tasting during their stay, may actually have increased early in the year.

Wendy Peterson, the executive director of the Sonoma Valley Visitors Bureau, said there has indeed been a positive, steady climb in overnight visitors. “Across the board, hotels are seeing an increase in occupancy,” she said. “Restaurants and businesses in all segments have seen positive increases.”

The SVVB tracks the number of phone and web inquiries it receives, along with people who utilize its two visitor centers. All those numbers are increasing as well, Peterson said.

Peterson said she is “cautiously optimistic” about the immediate future of the local hospitality industry. “There are a lot of sold-out weekends,” she said. “Fall looks like a very strong indicator. There are some very strong signs.”

One encouraging factor is the reappearance of business meetings and group sales on the hotel books. When the economy went south, those events were among the first victims of budget cuts.

“Starting in July, it’s all really off the charts,” Blum said. “We haven’t seen this in a couple of years. We are encouraged that things are beginning to turn around.”

The momentum improves on first quarter TOT numbers that were relatively flat across Sonoma County.

Sebastopol showed an increase compared to the same period in 2009 (up 15 percent), as did the unincorporated portion of the county (up 7 percent). With a 2010 figure of $18,786, Cloverdale had the biggest percentage drop, 30 percent.

In Sonoma, the TOT goes directly into the general fund where it accounts for nearly 20 percent of city revenue. Mayor Steve Barbose said, “I too have heard from people in the lodging industry that business is up from last year. I am hopeful that Sonoma’s income for the 2010-2011 fiscal year will be above the conservative projections we used for the budget process.”

Petaluma, Cloverdale and Sebastopol impose a 10 percent TOT. Santa Rosa and all unincorporated areas, impose a 9 percent tax. The fee is 12 percent in Rohnert Park, Healdsburg and Windsor. By comparison, San Francisco charges 14 percent.

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