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San Diego hotels losing business as conferences cancel en masse

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Posted at 5:42 PM, Mar 10, 2020
and last updated 2020-03-12 21:07:55-04

SAN DIEGO (KGTV) — Hoteliers across San Diego are seeing a significant loss of business from mass cancellations as efforts continue to stop the spread of the novel coronavirus.

The San Diego Convention Center Corp. reports five conferences have either been canceled or postponed, meaning upwards of 43,000 people would not be coming to San Diego and spending money locally.

"The hotel industry has seen a significant drop in business, a significant impact on the workforce," said Namara Mercer, who chairs the San Diego Hotel Motel Association. "Anecdotally the shifts are being cut, people aren’t going to work if occupancy is not high."

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As conferences cancel, large convention hotels downtown are finding themselves with hundreds, if not thousands, of unexpected empty rooms. That can be costly also to other hotels.

"What do they do? They reduce their rates - the big convention hotels - and then they start taking away business from all of us who are in outlying areas," said Bob Rauch, CEO of RAR Hospitality, which owns three San Diego County hotels and manages nine others.

Rauch said cancellations were up 15 percent last week, and he expects that to increase to 25 percent this week. He says he expects it to peak next week at 35 percent before he expects things to calm down.

As of now, he has not cut staff hours, but he said things could change if the loss of business continues to persist.

"If this worsens over the next couple of weeks, we will create some kind of shared pain program," said Rauch, adding that it would likely involve cutting hours across the board so no employees are laid off.

As of December, there were 31,700 people in the county working for hotels, up about 2.6 percent from December 2018, according to the state Employment Development Department.