San Diego Upgrades Air Infrastructure

<B> San Diego Upgrades Air Infrastructure</B>

By Jennifer Kulpa

With plans to construct 8,000 new guest rooms, double convention center space and expand air and ground transportation, San Diego continues to experience a flurry of activity aimed at accommodating corporate travelers.

Hotel expansion here could not come at a better time for business travelers, observed Roberta Orndorff, corporate director for the San Diego Business Travel Association and corporate travel

administrator for San Diego-based Sempra Energy. "Rooms seem to fill up as fast as they can," she said. "The occupancy rate is full very much of the time. We run into a lot of sell-out conditions, and unless we have negotiated rates, we're out of luck or have to pay exorbitant prices."

New hotel construction, Orndorff said, "will eventually alleviate the congestion," although she does not see prices coming down just yet. Depending on the amount of business a company can guarantee a hotel chain, Orndorff estimated that downtown rooms can be found for $85 to $200, compared with non-negotiated rates as high as $400. In general, travel prices for San Diego are comparable to those in Miami, she added.

Although San Diego still has a smaller proportion of business travelers than Los Angeles and Chicago, said Reint Reinders, president and CEO of the San Diego Convention and Visitors Bureau, the number is on the rise. "There is tremendous continued development driven by the visitor industry," he said, which is pulling the city out of the real estate recession it experienced earlier this decade and upping hotel occupancy rates to a steady year-round average of 77 percent.

"We are becoming the San Jose of the bio-tech industry," said Hilton La Jolla Torrey Pines national sales manager Stacey MacAllister. "The growth in biotech is huge. I can cite three different companies that have tripled the number of employees working for them in the past two years," she said.

And to meet this business boom, Reinders pointed to the addition of more than 8,000 new rooms. "There are 15 to 20 projects that I know of in some stage of development or discussion, with a lot of activity concentrated downtown and along the waterfront," he said. "As the new hotels are built, you're going to see them completely fiber wired and with state-of-the- art business enhancements to make wireless transactions easier."

Local hotel developments include a planned $200 million renovation to the Hyatt Regency, the May opening of La Jolla's 20-suite HotelParisi boutique hotel and some 50 other initiatives that stand to dramatically alter San Diego's topography within the next four years (<I>BTN</I>, June 21).

Current activities for Marriott include a downtown Marriott Courtyard that opened in May, a Residence Inn set to open in Carlsbad in March 2000, and another new property near the baseball stadium, said company spokeswoman Mara Begley. San Diego, she added, is the hotel chain's third city nationwide to begin installation of high-speed Internet connections. The service will cut waiting time by 50 percent and cost customers $9.95 per day.

Starwood Hotels area managing director Joe Terzi said the company is in the development stages for a new Westin in the Ballpark District and a W Hotel--both of which are scheduled to open in September 2001.

Hilton's San Diego presence--which includes the 394-room, 10-suite Hilton Torrey Pines and a 357-room, 17-suite location in Mission Bay--will increase to seven properties when its planned acquisition of the Promus Hotel Corp. is finalized later this year, said Hilton's MacAllister.

Business traveler amenities in the Torrey Pines property include complete audiovisual capacity, separate Internet lines in all rooms and complimentary Towncar service within a five-mile radius of the hotel. Occupancy is about 50 percent business to 50 percent leisure, with rates based on total room availability.

Contributing to the mounting business travel in San Diego is the $216 million construction project doubling the size of the Convention Center to 525,700 square feet by September 2001. The expansion potentially will increase the city's market by 30 percent, the center's vice president of sales and marketing Christine Shimasaki told BTN last year (<I>BTN</I>, Dec. 7, 1998).

As part of the project, the Sails Pavilion, a 90,000-sq.-ft., open-air space on the property will be enclosed with glass to create a climate-controlled meeting area, Reinders noted. "We just completed an environmental impact report and found that some mitigation has to be done in terms of parking garages, etc., but in general, we are in good shape," he added, noting that the city's burgeoning transportation infrastructure also will be expanded via trolley lines to alleviate some downtown traffic. In addition, the density of the downtown district allows for easy pedestrian navigation, reducing the need for car rental.

The city's proximity to its airport also lessens transportation stress related to business travel. Located 10 miles from downtown, San Diego International Airport is fresh from a $25 million expansion and facelift two years ago and is again the subject of study. A new $150 million to $200 million proposal currently under consideration at the state level would expand it further, create ancillary terminals along the Pacific Coast Highway and build the infrastructure for a mass transit tie-in. It should get the yea or nay some time next year. Reinders also reported talks of building an entirely new facility, with a projected cost of $8 billion to $10 billion.