America's “Sideways” love affair with northern Santa Barbara County may have cooled, but the number of hotel rooms that are occupied and the rates that are paid for them are expected to rise this year and next.

That's the assessment of the 2008 Southern California Lodging Forecast being delivered today to the Santa Barbara Conference & Visitors Bureau and Film Commission.

About 100 representatives of the hospitality industry and government officials are expected to attend to hear the report at the Cabrillo Arts Pavilion in Santa Barbara, said Shannon Turner Brooks, director of communications for the CVB.

Hotel room occupancy is directly tied to tourism rates, and the statistics in the report indicate the tourism industry as a whole is relatively healthy in Santa Barbara County.

The forecast being delivered by Bruce Baltin, senior vice president of PKF Consulting in Los Angeles, which prepared the report, notes the popular 2004 film “Sideways” had a big impact on tourism in northern Santa Barbara County.

The northern Santa Barbara County submarket's total supply of rooms has remained constant since 2002, standing at 540,930 rooms in Santa Maria, Buellton, Lompoc and Solvang and around the area's wineries.

But when the Academy Award-winning film set in Santa Ynez Valley wine country was released in 2004, the number of occupied rooms increased by 2.2 percent that year and again in 2005, peaking at 377,700 for a 69.8-percent occupancy rate, according to report statistics.

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Predictably, the increase in average daily room rates lagged slightly, increasing only 3.6 percent to $90.46 in 2004 but leaping 12.4 percent to $101.65 in 2005 as demand increased.

Room rates rose another 10.6 percent to $112.45 in 2006, but by that year, the “Sideways” honeymoon was over, and the number of occupied rooms actually dropped 2.5 percent to 368,177.

“Although the decrease in occupied room nights appears large, the market began reverting back to the normalized levels of 2004, prior to ‘Sideways,'” the report notes.

“In addition, the significant rate (increase) appears to have been more than the market could support.”

Forecasters expect things to slowly pick up again now that the northern Santa Barbara County tourism market is stabilizing following the superheated “Sideways” years.

For 2007, the report projects a modest increase of 0.8 percent in occupied rooms for a 68.6-percent occupancy rate. The average daily room rate is also expected to rise 4.1 percent to $117.05.

For 2008, the report forecasts a 1-percent increase in occupied rooms for a 69.3-percent occupancy rate. Average daily rates are also expected to rise 3.5 percent to $121.15.

Looking countywide

For the county as a whole in 2007, the report projects a 1.9-percent increase in occupied rooms to a 72-percent occupancy rate and a 7.7-percent increase in the average daily room rate to $184.99.

The number of occupied rooms in 2008 is forecast to rise 2.9 percent to a 72.1-percent occupancy rate, with the average daily room rate rising 4 percent to $192.36.

While the entire county has about 3.1 million rooms, the report says, available rooms total just over 1.85 million in the four submarkets examined by the report - Beach Resort, Town (Santa Barbara city), Goleta and northern Santa Barbara County.

For 2008, room supply is forecast to rise by 2.8 percent to just under 1.9 million in the four submarkets.

But that is the result of renovated rooms reintroduced at Fess Parker's Doubletree Resort, San Ysidro Ranch, Harbor View Inn and Holiday Inn Goleta, the report says.

Construction and land values continue to limit development of new hotels, the report says, and the current “credit crunch” has made it more difficult to obtain financing for new hotels.

While the economy is slowing down, the report says, hotels are boosting revenue by concentrating less on increasing occupancy rates and more on increasing the revenue per available room, as travelers spend more on hotels, food, beverages and such extra services as spas and golf.

Associate editor Mike Hodgson can be reached at 739-2221 or mhodgson@santamariatimes.com.

November 9, 2007