Business Revenues For Coronado’s Shops And Restaurants In Steady Decline, Chamber Of Commerce Looks To Educate And Influence For Positive Change - Coronado Eagle & Journal | Coronado News | Coronado Island News: Coronado City News

Business Revenues For Coronado’s Shops And Restaurants In Steady Decline, Chamber Of Commerce Looks To Educate And Influence For Positive Change

by David Axelson | Posted: Friday, August 23, 2019 3:46 pm

Sue Gillingham is the Executive Director of the Coronado Chamber of Commerce and as such has a handle on the business climate in the city. That element, combined with her strong business background, and the fact that she and her husband Dave Gillingham have lived in Coronado for two decades provides her with a unique perspective on the city. And the news from the business community of late is a tad underwhelming.

“A lot of the shops and restaurants tell me that 2015 was their last high point. For the hotels, 2018 was the high point. Last year the Transit Occupancy Tax (TOT) paid by the hotels to the City passed $15 million, which represents 25-30 percent of the General Fund, which a lot of residents don’t realize. Property Tax is the No. 1 source of income. The shops and restaurants haven’t returned to the 2015 level for the most part. There may be some new or niche businesses growing and doing well, but for the most part, that’s not the case. There has been a lot of feedback that when Discover Coronado stopped doing local advertising, that it hurt Coronado businesses. What happened is they had a nice video that was shown on local television, showing people having a great time in Coronado. Residents were upset by people coming to go to the beach, parking, leaving their garbage on our front lawns, with no benefit to the residents. The City Council told Discover Coronado not to advertise locally for day trippers, and they didn’t want to see or hear marketing in the San Diego Region. So Discover Coronado quit local television and radio advertising, digital advertising, and advertising in “San Diego Magazine.” They pivoted to focus on group business, which was a good thing, and not a lot of attention was paid to that.”

Although in theory, group business has less of an impact on the city’s infrastructure, including parking and traffic, than leisure or day travel does. Gillingham discussed the typical visiting hotel group scenario. “They drop in on a bus, spend time on the hotel property, but unfortunately they don’t spend time in our shops and restaurants. Meeting planners are familiar with what San Diego has to offer, like PETCO Park, the Gaslamp, the San Diego Zoo and a lot of other places. That makes it even harder for shops and restaurants to capture potential revenue. There’s no time for a leisurely stroll down Orange Avenue. Groups have time off with something specific to do in mind. Whether or not there is a cause and effect due to a lack of advertising, in the last four years business has been down. Several businesses have reported to me their first quarter this year was the worst they’ve ever had. And these are businesses that have been around for 12 years and restaurants for longer than that. I gave a presentation to the Coronado Roundtable and afterwards a merchant called me and said, “I thought was the only one in that situation.” He is very dependent on San Diego for his business. He also said, “Whatever you can do to market Coronado on a regional basis, we would really appreciate it.”

The business revenue statistics the Chamber has accumulated, reflect double-digit decreases in aggregate for the shops and restaurants for the first five months of 2019, with June a little bit better. The hotels as a group are down by double digits through May. June is not down as much, but down year-over-year. And for the city’s big hotels, business booked for the Fall 2019 season won’t increase enough to counter-balance the start of the year.

As for the hotels, future business indicators aren’t positive, according to Gillingham. “This year with the hotels, they are suffering from a number of challenges. In general, occupancy is down in the region, San Diego is down and then of course we are dealing with construction at the Hotel Del Coronado and the Coronado Island Marriott Resort & Spa just finished their remodel. We are beginning to see travel contraction and unfortunately when you have that, it’s common for people to say, ‘We’ll take shorter trips and stay at a less expensive property.’ Coronado doesn’t qualify for ‘less expensive property,’ so that doesn’t bode well for us. Another thing, this morning (Friday, Aug. 9) Air B&B had 145 listings for the Village and 20 for the Cays. Most places have four or seven-night minimums, you don’t have to stay 26 days. I know residents get upset about the hotels, but 165 residents are choosing to rent space. That’s basically another 165 hotel rooms, if not more. Where I am coming from is I want to make sure the facts are out there. As a long-term resident, I don’t want to ruin the Village atmosphere. I raised my kids here. Businesses have to do well. We don’t want empty store fronts because the atmosphere in town goes down. It’s a delicate balance. From the Chamber’s perspective, it all has to fit together.”

In addition to the above, there is a new dynamic in Coronado, which finds large parts of the Downtown area recently acquired by off-island investors. Gillingham explained, “There’s an opportunity for refreshing our Downtown in a positive way. There is also the threat of investors who are looking at their space to see how much money they can generate, versus how does this property fit into Coronado’s ambiance? Residents are concerned about the city year around. So that is why the Chamber’s emphasis, starting this year, is educating our residents about change. That it is the residents who have a voice in a positive, rational discussion as opposed to social media, which stirs people up and doesn’t contribute to positive change. One of the first things that happened was the Port of San Diego asked to come to our Board to present their updated Master Plan. That happened at our June Board meeting. The Chamber asked the Port to come back and make a presentation to the residents. And even though the Chamber didn’t get credit for the event, the purpose was to tell people what’s out there and for them to take time to comment. I was very happy with the turnout; people were respectful in their comments; and the Port staff did such a good job answering questions and being non-defensive. The next night, the City Council made their comment letter to the Port much stronger. They made it clear that as a town, we didn’t need another hotel. That was a big win for the Chamber in our goal of engaging residents before there is a crisis, an empty storefront or a plan from the Port that includes a hotel.”

Gillingham outlined a possible solution to the problems facing local shops, restaurants and hotels. “We want to make sure the Chamber is doing everything we can do to make it a community conversation, before it’s too late. We have engaged, smart people in Coronado and I’m hoping the loud voices don’t drown out other people. At the Coronado Roundtable, the response was amazing, and people appreciated the presentation. On a national level, the Chamber of Commerce is pivoting away from the three P’s of Parties, Parades and Pageants. The new model is Catalyst, Convener and Champion. It’s all about getting the influential people in the community around an issue. The issue Coronado has, besides traffic and parking, is the future of the business community. It’s a role the Chamber is uniquely situated to address, and we have a lot of positive examples in California and in the country that we can draw upon.”

An example Gillingham cited was the Chamber in Lodi under the direction of CEO and President Pat Patrick. “What he did was get influential groups together to address five initiatives. They pulled together volunteer action teams and they have attacked their five areas. He recruited from Chamber and non-Chamber members. Pat has the right people who have interest and passion around a topic to make things happen. He’s been very successful getting traction out of those groups and their spin-offs. The Coronado Chamber Board meets next weekend on a retreat and we’re going to talk about that. And then we’ll look at targeting individuals, Chamber members, non-members, city staff, commercial property owners and more, to continue on this path to try and build bridges and understanding. We want to educate the hotels about what the residents want and vice versa.”

In other strides made by the Chamber, they have a new multi-year agreement with Discover Coronado totaling $75,000 to help market local business. Gillingham said, “The Coronado Historical Association and the Visitors Center have agreed to hand off the Visitor Center website to the Chamber. We made about 80 updates to the website, updating directories. The website has lost 25 percent of its visits in the last two years and we want to turn that around. Raindrop Marketing did the initial update. We are looking at consultants to make the website more modern, more attractive and representative of what our businesses have to offer. We want to reflect how original and unique the town is. There are a lot of people coming to our hotels and we want to get them wandering down Orange Avenue, spending money in our shops and restaurants.”