Positive Thoughts

COVER UPDATE

Positive Thoughts

George Rauch still holds out hope that his

$3 million bet on beachfront tourism pays off. He is keeping his 'fingers crossed.'

The next four months will go a long way toward potential vindication for George Rauch.

The Longboat Key entrepreneur and retired Wall Street investment banker bought the Sara Sea Beach Resort in June for $3.35 million, hoping to turn the well-known kitschy Siesta Key hotel in a moneymaker to go along with the two other beach properties he owns.

But even though Rauch got the property at a 30% discount from its 2005 asking price, there is one looming challenge: The economy.

"The better hotels with decent rooms and decent amenities will be all right," says Rauch. "The other hotels will starve."

Rauch hopes to be in the former category, both with the Sara Sea and the other two hotels he owns that fall under the Tropical Beach Resorts brand name. A renovation project at the Sara Sea that began in the summer is completed, including adding new landscaping to the grounds and outfitting each of the 22 rooms with a new kitchen and 32-inch flat screen TVs.

The Sara Sea has been hovering at a 90% occupancy rate for the late fall and early winter, something Rauch is using as a crutch as the uncertain 2009 travel seasons looms. The first four months of the year are traditionally high times for beach hotels.

Both Rauch and Dawn Van Lanen, the general manager of the hotel company, say the trick to surviving the downturn will be not only in the product, but in marketing the product right, and to the right audience. Rauch says the company has refined its e-mail marketing lists and is adding money to the budget of discount dinner cards it gives to people who book rooms.

Says Rauch: "Just about everything you could think off, we tried."

While the Sara Sea gets ready for its first "Season," one of its sister hotels, the Tropical Sun, is going through a renovation project of its own. That project involves gutting and redoing 18 rooms, says Rauch, although it has been slowed down due to permitting delays from Sarasota County.

One other potential advantage for Rauch is that Siesta Key is highly populated with independently owned properties. And in a down economy, says Rauch, it's properties like those as opposed to the Hiltons or Hyatts, that end up closing down.

Even thought Rauch himself is an independent property owner, he hopes his experience and sufficient capital base will be enough to ride things out.

"We're just going to keep our debts low," says Rauch, and "our fingers crossed."

-Mark Gordon