PROFIT PITFALLS AND PERKS: Business tally varies

Summer business in Laguna was up — down — flat, depending on who’s talking.

Until sales tax figures are released, reports are anecdotal; but veterans of the business community can make “guesstimates” and speculate why.

“This summer started off strong,” said longtime Laguna Beach businessman George Nelson, owner of Fawn Memories on Forest Avenue. “July was good, but business dropped off in August when it was extremely hot. MTV spoiled merchants like me. That was a boom, and I can’t get near those numbers now.

“Don’t get me wrong. There were a lot of people in town, but they just went to the beach — they didn’t shop. And I am hearing the same story from friends of mine in business in other beach communities.”

Chamber of Commerce Executive Director Rose Hancock had a different take.

“I have heard comments that it didn’t seem as if there were as many people on the streets this summer, but sales matched last summer, which was really great, in spite of the July heat,” Hancock said. “August made up for it.”

From personal observation, Hancock said business is booming, certainly at midtown restaurants like Sapphire and Mozambique.

“Every time you drive by, you see a great crowd at Sapphire,” Hancock said. “I talked to Azmin Gahareman, the chef and owner, on Tuesday, and he said business had been great ever since the restaurant opened.”

The restaurant, which has highly visible outdoor seating, opened in February in the renovated Old Pottery Place on South Coast Highway.

Chris Keller, owner of the nearby Hotel La Casa del Camino and K’ya restaurant, said patronage was over last year.

“The whole package works out very well,” Keller said. “We are new, but we are gaining — definitely on the up swing.”

The “whole package” includes a rooftop lounge, which Keller said is a big draw, even more popular with locals than visitors.

The Planning Commission has said, however, that no permit was ever issued for a stand-alone bar. The City Council reviews the operation Tuesday.

Not every restaurant was as lucky.

“We always get a bump in summer, but we were down significantly this year from last year,” said Coyote Grill manager Desiree Gomez, whose family has owned the South Laguna restaurant for 18 years. “It could be that people have less expendable income.”

Prices at the restaurant had not been increased in three years, so that was not perceived as a factor.

However, Diann Shirley, owner of The Dutch Door in the Lumberyard Mall for four years and gift buyer for McCalla’s Pharmacy before that, also saw a downturn in business this summer.

“We have tried to speculate why,” Shirley said. “Gas was as much of a problem last year as this year. Maybe people are just holding onto their money because of the home loan industry.”

Mitzi Interlandi, who presides over the extensive perfume counter at Bushard’s Pharmacy, was upbeat.

“It was very busy this summer,” Interlandi said.

But that is nothing new. The pharmacy’s inventory of fragrances rivals and in some cases — Fracus and Tatianna come to mind — outdoes department stores.

“A lot of visitors come back every year to buy their favorite fragrances here,” Interlandi said.

The bulk of the pharmacy’s business is local, which stays steady, but tourist spending fluctuates.

“We were definitely busier this year than last year,” pharmacy owner Sheila Bushard said. “It seemed like there were a lot more people in town and visitors sometimes forget to bring their prescriptions or they run out — sometimes they get sick and need new prescriptions.”

Surfing is another business category that relies on locals for year-round business, but gets a bump in summer, according to Senna Pino, manager of Thalia Street Surf Shop.

“Business drops noticeably when school starts, but we still have our regulars,” Pino said.

On the other hand, the hospitality industry is no longer as seasonal as it once was in town. The Visitor’s Bureau has successfully positioned Laguna as a year-round destination, but this summer hoteliers discerned a marked increase in foreign visitors.

“Anecdotally, which might interest readers, we saw a marked increase in visitors from the United Kingdom and Europe, possibly due to the increased value of the Euro in comparison to the dollar,” said Judy Bijlani, executive director of the bureau. “The second part of that would be Laguna’s international exposure from ‘The Real O.C.’ and the bureau’s efforts in that area through FAM [familiarization] tours and trade shows.”

An informal poll of hoteliers taken by Bijlani at a meeting Thursday indicated a successful summer for the local industry.

“Summer occupancy was flat to slightly up, but the average room rate was up, which drove the average revenue up,” Bijlani said.

The hotels pay transient occupancy taxes, better known as bed taxes.

City Manager Ken Frank pegged revenue from bed taxes at $4.9 million for this fiscal year, just a tad more than the predicated sales tax revenue of $4,820,000. However, all of the bed taxes go to the city, unlike sales taxes, on which the state gets the first call.

The effect of the summer’s revenue on the city will be included in the midyear budget review, generally in presented in December or January by the city manager.