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Opinion

San Bernardino County Hotel Resilience is an Opportunity Zone Investment Opportunity

San Bernardino County (SBC) attracts millions of visitors and tourists every year. Despite a deadly global pandemic, rising political tension and an unpredictable stock market, SBC tourism has shown ongoing resilience compared to pre COVID-19 life. Interestingly, and given a healthy combination of business mix and ‘drive-to’ destinations, tourism in certain parts of SBC continued to grow despite the pandemic.

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OPINION

By Sophia Thé — Guest Writer

San Bernardino County (SBC) attracts millions of visitors and tourists every year. Despite a deadly global pandemic, rising political tension and an unpredictable stock market, SBC tourism has shown ongoing resilience compared to pre COVID-19 life. Interestingly, and given a healthy combination of business mix and ‘drive-to’ destinations, tourism in certain parts of SBC continued to grow despite the pandemic. 

As the largest county in the United States, San Bernardino County stretches across the golden state of California from the eastern border of Los Angeles County, through the mountains of Big Bear to the Mojave Desert. Its vast 20,000 mile area is spread across 24 diverse cities in the heart of southern California, and bordered by the states of Nevada and Arizona. 

The County includes a balanced mix of leisure, business and group related tourism demand. On the transient side, national parks, music festivals, and destination resorts are coupled with a quickly growing business community that includes pandemic-resilient industries such as logistics, defense, and aerospace. Before the pandemic, Ontario International airport was one of the fastest growing airports in the nation by number of travelers.  

Since the turn of the century, San Bernardino County has been growing exponentially in all sectors. Tourism spending reached $5.3 billion in 2018, employing over 55,500 workers, as indicated on the county website. Prior to the COVID-19 Pandemic, SBC hotels occupancy trailed Orange County and San Diego County by only 7% and 5%, respectively, as reported by Smith Travel Research (STR). 

The Pandemic

The County provides a good example of how focused political leadership can drive positive results. The diversification of business, coupled with ‘drive-to’ accessibility of local resorts, and the strength of the logistics sector powered by the three international logistics airports continued to get ‘heads in beds’. Per STR, when compared to all other SoCal Counties, SBC closed 2020 as the leader in hotel occupancy at 59%, followed by its neighbor Riverside County at 50.8%. Total room revenue in SBC declined 21.5% from 2019, versus San Diego County and Los Angeles County where revenue decreased 53.7% and 52.6%, respectively. Interestingly, while occupancy decreased from 2019, total available room inventory increased by 0.7%. 

Freddy Bi, Vice President of Sales and Marketing at Inland Empire Tourism Council, points to proactive local political leadership driving a healthy Chain Segment mix in San Bernardino County as a leading cause for business resilience: “Hotels in the Inland Empire are well positioned, with inventory that is in the economy to upper midscale hotel segments and limited inventory in upper upscale – which enabled the region to absorb the impacts of COVID-19.” Due to the industrial makeup of the region, unbelievable demand in manufacturing and logistics helped to sustain the market, and the reduction in corporate travel was quickly replaced by new demand to house frontline workers in response to COVID-19.”

The pandemic highlighted the unrivaled resilience of the hotel industry in SBC. Recent national press highlighted a consumer shift to outdoor drive-to destinations and, logically thinking, between Joshua Tree, Big Bear Lake, Lake Arrowhead, San Bernardino National Forest, and the Mojave National Preserve there are thousands of miles of fresh air and beautiful landscapes that attract both summer and winter clientele. 

According to Visit California Data, from January 2020 to January 2021, customer demand for hotels in the Inland Empire only changed -4.1%, a very small decline when compared to areas like Los Angeles and Orange County that saw -43.5% and -58.6% decreases in hotel demand respectively. The average hotel demand decline in California during this time period is -41.5% These data reveal that not only is San Bernardino doing better, it’s also doing 37.4% better than the rest of the state. 

Nevertheless, the reality is not uniform throughout the County. While some cities that depended on convention business saw a double-digit decrease in hotel revenue, STR reported Colton, Redlands, and Hesperia closing 2020 as the top performers with 7.1%, 3.4%, and 3% revenue increases from 2019. As an additional point of interest, Hesperia, a town located at the edge of the ‘mountain path’ and adjacent to Joshua Tree and the Mojave Desert, had its hotels increase Average Daily Rate (ADR) by over 7% from 2019. Even before the pandemic, the economy of Hesperia has been steadily increasing. Per DataUSA, from 2014 to 2018 there was a 17.3% increase in median household income in Hesperia, and a 21.3% increase in median home value. This is just one example of a local community that should be considered by investors given recent data. 

Rhonesia Perry, Economic Development, County of San Bernardino and Board Chair for Inland Empire Tourism Council, is proud of the collaborative work that the County, the cities, hotel owners, and tourism stakeholders in the region: “It is a testament to the great community of professionals we have in our hotels and at venues throughout the county that the community was able to pivot and work together; as many individuals in the hospitality industry employed.” While we have a long way to recovery, the numbers speak for themselves on the long term potential that hotel owners and investors have in our region.”

Opportunity Zones

Coincidentally, or maybe not, all SBC cities that performed at or above 2019 hotel occupancy have a strong Opportunity Zone (OZ) presence, which introduces an even higher incentive for investor attraction. According to data provided by Esri, of the more than 2 million residents of SBC, over 330k live in OZs and have a median household income of $35.7k. Approximately 68% of the OZ population is Hispanic origin and 12% are Black, versus the general SBC population which is 55% Hispanic Origin and 8% Black. Another interesting metric is the population median age being 28 in the OZs, vs 33 in the larger County. 

The county counts 57 qualified Opportunity Zones census tracts, spread throughout 15 cities and the unincorporated areas. In line with the general County, diversification is a recurring theme in the local OZs as well, with local industries such as cannabis and film production, in addition to world class medical research at Loma Linda and defense production in the high desert. Virgin Train, the Boring Company, Coca Cola, and Blackstone are just some of the companies that invest large checks in local opportunities. 

The Future

The strength of the local real estate market coupled with a business friendly local government is assumed to result in increased future demand in hotel investment. Unlike many other markets, where the cost to build (replacement cost) per room could be above market average, San Bernardino may remain an attractive place for ground-up construction given the ongoing availability of undeveloped land and  access to talented labor. Governor Newsom’s focus on California’s inland counties coupled with the long list of over 300 State and Federal incentives and loans for OZ projects will enable smart investors to leverage the current economy to invest in truly distressed communities, creating good hotel jobs while achieving attractive long-term financial returns. 

Contributed by Sophia Thé, Local Equity, an Economic Development Organization specialized in Opportunity Zone Investments, Ontario, California.  

The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.

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Health & Wellness

Embracing the Sun: The Simplest Wellness Hack for Busy Lives

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So Many “Wellness Tips” So Little Time

Wellness Tips By Sarah Goudie, Nutrition Expert & Guest Writer for IEBJ

For many of us, managing all the “right” things amidst the chaos of daily life is not just overwhelming but also… let’s get real, feels almost like an impossible task! Navigating where to begin feels like finding a needle in a haystack, particularly when ads, influencer opinions, and well-intentioned suggestions from friends and family bombard us. Here’s the deal: We can’t do it ALL. Take a deep breath and let that sink in. We. Can’t. Do. It. All. Now, don’t misunderstand me; I’m 100% into discovering what works best and crafting a routine that caters to the health needs of each individual. But let’s face it: with the hectic schedules of entrepreneurs and business owners, finding time for it all feels like a constant challenge.

So, what’s my top recommendation? It’s all about soaking up the SUNSHINE!

Catch some rays between 8 am and 10 am daily, even if it’s just for 10-15 minutes.

You may have heard before that our bodies have an internal clock. It’s called the circadian rhythm. At the heart of this rhythm is light. When we soak up natural light during the day, it’s like our bodies are taking cues from the sun to stay awake and alert. Our eyes catch that sunlight and shoot signals to the brain, giving it a little wake-up call. At the same time, our melatonin production, which is the sleep hormone, takes a back seat until about 12 hours later, when it kicks in and gets us ready for bed. It’s about syncing up with the natural light-dark cycle, like tuning into the right frequency for a good night’s sleep. Sunlight helps with sleep and dishes out Vitamin D, amps up energy and mental health, kicks stress to the curb, and boosts our immune system. *Quick note: Artificial light can mimic these signals, too, so be aware of screen time close to bedtime, as they can interfere with melatonin regulation.

How can you fit this into the daily grind?” Park a bit further from the office and enjoy some sun rays on your stroll. Take a breather outside during work breaks. Roll down that car window during rush hour. Do a lap around your workplace or hit the pavement after breakfast. And when outdoor time isn’t an option, consider snagging a red-light therapy lamp for a little biohacking boost.

So, instead of diving into the deep end with ALL the wellness trends this month, give this sunshine tip a whirl and see how it adds a sprinkle of vitality to your life!

ABOUT SARAH
Sarah passionately advocates for the intricate relationship between the mind and body. Her dedication to promoting vitality at the intersection of lifestyle medicine and nutrition inspires her exploration of biopsychology, epigenetics, and systemic belief systems within her PhD studies in Health Psychology. Sarah genuinely enjoys educating and guiding others, using an approach that is supportive and free of judgment. Recognizing the potential for shame in discussions about nutrition, she is committed to creating a supportive environment that encourages growth and progress. You can learn more about her work with approachable nutrition while visiting Murrieta Hot Springs Resort.

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Business

Partners in Action: How CalOSBA is bridging the gap in funding and resources for Inland Empire small businesses

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By Josaline Cuesta, California Program Director, Small Business Majority & IEBJ Content Contributor

For Tara Lynn Gray, Director of the California Office of the Small Business Advocate (CalOSBA), entrepreneurship has always been a core principle of her life. Her journey as an advocate for small businesses wasn’t built on textbooks, but on her family’s roots in small business ownership. As a young girl, she watched her grandmother empower and elevate Black women’s presences by styling their hair and instilling confidence in their personhood. She witnessed the direct impact of small businesses on community members in real time, and that’s always stayed with Tara.

As a key partner of Small Business Majority, she stands as a champion for the dreamers and risk-takers; the pillars of the communities across California and in the Inland Empire. I chatted with her to share more about her work at CalOSBA, what entrepreneurs can expect when they meet with a CalOSBA advisor, and the resources and community support available to help boost entrepreneurship in the Golden State.

Tell us about CalOSBA’s role in the small business community.

“California has the biggest small business community in the country, accounting for 4.1 million small businesses in 2023 alone. The overwhelming majority have no employees at all, except themselves, which means they don’t have a Board of Directors, expensive consultants, and they definitely don’t have lobbyists. I take my role as their advocate seriously, talking with and listening to small business owners from up and down the state. During the pandemic, we were under a very bright spotlight, administering nearly $5 billion in direct relief funding and we’re proud of the grant programs we still oversee. But that’s only a small part of what we do at CalOSBA.

My team connects small business owners to information and resources to help them get started, manage their business and, most importantly, to grow. If they’re looking for help, we want to be the first door they knock on. In addition, we offer Outsmart Disaster training, which focuses on how to mitigate risks associated with natural disasters and recovery avenues available to them. I always say the flagship of our office is our support for the statewide network of Small Business Centers, providing 1:1 business assistance and training for small business owners of all industries and in dozens of languages. In addition, supporting partners that deliver these services–all the federally funded centers like the Small Business Development Centers and the Women’s Business Centers but also Chambers of Commerce and other nonprofits—is a core function of my office. And a big source of pride because we know what a difference they make for their clients.”

What can small business owners expect from meeting with a California Small Business Center advisor?

“Small business owners can expect to meet someone who is fully invested in them. Our Centers cover the full spectrum of business needs, from writing a business plan and obtaining the right permits and licenses, to finding capital, planning a succession strategy and marketing to e-commerce. Our business advisors provide the experience and the objective perspective to help business owners optimize their best assets: ideas, energy, and ability to keep adapting and learning. And they do it because they love helping other people succeed. What’s more, business ownership can become isolating and it may be challenging for entrepreneurs to find assistance. But they don’t have to go at it alone–and they shouldn’t, when these no-cost and low-cost services are available to them.”

What’s the most rewarding part of your role at CalOSBA?

“I always say I have the best job in the state. And it’s because I frequently have the honor to watch someone’s dream come true. I love a ribbon-cutting ceremony–Every time, big or small. It means someone dreamed of accomplishing something and worked hard for it: They opened the doors to their business, they made a sale, and hopefully they will hire their first employee and then it’s off to the races. But no matter what happens to that business, that ribbon-cutting is a milestone they made happen for themselves. There are many other events I get invited to, where you can just see the hope and pride, and even fear in their faces. I’m often overwhelmed by the sheer emotion of it, and I’m always humbled that I get to participate in that person’s big milestone.”

What are some new programs that can benefit small business owners in the Inland Empire?

“The number one question my office gets asked is how to access small business financing. To help address this key need, we’re launching the Technical Assistance for Capital Readiness program this February. The program is part of a bigger effort to fill well-known funding gaps in the state to benefit very small businesses and Socially and Economically Disadvantaged Individuals (SEDI). Through investments from the U.S. Treasury, the State Treasurer’s Office and IBank, the program is going to support lenders to facilitate “high risk” loans that they normally would not approve.

In addition to supporting lenders, my office also received $25.3 million in U.S. Treasury funding to start the new Capital Readiness network. The Capital Readiness Coaches in this network will help business owners get ready for the lending marketplace, help them make the best choices in a high interest-rate environment, and optimize the use of the capital once they receive it. The network is also designed to help spread the word about this opportunity to these SEDI-owned businesses, and some of those partners will be focused on supporting the Inland Empire small business ecosystem.”

How can business owners get in touch with CalOSBA?

“That’s simple! Check out calosba.ca.gov and sign up for our monthly newsletter, where I write a column and showcase success stories from our network, along with deadlines and updates on grant and workforce support programs. We’re also on social media, so I would encourage business owners to check out all of our channels.”

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Opinion

BNBuilders’ Scott Augustine Leads the Company’s Expansion into the Inland Empire

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PEOPLE ON THE MOVE

Residing in the Inland Empire for nearly a decade, Scott seamlessly integrates his professional expertise with a personal dedication to regional progress. With an extensive 20+ year career in construction, he has played a vital role in shaping BNBuilders’ presence in the Inland Empire’s landscape. Notably, his impactful contributions to UC Riverside and his current involvement in the development of the Chámmakilawish Pechanga School for the Pechanga Band of Indians. This endeavor reflects his commitment to projects that not only enhance the built environment but also contribute to local education and well-being.

Since joining BNBuilders in 2020, Scott has brought valuable knowledge and leadership to the team. His impressive professional qualifications underscore his dedication to safety, sustainability, and maintaining the highest standards in construction practices.

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