Harsh economic times hit SLO

economyWhen local hotels didn't sell out for graduation in June, the San Luis Obispo Chamber of Commerce saw its first signs of an economic crisis.

"For the first time ever, we had hotels calling us with availability," said Lindsey Miller, marketing director at the chamber of commerce. "Usually they sold out in January."

According to Miller, occupancy was down six percent in June, and when tourism is down, locally-owned shops feel the impact.

"Traveling is the first thing you cut; it's kind of a frivolous expenditure," Miller said.

Tourism is what keeps some businesses - like downtown boutique French Quarter - thriving over the summer months when students are gone.

"I think it helps that it's a tourist city," said Brittney Durr, a sales associate at French Quarter. "If we didn't have any tourism, we wouldn't really have any income (in the summer)."

For Amnesia, a locally-owned shop on Higuera street which sells exotic sculptures and collectibles - tourism also kept summer sales booming.

"Our summer was good definitely because foreign tourists - a lot of Germans and British - could spend money," manager Deborah Hobbs said.

Although Hobbs said it's hard to tell what direct effect the country's economic situation has on her store, she has seen a cutback in expensive items being sold.

"Inexpensive items- people spend money on all the time. They'll let themselves buy $5 earrings," Hobbs said.

But expensive collectibles, like their Indonesian sculptures that go for $125 each, don't sell anymore.

Hobbs said sales to students are down about 30 percent from average, but students are still buying clothes.

"They see clothes as a necessity," she said. "Money doesn't stop them."

Kourtney Kaney, the retail keyholder at downtown clothing store Crazy Jays, said she observed the same trend; clothing is seen as a necessity, not a luxury. She said students aren't as pressed to save because they're spending their parents' money.

"It's been slow to a certain extent," she said. "Because our prices are cheap and affordable, there's not as much of an impact."

When asked how the economic situation changed his shopping habits, industrial technology junior and downtown shopper Connor Mcminimee held up his shopping bag.

"I went to Ross," he said, noting that he'd usually shop at someplace higher-end, like Men's Warehouse.

Although he browsed the racks at Urban Outfitters, he walked out empty-handed.

"It's been rough," Mcminimee said. "Especially because I'm from out of state, so the transportation costs have gone up really high, tuition even went up. The pinch is on."

He said he's made the biggest cuts on food and driving to compensate for higher prices.

"There was a line of students out the door of Ross today, so I'm pretty sure I'm not the only one," Mcminimee said.

While the economy is seen as a temporary drawback, Hobbs said the looming problem will come next year when stores have to relocate during seismic retrofitting of old downtown buildings.

"If the economy keeps going down, we certainly won't be able to come back and pay more rent," she said. "It's uncertain, very very uncertain."

Owner Jono Hicks of start-up clothing store Coalition said it helps that San Luis Obispo doesn't have many major chain stores to detract from local businesses.

"Downtown San Luis has a pretty amazing mix of international, big-box type retailers like Gap and Banana Republic and Urban Outfitters; it mixes really well with your small, local retailers," he said.

Jono doesn't regret his decision to open the store.

"We knew when we were opening that there was going to be a lot of increased competition and that things were a little off with the economy already, so it wasn't a huge surprise," he said.

Many downtown storeowners were reluctant to discuss the economy's impact on their businesses.

"In San Luis, a lot of these are small business owners, so it's their livelihood," Miller said.

Overall, San Luis Obispo is faring well compared to surrounding tourism hotspots like Monterey and Santa Barbara, she added.

"I think one of the things that really helps us is that we're more of an affordable destination," Miller said. "I think San Luis has definitely not been hit nearly as hard as other areas have. People are still coming, people are still living here."

At its retreat next month, the chamber of commerce will discuss ways to help boost local business if the economic situation doesn't improve, Miller said.