Nov. 18--Citing a slump in the number of visitors to the Peninsula, the Pebble Beach Co. has laid off 29 employees.

Occupancy rates have been slipping since mid-September, and while November through late January are typically slow for tourism, the current slowdown is more pronounced, said Bill Perocchi, chief operating officer

On Friday, the company cut 24 management positions and five hourly jobs from its payroll.

With three resorts and four golf courses, the Pebble Beach Co. is one of the county's largest private companies, with more than 1,600 employees.

The company tried to balance the drop-off in business through adjusted work schedules and short-term sales and marketing initiatives, said Perocchi, but those actions weren't enough to counteract the slowdown.

"People are cutting back in how they handle their own personal financial situations," said Perocchi. "It's affecting companies and it's affecting us."

Fewer events than normal are being booked in advance, and the schedule for holiday events is slower than usual.

"You're definitely seeing people more concerned about their expenditures," said Perocchi, "and companies more concerned about travel costs."

To keep up with changing times, the resort is putting most of its focus on the California market, said Perocchi, and its sales team is spending more time on the road than ever before.

"They're spending more time with clients and customers," he said, "explaining why it's still a great idea to have

a meeting at Pebble Beach."

Mark Bastis, general manager of the Hyatt Regency Monterey Resort & Spa, said there's been a lot of pulling back on spending for events already booked.

"What's happening now in the group market goes far beyond the holidays," said Bastis. "People are canceling, depending on how this market affects their business. If not, they're trying to reduce it in size, or reduce in contractual obligations, in terms of food and beverage."

One corporation, which he declined to name, walked away from significant deposits at two of the region's bigger hotels shortly after news broke of AIG's resort getaways even as the insurance giant was receiving federal bailout funds.

Groups with multiple-year commitments are scaling back not only on 2008-09 events but beginning to pull back from spending in 2009-10, said Bastis, as worries escalate that the economy may take longer to turn around than initially anticipated.

Those group meetings, said Bastis, are the lifeblood of the Peninsula's tourism industry, particularly important in filling hotel rooms during the off-season and mid-week.

It's not just the hotel companies that suffer, he said. It affects employees who depend on those wages and overtime hours during the holidays, and their well-being, in turn, affects the local economy.

"All those people are the ones that pay rent and buy gas and buy groceries," he said.

Even with fewer holiday parties and a lighter calendar of corporate events in the coming months, Bastis said a certain level of group travel will continue to fill rooms.

"Relationships are what build companies," he said, "and people still want to build relationships, so those people will still travel in that corporate environment."

Incentive travel, too, is likely to still fill some rooms, for companies who want to reward top performers, although the levels may slip a bit.

"Right now, I think everyone's in the 'tighten-the-purse strings' mode," he said.

If there's any positive in an otherwise bleak moment in the hospitality industry, Bastis said it's that the Peninsula still has opportunities to attract travelers from its largest feeder market, the Bay Area, at a time when consumers may be hesitant to spend money to travel much further than that.

Dan Concepcion, general manager of the Monterey Conference Center, has seen a shift in group travel patterns in recent months, not so much in how many companies are booking events but in how many attendees those events draw.

For groups that book a minimum of 500 hotel rooms, the conference center typically waives meeting room rental fees.

Concepcion said he's seen a 15 percent drop in how many meeting room fees are being waived these days.

While the conference center might generate more meeting room fees for the city of Monterey, it's losing out on the more lucrative hotel room taxes, or transient occupancy taxes.

He expects challenging times ahead, as corporations react to unhealthy earnings reports. Public perception, more than the economy itself, might drive others away from traditional spending patterns, fearing the type of backlash that followed AIG's recent corporate events at luxury resorts, he said.

Monterey's proximity to the Northern California travel market could potentially work to its advantage, said Concepcion, as corporate groups and trade associations look for affordable, accessible meeting options.

"We're in a very volatile, very uncertain period here," said Concepcion. "Meetings are still happening, which is good. But I don't know what the long-term effects are going to be."

Marie Vasari can be reached at 646-4478 or mvasari@montereyherald.com.

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