Hotels will have to re-organize and cut spending to make it through the balance of the year, the toughest in recent memory, according to Ernst and Young's West Coast Hospitality Group. PKF Consulting, based in Atlanta, also expects a soft market through the end of the year.

Hotel occupancy rates averaged 73% in 2001 and 13 million room nights were sold, according to the San Diego Convention & Visitors Bureau. San Diego will recover more quickly from the recession because it's a top tourist destination and leisure travel already is near normal levels, according to Ernst & Young.

The PKF report points out that San Diego is flexible because of the variety of hotel room prices and locations: the average daily room rate for properties in the county was $135. The city's recently expanded convention center, limited room supply and nearness to major California markets make it well-positioned compared to other cities of similar size, according to E&Y.