As the industry struggles through difficult times, Bob Rauch and Joe Simone have proven success is still possible.

Days after the topping-off party for their Hilton Garden Inn San Diego/Del Mar, the four-story building burnt to the ground on June 5, 2007. The neighboring Homewood Suites and its 300 guests, some still in town for the party, had to be evacuated at 2 a.m. Just about everything from the nearly completed $14-million construction project was lost, and 45 rooms at their co-owned Homewood Suites were damaged by fire, smoke and water. No one was injured.

“Where do you go from here,” Simone says he was thinking that morning. “But as the sun was coming up, the only thought in my mind was we must rebuild. There was no other choice.”

The estimated 14-week Homewood renovation took just seven weeks, and those 45 suites opened in time for the Del Mar horseracing season. Construction on the Hilton Garden Inn had to wait for the cleanup effort and the investigation — the official cause, to this day, is “undetermined.” The existing slab and basement walls were all that was salvaged. Although insurance covered everything, the restart meant the entire project had to be re-bid and the contract was essentially rewritten.

Construction began by mid-July and nine months later, the 80-room Hilton Garden Inn opened. The Homewood Suites — 80-percent occupancy with rates around $160 this year — has generated more than $5 million in revenue since its 2003 opening. The addition of the Hilton Garden Inn — already at 70 percent occupancy with rates at $152 — will push that number to a combined $10 million by the end of this year for Del Mar Hotels, Inc., the company the two partnered to form in 2003 to build the Homewood Suites. Simone has the real estate background and is the president, while Rauch, who teaches at San Diego State's hospitality school, is a partner and the GM at the Hilton Garden Inn.

The two hotels are 40 meters apart and were the first dual-designed Homewood-HGI, but not the first to open because of the fire. It's now a popular combination for Hilton developers. Homewood Suites' guests can take advantage of HGI's full-service Serenity Spa and Salon, the N.Y. Garden Deli & Café and the Great American Grill, all unique elements for an HGI.

“This is a compact full-service hotel without the infrastructure costs of a full-service hotel,” says Rauch, adding that local zoning required retail elements to the project.

Rauch and Simone credit the campus-like feel with the shared spa and fine dining as key reasons for the hotels' success during the downturn. Both hit their target in a tough September and Rauch projects the same for the fourth quarter.

“The next six months will be a huge challenge,” he says, but not so much they'll be afraid to pull the trigger on another project if something catches their eye. “We're interested,” Simon adds. “If we come across something, we could make it happen next month. The question will be is that the right deal for us?”