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in 2004 Little Changed from Previous Year in Orange County, California |
By Sandi Cain,
August, 2004
No newcomers debuted among the top 50 hotels in Orange County this year, the first time that�s happened since 1999. But employment climbed 3% overall, reflecting at least some optimism. Total room count on this week�s Business Journal list of the largest OC hotels was 20,922, up slightly from 20,889 a year earlier. The very few changes in ranking on this year�s Business Journal list were the result of renovations and expansions that have become the norm as hotel properties retool to keep pace with the new ones that have debuted since 2000. Employment for the 41 hotels that provided figures was up 4%. With estimates, the total number of employees at these 50 hotels rose 3% to 14,405. The 16 hotels in Anaheim alone accounted for 5,114 of the jobs. That number includes Business Journal estimates for the three Disney hotels in the city. Of the hotels that provided employment figures, 14 had an increase, 10 a decrease and 17 no change. The biggest increase in workers was at No. 38 Clarion Hotel Anaheim Resort, which jumped 50% to 150 employees. �Business is better this year. Last year it was awful,� said Stephanie Westberg, director of sales. �The foreign independent travel (bookings) are the best they�ve been since 2001.� Other big gainers: No. 17 Hyatt Regency Newport Beach grew its staff by 45% to 320 and No. 8 Hyatt Regency Huntington Beach Resort & Spa grew 44% to 650 employees. �Being a new resort, we�re ramping up to full service,� said Cormac O�Modhrain, general manager of the Hyatt Regency Huntington Beach. �As occupancy improves, we�ve added staff to make sure we maintain our service levels.� Two hotels, No. 29 Howard Johnson Hotel and No. 42 Holiday Inn Hotel & Suites � both in Anaheim � cut staff by 11%, the biggest drops on the list. Anaheim hotels posted an overall 1% decline in employment. Newport Beach ranks second in market share, with six hotels on the list and 2,312 rooms. That edged out Irvine, which also counts six hotels among the largest 50 hotels, but has fewer rooms, at 2,190. Costa Mesa has five hotels and 1,648 rooms among the biggest hotels in OC. Though some have described the summer season as soft, reported occupancy at the largest hotels averaged 68%, up from 67% a year earlier. That�s just a shade under the county average of 70% for the first five months of this year, according to Los Angeles-based PKF Consulting, which measures large and small hotels. Similarly, hotels on the list have an average starting nightly rate of $159�up $3 from those on last year�s list, and higher than the countywide average of $115 as reported by PKF earlier this year. Hoteliers contacted for this story were optimistic. �Group business is much better than last year,� said Russ Cox, general manager of No. 10 Coast Anaheim Hotel. �On the leisure side, the business is here but is (booked) very short-term.� The trend toward last-minute bookings is one heard repeatedly from area hoteliers, who said it applies equally to regional tourists, foreign visitors and meetings. �It�s a very short booking window,� said Cormac O�Modhrain of the Hyatt Regency. �We had only a three-week lead time for one group that booked 400 rooms.� Starting rates for the 47 hotels that provided prices range from $79 at six hotels to $560 at No. 41 Montage Resort & Spa in Laguna Beach. Sixteen hotels have published rates starting at less than $100. Of the 29 hotels that provided occupancy rates, 14 reported occupancy at or above the countywide average of 70%, while 15 reported lower occupancy. No. 26 Radisson Hotel Newport Beach and No. 34 Embassy Suites Irvine reported occupancy of 80% or above. �We�re a corporate hotel that caters to the individual business traveler,� said Mari Hnatt, general manager at the Embassy Suites Irvine, which ended last year with 83% occupancy. �This year, the business traveler is back on the road,� she said. According to the National Business Travel Association, 60% of corporate travel managers said their companies are spending more on travel this year than last. Several factors contribute to improved, though uncertain business at area hotels. The John Wayne Airport area and other business hotels have seen a definite uptick in business travel that had been missing since the 2001 terrorist attacks. �Our corporate business has been up 5% all year,� said Jeff Protzman, general manager of No. 15 Doubletree Hotel Anaheim/Orange County in Orange. Leisure business may be short-term, but visitors are coming�both from near and far. Coastal resorts are brimming with summer visitors, with some reporting little availability for August nights. �The trend is clearly for people to stay closer to home,� said Bill Gunderson, general manager of No. 6 Newport Beach Marriott. On the group business side, Coast Anaheim�s Cox said the difference lies with projected attendance. �Last year, the business was on the books, but the (projected number of) people didn�t show up,� he said. At perennial No. 1 Hilton Anaheim, bookings for the first half of 2005 are pretty good, but the second half still has �holes� to fill, said Edd Karlan, director of sales and marketing. The Hilton, along with No. 2 Anaheim Marriott and No. 3 Disneyland Hotel, are the only three OC hotels ranked on Tradeshow Week�s list of 80 largest hotel exhibit facilities in the nation. This year�s list may have the same brand names on the outside of the hotels, but half a dozen hotels changed ownership or management companies in the past year, most recently No. 13 Irvine Marriott, now owned by Meristar Hotel Corp. Previous Irvine Marriott owner Cigna Hotels also sold No. 22 Laguna Cliffs Marriott Resort & Spa in Dana Point, to Prudential Real Estate Investors. And the Doubletree Hotel Anaheim was sold to Slohat Hotels LP, though management remains under Hilton Hotels, which owns the Doubletree brand. The changes reflect an industry trend to separate ownership and management operations. Internal changes were plentiful at area hotels as well. Six of the largest 15 hotels either recently completed major makeovers or are slated to begin before year�s end. Those complete include Disneyland Hotel, No. 9 Disney�s Paradise Pier Hotel and No. 11 Sheraton Anaheim Hotel. The Laguna Cliffs Marriott also completed a renovation last spring that included the addition of 31 rooms and a new spa. The Newport Beach Marriott just began a $60 million renovation that will be finished in a couple of years. It�s the most expensive renovation in company history, Gunderson said. When complete, the hotel will have a spa, new restaurant and suites, updated meeting space and a revamped, 8,000-square-foot lobby. Business Journal lists often reflect budding industry trends. This has been the case on a couple of fronts for the hotel list. One dramatic change for hotels has been the emergence of technology in hotel rooms. As recently as 2000, only 21 hotels on the list offered high-speed Internet access to guests. This year, 38 offer wireless Internet access. To measure another budding trend, the Business Journal for the first time asked hotels if they charge a resort fee�an increasingly common surcharge at high-end hotels and resorts nationwide. These fees are said to cover resort business improvement district taxes, access to special amenities like spas or sports facilities, among other costs. Only nine of OC�s largest hotels reported charging this fee, despite the recent growth of resorts in OC, particularly along the coast. Meeting planners say resort fees are not typically a deterrent to booking a hotel if they offer true amenities and are not just extra fees for morning coffee and a newspaper. But hotel taxes always have the potential to be an issue. According to the American Hotel and Lodging Association, travelers pay an average of $9.51 in lodging taxes based on an average room rate of $83.26 per night. ---
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Sandi Cain Laguna Beach CA 949-497-2680 [email protected] |