California's Orange County Tourism Up Big; RevPAR Up 9.1% in 2013 - 4.9% Growth Expected for 2014
Mary Ann Milbourn | The Orange County Register | December 31, 2013 12:59am
Dec. 31--Tourism helped lead Orange County out of the recession, and hospitality industry leaders expect the good times to continue to roll in 2014.
Jay Burress, chief executive of the Anaheim/Orange County Visitor & Convention Bureau, said preliminary numbers show 44.3 million visitors coming to the county in 2013, 500,000 more than in 2012. That's not a record, but it will be the best showing since 2007, when the county also saw 44.3 million visitors.
Burress said Orange County is benefiting from the improving economy, growing consumer confidence and hotel developers, who have seen enough of a turn that they are upgrading older properties and starting new ones.
"It's a perfect storm," he said.
Disney's revamping of California Adventure with its new Cars Land, which opened in June 2012, has also been a major draw. Disney CEO Bob Iger told analysts during his November earnings conference call that the Disneyland Resort delivered record attendance in revenue and profitability.
Burress said the Anaheim Convention Center's new 100,000-square-foot Grand Plaza also has given a boost to Orange County's meeting business. It has been the site for everything from yoga classes to rock concerts. The plaza has become an attraction in its own right, with officials from other convention centers coming to Anaheim to see how they might use similar space for meetings in their communities.
Even with the plaza, Burress said the convention center is running out of space. He is planning to go to the Anaheim City Council next month for approval of a $155 million, 200,000-square-foot expansion. If the project is approved, Burress expects it to break ground by fall with a 2016 completion date. The new space will allow the convention center to host two shows at once and provide room to meet the increasing demand for seminar and breakout space.
The 2013 surge in visitors -- combined with relatively few new hotel rooms added to the market -- pushed up occupancy rates to an estimated 75.3 percent, according to PKF Consulting's 2014 Southern California Lodging Forecast. The Los Angeles-based hospitality industry research firm expects occupancy to edge up to 75.9 percent in 2014.
With rooms harder to come by, PKF predicts hotels will be increasing prices. PKF estimates the average Orange County room rate jumped 6.5 percent this year, to $138.40, and will increase to $144.11 in 2014. Revenue per available room, a measure of hotel profitability, jumped 9.1 percent in Orange County this year and is expected to grow 4.9 percent in 2014.
"Anaheim/Orange County is the strongest in Southern California and stronger than the national average," said Bruce Baltin, executive vice president of PKF. "It's obviously a very healthy market."
Orange County's resorts benefited the most from the bounce back in travel, mostly because the luxury market saw the biggest drop in traffic during the recession. Baltin believes the improvement in hotel occupancy and profitability will be across all segments of the market in 2014.
This year's boom pushed Orange County's leisure and hospitality employment to a monthly average of 186,500, the highest on record, according to state jobs data.
Industry experts say one of the big drivers of Orange County tourism this year and in the years to come will be the growth in international travel.
Orange County has suffered in the international market because it had only limited service to Canada out of John Wayne Airport. Most international passengers flew into Los Angeles International Airport and spent their stay in that city.
Last year, AirTran and Interjet launched two flights a day from Orange County to Mexico while WestJet continued to provide once-a-day service to Vancouver, British Columbia.