When the Laguna Beach Surf & Sand was the base for Tom Brokaw, Dan Rather and other members of the Western White House press corps during the Nixon administration, it was Orange County's only coastal resort.

Today, the Laguna landmark competes with the Ritz-Carlton Laguna Niguel, Four Seasons Newport Beach and the St. Regis Monarch Beach Resort & Spa in Dana Point.

And more resorts are on the way � one just a mile south from the Surf & Sand where the Montage at Laguna Colony is set to open early next year. 

Almost 1,000 rooms are set to be added along OC�s coast by next spring at the Montage, Balboa Bay Club and Hyatt Regency Huntington Beach Resort & Spa. That�s on top of the 400 at the year-old St. Regis Monarch Beach.

�Coastal hotels probably aren�t looking forward to new product coming on the market,� said Michael Mahoney, a hospitality consultant with PricewaterhouseCoopers LLP in Los Angeles.

What�s more, those hotels stand to add about 75,000 square feet of meeting space to the 1 million already available at the county�s 50 largest hotels.

�The timing of all of them opening in one year will be tough,� said Troy Jones, manager of the hospitality group at Ernst & Young LLP in Los Angeles.

With corporate meetings under budget constraints, it�s easy to wonder who�s going to fill all that space�and how existing resorts plan to hang onto their clients.
 

One thing hotels are doing is remodeling. The Four Seasons, Laguna Cliffs Marriott in Dana Point and Surf & Sand have done makeovers and spa additions. And the Ritz-Carlton plans a $30 million upgrade. Mahoney said more remodeling is likely. �That�s good business,� he said. Carrie Olson, director of marketing at the Four Seasons Newport Beach, said the key is to never take groups for granted. �When new business comes

Laguna Cliffs Marriott Resort 25135 Park Lantern Dana Point, CA

High-end resorts across the board have suffered more than other hotels in both occupancy and rates since Sept. 11. In May, high-end spots in OC were down 8.6% in occupancy to 69.3% and 5% in rates, according to Los Angeles-based PKF Consulting.

Nationwide July figures from Smith Travel Research in Hendersonville, Tenn., suggest the segment may not see positive year-over-year growth this year. �More supply and reduced demand doesn�t bode well" for new hotels, Jones said.

But most coastal hoteliers insist the growth is a good thing for OC, creating a resort hub that can compete with Palm Springs, Scottsdale, Ariz., or even Hawaii.

�We�re really competing with other destinations now,� said George Munz, director of marketing at the Ritz-Carlton Laguna Niguel. �The pie is getting bigger. That says Orange County is desirable.�

The Ritz is credited with being OC�s first coastal resort, even though the Surf & Sand has been around longer. Surf & Sand general manager Blaise Bartell said the Ritz was the first to position the county as a destination and helped introduce the financial markets to OC along the way. 

Now, others are cashing in.

�The Ritz put the area on the map,� said Bob Frear, Montage Hotels� vice president of sales. �Now everyone is enhancing that. The goal is to get people to come to the community."

But with most resorts targeting the same customer, it�s hardly a seller�s market. Coastal hotels throughout the county say they are targeting the corporate markets for group business. Trouble is, the sector has weakened in the past year.

Corporations have cut back the number of travelers, spouse programs and their length of stay. Some say incentive groups of sales people and customers also are smaller than a couple of years ago. Others insist the segment is healthy.

�In a resort like this, the dominant market segment is corporate. Incentive meetings are our No. 1 segment,� said Mark Podolski, director of sales at the St. Regis. Podolski said he thinks the incentive market still is strong. �Rewarding your sales staff or customers can�t go away (regardless of the economy) or you�ll have a bigger problem,� he said.

The corporate market has another problem, too: a reluctance to use high-end resorts when public scrutiny of business is high. One incentive group from WorldCom Inc. was living it up in Hawaii when that company collapsed, fueling criticism of such trips.

Others don�t want to risk criticism, even if the price is right.

John Gilbert, general manager of the Hilton Waterfront in Huntington Beach, said he expects some sensitivity from the corporate market. But he said that doesn�t worry him because the Hilton isn�t at the same price range as a Four Seasons or a Ritz-Carlton. Besides, he said, his hotel pitches its beachfront location. �It�s our greatest selling point,� he said.

But Ritz-Carlton�s Munz argues luxury resorts could be a better value for some groups. �If they know the return they get on the investment in higher attendance and a better chance for a meeting to go well, it becomes more cost-effective,� he said.

One thing coastal hotels won't have to worry about: competing with the Anaheim convention market, observers said.

�Anaheim and Disneyland are a separate market,� E&Y�s Jones said. �There will be some ripple effect (between Anaheim and the coast). But most competition will be on the coast.�

Some of that competition stands to come from the Hyatt Regency Huntington Beach Resort & Spa, due to open in early 2003. The Hyatt is set to include a 52,000-square-foot conference center that will be the largest facility on the OC coast.

The Hyatt is a resort rather than a convention hotel, though occasionally they do compete against hotels in Anaheim, said director of sales Bob Wentworth. �We�re talking to groups that would otherwise have to go inland,� he said . �But our competition is more from Scottsdale and Palm Springs than from Anaheim.�

Independent resorts such as the Balboa Bay Club in Newport Beach--set to open its first public hotel next spring--may not have the marketing leverage of a national brand such as St. Regis or Hyatt. But some believe that could be an edge. 

�We�re not one of the brands, and that may be to our advantage in luring corporate business,� said Jim Samuels, vice president of sales and marketing for the Balboa Bay Club. The lack of preconceived notions about the resort might loosen some corporate purse strings, he said.

Independents also have more flexibility in making changes at their hotels.
 

�Being independent allows you to be unique," said Blaise Bartell, general manager at the Surf & Sand. �That appeals to the affluent traveler.� Resorts such as St. Regis emphasize their all-inclusiveness, which they say is a draw for planners. St. Regis has hosted companies such as CompuWare Corp., Toshiba Corp. and Toyota Motor Corp.

Surf & Sand Resort 1555 South Coast Highway Laguna Beach, CA

But others�including the Surf & Sand and Newport Beach Marriott�sell location within walking distance of shopping, dining and entertainment that also is attractive to many visitors.

Fashion Island is a big plus for the Newport Beach Marriott Hotel & Tennis Club, according to general manager Bill Gunderson. And the Surf & Sand�s Bartell said gallery tours and dining are popular in Laguna Beach and easy to arrange.

Meanwhile, veteran hoteliers at the Four Seasons Newport Beach, convinced their high standards of service carry the day, remain unconcerned about an increase in competition along the coast.

�It�s great that people are looking at Orange County,� the hotel's Olson said. �And it�s nice to see what bells and whistles everyone brings in and to see which ones work. But it doesn�t matter if guests have a great plasma TV if they can�t get their room service order.�

Four Seasons Hotels, which is based in Toronto, saw its profits dip 36% in the second quarter this year.

In the end, whether coastal resorts target drug makers � the current darling of the corporate world�or small executive meetings, there�s one fallback no one can take away: OC is in driving distance of 20 million people from key areas including Las Vegas, Phoenix and the Bay area. Those markets traditionally have provided a hefty chunk of visitors to the county.

And with a national trend toward short vacations and long weekends, coastal resorts hope the short-term leisure market will help them through leaner times. PricewaterhouseCooper's Mahoney said resorts today are happy to accommodate the casual leisure traveler they might not have courted in better times.

And some of that leisure business begins at a meeting.

�We see people who come here with a group return with their families,� Podolski said. 
 

Sandi Cain is copy editor and a staff reporter covering hospitality,tourism, travel and sports. Cain holds bachelor�s and master�s degrees in education from Kent State University in Ohio, where she majored in social studies. A former high school teacher, she has written for niche-market sports publications in the U.S., England and Australia and formerly worked in both the printing and high-tech industries. A Cleveland, Ohio native, Cain hasbeen a resident of Laguna Beach since the late �70s. She enjoys travel, gardening, reading and spoiling her three cats.