News for the Hospitality Executive
|By Andrew Moyle, Inland Valley Daily Bulletin, Calif.
Knight Ridder/Tribune Business News
Mar. 18, 2004 - ONTARIO, Calif. -- Ontario hotels have had a lock on the local business hotel industry, but time is running out on the city's reign.
Five hotels are in the works for the intersection of Milliken Avenue and 4th Street in Rancho Cucamonga, just north of Ontario Mills.
That's uncomfortably close for members of the Greater Ontario Hotel Management Association, whose monthly meetings have taken a turn toward proactive protectionism.
"There's always a little concern when new properties open," said Jim Flowers, association president. "Everybody's updating to get ready for it. Everybody's planning."
That planning is taking the form of upgrades on everything from high-speed Internet access in hotel rooms to granite countertops in bathrooms. The improvements were always an eventuality for the hotels, but the prospect of the Rancho Cucamonga competition has caused the hotels to ratchet up their improvement schedule.
And that competition will be a formidable sight.
As early as 2005, Hilton Garden Inn, Hilton Homewood Suites, Marriott Towne Place Suites, Courtyard by Marriott, and a Holiday Inn Express will crowd Rancho Cucamonga's southern border, separated from Ontario by only the width of 4th Street.
The cluster of hotels is expected to generate $10 million in revenues in its first year of full operation, and that number is expected to climb in subsequent years.
Two of the five have already received approval from the Rancho Cucamonga planning commission, and the other three will be up for a vote in April, said Brad Buller, city planner.
After that, there will be an accelerated construction schedule, he added.
The success of the five hotels on the cities' common border may spur the inclusion of a four- or five-star hotel at the uncompleted Victoria Gardens shopping district.
For Ontario, the financial stakes are clear. The city collects $8 million in transient occupancy tax annually for its general fund. That's 11.75 percent of the nearly $69 million in revenue the hotels generate yearly.
Rancho Cucamonga expects to collect $1 million from the new hotels, at a 10 percent transient occupancy tax rate.
Ontario officials expressed confidence in the area's ability to support the five new hotels, and even more beyond that.
"It's going to dilute the market for the first couple years, but we're continuing on with business as usual," said Mary Jane Olhasso, redevelopment director. "The economics are very strong."
Ontario hopes increasing business at the Ontario Convention Center will continue to bring in convention-goers in need of a place to stay, Olhasso said.
"We still will have all the tourism related to the airport," Olhasso said, and the airport is still planning to expand.
Periodic revenue will also help.
"California Speedway is supposed to build another grandstand," Flowers said. "If that happens, you're going to double the capacity."
But business travel will still be the area hotels' mainstay.
"We're not exactly a mecca for tourism," Flowers said. "You're always looking for corporate travel. We're still there. We're still going."
-----To see more of the Inland Valley Daily Bulletin, or to subscribe to the newspaper, go to http://www.dailybulletin.com
(c) 2004, Inland Valley Daily Bulletin, Calif. Distributed by Knight Ridder/Tribune Business News. HLT, MAR, IHG,
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