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San Diego Area Added 2,402 Hotel Rooms in 2003, Outpacing the Rest of the California; Indian Casino Hotels Responsible for Much of Growth
By Adam Eventov, The Press-Enterprise, Riverside, Calif.
Knight Ridder/Tribune Business News 

Mar. 23, 2004 - Hotel growth in the Inland Empire was strong in 2003, but new development in the region couldn't match San Diego County's state-leading construction boom. 

San Diego County added 2,402 rooms last year, far outpacing the rest of the state in new hotel-room construction, according to a study released earlier this month by Atlas Hospitality Group, a Costa Mesa-based real estate firm specializing in hotel properties. 

"It has to do with all the excitement associated with the convention center, the entertainment hub downtown with the Gaslamp Quarter and the new baseball stadium," said Alan X. Reay, president of Atlas Hospitality. 

The Hyatt Regency hotel is also responsible for adding a huge number of rooms to both San Diego and Orange counties. The Hyatt Regency San Diego completed an expansion in 2003, adding 750 rooms. The opening of the Hyatt Regency Grand Coast Resort in Huntington Beach brought in 520 rooms last year to Orange County. 

San Diego County accounted for 15 percent of all the new rooms that opened in California last year. 

Indian casinos are responsible for much of that growth. Pala Resort opened late last year, adding 507 rooms. Barona Casino contributed 397 new rooms with the 2003 opening of a hotel attached to its existing casino. 

There are 55 projects being planned that would add 11,797 rooms in the near future, according to the Atlas report. 

San Diego's ability to fill rooms is one reason for such strong interest in new hotels. The city is third in the nation behind New York City and Oahu, Hawaii, in occupancy rates and draws the fifth- highest room rates in the country, according to the San Diego Convention and Visitors Bureau. 

San Diego's average daily room rate was $111.34 in 2003, behind New York ($169), San Francisco ($117), Boston ($117) and Oahu ($116). 

While not as strong as some regions, the Inland Empire's hotel market is doing well. 

Riverside County added 259 rooms, including the openings of an Extended Stay America in Palm Springs, a Hampton Inn & Suites in Palm Desert and a Comfort Inn in Murrieta. 

Riverside County has 13 projects totaling 1,699 rooms in the planning stages, according to the Atlas report. 

Three hundred forty-five rooms were added to San Bernardino County's stock of hotel rooms last year, including the openings of a Holiday Inn in Barstow, a Baymont Inn in Ontario, a Comfort Suites in Victorville and a La Quinta Inn in Hesperia. 

San Bernardino County has 21 hotel projects with 1,503 rooms being planned, according to the Atlas report. 

Hotel development is expected to be healthy in the Inland Empire for the next few years, with several major projects in the pipeline, according to industry experts. 

The Morongo Band of Mission Indians is planning to open its 310-room hotel project in Cabazon in early 2005, while the Cabazon Band of Mission Indians in Indio expects to open its 250-room hotel in November. 

Hotel occupancy in the Coachella Valley dipped in 2003 to an average of 59.4 percent, down from 62.7 percent in 2002, said hospitality expert Bruce Baltin of the Los Angeles office of PKF Consulting. The hospitality firm projects the valley will do better this year, with an average occupancy of 62.9 percent. 

Hotel developers are showing interest in Corona due to the city's proximity to Orange County, the 91 and 15 freeways and its explosive business growth, Reay said. 

Ontario and Rancho Cucamonga continue to be strong hotel markets, driven mostly by the Ontario International Airport and surrounding business development, Baltin said. 

Hotels in the Ontario area averaged about 75 percent occupancy last year and drew an average of $86 a room per night, according to PKF Consulting. 

"Ontario has been a very strong market for the last several years," Baltin said. 

That strength earlier this month attracted Virginia-based JER Partners to purchase the 309-room Hilton Ontario Airport for $30 million. The 299-room Ontario Airport Marriott was sold in January 2003 for $25.7 million to Sunstone Hotel Investors Inc., a San Clemente hotel investment firm. 

Five hotel projects have been proposed for Rancho Cucamonga, consisting of a Holiday Inn Express, a TownePlace Suites by Marriott, a Homewood Suites by Hilton, a Hilton Garden Inn and a Courtyard by Marriott. 


San Diego's occupancy rate is third in the nation behind New York City and Oahu, Hawaii. 

  • New York City: 74.4 percent 
  • Oahu: 73.1 percent 
  • San Diego: 69.5 percent 
Source: San Diego Convention and Visitors Bureau 

-----To see more of The Press-Enterprise, or to subscribe to the newspaper, go to 

(c) 2004, The Press-Enterprise, Riverside, Calif. Distributed by Knight Ridder/Tribune Business News. ESA, HLT, IHG, LQI, SSI, MAR, 


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