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Southern California Hotel Building Boom Fueled by More
 Tourist and Business Travelers Willing to Pay More

By Kimberly Pierceall, The Press-Enterprise, Riverside, Calif.McClatchy-Tribune Business News

Jul. 24, 2006 - More tourists and business travelers willing to pay more for a night's hotel stay continues to fuel hotel building in Southern California.

Developers have built 8,231 more hotel rooms than they had last year, almost twice the amount under construction by mid-2005, according to Irvine-based hotel-broker Atlas Hospitality Group.

In Riverside County, there are already 569 more rooms being built.

Alan Reay, president of Atlas Hospitality, said his firm's mid-year report signals continued hotel growth in the two Inland counties.

"They're definitely markets that developers want to get into, and investors," Reay said.

Bob Brown, director of the Ontario Convention Center, said the region is nowhere near having too many hotel rooms.

"The more hotels they can put up, the more business we can attract," Brown said. Conversely, "as we attract more conventions and trade shows and, to some extent, consumer shows to fill weekends, that also generates room nights."

Ideally, Brown said he hopes a luxury hotel will eventually be developed that could attract the wealthy NASCAR drivers and teams when they arrive for California Speedway races.

"They expect four- and five-star properties. They end up staying in LA and flying in," he said.

In Palm Springs, Lennar Homes is building a 450-room hotel for its Escena development. The city is also entertaining proposals from Starwood Hotels, Resorts Worldwide Inc. and Hard Rock Hotel Group to build luxury resorts adjacent to the city's convention center.

The number of Riverside County hotels in the planning stages has dropped 39.6 percent, but Reay said the number of hotels being built is more telling. Typically, 10 percent of hotels in the planning pipeline are actually built, he said, because some don't get financing or city approval.

San Bernardino County has 3,563 rooms planned, according to the report. The number under construction has dropped from 875 during this time last year to 576 this year which includes the 114-room Courtyard by Marriott Rancho Cucamonga.

The Northern California hotel industry, still picking up where Reay says Sept. 11, 2001 left them, has had a much steeper drop, falling from 14,088 rooms under construction last year to 4,391 this year. The number of hotels also dropped from 121 in the first half of last year to 41 this year. Reay expects construction to pick up next year.

"Right now we think there's just a pent-up demand for rooms," he said.


More hotel rooms are being built so far this year than in the first half of 2005 in every Southern California county except San Bernardino and Ventura counties.

Riverside County: 898 rooms under construction, 172.9 percent increase

San Bernardino County: 576 rooms under construction, 34.2 percent decrease

Los Angeles County: 1,336 rooms under construction, 52.8 percent increase

San Diego County: 3,045 rooms under construction, 551 percent increase

Orange County: 975 rooms under construction, 12.3 percent increase Ventura County: 697 rooms under construction, 30.3 percent decrease

Source: Atlas Hospitality Group Mid-Year 2006 New Hotel Development Survey


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Copyright (c) 2006, The Press-Enterprise, Riverside, Calif.

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