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Challenges Remain to Book Guests in Riverside and San Bernardino
Counties in California While Occcupancy Rates Do Show
Steady Improvement Since 2008

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

Sept. 11, 2011--It was quiet in the high-ceiling lobby of the Embassy Suites Ontario Airport hotel on the Friday afternoon before Labor Day weekend, a not entirely unusual atmosphere for the newest hotel to open in the two-county region.

Hotels have had a rough go of persuading people to part with their money for a night's stay during the economic downturn. Faced with a traveling public that was more apt to couch crash, if they vacationed at all, developers of new hotels slowed down or gave up altogether. The hotel market began to resemble the housing market with properties falling into default, and foreclosure buyers stayed away until the price was too good to refuse. New construction had been a rare occurrence since 2008.

While the economy continues to struggle, the outlook for hotel owners is seemingly a little less dire than before.

Occupancy rates and the revenue earned per available room at Riverside County and San Bernardino County hotels have improved in the first seven months of the year compared to the same time in 2008 and 2009, according to the according to statistics from Smith Travel Research which tracks occupancy rates, revenue and more at the nation's hotels.

Riverside County had a 58 percent occupancy rate on average through July compared to a 54.5 percent rate in the same time in 2010 and 53.5 percent rate in 2009. The county's hotels earned $63.63 per available room on average.

San Bernardino County had a 58.8 percent occupancy rate on average as of July with $41.73 revenue earned per available room, compared to 56.5 percent rate in the first half of 2010 and 53.8 percent rate in 2009.

In the Inland region, at least one new hotel is under construction -- the Hyatt in downtown Riverside -- and the Embassy Suites situated just a couple traffic signals from Ontario International Airport opened in May. Despite being surrounded by competition, the hotel hasn't budged on rates.

During the week, the hotel has asked for $169 to $189 a night. Rates during weekends are closer to $139. With that price comes a two-room suite, buffet breakfast, nightly cocktails, Wi-Fi and wired Internet and parking.

It has been anything but easy to fill the hotel's rooms, though.

The number of passengers flying into and out of nearby Ontario airport has dropped by one-third since 2007 and the convention center's calendar hasn't been robust with events that lead to overnight stays.

When he first arrived in Ontario from a cross-country drive from Fort Meyers in Florida, Brad Wymer, the hotel's general manager, said he was salivating at the potential pool of corporate customers surrounding his hotel and the airport that could be ideal Embassy guests, including UPS and others with brand names affixed to buildings nearby.

"It's much bigger than the puddle I came from," he said.

The hotel has 55 employees keeping tabs on the 175 suites. When business begins to ramp up, he expects to have 75 to 80 employees.

"We're getting a little stronger every week," he said.

Others had gotten progressively weaker.

Of the 478 hotels in California in default or foreclosure, San Bernardino County has the most, according to the latest report from Atlas Hospitality Group, a hotel brokerage firm.

Between April and June, the county had 28 hotels in default followed by Riverside County with 25 and Los Angeles with 21. San Bernardino County has 21 bank-owned hotels while Riverside County has 15, according to the firm.

Notice of defaults have been on the decline, though, and the firm attributed a rise in foreclosure activity to banks being able to unload a property on the books because there's a buyer.

Based on Atlas' midyear sales report, the buyers for hotels both in default, and not, have returned. Eleven hotels have been sold in Riverside County in the first six months of the year for a total of $14.4 million, including the 410-room Renaissance Palm Springs, marking a 175 percent increase compared with the same time a year prior. Twelve hotels, 50 percent more than a year ago, were sold in San Bernardino County in the same time for $43.2 million. That number included the sale of the 309-room Hilton Ontario Airport hotel.

The 136-room Aloft hotel opened in mid-2008, the first of its kind to open in the United States, and was sold in February to Pacifica Host Hotels for $8 million.

A former longtime Riverside resident, Christopher Ramirez, 37, now visits his family spread out in the Inland region at least twice a year, wishing he could make the trip from Merced to Southern California more.

On the Friday before Labor Day he was once again unpacking his car's trunk outside the Aloft hotel in Rancho Cucamonga where he usually stays.

"There's something really hip and cool about this place," said the professor of writing at UC Merced. The Aloft has a zen feel with fine modern lines he appreciates, he said.

Inside, the scent of citrus was piped in and a crowd of hotel guests surrounding the pool table kept the lobby lively. On one wall, the news ticker swiftly pushed aside the headline "job growth stalls, fuels recession fears," on to the next story.

The hotel's general manager, Cristina Slim, said the property was ahead of last year primarily in the revenue it earned per available room, which was up by double-digit percentage points, she said.

The rates during the week hover between $109 and $139 while weekend rates are $79 to $99. The hotel has plenty of competition including other nearby Starwood sister properties which all vie for loyalty club members.

But Slim said the Aloft brand that she referred to as the "baby sister" of Starwood's W brand was coming into its own.

"People are starting to recognize us," she said.


(c)2011 The Press-Enterprise (Riverside, Calif.)

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