HOTEL PIPELINE
A Number of OC Hotels Opened This Year, But Construction Has Tapered Off
By SANDI CAIN
There was a time not very long ago when a hardhat tour of a new Orange County hotel was almost a weekly occurrence.
Today, it’s an anomaly. In the past year, OC has seen a decline of 78% in rooms under construction, according to the 2003 mid-year report from Atlas Hospitality Group of Costa Mesa.
The Atlas report shows only three new hotels and one expansion currently under construction in the county, for a total of 462 rooms.
The largest,a Courtyard by Marriott in Foothill Ranch,is set for 156 rooms.
Others are a 126-room Candlewood Suites in Anaheim, a 103-room Hilton Garden Inn at Lake Forest and a 75-room expansion of the Desert Palm Inn & Suites in Anaheim.
But OC isn’t the only place to see a downturn.
San Diego County,where overall downtown development has some locals calling the crane the official bird of the city,has 63% fewer rooms under construction than last year; Los Angeles County is down by 45%.
The pattern is a reflection of the U.S. market, where the national hotel room supply grew by only 1.5% through May versus a year ago, according to Hendersonville, Tenn.-based Smith Travel Research.
And in the entire Pacific region, only 91 hotel projects were under construction for the same period and 321 others were in the planning stage. The region counts 7,526 hotels.
The slowdown also is a reflection of a decline in travel and tourism in California and the difficulty in obtaining construction financing, according to Atlas.
There are bright spots in OC.
The county saw six hotels open so far this year, with a total of 1,328 rooms, up 80% from about 1,000 rooms a year ago.
Statewide, that ranks second only to San Diego County, which had eight hotels open with a total of 1,777 rooms in the period.
Los Angeles saw its count of newly opened rooms fall 61% to 642.
The Hyatt Regency Huntington Beach Resort & Spa was the second-largest hotel to open in California this year. (The largest was the 750-room expansion of the Manchester Grand Hyatt in downtown San Diego.)
Other new OC hotels include the Montage Resort & Spa in Laguna Beach; the Balboa Bay Club Resort & Spa in Newport Beach; the Residence Inn in Garden Grove; ExtendedStay America Yorba Linda; and the Holiday Inn Express in Garden Grove.
The dearth of new hotels may help bolster OC’s occupancy and average daily rate through the remainder of this year.
As of June, the county’s overall occupancy was flat at 65.91% compared to 65.78% last year, according to figures from PKF Consulting in Los Angeles.
But, despite the opening of new high-end resorts, the county’s average daily rate has fallen to $105.73 from $110.30 a year ago. If more hotel rooms had been completed, both figures would likely be lower due to increased competition.
