Tourism Industry All Smiles at Prospects for 2001
For the past three years, Orange County’s hospitality and tourism industry has struggled under the weight of construction as the county has remade itself into what officials hope will be a singular destination. During that time of sagging convention attendance and hotel occupancy numbers and flat attendance at area attractions, the mantra in the industry was, “Wait until 2001.” Now, 2001 is almost upon us. The Convention Center, Disney’s California Adventure, Downtown Disney and an array of new and remodeled hotels are nearing completion, as is the Santa Ana (5) Freeway widening through the county. Projections are that California Adventure alone could bring in up to 7 million visitors in its first year of operation. And Anaheim/OC Visitor & Convention Bureau officials have estimated that visitor traffic could increase as much as 25% when the Anaheim Resort area is complete. Last year, about 38 million people visited Orange County. Projections, as the county’s bankruptcy of the mid-’90s and the recent crash of dot-com stocks have shown, can be a far cry from reality. In this case, however, early indications are that projections might just be on the mark. Charles Ahlers, president of the Anaheim/OC bureau, who has an up-close-and-personal view of resort development from his office at the Convention Center, said he’s eager to be able to compete effectively again in the meetings market again. That competition is clearly under way.
The Convention Center already has enough business booked to bring more than 828,000 meeting attendees to town next year, compared with the total of 767,689 in 1999 (see related story page 24). The big conventions like the National Association of Music Merchants that switched to other markets due to lack of space during construction are back; and the expanded facility,along with a wider variety of hotel and entertainment options in the area,are likely to attract more meetings business to the area. Kate Lawrence, president of the trade show and conference division of New Hope Natural Media in Colorado, which puts on the Natural Products Expo, will be bringing 32,000 conventioneers to the new center in both 2001 and 2002. “It’s a beautiful convention center,” Lawrence said. “We look forward to using the total space and to no more road construction. The focus will be more on the show.” That attitude is one that local officials hope carries over to others in the meetings market, and the bureau’s sales staff has been heavily targeting both corporate and association business. One big show the bureau has targeted is the POW WOW, the No. 1 international travel trade show put on by the Travel Industry Association of America. Representatives of that organization, which books its venues several years out, are being courted for 2005 or 2007. But next month, the smaller Latin American version of the travel trade prize, La Cumbre, will bring an estimated 1,700 delegates to Anaheim,that show’s first foray to the West Coast. “We take great joy in winning the battle of attracting more visitors and conventioneers,” Ahlers said. For next year, that joy appears to be shared by many others in the county,especially hoteliers. Patrick Hynes, director of public relations at the Hilton Anaheim and Towers, OC’s largest hotel, with more than 1,500 rooms and 94,695 square feet of meeting space, said next year’s bookings there look much better than this year, with a particular increase in high-tech and pharmaceutical meetings.
“We think these can be directly linked to the new resort area that will make us a full destination to be reckoned with,” Hynes said. Across the street at the WestCoast Anaheim, Director of Sales Vicki Rumsey said that hotel is anticipating about a 10% increase in business next year. “We’re going to be busy,” she said. Rumsey said busy translates to leisure business, too, with tour operators becoming more aggressive and blocking more rooms. But Jeff Hasty, general manager at the leisure-oriented Anaheim Fairfield Inn by Marriott said it’s still too early to gauge next year’s tourism market because Disney hasn’t started promoting the new park yet. “We’re still focused on the rest of this year,” Hasty said, “but expect to start seeing heavy demand around October.” Farther from the Convention Center, at the perimeter of Disneyland on Ball Road, the Sheraton Anaheim also anticipates brisk business in 2001, with more groups vying for room blocks during the same periods of time, according to Libby Sandefor-Zarrahy, director of sales.
“Interest in Anaheim is very strong,” she said. New, untested hotels that commonly need up to a year to achieve average occupancy are also expecting banner years. Tarsadia Hotels’ Portofino Inn and Suites,a remake of a former wing of the Jolly Roger Hotel adjacent to the Convention Center,opened just last week, but already the hotel has meetings business booked, including a group from the SCRC convention over Labor Day weekend and Wescon later in September. The Produce Marketing Association will use some rooms there in October. John Rusk, director of sales for both the Portofino and the Jolly Roger hotels, said Tarsadia has been marketing the property for about a year and that part of the attraction for meeting planners is the 50 one-bedroom king suites within walking distance of the Convention Center. “We bring a new dynamic to the market,” said Rusk, who is also director of travel industry sales for Tarsadia Hotels, “and 2001 will be an exceptional convention year for Anaheim.” Neighboring cities also are benefiting from the renewed interest in Anaheim.
In Garden Grove, which aggressively pursued developers with incentives to take advantage of the expected tourist boom, the Hyatt Regency Alicante, which is undergoing a $40 million expansion of guest rooms and meeting space, will be surrounded by six new hotels by this time next year.
Still, Kathy Williams, director of sales at the Alicante, said the hotel’s convention bookings are strong. “Everyone’s excited about next year,” she said. Across the street, a newcomer, the hacienda-themed Crowne Plaza Hotel, will open in mid-October. General Manager Jerry O’Connell said bookings are strong there, too, with room blocks already set during mega-conventions like NAMM, NEPCON, the Natural Products Expo and the Helicopter Expo, among others. The hotel has 384 rooms and 28,000 square feet of meeting space. “People love the idea of a brand-new, upscale hotel,” O’Connell said.
But Carrie Olson, director of marketing at the Four Seasons Hotel in Newport Beach, disagrees. The industry veteran said her experience has shown meeting planners will shy away from booking groups at a new hotel until they are sure the bugs have been worked out. And despite competition from a reinvigorated Anaheim, Olson said, the Four Seasons is “on track” for 2001, with about 40% of its group business already booked,a number considered normal for this time of year.
“There’s no slowdown, but it’s not going crazy, either,” Olson said. “You don’t get much variation at higher-end hotels.”
In Orange, Barbara deBoom, president and CEO of the Orange Chamber of Commerce & Visitor Bureau, is looking to 2002 when the city will see a big boost in tourists during the 17-weekend California State Bowling tournament. That sports series, the first landed by Orange since it began promoting tourism about a year ago, is expected to bring 10,000 people to the city. For next year, however, deBoom said the city will offer more familiarization trips to meeting planners and concentrate on print ads and a planned video to attract more meetings business. “With Disney opening, it’s an impetus for people to come,” she said. Another thing giving a boost to Orange was the introduction of the Orange Trolley in June. The trolley, the brainchild of one of the chamber’s members, links the Block at Orange, Old Towne Orange, restaurants and hotels to the Anaheim Resort district. “It’s been bringing people in,” deBoom said. Meanwhile, in neighboring Buena Park, the Radisson Resort at Knott’s Berry Farm is gearing up for its first full year of meetings business since the $27 million acquisition and renovation of the property by Cedar Fair, parent company of Knott’s. Sally Brayton, the hotel’s new director of sales, said the hotel is not yet full for next year, but is getting leads daily.
“We can’t get a lot of Convention Center business,” she said. “But we’re going after the overflow market.” Brayton, formerly with Radisson in both Carson and Seal Beach, said she has seen a shift in tourists’ thinking about LA. “I see a lot of people who don’t want to deal with LA any more,” she said.
Pattie Davidson, managing director of the Buena Park Convention and Visitors Office, however, said she doesn’t encounter that feeling often. Instead, she thinks Orange County is doing a better job of marketing itself. “Planners are beginning to listen to our story,” she said. Farther afield at the Doubletree Costa Mesa,soon to be rechristened a Hilton,Director of Sales Dan Fitzgerald predicted the hotel will have a banner year next year. “Anaheim will do so well citywide that some (visitors) are going to go to outlying areas and drive up demand,” he said. The Doubletree this year landed an LA transplant: an annual jazz festival that organizers moved to OC. The first Orange County Classic Jazz Festival, held earlier this month, was a sell-out, and the group has already booked the hotel for 2001 and 2002. “The sheer mass of humanity here over three days was incredible,” Fitzgerald said. “I even had line employees thank me for booking the group.” Meanwhile, Hyatt Newporter director of sales Joe Alegre said that hotel is ahead of pace in bookings for next year, but not necessarily from Anaheim developments. “The transient market has been strong,” he said, while group business,which was down a bit this year,looks about the same. One additional enticement for meeting planners to come to Orange County is a recently signed partnership between the Anaheim/OC bureau and American Airlines, which have teamed to offer groups of 10 or more 40% to 60% off published, unrestricted coach fares to the area. The offer applies to groups using John Wayne, Ontario International or Long Beach airports. But despite all the smiles and optimism about Orange County’s tourism future, challenges remain. One is the issue of hotel room supply.
Jim Burba, a local hospitality consultant and founder of the annual UCLA Extension Hotel Industry Investment Conference, which attracts visitors from around the world, said he believes there is enough potential hotel demand coming to the area to stave off any worries of oversupply for a while, which means room rates should be healthy. But some believe the issue is undersupply, rather than oversupply. Bruce Baltin, senior vice president of the LA office of PKF Consulting, has long held the belief that,even if everything in the pipeline for Anaheim opened in 2001,more hotel rooms would be needed. Baltin said he still sees the demand, but many hotel projects have been delayed. “They’re waiting to see what happens when the (Disney) park opens,” he said. “You probably won’t see a lot of new supply in 2002, but will in 2003. There will probably be a second wave of development.” Some developers, however, didn’t want to wait around. Besides Tarsadia’s Portofino Inn & Suites, the Anabella Hotel, a 358-room upscale project that will replace two low-end motels near the Disneyland Resort at Katella Avenue and Disneyland Drive, broke ground in July. Owners FJS Inc. hope to have the first phase open in January. And Irvine-based R.D. Olson is developing a Holiday Inn and a Staybridge Suites on Manchester Avenue that it plans to open in December. Bob Olson, CEO of the company, said the resort-style development will cater to convention travelers at the Holiday Inn and families at Staybridge. “Our meeting space is ancillary to the Convention Center,” he said, offering a place to hold breakout sessions or smaller meetings in the approximately 3,300 square feet of space at the Holiday Inn.
“We may find we’re short on meeting space once we’re open, but we’ll pay close attention to what other hotels are doing,” he said. Olson said the good news is that the Holiday Inn and Staybridge will be competing with new product in the market .
“New supply demands good return on investment,” he said. (Eventually) it will help the market and make Anaheim a better place to stay.” Don Wise, president of Wise Hotel Investment in Corona del Mar, also believes it could take a while to see the average room rate rise in Anaheim. “The consensus is there is a big switch going on next year with the completion of the resort area,” he said. But Wise thinks hotel occupancy will go up first, after which hoteliers will be more inclined to increase rates. “Demand will exceed what is there in room nights,” he said. Michael Branigan, VP of Wise Hotels, said he thinks rates will be up next year, with more people using Anaheim as a base from which to explore LA instead of the reverse. But the caveat, he said, is how long people stay. “Length of stay will be the single most important variable that will determine how the rate moves,” he said. Another challenge that remains is that of convenient transportation, according to Diane Baker, president and CEO of the Huntington Beach Conference and Visitors Bureau and co-chair of the Orange County Tourism Council. She said that issue is one of the major priorities the council expects to address at its meeting this Wednesday.
Orange County’s lone foray into county-wide tourist transportation, the Orange County Connection that was operated by Anaheim-based Pacific Coast Sightseeing, was abandoned after two years due to lack of ridership. The trolleys in Anaheim and Orange help visitors, but that doesn’t get them to other parts of the county for shopping, dining or visits to the beach,all of which are high priorities among both leisure travelers and conventioneers. Baker said the Tourism Council is hoping to work more closely with Amtrak, which has six stops throughout the county, noting that train travel gets high ridership elsewhere. She pointed to Santa Barbara, where the city has a shuttle that takes visitors all over town and links with the train station, saying that’s an idea whose time may have come for OC. In all, Anaheim now has 43% of Orange County’s 887,692 square feet of permanent, indoor hotel meeting space available at its 13 largest hotels. The city could see as much as 200,000 square feet of new space and up to 10,000 hotel rooms come on line as new hotels and renovations are completed. Baker said there’s no question the county could use more hotels. “I’d like us to be further along in construction, but hopefully in 2001 we’ll all be under construction,” she said. “It will be a banner year for Orange County.” n
