After four years of prosperity, hotel owners have good reason to let the good times roll. Since 2003, nationwide demand for hotel rooms has soared 10.2%, according to Hendersonville, Tenn.-based Smith Travel Research. Because the post-2001 pipeline of new hotels has been meager at best, higher demand has led to higher daily rates and higher profitability that have taken hotels back to the heyday of 1999-2000.
The average cost of a room in the top 50 U.S. cities has increased by 23% during that time and the industry is on track to post $27.4 billion in profits this year, Smith Travel reported.
In Orange County, the average daily rate grew 9.4% to $148.61 countywide in the first two months of this year, while revenue per available room,one measure of hotel profitability,grew 8.4%.
Smith Travel reports some consumer pushback in high-cost markets like New York, but in general hotels likely will continue to see higher profits until more hotels are built. An April report by PKF Hospitality Research in Atlanta indicated that OC, Los Angeles and San Diego are among the 13 markets most ripe for additional development between now and 2011, suggesting the party may be nearing an end. For this year, the market appears to remain healthy.
“We haven’t seen a tremendous pushback on rates,” said Gary Sherwin, president and chief executive of the Newport Beach Conference & Visitors Bureau. “That’s a testament to (our) destination.”
In the interim, the healthy state of the hotel industry has not been lost on investors, leading to a frenzy of hotel sales. Private equity groups and high-profile individuals have clamored to get their share. Oracle’s Larry Ellison recently paid $20 million for Casa Malibu Inn.
New ownership and higher profits also have led to a host of hotel renovations that have turned more OC hotels into hip, urban oases with trendy bars and restaurants designed to draw locals and visitors alike. For those who haven’t seen some of the makeovers, here’s a peek at what’s been going on behind the fa & #231;ade of some OC hotels in the past year.
Anaheim Marriott
Anaheim Marriott debuted its new 25,400-square-foot Platinum ballroom in mid-April along with a smaller, 2,100-square-foot ballroom.
The larger room can be divided into 10 meeting spaces with individually controllable decorative lighting, speakers and air-conditioning. In all, the Anaheim Marriott now has 82,580 square feet of function space.
The new facilities include a plating room and cooler for banquets, an event manager’s office next to the ballroom and a registration area that offers both built-in desks and floor connections for groups wishing to use their own registration booths. Flat panel displays direct people to meetings in progress. The area also has WiFi throughout and a 10-foot by 12-foot loading dock on two sides.
Resident manager Steve Montgomery said the exterior design blends with the existing hotel, the convention center and the landscaping and signage along Convention Way “to give it a more campus feel.”
Disney’s Grand Californian
The Grand Californian reinvented its spa last fall, turning it into Mandara spa, a Balinese oasis with a design that complements the Arts & Crafts style of the hotel. It includes eight treatment rooms, a couple’s pavilion, a coed lounge, sauna and steam rooms, a fitness center and a full-service nail salon.
Fairmont Newport Beach
The Fairmont in March opened its 8,000-square-foot Willow Stream Spa, the last phase of the hotel’s $32 million conversion from the Sutton Place. The spa has seven treatment rooms and a “U” Room that offers do-it-yourself scrubs, aromatherapy and other simple treatments.
In classic Fairmont fashion, the hotel will donate 10% of the price of any Generosity Treatments to an adopt-a-beach program. Fairmont Hotels are known for contributing to local environmental efforts in each of their locations.
Hilton Waterfront Beach Resort, Huntington Beach
The Hilton Waterfront finished its most recent makeover last December, spending about $10 million on its guestrooms. The new look includes custom-made furniture and drapes, Herman Miller chairs and original art that reflects the city’s surfing heritage. Rooms also include tea and coffeemakers and safes. It also added high-tech lighting features. The restaurant, now called Shades, got new furniture built by local artists and new table settings. Previous furnishings were donated to Marines in need at Camp Pendleton in Oceanside.
Hotel M & #233;nage, Anaheim
Laguna Beach-based Casa Resorts purchased the former Holiday Inn at Harbor Boulevard and Ball Road last January and turned the ordinary hotel into a boutique-style property at the edge of the Disneyland Resort. They added a second K’ya Restaurant at the hotel based on the popularity of the first such venture in Laguna. In addition, they are adding a fountain courtyard and cabanas at the Mist Pool, a pool bar with a water wall and valet parking. An outdoor Palapa Bar already extends K’ya and the adjacent lounge outdoors.
The new owners also converted some ground floor guestrooms into themed breakout/special event rooms called Tuscany, Platinum, Retro, New York Loft and the double-size Zen.
Island Hotel, Newport Beach
With the rest of the property spruced up last year, the restaurant and bar recently closed to get a facelift of their own. When the restaurant reopens around the beginning of June, it will be called Palm Terrace Restaurant & Lounge and carry a tropical oasis theme. It also will feature a new menu that includes a variety of small plates.
Laguna Cliffs Marriott Resort
& Spa, Dana Point
In a makeover of another kind, Laguna Cliffs Marriott entered a contest sponsored by Cincinnati-based uniform-maker Cintas Corp. that challenged hotels to explain why they should be selected for a $20,000 uniform makeover. The hotel won and flew general manager Jim Samuels to New York to accept the award during the International Hotel Show. Then Cintas met with hotel executives and designed a new line that unified the look for the entire resort.
‘They looked at big picture of the entire resort,” Samuels said. “It’s very hip and contemporary.”
Ritz-Carlton Laguna Niguel,
Dana Point
After completing a $40 million makeover in 2006, the Ritz-Carlton Laguna Niguel in March opened Eno, a wine, cheese and chocolate tasting room, a concept introduced by Ritz-Carlton in Chicago. The Laguna Niguel room is the first on the West Coast.
Wine and cheese pairing events and tastings are staged for both the meetings and leisure markets and have garnered a favorable response in the first months of operation. Eno has a floor-to-ceiling wine tower with 700 bottles of wine and a rotating selection of cheeses and chocolate from local artisans. It seats 36 and offers communal tables. All products,including wine glasses,are available for sale.
Sheraton Park Hotel at the Anaheim Resort
The former Coast Anaheim Hotel reopened early this year after a $40 million renovation that stripped portions of the hotel down to its bones. Now remodeled inside and out, guestrooms feature the signature Sheraton bed and have balconies that overlook either the pool or Disneyland.
Rooms also have telephones with dataports and voice mail, refrigerators and safes, and 27-inch flat-screen TVs. The hotel added wireless Internet service and club level rooms.
On the Horizon
The Hilton Anaheim will undergo a complete renovation estimated at $50 million beginning later this year. Most recently, the 1,572-room hotel added check-in kiosks that allow guests to bypass the front desk and print boarding passes for return flights.
The Athens Group, the Phoenix-based developer of the Montage Resort & Spa in Laguna Beach, in April unveiled its proposal for redevelopment of the Aliso Creek Inn and Golf Course in Laguna Beach it purchased in 2004. Proposed elements of the redevelopment include 75 total hotel rental units in a spa building, an inn and in guest cottages.
Embassy Suites is awaiting final approval to move ahead with a 225-room tower expansion to the property at Harbor Boulevard and Chapman Avenue adjacent to the Hyatt Regency Orange County.
The Hyatt Regency Orange County in Garden Grove plans to redo all first-floor meeting space this year and the north tower guest rooms next year.
