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OC Tourism Industry on Odyssey

New Attractions, Roads and Rooms Coming, but Business Seen Lagging Next Year

Purists may argue over whether the millennium will begin in 2000 or 2001, but for the Orange County tourism industry, it’s 2001.

That’s when California Adventure will open. That’s when the Convention Center will once again be in full swing with expanded capacity. That’s when the Santa Ana (I-5) Freeway construction through Anaheim will be complete. That’s when Gotcha Glacier is slated to open. And it’s the target opening date for many of OC’s new hotels.

Unfortunately, it’s still more than a year away.

While the California Division of Tourism reports that travel in and to California is up about 10% this year and similar growth is anticipated in 2000, Orange County hopes to end the year with about 38.6 million visitors, up just 3% from the 37.5 million it saw in 1998. And hotels — particularly those in Anaheim — have struggled to fill rooms in the face of ongoing construction for the past two years. Bruce Baltin, senior vice president of Los Angeles-based PKF Consulting, which tracks the area’s hotel performance told an audience at the recent UCLA Southern California Visitor Industry Outlook Conference in Long Beach that 2000 will be “challenging for achieving growth” for the area’s hotels.

PKF estimates OC will end the year with an overall occupancy rate of 69.5% — about the same as last year. And Baltin said the county can expect a slight decrease in occupancy next year, though average daily rates are expected to remain strong.

Jack Kyser, chief economist for the Economic Development Corporation of Los Angeles County, cautioned that despite bright spots like the Gravity Games slated for Mammoth Mountain and the Democratic Party convention in LA, there are still concerns for the industry in 2000. Kyser particularly pointed to increasingly strained airport capacity and the minimum-wage push as areas of uncertainty. And Las Vegas presents increasing competition, in particular for the area’s meetings industry.

But the local tourism industry is not sitting still.

Ann Gallaugher, director of tourism development for the Anaheim/Orange County Visitor and Convention Bureau, said the bureau is increasing its marketing efforts in Latin America and key domestic markets (mostly in the West) to bolster OC’s numbers.

Gallaugher said Mexico, which generates almost 400,000 visitors a year to California by air alone, is one of the bureau’s current targets, and she expects to see a 4% to 6% increase in visitors from Mexico next year, particularly from Mexico City, Guaralajara and Monterrey. To encourage that growth, the bureau will take part in Expo Vacaciones, the largest trade show in Mexico, in the spring, and will host events for both wholesale and retail travel professionals at the show.

In addition, the VCB recently took part in ABAV, the largest trade show in Brazil, partnering with United Airlines and the California Department of Tourism for booth space. Gallaugher said research has shown that California is the third-most-popular state visited by Brazilians (after Florida and New York), and that the country’s recent economic woes affected travel to Florida more than to California.

If Brazil’s economic turnaround continues, visitor traffic from that country could go up 3% — or 3,000 people — next year and double that in 2001, spurred in part by new direct flights to LAX from Brazil that United is expected to launch in the spring.

The VCB is also targeting Argentina, Costa Rica, El Salvador and Guatemala. And next September, Anaheim will be the first West Coast city to host La Cumbre, the premier travel industry conference for Latin American buyers. About 2,000 delegates are expected to attend.

Domestically, the bureau has upped its promotional efforts on the West Coast, which accounts for 65% of OC’s visitor market, through partnerships with AAA and the “kids fly free” programs offered by Southwest Airlines, Alaska Air and American Airlines.

Alynne Hanford, national sales manager with American Airlines, said visitors to Orange County purchased 20% of the airline’s vacation packages to the area through August this year. That translates to about 6,200 passengers and about 8,400 hotel room nights. Hanford told conference attendees that American expects vacation package numbers to increase 30% to 50% next year because of the airline’s recent acquisition of Reno Air and its routes to the Southland.

Though California Adventure won’t be ready next year, Disneyland will add some new touches to its repertoire. The park will celebrate its 45th anniversary next year and unveil its refurbished Autopia in the summer. In addition, it will debut a new fireworks show in February that Scott Tanner, director of destination sales for the Disneyland Hotel and Resort, called the “largest fireworks show in our history.”

Meanwhile, Disneyland’s neighbor and competitor, Knott’s Berry Farm, is aiming to increase its share of the visitor pie next year, before California Adventure opens.

Knott’s will launch another new ride, Perilous Plunge, promoted as the world’s tallest (4 1/2 stories), steepest (70 & #176; final plunge) and wettest ride. In addition, Knott’s parent company, Sandusky, Ohio-based Cedar Fair LP, will open a separate 13-acre water park, dubbed Soak City USA, that will feature 21 water rides and attractions.

Bob Ochsner, manager of marketing and sales for Knott’s, said the company will be “aggressively packaging this (park) with our hotel,” the revamped Buena Park Hotel Cedar Fair purchased early this year for $17.5 million. The hotel has been closed for renovation and will open before Christmas as the Radisson Resort at Knott’s Berry Farm. When it reopens, it will include 321 rooms, 20,000 square feet of meeting space and a special “Snoopy floor” that the company expects to be especially popular with international guests, according to Ochsner.

According to trade publication Amusement Business, Knott’s drew about 3.4 million guests last year, a figure that is expected to be slightly higher for 1999. A company spokesperson said attendance goals for Soak City have not been finalized.

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