St. Regis Opening Boosts Area’s Meeting Space, Adds to Competition
When Disney’s Grand Californian Hotel opened in Anaheim last January, it set a new standard for resort hotels in North Orange County that has helped boost room rates in that market. But South County, with only 6% of the county’s meeting space in major hotels, was hard-pressed to lure large groups.
The recent opening of the new St. Regis Resort in Dana Point, however, has expanded South County’s offerings and focused attention on the area, promising to raise the bar for coastal lodgings the way the Grand Californian did in Anaheim.
“St. Regis will allow new business to come into the pie and the pie will get bigger,” said Michael Branigan, vice president of Corona del Mar-based Wise Hotel Investments.
The $240 million hotel promises to be a showcase for South Orange County and is the first of a string of resorts under construction that are poised to take advantage of a luxury hotel segment that many observers believe is almost recession-proof. And coastal lodgings like the Ritz Carlton Laguna Niguel, Laguna Cliffs Marriott in Dana Point and even the Surf & Sand in Laguna Beach could benefit from the new resort if large groups end up booking space in more than one hotel.
But that bigger piece of the pie also could mean increased competition among South County hotels for group business. And hotels in Newport Beach and the airport area,both of which have felt the pinch of corporate cutbacks in business travel,are keeping a watchful eye on group bookings.
“It (St. Regis) will be interesting to watch,” said Gary Mitchell, director of marketing at Sutton Place Hotel in Newport Beach.
The 400-room St. Regis resort employs 700,a higher-than-average employee-to-guest ratio,and encompasses numerous features catering to travelers seeking high-end amenities. Here, visitors can enjoy a yoga room in the spa, in-room DVD and CD players along with a 300-title library, an on-site art gallery and a wine cellar with private lockers. But the hotel also is designed with group business in mind,with an eye particularly cast toward social functions long limited by facility size constraints along the coast.
Indeed, the addition of St. Regis’ 30,000 square feet of indoor function space will boost South OC’s share of the county’s total indoor space to 9.6%. The resort also has 60,000 square feet of outdoor function space well-suited to social events and receptions.
St. Regis is targeting the leisure weekend market, small conferences, social events, fund-raisers and political events.
Don Wise, president and chief executive of Wise Hotels, said the Ritz-Carlton Laguna Niguel,directly across Pacific Coast Highway from St. Regis,is likely to feel the heat of competition when it comes to social business.
“The Ritz has been the social hub (in South County),” Wise said. “Odds are St. Regis will take some of that business.”
The Surfrider Foundation’s Waterman’s Ball was the first social event at the hotel, bringing about 900 guests to the new resort on its first weekend of operation.
Officials from neighboring Laguna Cliffs Marriott and the Ritz Carlton, however, both publicly and privately tout the synergy that St. Regis adds to the mix in Dana Point.
“St. Regis will be a major player in the marketplace,” said George Munz, director of marketing at the Ritz-Carlton.
“What we had here before was one hotel,” Munz said. “One hotel can’t promote the destination. Three hotels can. We’ll get our due reward.”
Jeroen Gerrese, general manager of the Laguna Cliffs Marriott, which is in the midst of its own meeting space remodeling, agreed the St. Regis will be good for the area. Gerrese said he hoped it would provide the impetus for the area to become more proactive about tourism, too.
Some OC players think the tourism boost will be a natural.
Chapman University president Jim Doti said the resort is likely to broaden OC’s tourist base and “give it a certain panache that will attract a different type of tourist clientele.”
Both Gerrese and Munz believe there’s enough demand in South Orange County to keep St. Regis, the Ritz and the Marriott busy. Muntz pointed to companies like Ford and Lincoln, which have moved into the area in recent years, as the kinds of companies that have gone outside the county for meetings, but now have more options here.
There’s no question that automakers were on the minds of the St. Regis designers,its main 12,000-square-foot ballroom has a roll-up door that allows a vehicle to be driven directly into the ballroom, making it more attractive for automotive product launches. Automaker Volvo already has an event on the books.
“We want (local business) to stay home and have events,” Munz said.
But just up the coast in Newport Beach, officials at the Four Seasons remain unconcerned about their new competition to the south.
“The St. Regis is just another addition to the equation,” said Director of Marketing Carrie Olson. “We haven’t lost any social business to them yet,” she said.
Neither has Newport’s Sutton Place Hotel, according to Mitchell.
Olson said the Four Seasons relies on providing exceptional service to bring repeat business,something that takes time to build. Plus, a good chunk of the Four Seasons business is corporate.
“There’s not as much commercial demand in South County,” Branigan said. “Four Seasons is more corporate. St. Regis will be more meetings-dependent.”
And Anaheim,the heart of Orange County’s convention business and the home of its convention center,is unlikely to even blink in the face of new competition from points south.
“Anaheim is a different beast,” said Kathryn Jurgensen, principal of Premier Meetings in Irvine, a destination management company that books corporate and incentive groups into the area.
That sentiment is echoed throughout a meetings industry that has been battered by the economic downturn in places like San Francisco, Washington, D.C. and New York. (see story, page 26).
Indeed, while the rest of the country is feeling the pinch of cutbacks in business travel, hotel occupancy in the Anaheim area is up 2.2% year-to-date,one of only three markets nationwide that has not seen a decline, according to data from Smith Travel Research. Room rates, too, are up,7.4% year-to-date,and convention bookings are still strong.
“The pace and number of meetings is about 65,000 rooms ahead of last year,” said Charles Ahlers, president of the Anaheim/Orange County Visitor & Convention Bureau.
Meanwhile, South OC has seen its rates jump about 10% this year, while occupancy has dropped by about the same amount, according to Los Angeles-based PKF Consulting.
Of course, corporate meeting planners facing cutbacks might hesitate to book meetings at luxurious properties like the St. Regis, where room rates start in the mid-$300s (and that’s during off-peak season), but Director of Sales Brian Dye said bookings have been brisk. Groups from companies like Neutragena, Credit Suisse Group, Callaway Golf Co. and Allstate Insurance are already on the books; even a group from the Teamsters Union will meet there in the fall.
And meeting planners coming to the St. Regis will be hard-pressed to find any items missing from the function areas, from a separate entrance and check-in desk to video and television-ready lighting. Meeting attendees can be delivered directly to the south wing of the resort, where the ballrooms and breakout rooms are below the lobby level. The 12,000-square-foot Pacific Ballroom opens onto a broad terrace overlooking the gardens and golf course and is divisible into three sections. A junior ballroom has 5,600 square feet.
Prefunction areas are more than just a hallway,they are alcoves where attendees can gather without disrupting other foot traffic. There is high speed wireless Internet access throughout and skyhooks drop from the ceiling to address a variety of power and lighting needs. A circular stairway, highlighted by a Murano glass chandelier, winds around the rotunda and leads to the main ballroom and wedding lawn,.
And while meeting planners sometimes fret that a too-enticing outdoor setting could detract from business, that concern, too, is addressed at the St. Regis. Any inside speakers can be connected to any set of outdoor speakers, enabling a group to listen to a presentation while relaxing on the terrace or at the pool.
Various outdoor lawns and gazebos, surrounded by gardens and fountains, can be used for a variety of private events or concerts. Private wine-tasting sessions can be arranged at the Wine Cellar and a private dining room is available at the hotel’s signature restaurant, Aqua.
In addition, the 14,000-square-foot clubhouse at Monarch Links Golf Course is available for themed evening events, and a professional wedding coordinator is on site.
Of course, St. Regis is just the first of several coastal resorts coming on line in the next couple of years that industry insiders say will help boost OC’s image as a destination resort.
Just a few miles north in Laguna Beach, Phoenix-based Athens Group is building a 274-room resort still to be named by manager Marriott International. That resort will have about 10,000 square feet of meeting space,enough to host events of up to 300 people. In fact, that design element was of prime importance to the city of Laguna Beach, which was all too keenly aware of the number of local groups that have held events outside the city. At present, the Surf & Sand has the most meeting space in the city, with 8,787 square feet. And the venerable Hotel Laguna at Main Beach, offers only 6,000.
Less likely to compete with resorts in Dana Point or Laguna Beach, but still adding to coastal options is the private Balboa Bay Club, which is in the midst of a $55 million renovation. That waterfront project will include a 131-room resort hotel open to the public and feature a 7,500-square-foot ballroom that will accommodate up to 500 guests. The hotel is expected to open in early 2003.
COO Henry Schielein said the ballroom,just steps from Newport Bay,will be a unique feature not found elsewhere on the county’s coast.
“We’re already getting calls about it,” he said.
And the Hyatt Corp. and Robert Mayer Corp., Newport Beach, last spring secured joint-venture funding to build a resort next to the existing Hilton Waterfront in Huntington Beach. That expansion will include up to 52,000 square feet of indoor meeting space, much of which will be in a separate conference center.
But South County projects like the St. Regis are likely to be the best-positioned for both corporate and leisure business in the future.
“The continued growth of Orange County in the long term is really being pulled by South County, and that’s where (St. Regis) is,” said Steve Duffy, a partner in the OC office of Ernst & Young.
But despite unbridled enthusiasm for the St. Regis and all it represents to South OC, the unpredictable economy could still take a toll.
“It will take time to get off to good start,” Don Wise said. “And if it turns into a price war (between the Dana Point resorts), the Laguna Cliffs Marriott and others could take a hit.” n
