SUMMER DREAMS
Tourism Industry Prepares for a Better Summer; Watching Economy Closely
By SANDI CAIN
A beleaguered tourism industry is hoping that falling gas prices and the calming tension in Iraq will boost Orange County visitor numbers this summer.
Some positive signs have emerged in recent weeks as hoteliers and tourist attractions report a slight uptick in bookings and inquiries. But a weak economy, international conflict and the SARS epidemic continue to hamper a turnaround.
“It’s a triple whammy,” said Peter Yesawich, managing partner of Yesawich Pepperdine Brown & Russell, an Orlando, Fla.-based travel and leisure marketer.
In a recent poll conducted by Yesawich, 48% of respondents cite the economy as the main reason for not traveling. The good news: 82% of Americans said they still plan to take a holiday trip this summer.
“The economy is the most important issue,” said Bruce Baltin, senior vice president of Los Angeles-based PKF Consulting, which tracks the hospitality industry.
“People have shown in the past that travel is important, but they have to feel they have the money (to do it),” he said.
Whether or not an economic upturn materializes may turn out to be the key for the travel industry this summer.
That’s especially worrisome for hoteliers who have seen insurance rates skyrocket and profits shrink since the Sept. 11 terrorist attacks. Baltin said business hotels in major markets have been hurt the most, but Disneyland-area hotels that typically serve the international traveler also have felt the pinch but are hoping things will pick up.
“We’re cautiously optimistic,” said Edd Karlan, director of sales and marketing at the Hilton Anaheim.
Some hoteliers are trying to lure visitors with special promotions and packages that can cut into a hotel’s profitability,just as they did immediately after Sept. 11.
With consumers, “cheap is chic,” Yesawich said.
But Baltin said upscale resorts such as those in OC might benefit when people stick closer to home, as travelers increasingly have said they’re doing. A Travel Industry Association of America poll found that 65% of willing travelers intend to drive rather than fly to a vacation destination.
The Los Angeles Economic Development Corp. recently projected that statewide competition for the drive market will be “fierce” this year as more travelers take to the road to avoid the hassles of air travel.
Never before has the driving public been so coveted in so many markets and visitor bureaus are paying attention to that trend.
For OC, the drive-in market could be gold for the hurting industry.
“The biggest plus for Orange County is that we are central to the second-largest drive market in the U.S.,” said Charles Ahlers, president of the Anaheim/Orange County Visitor & Convention Bureau.
“There are about 22 million people within a six-hour drive of us,” he said. “It’s a very strong drive market.”
Werner Escher, executive director of domestic and international markets for South Coast Plaza in Costa Mesa, calls it the “reach of the road” and hopes some of those roadies will end up visiting OC.
In 2002, OC saw 41.8 million visitors who spent $6.4 billion, putting the county among the top five in California for visitor spending last year. Naturally, tourism promoters would like to see those numbers climb.
But military action in Iraq began in March when families typically begin planning summer vacations, putting many plans on hold. According to the Travel Industry Association, 45% of Americans who plan to travel this summer had not booked trips by the end of April.
And the recent bump-up in the terror alert level just before the Memorial Day weekend may keep more folks at home.
Now, as the war in Iraq turns to rebuilding, OC’s visitor bureaus have armed themselves with the tools they think will snag those bookings this summer.
Here’s a peek at what’s on tap:
Anaheim
Summer vacationers may not be clamoring for rooms yet, but Anaheim benefited this spring from the NCAA West Regional basketball tournament that generated more than $3 million in revenue for the city and filled rooms at the Hilton Anaheim, Ayres Hotel and Anabella Hotel, among others, with players, media and fans.
More recently, the surprising success of the National Hockey League’s Mighty Ducks has generated additional revenue for area businesses.
And a strong convention market has kept hotel occupancy around the 60% level,up slightly from a year ago.
“We may hit 1 million room nights (for conventions) this year,” Ahlers said.
That’s below what he called “lofty projections” for the year but ahead of competitors such as San Diego, he said.
One plus is the marketing power of advertising Anaheim as the home of the World Champion Anaheim Angels.
“Having the Anaheim name on those uniforms is priceless,” said city spokesman John Nicoletti.
The Anaheim/Orange County Visitor & Convention Bureau touts last fall’s World Series win on its Web site and marketing materials and area hotels remind visitors of their connection to the Angels.
And the visitor bureau launched a new marketing campaign touting the unique attributes of OC. Dubbed “It’s sOCalifornia,” the campaign points potential visitors beyond Disneyland,and baseball,to OC’s music scene, surf culture, museums and golf.
One of the promotional items is a beach ball that looks like a giant baseball and bears the new slogan.
The bureau also plans to publish an OC driving guide in July.
Visitors willing to shell out $300 per person can opt for a bird’s-eye view of the county and the coast on the new Anaheim Blimp, set to debut in June. Owner Terry Barnes said he’s lined up corporate business booked for upcoming conventions.
The company hopes to launch a smaller version from the Block at Orange.
At the Disneyland Resort, the recent addition of Playhouse Disney at California Adventure and the Adventures of Winnie the Pooh at Disneyland are expected to help drive attendance, as will special events planned for the debut of the “Pirates of the Caribbean” film due out this summer.
A new X Games Xperience at California Adventure is set to begin July 1. Envisioned as a lead-in to the ninth X Games set for August in L.A., the theme park version will include a freestyle Moto and halfpipe show.
Disney hotels were almost at capacity during early spring break, but May and June bookings were soft as of early April.
Walt Disney Co. Chief Financial Officer Tom Staggs said in a May 1 conference call with investors that reservations had picked up and are now slightly ahead of last year’s numbers.
Staggs said the short lead-time in booking,evident throughout the industry since Sept. 11,is still the norm.
“The summer picture is substantially less clear than is typical at this time of year,” he said.
Meanwhile, Knott’s Berry Farm has been revamping its Camp Snoopy, which celebrates its 20th anniversary this year. A new ride, Joe Cool’s Gr8Sk8, will debut for summer.
Costa Mesa
Anaheim visitors can get to OC’s golf links by hopping the Anaheim Golf Shuttle and to South Coast Plaza via a van service launched in May.
Members of the Costa Mesa Conference & Visitor Bureau also have teamed up for a free gas promotion to encourage drivers. The promotion generated 300 calls during Easter week alone, a bureau spokesman said.
South Coast Plaza also partnered with Costa Mesa-area hotels for shopping packages. “The hotels recognize South Coast Plaza is an asset as a shopping destination,” Escher said. “We’ll capitalize on that.”
Beach Cities
New luxury resorts along the coast are likely to give beach cities an edge with the drive-in market. But they’ve also heightened competition among resorts for beach visitors.
OC resort properties such as the St. Regis Monarch Resort & Spa and Four Seasons said their leisure business is up compared to last year. And the newly opened Montage Resort & Spa in Laguna Beach reports strong summer bookings.
“We’re nearing capacity for our three- and four-bedroom bungalows over summer weekends,” said Montage spokesperson Marguarite Clark.
St. Regis just launched summer packages that include a docent-led tour of the Laguna Art Museum followed by lunch, a sport fishing trip from Dana Point Harbor or a tour of Mission San Juan Capistrano followed by wine tasting.
In Newport Beach, the new 131-room hotel at Balboa Bay Club and Resort opened a couple of weeks ago and is expected to generate local as well as visitor interest. Spokesperson Maggie Feldman said inquiries for wedding parties were brisk. The first of several large groups booked for the summer was a 300-person wedding over Memorial Day weekend.
Marta Hayden, executive director of the Newport Beach Conference and Visitors Bureau said the bureau is working to promote the city through special offers and packages. Those include a summer passport targeted to the drive market, direct mail through a partnership with American Express and hotel packages that include coupons offering discounts at Fashion Island and for harbor cruises.
The Four Seasons in Fashion Island is targeting the coveted drive market with a $450 package that includes a golf outing at Pelican Hill and discounts at Fashion Island retailers.
“It’s done very well for us,” said Four Seasons director of marketing Katie Mitchell.
Hayden said the city aims to offer one-stop shopping that still provides flexibility for the visitor.
“Newport Beach is a safe family atmosphere and John Wayne Airport is easy to use. All those things work to our favor,” she said.
Huntington Beach, too, is poised to capitalize on its new asset: the 512-room Hyatt Regency Huntington Beach Resort & Spa that opened in January (photo).
“We’re well positioned for the short-stay drive-in market and those looking for a new meetings venue,” said Doug Traub, president and chief executive officer of the Huntington Beach Conference & Visitors Bureau.
Competition
OC may be the most central destination in Southern California, but that doesn’t mean its neighbors will concede the visitor market.
Legoland, in nearby Carlsbad, this summer will debut its Bionicle Blaster ride and a SportsZone.
Sea World in La Jolla is repeating its 2002 campaign that turns a one-day ticket into a season pass. The San Diego Zoo has debuted its new ape exhibit.
In Los Angeles, the visitor bureau just launched a “Kids Free LA” campaign targeted to the leisure drive market. The package gives families free lodging for the kids and free admittance to attractions.
And in Long Beach, Carnival Cruise Line opened its new passenger terminal next to the Queen Mary hotel and museum.
