Tourist Trade Sees 2004 Marking Demise of Downturn
By SANDI CAIN
Orange County’s hotels and tourist attractions are hopeful that 2004 will bring a long-awaited end to the downturn that has lingered for more than two years.
Positive signs include an increase in consumer optimism and economic growth that is expected to continue into the New Year.
A recent American Express Leisure Index study, which looks at travel budgets and plans, found that travelers expect to spend almost $3,000 on vacations next year,up 37% from 2003.
OC hoteliers should end 2003 at about 67.2% occupancy, up 6 percentage points from 2002, according to Bruce Baltin, senior vice president of Los Angeles-based PKF Consulting, who detailed projections at the recent South-ern California Tour-ism Outlook Con-ference in Long Beach.
The average daily hotel rate of $98.62 is about the same as last year, according to PKF. For next year, the data tracker expects occupancy to grow to 68.4% and the average daily rate to break the $100 barrier.
PKF’s 2003 estimates were based on data through the third quarter. Since then, Baltin said hoteliers reported a surge in fall bookings. It has been a sudden rebound.
“There are traces of optimism,” said Charles Ahlers, president of the Anaheim/Orange County Visitor & Convention Bureau. “Some Anaheim hotels are reporting weekday business that’s two and a half times what they had in 2002.”
The county’s hotel market has benefited this year from new coastal resorts, which bolstered visitor numbers and hotel occupancy. That trend is likely to continue into 2004.
“There’s been a huge growth in supply of these resorts, but demand is still up 16%,” PKF’s Baltin said.
One sign of optimism for high-end resorts: According to the American Express survey, the percentage of travelers planning to spend more than $5,000 on vacation expenses will grow from 6% this year to 11% next year.
Big and mid-scale hotels have held their own, in part because room supply grew by only 3.3% to about 55,000 total rooms this year. And only a handful of smaller hotels are on the horizon for 2004.
On the convention front, bookings and attendance have ticked upward this year. There were 617 conventions in OC in 2003, and attendance is expected to top 1 million.
As of late November, there were 282 events booked for 2004, compared to 292 for 2003 as of mid-December last year. “Leads are up 18% and bookings (for all years) are up 11%,” Ahlers said.
Spending, too, is rising.
“Business spending is up 2% to about $6.8 billion for 2003, and it should be up again in 2004,” Ahlers said.
Business travel, however, remains weak.
Tiffany Urness, senior tourism specialist with California Tourism, told conference attendees in Long Beach that business travel in California is likely to remain flat next year.
That’s in contrast to national trends, where it is expected to increase 4.2% to 122 million trips next year, according to the Travel Industry Association, a Washington, D.C.-based trade group.
Leisure travel trends are more encouraging, with the Travel Industry Association expecting an increase of 3.2% next year. And international travelers are beginning to return, prodded in part by a drop in the dollar’s value. Visitor numbers from Mexico, Canada, Japan, the United Kingdom and Germany are expected to increase in 2004.
Early indications are that the feeder markets of Arizona, Nevada, Oregon, Chicago and New York may bring additional growth.
“It’s one of brightest outlooks in a long time,” said Jack Kyser, Chief Econ-omist of the Los Angeles Economic Development Corp.
OC benefits from its geography. About 21 million people live within a day’s drive of the area, and travelers still are sticking close to home.
New service at John Wayne Airport might help bolster traffic from key feeder markets. Frontier Airlines and Atlantic Southeast Airlines (a unit of Delta Air Lines) entered the OC market this year, providing additional service to Denver, Dallas and Salt Lake City.
Year-to-date passenger volume was up 7.3% to 7.1 million through October, versus a year ago.
The Disneyland Resort always is a big county draw, and there are some new attractions slated for 2004.
Disney reported an increase of 12% in park attendance for the third quarter. Vacation packages for 2004 were announced in October and the company said bookings are on the upswing.
Set to open May 4 is the Twilight Zone Tower of Terror at California Adventure, an updated version of the popular Walt Disney World attraction that features a 13-story free fall.
OC shopping malls have been luring travelers. About 30% of shoppers at South Coast Plaza are from outside the area, and overseas business is on the rise, according to Werner Escher, executive director of domestic and international markets for the shopping district.
Fashion Island, Irvine Spectrum Center, The Shops at Mission Viejo and other area shopping districts also reach out to visitors.
San Diego-based CIC Research, which analyzes visitor data in Southern California, estimates domestic tourism should be up about 2.5% to 3% in 2004. For OC, that translates to about 43 million visitors. Spending is expected to rise about 5% to $7 billion in OC.
International arrivals in Southern California,which numbered 7 million in 2000,will top out at about 4.8 million for 2003. Next year, CIC estimates that figure to reach at least 5 million.
PERSON TO WATCH: MATT QUIMET
Ouimet was named president of the Disneyland Resort in October, following Cynthia Harriss’ six-year stint in one of the most high profile,and demanding,positions in Orange County’s tourism industry. Harriss resigned in early October, citing personal reasons.
Ouimet is a 14-year Walt Disney Co. veteran who most recently was president of Disney Cruise Line. He also held executive positions at Walt Disney Imagineering and the Walt Disney World Resort, Disney Vacation Club and Disney’s Wide World of Sports, as well as developing new business opportunities within the vacation market for Walt Disney Parks and Resorts.
Now, the New York native is charged with preparing for the 50th anniversary of Disneyland in 2005 and overseeing the debut of the Twilight Zone Tower of Terror at Disney’s California Adventure,a long-anticipated attraction that company officials hope will give the newer park another shot in the arm.
He’s said to be a hands-on executive who regularly walks the park seeking guest feedback.
Disneyland already is undergoing some serious facelifts in anticipation of the 50th birthday celebration. But Broadway-caliber entertainment shows like “Aladdin” are perhaps just as likely to proliferate as new rides.
“We’re constantly looking at new ways to make the guest experience fresh and exciting, so new offerings like this and the Twilight Zone Tower of Terror opening at Disney’s California Adventure will continue to be a priority for us,” Ouimet said.
The Disneyland Resort’s new top gun garnered kudos for growth plans in Florida that led to record attendance at Walt Disney World and high guest satisfaction ratings for the cruise operation. But Southern California is a different market, and Ouimet will face some different challenges here.
As Orange County’s largest employer, Disneyland Resort has a big impact on the county’s economy. The drive-in regional market,a small portion of visitor numbers in Orlando,is a big factor in Disneyland attendance. In addition, the company has tightened the purse strings for big-budget attractions after a decade of no-holds-barred development.
And despite a multitude of changes at California Adventure, the newer park has yet to live up to its original expectations. Company officials,and the Southern California public,will be looking to Ouimet to turn that around.
,Sandi Cain
ENTITY TO WATCH: GARDEN GROVE
The city of Garden Grove has long watched Anaheim reap the benefits of Disneyland, the Convention Center, Edison International Field and the Arrowhead Pond.
A few years ago, the city moved to make itself into a destination, creating a redevelopment package for the Harbor Boulevard and Chapman Avenue area. Hoteliers especially liked the deal, and today there’s a cluster of six new hotels, an expanded Hyatt Regency Orange County and a handful of popular restaurants at the intersection that’s just a mile from the Convention Center.
But other efforts to turn Garden Grove into a tourist hub have not yet reaped rewards.
In 1999, the city proposed a “Riverwalk” complex of retail and entertainment projects that would link the Anaheim and Garden Grove segments of Harbor Boulevard, but that fell through, and other proposals have not yet come to fruition.
Garden Grove remains ambitious in its efforts, and city manager and redevelopment director George Tindall said officials believe they will find the right mix eventually.
“We’re billing ourselves as International West,” he said, “similar to the area called International Drive in Orlando.”
The city has touted itself as an ideal location for a third theme park at the International Association of Amusement Parks & Attractions trade show for about five years. It’s had a booth at the International Conference of Shopping Centers for about the same period of time.
“We were one of the first cities to have a booth there,” Tindall said. “Now everybody wants in.”
Tindall said the city doesn’t go about this lightly. Before dipping their toes into tourism efforts, they did market, land and branding analyses.
“We’re marketing Harbor Boulevard as part of the Disneyland Resort,” he said. “People know where Disneyland is, but they don’t always know Garden Grove. We’re trying to enhance it.”
The city still provides financial assistance in redevelopment areas and is working with a couple of developers on additional hotels and restaurants, though none are ready to break ground in 2004. But so far, there are no takers for a new theme park.
The Walt Disney Co. has put its third theme park,slated for a parcel along Katella Avenue and Harbor Boulevard,on the back burner.
So, if another theme park is in the cards, why not in Garden Grove? Tindall thinks it’s feasible. Only time will tell.
,Sandi Cain
