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2016 Preview: HOSPITALITY

Look for continued strength in the hotel market here in 2016, with additional gains at the operating level bringing another brisk year for sales.

“We’re still expecting revenue per available room to increase, though at a slower pace than the last three years,” said Alan Reay, president of Atlas Hospitality Group in Irvine.

CBRE Hotels’ PKF Research division recently forecast strong occupancy rates through 2016 and 2017. It pegged the Anaheim market as the fourth fastest grower nationwide on average daily room rates in 2016, with a 7.4% pickup expected.

Airport and resort hotels lead the pack, the report said.

Those positives results will drive hotel sales.

“We have another couple years of increases in values because of the industry’s performance,” said Harry Pflueger, president of Maxim Hotel Brokerage in Newport Beach.

Reay said 2015 should end with 26 hotel sales in OC versus 30 in 2014. He expects 25 hotels to sell in 2016.

Disneyland Resort’s expansion of Disneyland Park should drive growth for the tourism industry for some years to come. The park covers 85 of the resort’s 500 acres, and its new Star Wars Land, breaking ground in 2016, will add 14 acres of attractions.

Company to Watch Marriott Hotels International

Bethesda, Md.-based Marriott’s pending $12.2 billion purchase of Starwood Hotels & Resorts Worldwide in Stamford, Conn., is set to bring two prominent local resorts—the Ritz-Carlton, Laguna Niguel in Dana Point and the St. Regis Monarch Beach—under one management umbrella.

Ritz is a Marriott brand; St. Regis is Starwood’s.

Also overlapping are the luxury JW Marriott planned for Anaheim and Starwood’s Tribute Portfolio—which the former Wyndham Avenue of the Arts plans to become in January and which also competes for the boutique traveler with Marriott’s Autograph Collection—one of which is planned for a site in San Juan Capistrano.

Overlaps in the upscale and high-end business segments include Westin South Coast Plaza (Starwood) in Costa Mesa and two Marriott brands being built in Irvine: the Spectrum Marriott and Park Place’s AC Hotel, though the latter also has a younger guest in mind.

A combined company would have about 110 hotels locally under various flags—95% from Marriott, which is more than three times larger than Starwood by number of hotel properties managed worldwide.

Some hotel industry analysts have said Marriott’s integration of 12 Starwood nameplates to go with its existing roster of 19 could blur lines between brands but bring behind-the-scenes benefits in marketing, purchasing, booking and loyalty programs.

Person to Watch Paul Sanford

Sanford is point man for the Anaheim-based Wincome Management & Development, which runs three OC hotels and keeps tabs on a fourth from an office on West Katella in Anaheim.

Two of the four properties—Anaheim Plaza Hotel & Suites and Avenue of the Arts in Costa Mesa—are slated for development work in 2016. Two others in Anaheim—the Anabella Hotel and Carousel Inn & Suites—are turning in steady performances, thanks in part to their proximity to Disneyland Resort.

Affiliates of Wincome Group in Hong Kong had owned all four but in April sold Carousel to the Disney Co. for $32 million.

Wincome Management stayed on at the Carousel, and the company looks like a candidate to eventually run the Anaheim Plaza Hotel.

The Hong Kong-based owner, meanwhile, put $89 million into buying Anaheim Plaza Hotel, as well as buying and renovating Avenue of the Arts. The owners plan to demolish Anaheim Plaza and replace it with a 580-room luxury hotel with retail and meeting space, while Avenue of the Arts could get a 23-story luxury condo tower on land it owns next door.

The Anabella, meanwhile, is “extremely successful and profitable and doesn’t need changes at this time,” said Sanford, who also oversees that hotel’s Tangerine Grill & Patio restaurant and the Silver Trumpet at Avenue of the Arts.

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