If you live locally, hospitality appeared downright inhospitable over large portions of 2018.
Anaheim was an epicenter of that, from labor unrest at Disneyland Resort to wage disputes at the ballot box to the county’s top employer and tourist draw nixing a luxe hotel in its tracks, all while questions swirled over a few other hotel projects by additional developers already underway in the city.
Was it really only a year ago that Disney concluded an 18-month celebration of its 60th anniversary?
Not all news was bad. For OC visitors, travel was still very hot.
And the infighting among key industry players will likely seem like a distant memory by next year’s opening of Star Wars: Galaxy’s Edge.
Here’s our take on the top hospitality narratives this year:
Mouse Maneuvers
Disney agreed in the summer to raise workers’ starting pay, with a fresh bump on Jan. 1 and a third 18 months from now. Thousands of employees will earn at least $15 an hour in the new year.
Anaheim voters went further in November, passing Measure L 54% to 46%, setting starting pay for tourism and travel enterprises taking city subsidies to a minimum $18 by 2022.
In October, Disney abruptly canceled a planned luxe hotel next to its Downtown Disney retail center, a decision partly attributed to the then-pending initiative.
Two projects—a JW Marriott near GardenWalk by a joint venture of Prospera Hotels in Orange and O’Connell Hotels & Hospitality in Anaheim, and the Westin Anaheim Resort near Anaheim Convention Center by an affiliate of Hong Kong-based Wincome Group—are still in the works and slated to receive city subsidies. One more hotel each by the same two developer groups could also be affected.
Diamond Development
All four of the planned hotels have been discussed as 4-diamond level properties and are within a short shuttle—or stroll—of the convention center. It’s an upscale move for the city’s resort district. Currently, just two city properties—Disneyland Hotel and Disney’s Grand Californian—have that high-end designation.
The convention center campus is a big story to watch next year. Big shows are up 20% following its first full year after the West Coast’s largest convention center added 200,000 square feet late last year.
Area destination marketer Visit Anaheim has spearheaded the shift to catching the bigger fish first.
Sports Zone
Headline-making stadium battles between Anaheim and the Angels aside, OC’s increasingly been rolling out the carpet to attract more sporting events.
Visit Anaheim’s Sports Anaheim unit targets athletic events, including college and high school tournaments and associations that have brought weightlifting, basketball, soccer and other sports crowds to the county this year.
Attracting those players is attractive in many ways. Thousands of such groups at many levels hold events every year. They’re more or less always on the lookout for a new part of the region or country to visit, and youth athletics travel tends to include family members—meaning more hotel room sales.
The effort is countywide: Irvine’s Orange County Great Park athletics layout—part of the development overseen and funded by Aliso Viejo-based Five Point Holdings LLC that also includes residential, commercial, offices and a planned City of Hope campus—is a growing focus of OC’s hospitableness to sports. A few dozen soccer fields and a nearly ready Olympic-level hockey offering should get a lot of use in coming years.
Destination Irvine, the city’s travel promoter, has pushed hard to fill area hotels with those visitors.
Higher Peak
Orange County hotels performed unexpectedly well this year.
There’s been much industry talk about a peak in the hotel market. The county doesn’t seem to have reached it, though it could be close. OC is always an outlier for such things because of its status as a hotbed of “ABC” tourism—Anaheim, beaches and coastal shopping meccas.
CBRE Hotels in Los Angeles reports still-growing average daily rates and revenue per available room—along with countywide occupancy steady at above 81% for the year to date through October.
Another way to slice it: Most of the growth is at the market’s high end. Rates and revenue of rooms priced above $200 rose 5% to 10%, depending on the time frame, to about $350 per night, with occupancy equal to or exceeding OC overall.
Harbor Happenings
The last big story of the year looks to make waves for several more to come.
The county chose a master developer for the $350 million Dana Point Harbor redevelopment, a partnership of Burnham Ward Properties for the retail, Bellwether Financial Group for the marina and R.D. Olson Development for two hotels. The group hopes to kick off the project in earnest next year. The three partners are based in Newport Beach.
— Paul Hughes
