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Saturday, Jan 28, 2023
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OC Tourism Travels Back

Local Airport, Hotel Data Suggests Business is Back to Pre-2020 Levels

After a headwind-filled two years, Orange County’s tourism industry is back on track.

In a notable sign of the area’s recovery, airline passenger traffic at John Wayne Airport surpassed pre-pandemic levels in May, rising 6.5% over the same month in 2019.

The airport served north of 1 million passengers in May, a new traffic record and a 71% jump over 2021 levels. It was also a nearly 1,120% jump over the levels of passenger traffic seen in May 2020, just as the county saw the impacts of the halted travel sector as a result of the pandemic.

“After two years of pent-up travel demand, Americans are splurging and making up for lost time by treating themselves to trip upgrades, luxury experiences, and longer stays,” Visit Anaheim Chief Executive and President Jay Burress told the Business Journal.

 

Business Travel Boost

While leisure travel has led tourism’s recovery, business travel is now holding its own, with U.S. bookings exceeding 2019 levels for the first time in March, according to Mastercard Economics Institute’s third annual travel report.

In OC, Visit Anaheim—the county’s largest Destination Marketing Organization (DMO)—has booked 175 events, meetings and conventions for 2022 with 833,177 attendees expected for an estimated economic impact of $1.2 billion. The DMO expects next year to be even better as it gets more events on the books.

The headwinds aren’t fully in the rearview mirror, with industry players closely monitoring rising inflation and new COVID-19 variants, but these early signs suggest a positive outlook for the industry ahead of what’s shaping up to be a busy summer season.

 

Airport Improvements

John Wayne Airport’s recovery comes amid a new airport director, Charlene Reynolds, who was appointed last month by Orange County’s Board of Supervisors and started on June 6.

The Phoenix native holds over 20 years of experience in both the public and private sectors.

Reynolds was previously the chief commercial officer of the Houston Airport System, and previously worked for the Phoenix Sky Harbor International Airport as the interim and assistant aviation director.

According to OC Supervisor Katrina Foley, “improving the quality of both internal and external community operations remain my priority. Ms. Reynolds impressed me with her earnest responses, hard work ethic, emphasis on collaborations with stakeholders, and breadth of knowledge on environmental and sustainable practices to clean up the airport and its impacts.”

The largest physical update to the airport of late kicked off in 2020 when the Board of Supervisors took the first steps on a general aviation facility improvement plan by selecting three new fixed-base operators (FBOs).

The plan, dubbed the General Aviation Improvement Program (GAIP), is expected to lead to nearly $150 million in new investments over the next decade with upgrades to offices, hangars and other facilities funded by the new operators.

ACI Jet and Clay Lacy Aviation agreed on 35-year lease terms while Jay’s Aircraft Maintenance was chosen as a limited-service FBO. According to airport officials, the operators are in the design process as the airport awaits FAA approval to move forward with the GAIP.

 

Hotel Rebound

Hotel metrics are also approaching pre-pandemic levels.

Hospitality groups such as Newport Beach-based Twenty Four Seven Hotels have reported occupancy levels are back on track with 2019 figures, and portfolios outperforming during the first quarter of 2022.

Visit Newport Beach, which ranks No. 2 among OC’s nine DMOs, expects citywide hotel occupancy and rates to return to 2019 levels this year, bolstered by demand for leisure coastal markets.

Anaheim, which represented nearly half of the 50 million visitors that came to OC in 2019, reported a hotel occupancy rate of 78% as of April.

Irvine hotels are also reporting increased metrics as travel spending, employment and earnings all increased in 2021, according to a report prepared by Dean Runyan Associates.

Citywide spending reached $467 million in 2021 with accommodations showing the greatest gain, increasing 34% over 2020 levels to $137 million in travel spending.

 

Corporate Push

The corporate sector is bolstering business across airport hotels, according to data from Irvine-based hotel owner and operator S3 Hotel Group. Occupancy across the company’s portfolio increased 85% compared to last year with the strongest growth seen in midweek visitation, which the hotels associate with business travel returning.

“Companies are opening their purse strings to encourage travel, as well as allowing smaller meetings to occur and conduct business,” S3 Vice President of Operations Ronnie Dalgado told the Business Journal. “Our percentage of corporate travel has more than doubled year-to-date.”

S3 Hotel Group has six hotels and 752 rooms in the OC airport area, including the Hilton Garden Inn.

“As we enter Q3, we are looking forward to occupancy levels returning to 2019 numbers, and ADR increases of at least 20%,” Dalgado said.

According to DMO Visit Huntington Beach, international visitation is the slowest to return compared to domestic leisure and business travel, but that segment is expected to recover further as the U.S. lifts COVID-19 testing requirements to enter the country.

“We anticipate international travel to continue growing now that airlines are getting back to full capacity,” Visit Huntington Beach officials told the Business Journal.

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