What a difference a year makes for Orange County group meetings.
No one is throwing around the word recovery yet, but the county saw a boost in convention business in 2010 thanks to a few major events.
None so big as Major League Baseball’s All-Star Game at Angel Stadium of Anaheim and FanFest at the Anaheim Convention Center.
“It was the biggest by far,” said Charles Ahlers, president of the Anaheim/Orange County Visitor & Convention Bureau.
The baseball events brought some 200,000 people to Anaheim, bumping occupancy at local hotels to 87% for that week, Ahlers said.
That’s compared to the average 66.7% hotel occupancy for the six months through June, according to Henderson, Tenn.-based Smith Travel Research Inc.’s STR Global, a tracker of the hotel industry.
Group activity—albeit on a smaller scale—should continue through the end of the year in Anaheim, according to Ahlers.
He named a number of booked conventions through the end of year that are expected to draw from 2,000 people to 25,000 people (Irvine-based Blizzard Entertainment Inc.’s BlizzCon being the largest planned event in October).
Meetings Crash
But big events aren’t enough to bring the meetings business back to where it was before the downturn.
When the economy crashed, a lot of meetings were canceled and few were rescheduled for coming years, “leaving hoteliers in big quandaries,” said Tim Brown, chief executive of Meeting Sites Resource in Irvine.
Hotels saw as much as a 15% to 40% drop in rooms that were expected to be absorbed by groups and those that actually were.
“What they replaced those with was at a much lower average daily rate,” Brown said. “They lost a lot of business. New business development was at a snail’s pace. Those that kept business did not need as much room.”
As a result, hotels and meeting planners are working to renegotiate deals or offer bargains to attract events. Hotels are dropping the number of required room blocks or lowering mandatory food and beverage amounts—which is where hotels make a big profit—in an effort to attract meetings.
“People are lowering rates trying to draw business,” Ahlers said. “Groups are driving a hard bargain and really trying to leverage their business.”
Drug and medical companies, as well as biofuels and energy interests, are booking meetings and growing, Brown said.
Aerospace, manufacturing, finance and real estate all took a hit and are slower to recover, he said.
Groups are looking for more value when booking their meetings, Brown said. They might look for a slightly less luxurious hotel, shorten the length of conferences with less free time or move to a less high-profile city.
“Collectively, everyone is selling harder and selling smarter to make more deals,” Ahlers said. “Deals are costing us, but it is leveling the playing field. There are a lot of empty rooms everywhere, so people are going to have to sharpen their pencils.”
Occupancy is up from last year, according to STR Global.
June occupancy was up 8.8% from a year earlier to 76.3% from 70.1%, and the first six months of 2010 saw a 6.3% rise from the first six months of 2009 (see related story, page 20).
But that bump wasn’t just from business travelers.
“Hotels were trying to fill it with anything that came in—that could be leisure, business travelers, religious groups. The business mix changed,” Brown said.
La Costa Resort & Spa, just across the county line in Carlsbad, saw that mix switch recently.
“Group business got hit last year, but leisure stayed up,” said Denise Chapman, director of marketing.
The family-friendly resort is predicting 80% occupancy for the summer months—its busiest time. Chapman declined to give other occupancy details.
La Costa is set to undergo renovations to its golf courses and rooms starting in November, after the summer rush.
The tony hotel attracts a lot of families with its seven pools, three water slides and day camp for kids.
Chapman said the hotel gets a lot of guests attracted to the beach, Legoland and even Disneyland.
“Leisure has always been big here, it’s a family destination,” Ahlers said. “We see families because of Disneyland. People typically stay at the beach.”
OC’s family-friendly activities are a point of attraction for some meeting planners, according to Brown. It may sway some to make the trek if they can tack on a family vacation to a work event.
“It behooves a meeting planner to look for spouse and family programs because it can increase the attractiveness to attendees by bringing families,” he said.
The amount of leisure and business travelers is expected to continue growing into next year.
Hotels are looking for a 5% to 6% bump in rates in 2011 as demand continues to rise, Ahlers said.
“In 2010, projections for the industry were a little ambitious,” Brown said. “It hasn’t snapped back, but it is coming back at a slower speed.”
