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Wednesday, Feb 28, 2024

The Year of ‘Bleisure’ Travel

Come for Business, Stay for the Beach

Visit California is getting creative in its strategies to bring the meetings market back to its pre-pandemic potential, and Orange County is playing a large role in those plans.

“Orange County is a natural choice for meeting planners looking for a location with year-round appeal and endless tourism opportunities—it’s a destination where delegates will want to add days around their business meetings simply to enjoy all the offerings nearby,” Visit California Vice President of Communications Ryan Becker said.

Travelers of today are combining leisure travel with business trips by extending stays. Hotels and venues are looking to capitalize on this by creating leisure components to encourage guests to extend their stay after a business trip.

“They are trying to motivate and create additional time for people to stay during convention periods,” Alan Reay, president of Atlas Hospitality Group told the Business Journal.

Business-related travel recovered to 79% of 2019 levels in 2022, according to Tourism Economics. Leisure travel has been the fastest to return recovering to 93% of pre-pandemic volumes.

According to Visit California, the loss of critical business meetings and international travel continue to make an impact on the state’s travel economy—especially in the urban centers.

The destination marketing organization for the state, which represents the state’s tourism industry and its institutions, defines this business sector as both group and individual travel that includes conventions, professional meetings and events.

The organization projects that the total number of business visitors will not recover until 2025 with an estimated 54 million travelers.

“The outlook for business travel is improving as meeting planners, attendees and businesses look for meaningful opportunities to engage face-to-face,” Becker said.

Anaheim’s Allure

Visit California last year invested $4.5 million to promote professional meetings and events around the state for the first time, following years of focusing on California’s leisure offerings.

“We’ve come to the table with another $4.5 million this fiscal year,” Becker said.

Orange County is a market that “creates meeting destinations that have so much more to offer than meetings,” he added.

Anaheim is perhaps the best example, with the Anaheim Convention Center and more than 700,000 square feet of meeting space across the city’s hotels situated in or near the region’s No. 1 tourism driver: Disneyland Resort.

“Anaheim leads the entire state” in RevPAR—or revenue per available room—increases since the onset of the pandemic, Reay said.

There are just five hotels under development in Orange County, with 811 rooms under construction. Anaheim is home to the largest hotel under construction: a new 344-room Disneyland timeshare tower called The Villas at Disneyland Hotel.

The 280,000-square-foot tower will add additional venue space to the 973-room Disneyland Hotel, which counts nearly 216,000 square feet of meeting space, the most among OC hotels.

Development Outlook

As the leisure market continues to prop up the business travel sector, Reay questions the future of business hotels.

The office market will play a role—that segment’s slow return has prompted a subsequent slowdown in investment for hotels that hinge on business travel.

Extended stay hotels—which offer units with kitchens and living rooms—blossomed in popularity during the pandemic and are a hot product type for developers, Reay said.

Orange County has 12,475 rooms across 68 hotels in planning.

Just one hotel was built and opened in OC last year, according to Atlas’ California Development Survey for 2022: Element Irvine. The hotel counts 124 rooms and is near MacArthur Boulevard, down the street from John Wayne Airport.

That’s a 91% decrease from the 1,595 rooms that were opened the previous year, which included the 613-room Westin Anaheim.

Reay expects 2023 to be one of the lowest years on record for tracking new development in OC. That drop-off is expected to continue in the next two years.

For sites that are not already under construction, Reay cited financing as a large issue moving forward.


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