Expansion Set at Van Nuys Airport’s Airtel : Hotel Takes Flight on Edge of Runway
It is a funny place for a hotel, this airport. It is even a funny place for an airport hotel.
Most airport hotels are near the airport or perhaps even next to the airport.
This hotel is on the airport, alongside the runway, like a hangar with suites and bellboys. Pilots can taxi up to the back door in their planes.
And what an airport for a hotel.
This is not LAX, London or New York. Those are gateways to metropolises and continents, daily crossing points for thousands of air travelers desperate for a place to shower, sleep and get a meal that is not a little plastic insult on a little plastic plate.
This is Van Nuys Airport, gateway to a bowl of suburbs, where there are no commercial airlines at all. Most of the planes here still have propellers and engines with cylinders, things that disappeared from the jetports of the world back when all the flight attendants wore skirts.
Funnier yet, it seems to be working.
The Airtel Plaza at the Van Nuys Airport is doing well enough to prompt plans for expansion after less than two years in operation, according to the hotel’s management.
The 200-room hotel, built for $20 million, is planning to spend “in the neighborhood of $6 million” on an addition that will include about 90 rooms, a health club and a ballroom, said H. Joel Biggs, the general manager.
The architects “are still doing the scratch drawings,” Biggs said, but the owners of the hotel are committed to an expansion to handle the demand for rooms and banquet facilities.
“We have two to four weddings a weekend now, and we’re booked up on weekends, from Friday night to Sunday night, for a year,” he said.
City Profits From Hotel Success
The hotel’s owners would not reveal profit figures. But revenue was $7.3 million in 1985, and it made a profit “higher than industry standards for a newly opened hotel,” Biggs said.
The hotel’s prosperity is good news for the Los Angeles Department of Airports, which leases the land the hotel stands on just north of Sherman Way and alongside the eastern edge of a runway. The city agency, which must support the four municipally owned airports from its own income, now receives $150,000 a year from the Airtel. In 1987, that becomes a minimum guarantee against 7.5% of the hotel’s gross on room rentals and 5% of the gross on food and drink.
The Airtel, which now leases 7.2 acres, has asked the department for two acres of the vacant lot on the north side of its present site to build an addition, said Don Miller, deputy general manager of the Department of Airports. The addition would raise the minimum guarantee for the lease to $205,000 a year, although Miller said he expects its revenue from the hotel to be even higher because of the percentage agreement.
Miller and other airport administrators have said repeatedly that they are pleased with the hotel’s development. It is a cornerstone of the department’s plan to ring the airport with real estate developments on airport-owned land that will bring in money to offset what is lost on airport flight operations.
Biggs said the hotel management hopes to break ground on the addition, which requires city approval, by the end of the year.
The Van Nuys Airtel, a Best Western franchise, was developed by four Valley men: developers Richard H. Dunn of Calabasas and his son, Jim Dunn of Westlake Village, who together hold a one-third interest; builder Howard E. Shirley of Canoga Park, with another one-third stake, and hotelier G. Robert Hemstreet of Woodland Hills, who owns the remaining interest.
It opened in July, 1984, with an eye toward the coming Olympic Games. Like other hotel operators in the Los Angeles area, Airtel’s managers were disappointed by the light advance bookings they had from tourists going to the Games. Because the hotel was built long after the Olympic Organizing Committee had made guaranteed-rate deals with other hotels to house visiting Olympic committees, Airtel missed out on that business too.
But it turned out, Biggs said, to be a blessing.
“Two days after the opening ceremony, the FBI booked 50 rooms,” he said. With the adjoining runway and airport facilities, agents preparing for terrorists and other problems found that they could stay outside the traffic-clotted Olympic area and yet leave right from the hotel by helicopter and quickly reach anywhere in the region.
Occupancy Rate at 79%
The hotel had rooms for last-minute-impulse tourists when the early television coverage stirred up “Olympic fever,” and it was not bound by agreements to reserve the rooms at lower rates for Olympic officials, he said.
The Olympic Games “hurt many of the other hotels, but they helped us,” said Biggs, adding that more than 60% of Airtel’s rooms were occupied. Since then, the hotel’s occupancy rate has risen steadily, to a current average of 79%, Biggs said.
Most of Airtel’s guests are business travelers who have dealings with central Valley firms. Despite the Airtel’s location and pervasive airport theme--the coffee shop is named for Amelia Earhart--about 65% of the guests “have no relationship to the airport at all,” he said.
Still, the hotel goes out of its way to offer amenities to the fliers. The hotel has tie-down parking spaces for 40 aircraft, offers weekend “fly-in” packages for private pilot tourists and has a pilots’ lounge complete with airport tower communications and aviation weather information.
Airtel’s occupancy rates appear to be impressive. Mitch Roberts, manager of the leisure-time industry consulting group of the accounting firm of Laventhol & Horwath, said, “It ordinarily takes a new hotel three or four years to build up to a reasonable level, say 75%.”
Reaching that level so quickly after opening could indicate, however, that the hotel was too small to begin with and should be expanded to tap the available business, he said. He said Airtel, which has rooms with bubbling hot spas, has probably done well because “it’s the nicest property in the central Valley market.”
Other hotels and motels in the area are not in the same class, he said. The closest competitors, he said, are the Valley Hilton on Ventura Boulevard in Sherman Oaks and the Holiday Inn on Roscoe Boulevard near Sepulveda Boulevard, both about three miles away.
“What’s going to affect the Airtel is the new Marriott in Warner Center,” about eight miles away, he said. Airtel has drawn customers from the West Valley who are in search of a better hotel, “at least some of whom are now going to go to the Marriott,” he said.
The East Valley, Robert said, is a saturated market, with hotels such as the Burbank Airport Hilton. He said the Airtel probably will be able to count on the quality of its facilities to hold its place in the central Valley market, however, and remain competitive with the just-opened Marriott for West Valley business by offering lower rates.
Rooms at the Airtel cost about $85 a night for a single and $95 for a double. The charges for corporate rate clients average about $78 a night with breakfast, Biggs said, and suites are $125 to $200.
At the Warner Center Marriott, singles are $98 and doubles $128 a night. Suites range from $250 to $800 a day.