Anaheim Hilton Moves to Increase Its Occupancy Rate
If its lackluster occupancy rates haven’t been enough of a problem over the past three years, the Anaheim Hilton and Towers hotel suffered a public relations nightmare this week when its owners were hit by an $5.6-million eviction suit.
But the 1,600-room, $180-million hotel--Southern California’s largest--is dealing with its troubles by quietly increasing its marketing program and bringing back a veteran national salesman to help boost sales.
According to industry sources and area hoteliers, the Hilton is battling a glut of hotel rooms in Orange County, lacks a strong marketing program and has been hurt by its newness and architectural style.
“It’s a businessman’s hotel. The steel-and-glass style isn’t conducive to making Anaheim’s tourist market feel comfortable,” one competitor said.
“The word on the street is they’ve really got some problems--that they’re not doing that well,” said another source who asked not to be named.
The Anaheim hotel drew sharp scrutiny Wednesday after national publicity about the eviction lawsuit that was filed by Anaheim against the hotel and its owner, the Anaheim Hotel Partnership, over being behind in payments on a city redevelopment loan.
Hotel officials deny that there is a cash-flow problem and said the lawsuit is merely part of a contract dispute over payments on the city loan for two parking structures.
“We’re right on the button (and) . . . very much pleased” with occupancy rates, said Glenn Hale, general manager of the Hilton, which is managed by Hilton Hotels Corp.
Stanley R. Castleton, president of Los Angeles’ May Cal Properties Inc.--which owns 90% of the Hilton--said occupancy rates this year are expected to average 60% to 65%.
But competitors said those occupancy rates--an industry gauge of measuring a hotel’s success--are overblown and at best are more in the neighborhood of 50%.
Either way, it is undisputed that the Anaheim Hilton fares the worst among Orange County’s three largest hotels. In rooms sold per night, the acknowledged leader is the 1,100-room Disneyland Hotel--which manager Michael Bullis said has an average occupancy rate of 85%--and the 1,057-room Anaheim Marriott--which on the average fills 75% of its rooms, sources said.
One reason for the Hilton’s poorer showing is that more space is harder to fill.
Its 1,600 rooms make the Hilton one of the biggest hotels west of the Mississippi, so “they’ve got to sell 800 rooms each night to be just half full,” one competitor said.
Need Exposure Time
Guests also typically need three to five years’ exposure before they will regularly book into a hotel. “It always takes several years of negative cash flow for a hotel to mature to the point that it pays for itself,” Bullis said.
The Hilton is also handicapped by its location in an area that has been swamped with more than 5,000 new hotel rooms since 1984.
The ultra-modern Hilton may have other problems much closer to its own backyard. One area hotelier said: “They’ve built two of the greatest-looking ballrooms in America, they have a great lobby and registration desk. But the architect totally neglected a major market here, and that’s the tourist. It isn’t (registering) the sense of warmth that tourists look for.”
When it comes to the all-important convention business, the Hilton’s troubles may have started even before it opened in May, 1984. Its sales staff had just one year before that opening date to start booking rooms. “Even a year isn’t enough lead time (because) conventions of more than 1,000 rooms make decisions three years and on into the future,” said Ed Coffey, formerly with the Anaheim Hilton and now director of sales with the Fontainebleau Hilton in Miami.
Now, at the Anaheim Hilton’s request, Coffey--who has a long background in national sales--will become the Anaheim Hilton’s director of sales on May 3. He will head an 11-person sales staff. Coffey was the Anaheim Hilton’s assistant director of sales from May, 1983, until he transferred to Miami 25 months ago.
The Anaheim hotel’s hastily prepared entry into the cutthroat convention market is one reason, according to Coffey, that the hotel is projecting a comparatively bleak occupancy rate in 1988.
“We don’t have the convention business on the books that you typically might have” booked for next year, he said.
To help fill its guest roster, the Anaheim Hilton is pumping more dollars into its marketing budget, hotel executives said.
The current sales director, Robert P. Neopolitan, will become marketing director. “His duties are expanded and he’ll still be in charge of the entire sales department,” Hale said.
