RETAIL/TOURISM : Only Brea, Coast Area Are Bright Spots in Sour Hotel Market

A lack of developable sites and overbuilding have led to a virtual halt in construction of new hotels in most of Orange County, according to a report by a hotel consulting company based in Mineola, N.Y.

After a decade of steady growth in the 1980s, the market for hotels has turned sour. Demand for hotel rooms increased slightly in 1990, but room revenue has been stagnant and has failed to keep pace with inflation, the report by Hospitality Valuation Services says.

Even if rates increased, building would be difficult.

“The remaining hotel sites in the county that are unencumbered by municipal land-use restrictions and direct public opposition to development are often subject to steep developer impact fees,” the report states.

There are some bright spots, however. The report says Brea might be a new site for growth, given the success of the Brea Mall and the booming growth of the Inland Empire. And the “most significant area of opportunity” is the coast, where nine upscale resorts totaling 5,000 rooms are being planned or built from Huntington Beach to Carlsbad in northern San Diego County.