Tourism in O.C.: ‘Good, Not Great’ : Visitors: Most county and Southland attractions are seeing things pick up gradually after being dampened by Gulf War and recession.

One way to gauge the strength of Orange County’s summer tourist season is to peer out motel manager Bill O’Connell’s second-floor office window.

His desk overlooks the reservation desk at Stovall’s Inn in Anaheim and offers a view over the thick oleander bushes that mask the Disneyland parking lot.

O’Connell knows when cars fill the Disneyland lot and when the motel reservation operators are busy. So he can speak with some authority when he says of the county’s Summer of ‘91: “It’s good--but not great.”

After months of recession, the Persian Gulf War and a decline in the number of Japanese visitors, tourism-dependent companies were hoping that droves of summer visitors would compensate for a weak winter.

The droves haven’t appeared, but business could be worse.

The fact that the tourism market is even respectable belies earlier predictions by some industry observers that the tourist drought would last through the end of the year. If business is going to be lousy, tourism executives say, don’t let it happen during the prime summer season.

“It’s come back stronger than most people expected and yet it’s not going to be record-breaking,” says Jim Luce, director of marketing for the Anaheim Marriott Hotel.

Southern Californians seem to be following the national trend of staying closer to home this year. Instead of gondola rides in Italy, a summer fling this year is more likely to be a harbor cruise past the stars’ homes in Newport Beach.

“We’ve seen that the plans to have an overnight stay in a hotel or motel have increased more quickly than air-travel plans,” said George Rosenbaum, chief executive of Leo J. Shapiro & Associates, a Chicago market-research firm. In fact, most airlines have been reporting sharp losses as the recession continues to slow travel.

Rosenbaum said his company’s research has found that more leisure travelers are taking to the roads rather than the skies this summer. They’re also saying closer to home.

San Diego, for instance, is prospering as a destination for vacationing Southern Californians.

“San Diego has been a positive surprise,” said Robert A. Rauch, a hotel-industry consultant in La Jolla. “I had predicted (tourism) would be flat at best. But (it) really has picked up. The performance beginning in March has been beyond anyone’s expectation.”

After almost a year of steadily declining occupancy rates before March, San Diego’s hotels have rebounded sharply. Occupancy was 64.9% in April, up 10.6% from 1990; and 64.8% in May, up 14.1%, according to Smith Travel Research, a Gallatin, Tenn., survey firm.

Knott’s Berry Farm and Six Flags Magic Mountain, two amusement parks that traditionally draw strongly from the local market, report modest attendance increases.

“We are not doing as well as in years past,” said Courtney Simmons, a Magic Mountain spokeswoman.

While Magic Mountain has another new roller coaster, Knott’s has been trying to lure local families by cutting children’s admission prices and offering a lavish schedule of circus acts and other special attractions.

The Movieland Wax Museum in Buena Park and its sister attraction across Beach Boulevard, Ripley’s Believe It or Not Museum, have suffered badly in the recession, according to their general manager.

“We’re down. Everybody’s slow,” said Mark Edwards. Attendance is off 20% compared to last year at Movieland and is running 17% below expectations at Ripley’s, which opened late last year. “We’re not seeing the crowds, and when we’re seeing the crowds, they are not spending as much as they normally do.”

The average visitor is spending about $1.50 less than last year’s average of $16.84, Edwards said.

Movieland, like most other Orange County amusement attractions, does not release specific attendance figures.

Disneyland, which traditionally draws equally from tourists and local visitors, says its summer business has gradually brightened.

“We’ve been seeing steady improvement for about the last two months. Everything I’ve heard for weeks has been extremely optimistic,” Disneyland publicist John McClintock said.

The Walt Disney Co. reported last week that revenue from its resorts and theme-park business fell 12% in the third quarter ended June 30 to $759 million, down from $858 million last year. That includes business at Disneyland, the Queen Mary in Long Beach, Walt Disney World in Florida and Tokyo Disneyland. Profits fell 39% to $176 million, compared to $288 million for the same three-month period last year.

McClintock said Disneyland is recovering from earlier this year, when tourism slowed because of the Persian Gulf War. The war dried up “practically all of our international tourism,” he noted.

Slowly, Japanese tourists are beginning to return to Southern California. After a sluggish spring, bookings of packaged tours are now running 3% to 5% above last year, said Shigeto (Chuck) Mayumi, a sales representative for Japan Travel Bureau International in Los Angeles.

Despite the rebound in local Japanese tourism, Mayumi said that fare wars on international flights to the East Coast may actually be drawing some Japanese visitors away from the Southland.

“We are having a hard time promoting Southern California,” he lamented.

Other tourism-dependent businesses--tour bus operators, hotels and restaurants, for instance--are also struggling.

Starline and Gray Line Tours, one of the largest tour-bus companies in the Southland, is facing its hardest times in 22 years of operation, according to co-owner Fred Sapir. The Los Angeles-based company has laid off 60 of its 300 employees and closed its Anaheim office.

“We’ve had hard times. We’re behind on some bills and we’re trying to catch up,” he said. “It has been very difficult because of the war problems and the problems of the economy. The Japanese have stopped coming to the United States.”

Orange County hotels--struggling from an oversupply of rooms as well as the recession-related drop in tourism--have been slashing prices to attract guests. The 1,042-room Anaheim Marriott, one of the plusher hotels on the edge of Disneyland, has cut rates to $49 a night with a 21-day advance purchase.

The price-cutting strategy is working at filling rooms, if not enhancing profits. In June, the Anaheim Marriott was the giant hotel chain’s third-busiest in the United States, the company said.

Even the Disneyland Hotel, which in the past has shunned discounting, is offering package deals for families. Bookings are “not as strong as in past summers, but that is due to the economy as a whole. The advance bookings are very strong through the end of the year,” marketing manager Shannon Stewart said.

For the first five months of the year, demand for hotel rooms in Orange County fell by 4%. But at the same time, 3.3% more rooms came into service. That resulted in an overall occupancy-rate drop of 7.2% for the period, Randy Smith, president of Smith Travel Research in Tennessee, reported.

Room rates rose only slightly to an average of $62.80 a night for the first five months of 1991, up from $62.09 during the same period last year, but that came before the current round of discounting.

“From the traveling public’s point of view, it is a perfect scenario for travel,” Smith said. For the fourth year in a row, hotel industry room rates have failed to keep pace with inflation, he added.

Discount deals by the likes of Disney and Marriott have left other hotels scrambling to match them.

“People are building that occupancy through discounting,” said Larry Rose, general manager of the Red Lion Hotel in Costa Mesa. “In a down year, you do everything you can to keep the cash coming in. . . . Most of the hotels in our segment are pretty much the same on quality, so what differentiates them is the rate.”

“This is going to be a tough year on us,” Rose added.

It will be a tough year, too, for even the posh Ritz-Carlton Laguna Niguel in Dana Point. There, general manager Henry Schielein vows to stay clear of the price-cutting wars.

“The industry has been taking a beating this past 12 months,” he said. “It is our belief that you have to retain a certain price structure to maintain your property. We have to watch very carefully what is going on. I cannot compete with a $59 (rate), but I’m not a Marriott.”

Some smaller Orange County attractions are holding their own.

Attendance is flat at the Mission San Juan Capistrano, said docent Gaynel Wald. The historic mission attracts mainly students and senior citizens.

“We’re not primarily a tourist attraction,” Wald said. “A lot of the groups that come here are educationally oriented.”

The Wild Rivers water park in Irvine reports a 10% attendance decline this summer over last, but general manager Greg Briggs attributes the decline mainly to unseasonably cool temperatures.

“Last year, July was a great month for us,” he said. “I would say most of the problem is weather.”