RETAIL/TOURISM : Plunging Occupancy Could Force Hotels to Check Out Early

Hotel owners, hoping that a resurgence in summer tourism would brighten their fortunes, are sure to be disappointed with the latest hotel occupancy figures.

The industry was counting on a strong summer to make up for a severe travel slump earlier this year. Now, with average occupancies dipping below the level where some local hotels can earn a profit, analysts say some failures are sure to follow.

Hotels are doing “whatever they can to get back on track,” said Rick Schwartz, who follows the industry for the accounting firm of Pannell Kerr Forster in Irvine. “Unfortunately, a lot of the operations have expenses that are fixed.”

Total occupancy declined to 71.4% in June compared to 76.1% for the same period last year. For the first half of 1991, occupancy was 62.6%, off from 67.4% a year earlier.

Since most hotels break even in the 65% to 75% occupancy range, the figures indicate that many are losing money, said Dave Philp, director of the hospitality group for Kenneth Leventhal & Co. accountants in Newport Beach.

If the trend continues, he warns, more will face bankruptcy.