Hotels Continue to Show Drop in Occupancy Rate : Economy: First-quarter decline posted despite 5% cut in room prices.


Orange County hotels continued a downward trend in keeping their rooms filled, despite slashing rates an average of 5% from last year to lure customers, a Los Angeles consulting firm reported Monday.

The first-quarter occupancy report by PKF Consulting came little more than a week after county officials and local tourism executives met in Anaheim to discuss ways to draw more visitors to an area that traditionally has been considered a tourism hot spot.

"We have a drop in tourism and that shouldn't happen," said John Dravinsky, general manager of the Ritz-Carlton hotel in Dana Point and a member of a steering committee that was formed at the April 29 gathering.

The meeting, which drew 100 executives to the Anaheim Convention Center, included retired Disneyland President Jack Lindquist and Orange County Supervisors Gaddi H. Vasquez and William G. Steiner.

"We have a wonderful product here and we need to put together a unified force" to lift the tourism industry out of its doldrums, Dravinsky said.

The PKF survey showed that the average occupancy rate in Orange County through March 31 was 61.38%, down 6.2% from the same period the year before.

The drop, however, was due in part to a change in the monthly survey, in which researchers added two money-losing hotels in South Orange County to its list of hotels the firm routinely contacts, said PKF researcher Melissa Mills.

She declined to identify the two South County hotels, citing a confidentiality clause between PKF and participating hotels. She also declined to say how many Orange County hotels the PKF contacts in preparing its countywide survey.

Overall, South Orange County, with fashionable destination resorts such as the Ritz-Carlton and the Dana Point Inn, also in Dana Point, suffered a decline of 11.1% from last year's first quarter, Mills said.

Anaheim, popular for its cavernous Anaheim Convention Center, Disneyland and two sporting complexes, did not fare much better. The PKF survey reported that only three of every five Anaheim hotel rooms were filled, on average, in the first three months. That is down 8.4% from the year before.

North Orange County hotels, located in Fullerton, Fountain Valley, Buena Park, Huntington Beach, Orange, Cypress, Yorba Linda, Brea and Placentia, saw an average drop of 9.1% in their occupancy rates, from 60.67% to 55.13%, the survey said.

Mills said that the drop in tourist-oriented areas such as Anaheim and South Orange County, including Mission Viejo, Dana Point, Laguna Beach, Laguna Hills, San Clemente and San Juan Capistrano, came largely because of a reticence by out-of-towners to visit a region that has seen itself rocked over the past several years by earthquakes, fires, floods and riots.

"People were staying away from Southern California in general," she said.

The silver lining was found in an increase in occupancy at hotels near John Wayne Airport, Mills said. That area saw a 3.7% hike in hotel usage--from 65.6% to 68.02%--over the past year as Orange County's economy eased itself out of a stubborn three-year recession.

"I think it is a good sign that business travel is improving," Mills said.

Ritz-Carlton's Dravinsky said that he expects a turnaround by January, but he added that the county and tourism officials must become more aggressive with marketing to show Orange County as a place to spend time and money.

"We need to advertise smarter," he said, "It is a question of getting people down here and showing them how diverse the county really is."

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