O.C. Hotel Occupancy Rises in April; Rates Follow Suit
Strong demand for Orange County hotel rooms led to higher room rates in April as local hoteliers cashed in on the rebounding tourist economy.
On average, 74.3% of the county’s rooms were filled in April, compared with 70.4% a year ago, according to a survey by Los Angeles-based PKF Consulting. Big-spending convention visitors helped drive up room rates to $83.71 a night on average, a 5.6% increase over April 1995.
“Occupancy has been booming, so we’ve been expecting room rates to follow,” said Melissa Mills, PKF research analyst. “It has taken awhile, but rates are finally moving up.”
Indeed, most hoteliers weren’t surprised at April’s brisk occupancy figures. Fueled by strong attendance at local theme parks and a resurgence in business travel, Orange County hotels did a brisk trade in the first quarter and are bracing for a strong summer season as well.
But room prices have remained sluggish coming out of years of recession. Area hoteliers have been waiting for a period of sustained demand to hike rates and fund needed improvements to their properties. Yet rates continue to fluctuate, depending on the number and type of customers demanding rooms.
In March, for example, discount-driven tour groups pulled Anaheim’s average rate down to $88.68, a 2.2% decline from March 1995. But in April, several large conventions, whose members aren’t as price-sensitive, boosted the city’s average room price to $89.15, a 5.1% increase over April 1995.
“We’ve seen some upward movement in rates . . . but it’s hard to say what can happen going forward,” said Ned Snavely, general manager of the Anaheim Marriott hotel.
Surprisingly, the county’s luxury hotels showed the greatest occupancy jump of any price segment, increasing to 71.3% in April from 62.3% in the same month a year ago.
John Dravinsky, general manager of the Ritz-Carlton in Dana Point, where rooms start at $275 a night, says corporate America is loosening its purse strings after years of cutbacks and downsizing. He said the Ritz has seen strong growth in its corporate meeting business.
“Companies are rewarding their people again,” Dravinsky said. “The economy is rebounding and businesses are feeling it.”
Corporate meeting business helped boost April occupancy across South County to 69.5%, up from 61.0% in April 1995. Meanwhile, leisure travelers heated things up in the northern part of the county, where 71.3% of the rooms were full in April, compared with 63.4% last year.
Dan Howery, general manager of the Buena Park Hotel and Convention Center, credits the surge in visitors to new attractions at Knott’s Berry Farm and spillover from Disneyland.
“Disneyland is having a banner year, and Knott’s is marketing its new attractions very aggressively,” Howery said. “It’s shaping up to be a great summer.”
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Cashing In
In April, the average daily room rate at Orange County hotels jumped 5.6 % while the occupancy rate rose 5.5%.
Average daily room rate
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1995 1996 Change Anaheim $84.80 $89.15 5.1% Airport area 71.49 78.47 9.8 North County 58.72 58.31 -0.7 South County 90.24 97.49 8.0 Countywide 79.29 83.71 5.6
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Occupancy percentage
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1995 1996 % Anaheim 75.3 77.6 3.0 Airport area 64.1 68.6 7.0 North County 63.4 71.3 12.4 South County 61.0 69.5 14.1 Countywide 70.4 74.3 5.5
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