O.C. Tourist Trade Delivers Big Seasonal Boost

August capped a robust summer for Orange County’s hotel trade, as a flood of vacationers and business travelers pushed occupancy to the highest level all season.

Countywide, hotels average 84.4% occupancy in August, up from 81.1% a year ago, according to a monthly survey by PKF Consulting in Los Angeles. Orange County hoteliers saw the summer end with a bang as those strong August figures surpassed July’s robust 83.8% mark and the 83.9% countywide occupancy posted in June.

“1995 was a good year, but 1996 is shaping up to be a terrific year,” said Bill O’Connell, general manager and partner in four Best Western Stovall’s Inns in Anaheim. “It truly has been a great summer.”

Anaheim was bursting at the seams in August as visitors on average kept 87.6% of the city’s rooms filled throughout the month.

Cheri Chester, general manager of the Ramada Inn Conestoga in Anaheim, attributes some of the tourist onslaught to the overall health of the economy and a respite from natural disasters in California.

But mostly she credits Disneyland’s marketing machine for luring travelers from near and far to catch a final performance of the Main Street Electrical Parade, which “glows away” Oct. 15.

“All anyone wants to talk about is that parade,” Chester said. “It’s amazing what happens when Disney puts its efforts, money and talent behind a promotion. I’ve never seen anything like it.”

Still, vacationers and parade lovers weren’t the only bright spots for the county’s innkeepers. Business travelers pushed occupancy at hotels near John Wayne Airport to 80.8% in July, up from 74.5% in the same month a year ago.

Airport hoteliers capitalized on that surge in demand to boost room rates to $80.55 in August, up a healthy 9% from the same month a year ago.

Margo Repta, general manager of the Costa Mesa Marriott Suites, says several airport-area properties have undergone multimillion-dollar renovations that are allowing them to command higher rates. Likewise, she says, summer demand for rooms has been strong enough that airport hotels didn’t have to discount their rooms in what is typically the slow season for business travel.

“We didn’t need to hold any fire sales to get people into our hotels,” Repta said. “Strong demand made us a little more confident in holding our rates.”

In fact, hotel room rates were up all over the county after languishing most of the year. The average price of a hotel room in Orange County in August was $83.92, up 6.7% from August 1995.

The county’s priciest rooms were to be found in the South County market, where luxury hotels such as the Ritz-Carlton in Dana Point and the Marriott Laguna Cliffs Resort pushed the average room rate to $113.65 in August in that geographic segment, up 10.5% from the same month a year ago.

“People are traveling again and the demand is there,” said John Dravinsky, general manager of the Ritz-Carlton. “We are able to request a higher rate for a quality product.”

Even in cutthroat Anaheim, the county’s largest, most competitive hotel market where prices haven’t budged most of the year, room rates climbed 6.1% to $85.74 in August. O’Connell attributes the increase to strong convention business and new bookings to see the Electrical Parade.

“Certainly supply and demand is part of the equation,” said Best Western’s O’Connell. “Anaheim rates have been depressed for so long they had nowhere to go but up.”

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Busy Season

August was a strong month for Orange County hotels. Both occupancy and average daily room rates were higher than last year in every region. August figures:

Average daily room rate

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1995 1996 % Change Anaheim $80.80 $85.74 6.1% OC Airport 73.91 80.55 9.0 North OC 60.99 63.17 3.6 South OC 102.84 113.65 10.5 Countywide 78.66 83.92 6.7

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Occupancy Rate

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1995 1996 % Change Anaheim 85.82% 87.64% 2.1% OC Airport 74.46 80.78 8.5 North OC 70.30 75.67 7.6 South OC 77.93 80.49 3.3 Countywide 81.09 84.40 4.1

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Summer Success

This summer was the most successful one in three years for county hoteliers, with both room rates and occupancy higher in each of the three months:

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Room rate Occupancy rate June 1994 $75.33 68.46% 1995 80.80 80.57 1996 82.85 83.87 July 1994 $75.46 76.80 1995 76.48 81.24 1996 80.56 83.78 August 1994 $76.77 78.73 1995 78.66 81.09 1996 83.92 84.40

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Source: PKF Consulting