Steady Growth in Southland Tourism Seen

Barring natural disasters or an unexpected blow to the economy, Southern California’s tourism industry is poised for solid growth in 1997, although not as strong as this year.

That’s the consensus of a slew of industry experts who gathered Wednesday at the Hotel Queen Mary for the annual Southern California Visitor Industry Outlook Conference sponsored by UCLA Extension.

Traveler spending in the southern part of the state could increase as much as 7%, to $21.6 billion, next year, according to projections by panelist Skip Hull of CIC Research in San Diego.

That’s down from the 8% spending increase projected for 1996 but still well ahead of the 3.3% rise posted in 1995, when the state’s economy was still shaking off the effects of the early 1990s recession and natural disasters.

The overall visitor count should rise about 2.5%, to 45.3 million overnight guests, Hull said.

Most of the increase in visitor volume and spending can be attributed to projections that the state’s economy will continue to show strength. California residents are the backbone of the state’s tourist trade, representing 80% of the trips taken in the Golden State.

Continued growth is good news for area hotels and attractions, coming on top of a banner year for tourism in 1996. Still, Orange County’s red-hot hotel market is expected to cool following the unplugging of Disneyland’s Main Street Electrical Parade.

The farewell season of the venerable procession attracted record crowds to Disneyland and boosted countywide hotel occupancy for the year to a projected 74% for 1996, up from 69% last year, according to Scott Paschall, vice president of Los Angeles-based PKF Consulting. He expects 1997 Orange County hotel occupancy to inch up to an average of 75%.

“Some unique circumstances fed the occupancy growth this year, making it tough to sustain,” Paschall said. “We’re going to see it level off.”

Paschall also sees slower growth in the Los Angeles hotel market, where 1997 occupancy is projected to average 71%, up only slightly from the 70% forecast for 1996.

Still, area hoteliers should see room rates--and profits--increase in 1997.

Hotels nationwide commanded higher rates this year, thanks to a robust travel market and a slowdown in new hotel construction. Paschall said that California innkeepers will continue to pass along rate increases in 1997, after years of anemic pricing dating back to the early 1990s recession.

PKF estimates that the average room rate in Los Angeles will increase 4.5% in 1997, to $92 a night. Orange County rates are expected to jump 5%, to an average of $85 a night, next year.

“We’re still playing catch-up,” Paschall said. “Room rates are going to grow faster than occupancy.”

Nationwide, the $440-billion travel industry is expected to post sales growth of 3% to 4% in 1997, slightly faster that the rate of inflation, according to Catherine Shaw, director of marketing research for the Washington-based Travel Industry Assn. of America.

California, with its beaches and ski resorts, is poised to capitalize on the upcoming winter vacation season, which is expected to be a strong one. The industry association projects that Americans will take 138.8 million vacation trips this winter, up nearly 5% from last year.

Higher Rates

Orange County hotel room rates are expected to average $85 per night next year, while the occupancy rate will inch upward. Daily average trends:

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Rate Occupancy 1993 $78 66% 1994 $79 66% 1995 $77 69% 1996* $81 74% 1997* $85 75%

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* Projections

Source: PKF Consulting