Rise in Southland Tourism Seen for ’97

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 projected for this year.

That’s the consensus of industry experts who gathered Wednesday at the Hotel Queen Mary in Long Beach 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, while the overall visitor count should rise about 2.5%, to 45.3 million overnight guests, 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.

Next year’s expected increase in visitor volume and spending can be attributed to continued strength anticipated for the state economy. California residents are the backbone of the state’s tourist trade, representing 80% of the trips taken in the Golden State.

Continued growth would be 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. Paschall expects 1997 Orange County hotel occupancy to inch up to an average of 75%.

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 ’97.

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

PKF estimates 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.

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