O.C. Hotels Enjoy Busiest April in Five Years

Spring business was blooming for Orange County hoteliers, who posted their strongest April in five years in both room rates and occupancy levels.

Vacationers and business travelers filled 80.1% of the county’s rooms in April, up from 74.3% in April 1996, according to a study by Los Angeles-based PKF Consulting.

That healthy demand helped boost room rates a whopping 15.2%, raising the countywide average rate to $97 a night in April.

Business was particularly brisk in Anaheim, the county’s largest hotel market. Spring break vacationers filled most of those 15,000 rooms, pushing April occupancy to 82.8%, up from 77.8% for the same month a year ago.

But it was big-spending convention visitors that sent room rates soaring 16.4% to an average of $103.83, according to Anaheim hotelier Bill O’Connell.

“We had all the spring break business plus three major conventions in April,” said O’Connell, who is partner and general manager of four Best Western Stovall’s Inns in Anaheim.

“It was a terrific month in what so far has been a terrific year.”

Whether Anaheim can sustain that increase remains to be seen. Leisure travelers, the bread-and-butter of the Anaheim market, are much more price sensitive than business professionals traveling on expense accounts.

Still, O’Connell says room rates in Anaheim have remained artificially low for the last several years, as hoteliers locked themselves into long-term, low-profit contracts for group tour business booked during the early ‘90s recession. Most of those contracts have expired and are being renewed at much higher rates.

“Rates had nowhere to go but up,” O’Connell said. “But Anaheim is still a bargain compared to other hotel markets around the country.”

Indeed, room rates have been rising nationwide thanks to a strong economy, robust demand by both vacationers and business travelers, and a slowdown in the overbuilding that depressed room prices in the late ‘80s and early ‘90s.

Business travel continues to surge, and hotels near John Wayne Airport that host those travelers continue to reap the benefits.

Road warriors filled 77.6% of the rooms in the airport area in April, up from 71.2% in April 1996. Room rates jumped 17.1% to an average of $96.71.

Occupancy in North County hotels improved to 77.3% in April from 70.4% over the same period a year ago. South County also showed occupancy gains with 78.2% of its beds filled in April, compared with 74.4% in April 1996.

For the first four months this year, countywide occupancy averaged 73.2%, up from 72.1% over the same period in 1996. The year-to-date average room rate surged 13.6% to $95.51.

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Hotel Highs

Orange County’s April hotel occupancy rate and average room price were the best for that month in five years. Average daily room rate and occupancy for April 1997:

Occupancy

Anaheim 82.8%

Airport area 77.6

North County 77.3

South County 78.2

Countywide average 80.1

Average Daily Room Rate

Anaheim $103.83

Airport area 96.71

North County 64.29

South County 96.07

Countywide average 97.00

*

The five-year April patterns:

Room rate

1993: $76.63

1994: 82.64

1995: 79.29

1996: 83.71

1997: 97.00

Occupancy

1993: 64.3%

1994: 67.6

1995: 70.4

1996: 74.3

1997: 80.1

Source: PKF Consulting; Researched by JANICE L. JONES / Los Angeles Times