Luxury Hotel Building Boom Not Limited to Coastal Areas

In Orange County, coastal resorts are part of a larger attempt to encourage tourism and business visits. County beaches always had devotees, to be sure, but most vacationers stopped only for a day or two at theme parks. The top draw, Disneyland, was surrounded by tawdry motels and strip malls.

These days, a huge construction project is transforming Anaheim. Bidding to extend guests’ stays to three days or longer, and broaden Disneyland’s appeal, Walt Disney Co. is spending $1.4 billion on a new, more adult-oriented theme park, a 750-room hotel and an entertainment, dining and retail center aimed at the teen and adult markets.

Government agencies are spending more than $1 billion to improve nearby freeways, $150 million to expand the convention center and $450 million for public works improvements. All told, $4 billion will be paid to make Anaheim a “destination resort” like Walt Disney World in Florida.

“The long-range future of tourism in Orange County is very bright,” said Bruce R. Brown, director of the county tourism council. “Expansion plans for tourism venues are popping up all over the county.”

Hotel broker Alan X. Reay, president of Atlas Hospitality Group in Costa Mesa, has counted no fewer than 19 new hotel projects with 4,146 rooms that have been announced in Anaheim and adjacent Garden Grove.

Clearly, not all will be built, Reay said. “If it all came out, Anaheim would have a very hard time absorbing it.”

He is most skeptical of several top-end hotels planned for the area. Luxury hotel guests “aren’t your typical family of four coming out of the Midwest for a budget vacation at Disneyland,” Reay said.

But he’s still bullish on oceanfront hotels, which until a 1997 price run-up could be purchased for less than it cost to build new ones. Given how few new ones have been built, and with occupancy levels high, he said the proposed resorts “still make a lot of sense--if they can get financing.”