L.A. Hotels’ Room Rates Grow Even as Guest Count Shrinks

The average cost of a hotel room in greater Los Angeles rose 9% in August even as occupancy slipped by 3%, the latest data showed.

Orange County experienced a similar jump in room rates even though overall occupancy there dropped by 8%, according to PKF Consulting, which studies the hospitality industry.

Tourism industry observers, however, said there was still sufficient demand for hotel rooms in both counties to warrant an increase in prices despite the falloff in guests.

Total August occupancy for Los Angeles County hotels was 80% capacity, compared with 83% in August 1997. Hotel rooms in Orange County were at 76% capacity, versus 84% a year ago.

Occupancy in Orange County, however, has fallen 5% since January, compared with the first eight months of last year. Most of that drop has been attributed to heavy construction in Anaheim, home of Disneyland and other attractions. Occupancy in Anaheim alone is down 7% for the year.

Meanwhile, occupancy rates in Los Angeles County from January through August have held steady with last year, despite a 6% drop in Japanese tourism, which provides the region its largest contingent of foreign visitors.

Michael Collins of the Los Angeles Convention and Visitors Bureau said higher rates of U.S. tourists and business travelers have kept occupancy at an average 76% this year through August, on a par with the first eight months of last year.

Collins said high guest volume has allowed hoteliers in Los Angeles County to charge an average of $108.14 per room, up 9% from the previous year. In Orange County, the average room rate has been $101.99 a night so far this year, up 7% from last year.