Projects Cut County Hotel Occupancy

Anaheim convention business virtually disappeared in May amid the city’s huge construction projects, sending occupancy at Orange County hotels down sharply despite generally lower room prices, tourism officials said Thursday.

The county’s average price per night, $97.24, was down 3.7% from $100.94 in May 1998. Occupancy plunged much further, from 72% of rooms filled to 66%, according to PKF Consulting, which tracks the region’s hotels. In the Anaheim area, occupancy fell from 76% to 64% despite a 15.8% decline in rates, to an average of $92.57 per night.

Officials blamed the decline on Walt Disney Co.’s tourist complex and the Anaheim Convention Center. Construction in the Disneyland area, which by some counts will total $6 billion by the time Disney’s California Adventure theme park opens in 2001, already had slowed convention business and in May brought it to a virtual standstill, except for a single gathering that attracted 6,500 visitors, experts said.

“May is generally not the best month [for conventions],” said Charles Ahlers, president of the Anaheim/Orange County Visitor and Convention Bureau. “But this year it was the worst month of the fiscal year by all measures.”

Calling the month an anomaly, Ahlers noted that despite the construction, Anaheim attracted several conventions in April, including a dental meeting of 30,000, and again in June, when evangelical and barbershop quartet conventions attracted 12,000 each.

Smaller hotels catering to the Disneyland crowd have fared better during the construction than big convention hotels, said Bill O’Connell, general manager of the four Best Western Stovall’s Inns in Anaheim.

O’Connell said his revenue in May was down 8% from a year earlier, “but overall we’re up for the year.”

An 8.9% decline in occupancy at South County hotels may be related to a sharp rise in room rates, said PKF’s Melissa Mills. PKF’s survey showed that the average price for a night in a South County hotel rose by 9.4%, from $103.44 to $113.13, from May 1998 to May this year.

The statistics contrasted with those in the Los Angeles area, where travel demand was steady, allowing hoteliers to raise room prices during May.

The average price per night at Los Angeles County hotels grew 2% in May, to $115.81 from $113.10 a year ago, according to PKF. In April, hotels raised rates 4% from a year earlier.

“They’re positioning their rates for summer high demand,” said Michael Collins, with the Los Angeles Convention & Visitors Bureau.

Meanwhile, average hotel occupancy in May was nearly flat, edging up one-tenth of a percent over last year, PKF said. Los Angeles County hotels were booked to nearly 73% capacity.

Times correspondent Stephen Gregory contributed to this report.

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Rooms Available, Cheaper

Orange County hotel occupancy and room rates declined in May compared to a year ago. Occupancy suffered most at the higher-end establishments, although the most expensive rooms did register a price increase of nearly 6%. Average room rates and occupancy for May and change from the same month last year:

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Region Rate Occupancy 1999 Change 1999 Change Anaheim $92.57 -9.5% 63.6% -15.8% Airport 98.67 -0.7 69.2 -0.5 North County 69.13 +4.4 69.9 -1.3 South County 113.13 +9.4 69.8 -8.9 Newport Beach 134.13 -1.3 63.9 +0.2 Countywide $97.24 -3.7 % 66.2% -8.3%

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Price Rangen Rate Occupancy 1999 Change 1999 Change $35-55 $48.50 +0.7% 69.7% -4.9% $55-75 60.53 -8.1 70.0 -3.7 $75-100 87.03 -4.8 66.3 -7.4 $101-150 122.70 -2.3 64.1 -11.3 More than $150 185.29 +5.7 62.8 -11.7 Overall avg. $97.24 -3.7% 66.2% -8.3%

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Source: PKF Consulting