New Attractions Could Cushion Landing for Southland


Nationally, the tourism business is slowing. An economic “soft landing” has already begun for hotels, said PricewaterhouseCoopers, which predicted profits will grow at a slower rate in 2001 than at any time since 1992. Bear, Stearns & Co. recently downgraded ratings on the stocks of six hotel companies.

But in Southern California, the outlook appears to be much brighter, thanks largely to the Feb. 8 opening of Walt Disney Co.'s long-awaited “second gate” next to Disneyland--California Adventure.

In Anaheim, Disney also is opening the four-star Grand Californian hotel and Downtown Disney, a zone of nightclubs and restaurants. It’s all part of the entertainment company’s $1.4-billion bid to turn a traditionally budget-minded vacation spot into an upscale multi-day resort.

But how much stimulus will it give to the region? And how long will it last? Given uncertainties about the economy and Disney’s ability to transform the Anaheim experience, Bruce Baltin of PKF Consulting is wary of making predictions. But Baltin said Orange County should do quite well and projected an increase of nearly 11% next year in hotel-room nights--more than triple this year’s growth.


Hotel-room demand in Los Angeles County figures to grow much more modestly, just more than 2% in 2001, after a 4% increase this year, he said.

Southern California also could get a nice boost with the addition of some luxury coastal resort hotels. For years, Baltin said, there were really just two--the Four Seasons Biltmore in Santa Barbara and the Ritz-Carlton in Dana Point.

Not anymore. Newcomers such as the Bacara Resort & Spa near Santa Barbara, which opened recently, and the St. Regis in Dana Point, which will share a golf course with the Ritz when it opens next summer, hope to attract the wealthy from around the world.

One possible downside is the high-tech bust. Residents of tech-rich Northern California supply 18% of Southern California’s overnight visitors, but the sagging stock market could dampen their travel plans in the coming year.


For now, most analysts credit the state with enough allure and economic steam to weather the storms. Skip Hull, director of CIC Research, predicted that spending on Southern California hotel rooms will jump another 8% next year after an 8% increase this year. That’s not just more guests, but also higher room bills.

Hoteliers “just seem to be defying gravity in their ability to raise [room rates],” Hull said.