Weak Dollar Has a Silver Lining for L.A. Tourism

With a weak dollar providing bargains for overseas tourists and a spiffed-up city attracting close-to-home travelers, the Los Angeles area is expected to have attracted a record number of visitors this year, according to a report set to be released today.

LA Inc., the city’s convention and visitors bureau, projects that 24.3 million tourists will have visited Los Angeles County in 2004. That’s an increase of 4.1% over last year and tops the previous record of 24.2 million set in 2000.

And the trend is likely to continue next year, hoteliers and travel agents said, as the slumping greenback continues to lure bargain-hunting foreigners.

“It’s phenomenal,” said Mark Liberman, president of LA Inc. “This is the best year in terms of number of visitors in the city’s history. We’ve added attractions. The city has a new look, a new feel. There’s a vibrancy here.”

Liberman and others cited a spruced-up Hollywood area, the new Walt Disney Concert Hall in downtown L.A. and new attractions at local theme parks as big draws.

Orange County, with its beaches and Disneyland, also expects to set a tourism record this year. The Anaheim/Orange County Convention & Visitor Bureau projects that the county will have hosted 43.6 million visitors, up 2% from last year and higher than the previous record of 40.2 million in 2000.

In the Los Angeles area, visitor spending is expected to hit $12 billion, a gain of 7.8% from last year and the first time there has been a year-to-year increase since the 2000 record high of $13.3 billion.

All of which is welcome news for a region struggling with a soft economy and the sharp drop-off in tourism that followed the Sept. 11 terrorist attacks. That put a crimp in air travel, especially by foreigners.

“This ripples through the economy,” said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. “A record level of tourists and a big pop in spending -- this helps sales taxes and jobs.”

In fact, a resurgence in international visitors -- up 8.4% this year, the first increase since 2000 -- is helping to drive the rebound. Travelers whose home currencies have strengthened dramatically against the dollar -- Japan, Canada, Australia and European Union countries are prime examples -- have been especially eager to take advantage of their increased buying power.

Parisian Ludovic Boulnois, who was cruising the Grove outdoor mall Thursday afternoon, has been snapping up DVDs, CDs and clothes during his visit to L.A. Asked about the euro, which is worth 54% more in dollar terms than at the beginning of 2002, the 35-year-old postal worker grinned and said, “Yes, I am shopping a lot.”

Although the galloping Canadian dollar was a plus for Winnipeg resident Rachel Wahl, she was also in town to see the usual Southern California draws, such as Rodeo Drive and Sunset Boulevard.

“All these things I’ve seen on TV,” Wahl said. “It’s cool to see them for real.”

The weak dollar also is helping to boost the number of Americans who are visiting California -- and other U.S. destinations -- rather than embarking on more costly European vacations. For the year, projected overnight domestic visitors to Los Angeles County are expected to increase 3.2% to 20 million, LA Inc. said.

The influx in tourists is boosting a variety of travel-related businesses.

Bookings are up significantly at STA Travel in Santa Monica, especially with an increase in travelers from New Zealand and Australia, branch manager Josh Beck said.

“There is a lot of happiness about the weakness of the U.S. dollar, especially among the Australians, who aren’t used to that situation,” he said.

At restaurant Gladstone’s Malibu on Pacific Coast Highway, business is up about 10% this year, thanks in large part to more tourists, spokeswoman Christine Lloyd said. Area theme parks are also benefiting. Disneyland and Universal Studios Hollywood both reported increased business.

“We’ve had a terrific year, and 2005 appears to be very solid as well,” said Eliot Sekular, spokesman for Universal, which this year introduced the Revenge of the Mummy roller coaster.

Through October, hotel occupancy rates in Los Angeles are averaging 73.2% this year compared with 68.1% in 2003, according to LA Inc., with Hollywood and Beverly Hills posting the biggest gains. Average daily room rates are up 5.7% to $91.06.

“There has definitely been a surge,” said Bruce Baltin, senior vice president in charge of the Los Angeles office of hotel consulting firm PKF. “This year has surpassed our expectations.”

On the beachfront in Santa Monica, executives at the 198-room Shutters on the Beach and the 129-room Casa Del Mar say they are experiencing an upturn in hotel reservations.

“We are absolutely seeing an increase from last year,” said Armella Stepan, vice president of business development for both hotels, adding that bookings for January are strong.

In Orange County, the story is the same. Hotel occupancy is averaging 70.6% this year, up from 68.1% last year. Room rates are up a more modest 1.2%.

“We’re looking forward to an even better year next year,” said Charles Ahlers, president of the Anaheim/Orange County Convention & Visitor Bureau, who is counting on hoopla surrounding Disneyland’s 50th anniversary next year to give an added boost to tourism.

Officials expect L.A.-area tourism to increase 2.5% next year to nearly 25 million visitors. Projections call for a 6% increase in international visitors, if economic and political conditions remain stable and there are no domestic terrorist attacks.

Liberman of LA Inc. noted that big crowds are anticipated for an elaborate King Tut exhibition that is coming to the Los Angeles County Museum of Art in June.

“It’s going to be great for us,” he said. “I personally think our 2% gain projection is conservative.”

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Tourism taking off International passengers arriving at LAX (In thousands)

Jan-Aug Jan-Aug Pct. Origin 2003 2004 change Japan 194 250 +29% Australia 145 187 +29 U.K. 184 181 Ð2 Mexico 152 173 +14 S. Korea 104 107 +3 Taiwan 64 88 +37 Germany 56 63 +12 N. Zealand 50 59 +17 France 40 45 +13 China** 22 34 +56 **Excludes Hong Kong *Projected

Sources: CIC Research, U.S. Office of Travel and Tourism Industries, Department of Homeland Security